Bitcoin Briefly Spikes Above $59,000

Bitcoin’s (BTC) price rose to more than $59,000 in the early U.S. hours Wednesday before settling back to the $57,400 level in the afternoon. The largest cryptocurrency by market cap remained range-bound amid selling pressures from Germany and bitcoin exchange traded fund inflows.

German Selling, Spot Bitcoin ETF Inflows Steady Bitcoin

In Germany, the government’s seized bitcoin holdings have dropped below a $1 billion valuation for the first time, after several days of offloading to crypto exchanges. The initial on-chain stash of close to 50,000 bitcoin originally seized by Germany from online piracy website Movie2k is now down to 13,110, according to data from Arkham Intelligence.

Despite the bitcoin dumping from Germany, U.S. spot bitcoin exchange-traded funds (ETFs) have enjoyed strong inflows the first two days of the week. According to Farside Investors, these ETFs recorded a combined $511.2 million of inflows on Monday and Tuesday.

Congress, Democratics Focus on Crypto

Wednesday also could be a major day for U.S. crypto regulation as the U.S. House of Representatives votes on an attempt to overrule President Biden’s veto of a bill that would overturn the Securities and Exchange Commission’s (SEC) special regulations for custodians of crypto assets. The SEC policy is seen as posing significant challenges for traditional financial firms looking to offer crypto custodial services.

Overturning the SEC policy would make it easier for traditional banks to serve a custodians of digital assets for their customers. But Custodia Bank Chief Executive Officer (CEO) Caitlin Long took to the social media platform X Wednesday to say that she doesn’t believe Congress has the votes to overturn the Biden veto.

Somewhat ironically, a meeting among crypto industry representatives, major Democratic leaders, and White House officials was also scheduled for Wednesday. The meeting was put together by Democratic Rep. Ro Khanna, who represents a district in California that includes Silicon Valley.

However, Democrats as a whole have been slow to recognize crypto supporters as a potential voting bloc, while Republican presidential candidate Donald Trump has engaged openly with them for several months, offering to relieve the regulatory burden placed on the crypto industry by the SEC under the Biden administration. Republicans made various protections for crypto, such as the right to bitcoin mining and self-custody of crypto assets, part of their official party platform earlier this week.

CFTC Chairman Seeks Legislative Response on Crypto

Also Wednesday, a Senate committee held a hearing on oversight of digital commodities that featured testimony from Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam.

Behnam noted the lack of legislative action in his opening remarks, stating, “What has concerned me most throughout the expansion of this digital asset class is that while everyday Americans fall victim to one digital asset scam after another, there remains no completed legislative response. I have repeatedly been asked by members of Congress what I am doing to protect their constituents.”

In addition, market observers watched Federal Reserve Chairman Jerome Powell’s second day of testimony in Congress Wednesday for indications of where interest rate policy may head this year.