The launch of spot Bitcoin exchange-traded funds (ETFs) has reduced demand for Bitcoin futures, as open interest for the CME Group’s Bitcoin futures has dropped around 24% after the launch of the spot Bitcoin ETFs, as of January 30.

Ethereum’s Dencun upgrade, which is set to help dramatically reduce transaction costs on the network, went live on the Sepolia testnet, as it moves closer to introducing the highly-anticipated “proto-danksharding” feature.

German authorities have, with the support of the U.S. Federal Bureau of Investigation (FBI), seized 50,000 Bitcoin valued at around $2.1 billion in an operation that targeted operators of piracy websites.

Top stories in the Crypto Roundup today:

• Spot Bitcoin ETFs Dampen Demand for BTC Futures
• Ethereum’s Dencun Upgrade Deployed on Sepolia Testnet
• German Authorities Seizes $2.1 Billion in Bitcoin from Piracy Website Operators
• Chart of the Week: Bitcoin Futures Open Interest on CME Slides

Spot Bitcoin ETFs Dampen Demand for BTC Futures

The launch of spot Bitcoin exchange-traded funds (ETFs) has reduced demand for Bitcoin futures. Open interest for the CME Group’s Bitcoin futures has dropped around 23% after the launch of the spot Bitcoin ETFs, as of January 30.

The drop notably comes after open interest hit a record high amid Bitcoin’s impressive near 160% surge seen last year in anticipation of the launch of these spot ETFs in the country.

CME’s derivatives, once a go-to for investors eyeing regulated Bitcoin exposure, face competition from these new spot ETFs. These products were used in an arbitrage trade involving Grayscale’s $21 billion trust GBTC, but that trade has now faded after the trust’s conversion to a spot Bitcoin ETF.

According to Richard Galvin, the co-founder of DACM, many traders took advantage of the GBTC discount by buying GBTC and shorting Bitcoin futures on the CME. While the trade was attractive, investors have now moved to sell their GBTC shares and closed their CME positions, which has reduced the open interest.

Ethereum’s Dencun Upgrade Deployed on Sepolia Testnet

Ethereum’s Dencun upgrade, which is set to help dramatically reduce transaction costs on the network, went live on the Sepolia testnet, as it moves closer to introducing the highly-anticipated “proto-danksharding” feature.

The Dencun upgrade went live on Sepolia at 22:51 UTC on Tuesday in an “uneventful” upgrade, according to Parithosh Jayanthi, a DevOps engineer at the Ethereum Foundation.

The upgrade’s implementation on the Sepolia testnet follows an earlier implementation on the Goerl testnet, setting the stage for the final test on the Holesky testnet, which is scheduled for February 7. If successful, Dencun could be on Ethereum’s mainnet by March.

One of Dencun’s features is called proto-danksharding, which  it introduces a novel way of handling data through a storage mechanism called “blobs,” which are large blocks of data that can be “much cheaper than similar amounts of calldata,” according to Ethereum co-founder Vitalik Buterin.

German Authorities Seizes $2.1 Billion in Bitcoin from Piracy Website Operators

German authorities have, with the support of the U.S. Federal Bureau of Investigation (FBI), seized 50,000 Bitcoin valued at around $2.1 billion in an operation that targeted operators of piracy websites.

The operation marks Germany’s largest Bitcoin seizure to date, with the funds being confiscated from German and Polish nations who are under investigation for running piracy websites and engaging in money laundering.

Saxony police have in a press release highlighted the operation as unprecedented in the country, noting that the accused “voluntarily transferred them to official wallets provided by the BKA [Germany’s Federal Criminal Police Office].”

The seized BTC are being held “provisionally” in the custody of authorities, pending the outcome of ongoing investigations. Authorities are deliberating on the future of the seized assets.

Investigators have traced the origin of these Bitcoins to profits made from selling copyrighted materials on piracy websites, but how the accused planned on using the funds hasn’t been determined.

Chart of the Week: Bitcoin Futures Open Interest on CME Slides

CME’s Bitcoin futures have seen open interest on them fall by 23% to $4.96 billion after reaching a multi-year high of $6.45 billion the day that spot Bitcoin ETFs were approved in the United States.

Even after this drop, CME is still the biggest derivatives exchange by open interest in Bitcoin futures.

State of the Crypto by Top Tier Exchange Volume

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