BTC Wealth Report – Issue 03

👋 Welcome to BTC Wealth – Issue 03

Momentum is building.

ETF flows are surging.
Open interest is rising.
The Fed just opened the door for banks to move into Bitcoin.

And on the edges, the siren song of leverage is starting to call some Bitcoiners back into risk.

Here’s what we’re tracking this week:

• ETF inflows flip positive — real demand returns

• Basis trades heat up — not all flows are pure Bitcoin buying

• The Fed steps back — banks get more freedom to engage with crypto

• Lessons from leverage — real talk from Bitcoiners who’ve borrowed before

Let’s dive in.

🟠 Bitcoin ETF Tracker: Flows Surge Back

Big week for Bitcoin ETFs — and the flows flipped positive for 2025.

U.S. spot ETFs bought 33,140 BTC over the last week, led by:

• BlackRock: +15,850 BTC

• ARK: +6,785 BTC

• Fidelity: +6,350 BTC

As of April 25th, total net inflows for the year are now positive at +27,184 BTC.

The sharp rebound in flows tracks closely with Bitcoin’s recent price strength — and the flow surge shows allocators didn’t abandon Bitcoin — they were simply waiting for momentum to turn.

BlackRock continues to dominate the bid, but good breadth this week — strong buying from ARK and Fidelity.

📈 Not All ETF Flows Are Created Equal

One thing to watch: futures open interest rose sharply this week, even as ETF inflows surged.

Why does that matter?

Because part of the new demand flowing into ETFs isn't pure spot Bitcoin buying — it's hedge funds running the basis trade:

• Long Bitcoin ETFs (buying spot exposure)

• Short Bitcoin futures (selling forward contracts)

• Harvesting the spread, which is currently yielding around 8% annualized

This strategy is capitalizing on the persistent futures premium — but it’s not necessarily accretive to Bitcoin’s price.

So while flows flipping positive is a strong signal, not every dollar coming in is directional Bitcoin exposure. Some of it is structural arbitrage.

Flows returning to ETFs are bullish — but the basis trade is a dynamic to watch. Not all flows are pure Bitcoin demand.

🏛️ Fed Rolls Back Crypto Guidance — What It Means for Banks (and Bitcoin)

On April 24, the Federal Reserve quietly pulled back four major pieces of guidance that had previously constrained banks’ ability to interact with crypto — including Bitcoin custody, stablecoin issuance, and tokenized payment rails.

The message: banks no longer need permission to engage in crypto. Just supervision.

🔍 What Got Scrapped:

The Fed rescinded guidance issued between 2022 and 2023, originally released in the wake of the FTX collapse and Terra-Luna implosion. These included:

• SR 22-6: Required Fed-supervised banks to notify regulators before engaging in any crypto activities

• SR 23-8: Set up a formal “nonobjection” process for dollar token (stablecoin) involvement

• Joint statements with the FDIC and OCC outlining risk warnings around volatility, liquidity, and operational risk

All four have now been withdrawn.

💡 Why This Matters:

• Crypto isn’t a regulatory third rail anymore.
  Banks can now explore Bitcoin custody, stablecoin infrastructure, and tokenized payments without jumping through pre-clearance hoops.

• Stablecoins just got a shot in the arm.
  With the Fed dropping its dollar token approval process, state-chartered banks can move faster to integrate tokenized USD rails — and USDC just became easier to work with.

TLDR:

🧾 Leveraged Bitcoin: Lessons from the Community

That’s the question @BitcoinerJake threw out on X last week — and what followed was a wave of insight from Bitcoiners with real life experience on the matter. Some practical, some psychological and others just shared memes. We sifted the signal.

Here’s what stood out:

💸 1. Make Sure You Can Cover the Payments

The advice sounds basic, but it’s the foundation: don’t overextend. He also suggests a four-year time horizon — enough to ride out volatility, align with halving cycles, and avoid panic selling.

📉 2. Plan for Maximum Pain

Too bearish? Maybe. But it’s good risk hygiene.

When you lever up on Bitcoin, you’re betting not just on price — but also on your income, your health, and your emotional stability.

Credit score destruction, forced liquidation, and margin calls don’t care how bullish you are. Stress-test your downside.

🏦 3. Avoid Bad Debt, Use Clean Collateral

With 27 years in debt collection, Brett goes further and adds

• Avoid high-interest loans (15–25% credit cards = no bueno)

• Use BTC-backed loans from regulated platforms

• Keep LTV under 50% — and maintain top-up collateral

• Assume rates could double

Same principle as above: Stress-test your structure.

🧠 4. Don’t Underestimate the Psychological Toll

The memes are funny — until they’re not. These comments point to a deeper truth: debt amplifies emotion. Even if your thesis is right, the drawdowns can be brutal when you’re carrying monthly payments and watching your LTV tick upward.

🧱 My Two Sats:

• Your income is your best collateral. A job-backed loan is safer than a BTC-backed one in a volatile market.

• If you’re borrowing against your Bitcoin, you are taking the credit risk. Make sure you can trust the lender.

• MicroStrategy is a leveraged Bitcoin play. Before you DIY your own homebrew leverage, consider all available plays. You might be better off letting the pros manage the risk.

For most, the simple play still wins: stack with cash flow, stay solvent, and let time — not leverage — do the heavy lifting.

That’s your BTC Wealth Report.

Thanks for reading.

- Thomas Fahrer