Market Insights: FEB 2025 | Week2
Wavebridge Research/
Crypto Trading Volume on Centralized Exchanges Drops to $9.3 Trillion in January
Combined spot and derivatives trading volumes on centralised exchanges totalled $9.3 trillion in January, down 20.2% month-on-month. Spot trading fell 22.9 per cent to $2.88 trillion, while derivatives trading was down 18.8 per cent. In his first press conference on digital assets, US crypto czar David Sachs said that ‘Bitcoin reserves are one of the first things the Digital Working Group will look at’. Franklin Templeton filed an application for a cryptocurrency index ETF with the US Securities and Exchange Commission. Bitcoin's network transaction activity fell to its lowest level since March 2024. JPMorgan assessed the Bitcoin mining market in January this year, saying that mining difficulty has fallen, creating a favourable environment for miners. El Salvador removes Bitcoin as a legal tender. El Salvador became the first country in the world to make Bitcoin a legal tender in September 2021, but the policy was changed following the signing of a $1.4 billion loan agreement with the IMF.
Memecoin Frenzy Cools: Market Cap Falls from $117B to $70B
Ethereum developers have finalised a testing schedule for the next upgrade, Pectra. The Pectra upgrade is targeted for release in April and will include a number of improvements focused on the wallet and valuator. Tokens related to AI agents have fallen by up to 90% from their 2024 peak. AI agent tokens as a whole have fallen by more than 40%, reducing their market cap from a peak of $10bn to around $6bn. Memecoin market capitalisation has been falling rapidly since Trump's inauguration. The total market capitalisation of memecoins spiked to $117 billion with the launch of the Trump token, but now stands at $70 billion, down $47 billion in three weeks and $56 billion from its December peak. There are now close to 11 million cryptocurrencies listed on CoinMarketCap. There is a growing concern that this could distract investors from an already saturated market. XRP certificates of deposit are expected to be launched soon. Similar to traditional American depositary receipts, these will allow investors to invest in XRP without having to use a cryptocurrency exchange. In 2024, stablecoin transactions reached $15.6 trillion, exceeding Visa and Mastercard transactions by 119% and 200% respectively.
Maryland Proposes Strategic Bitcoin Reserve Asset Act
The US state of Maryland introduced the Strategic Bitcoin Reserve Asset Act, which would establish Bitcoin as a reserve asset. The bill involves the state government using fines from gambling law violations to purchase and hold Bitcoin. The US state of Utah became the first US state to pass a bill in the House of Representatives that would allow public funds to be invested in cryptocurrency assets. US President Donald Trump's son Donald Trump Jr. stated that cryptocurrencies are ‘the future of American hegemony’. US President Trump, through his Trump Media and Technology Group, applied to trademark a financial product branded ‘TrueSpy’. Some speculate that he will be the first US president to issue an ETF. Trump's plan is to create a sovereign wealth fund using US assets to strengthen the country's economy. If the sovereign wealth fund invests in digital assets, it could be a sign of the US government's acceptance of digital assets within the institutional financial system. Ripple CEO Brad Garlinghouse is being tipped as a possible crypto advisor to President Trump. He met with Trump in Mar-a-Lago last month.
Brazil’s Central Bank: 90% of Crypto Usage in the Country Tied to Stablecoins
Brazil's largest stock exchange, B3, is expanding its crypto investment offerings. The governor of Brazil's central bank noted that the use of digital assets in the country has surged over the past three years, adding that 90% of cryptocurrency use in Brazil is related to stablecoins. The Hong Kong government has accepted Bitcoin and Ethereum as proof of assets for investment immigration applications. The Czech Republic formalised a capital gains tax exemption for long-term cryptocurrency holdings. The Russian Ministry of Energy announced plans to require all cryptocurrency mining equipment to be registered. The Securities and Exchange Commission of Thailand plans to introduce a new securities trading platform based on distributed ledger technology to facilitate digital token trading. The Indian government recently deemed cryptocurrency income as miscellaneous income, which will result in additional tax burdens. Coinbase has $42 billion in customer digital assets under management, more than the 21st largest bank in the United States, according to an analysis. Tether is expanding outside of traditional blockchain-related investments, and its investment strategy is considered to be ‘similar to Saudi Arabia's sovereign wealth fund, which reinvests oil revenues. Bybit has paid a $1 million fine to Indian regulators, completing its re-entry into the market. SBI Holdings plans to become the first Japanese bank to start handling the stablecoin USDC this year.