Market Insights: JAN 2025 | Week1
Wavebridge Research/
Rising Bitcoin Adoption and Network Advancements
Bitwise predicts that inflows into US spot Bitcoin ETFs in 2025 will exceed last year's levels. Currently, US spot Bitcoin ETFs have seen cumulative net inflows of approximately $35.66 billion. Bitcoin hashrate reaches record highs, significantly strengthening network security and mining participation. After surpassing 1,000 EH/s, the Bitcoin hashrate is currently hovering around 783.02 EH/s. There has been a significant increase in attempts to utilise Bitcoin as a national reserve asset. Switzerland has announced plans to move forward with the inclusion of Bitcoin as a national reserve asset. Germany's finance minister argued that the European Central Bank and the Bundesbank should accept bitcoin and cryptocurrencies as part of their foreign currency reserves. Russia is looking to overcome sanctions by using Bitcoin in international trade. Russia's finance minister has stated that this strategy is already being implemented. Hong Kong's Web3 Virtual Asset Development Committee has proposed that Bitcoin be included in Hong Kong's foreign exchange fund. It argues for the inclusion of Bitcoin using the one-country, two-systems approach, emphasising that it would enhance Hong Kong's financial security.
MiCA Implementation and Stablecoin Market Dynamics
MiCA, the world's first cryptocurrency framework law enacted by the European Union, came into full force across the EU on 30 December 2024. Tether, the world's largest unlicensed stablecoin USDT issuer, suspended operations of its fee-based stablecoin EURT in the EU's 27 member states in November. The stablecoin suffered its biggest weekly decline in market value in two years. USDT's market capitalisation fell by more than 1% to $137.74 billion. Stablecoin RLUSD overtook rivals PayPal's PYUSD and Circle's EURC in trading volume. Ripple Labs' RLUSD is now the third most traded stablecoin after USDT and USDC. Ethereum's estimated leverage ratio is now at an all-time high of 0.57. This is double that of Bitcoin. Solana developers have created a quantum-resistant vault to protect user assets from potential threats from quantum computers.
Altcoin ETF Applications and Global Crypto Developments
The US SEC is reviewing applications for ETFs for major altcoins, including Solana, Ripple, Litecoin, and Hedera. Polymarket gives the Solana ETF an 85% chance of being approved by the end of 2025. The United States continues to lead the way, accounting for more than 40 per cent of the global hashrate mined for Bitcoin. Foundry USA is expected to grow to 280 EH/s by 2024, maintaining its position as the world's largest mining pool. The US Internal Revenue Service delays cryptocurrency tax reporting rules. The US Internal Revenue Service has announced that it will delay the implementation of new cryptocurrency tax reporting requirements until 2026. The IRS announced temporary tax relief for cryptocurrency holders using centralised exchanges in 2025, and also revealed its intention to classify platforms such as decentralised exchanges as brokers in a final rule requiring disclosure of cryptocurrency transactions. The founder of Skybridge Capital predicted that President-elect Trump's plan to buy 500,000 bitcoins could pass the US Senate.
Major Institutional Moves and Crypto Market Expansion
Singapore issued twice as many cryptocurrency licences in 2024 as the previous year. The Monetary Authority of Singapore issued 13 major payment institution licences for cryptocurrency exchanges in 2024. FTX began the process of repaying creditors under its Chapter 11 bankruptcy reorganisation plan. FTX will repay up to $16.5 billion to creditors, with 98% of creditors expected to recover 119% of their approved claims. Coinbase acquired the Cypriot operations of European brokerage Bucks, obtaining a key licence for its European expansion. Binance acquired financial services firm Simpol and received a broker-dealer licence from Brazil's central bank. MicroStrategy set a goal to raise an additional $2 billion in the first quarter of this year. The funds, which will be raised through a perpetual preferred stock offering, will be used to fund a large-scale Bitcoin buyback. US cryptocurrency exchange Coinbase is considering offering a tokenised version of its own stock, COIN, on the Base Network. Digital asset trading and brokerage firm FalconX has acquired derivatives startup Avelos Markets. Morgan Stanley's crypto-related subsidiary Etrade is preparing to launch a crypto trading service. Garanti BBVA Crypto, a cryptocurrency custody platform operated by Garanti BBVA, the fifth largest bank in Turquoise, will offer cryptocurrency trading services to the public.