Market Insights: JAN 2025 | Week2
Wavebridge Research/
Bitcoin's Evolution and Market Dynamics
It's been 16 years since the first Bitcoin-related tweet. Sixteen years ago, on 10 January 2009, Hal Finney, an early Bitcoin user and computer scientist, tweeted ‘Running Bitcoin’. Bitcoin grew by an average of 154 new millionaire wallet addresses per day during 2024. The number of wallet addresses holding more than $1 million in Bitcoin grew to approximately 56,325. Only about 160,000 to 170,000 new bitcoins are expected to be mined on the Bitcoin network this year. Corporations bought 270,000 bitcoins last year, and ETFs bought 400,000 to 500,000 bitcoins. The shortage is expected to worsen if governments also buy hundreds of thousands. The US holds 198,109 BTC seized during criminal investigations. It is followed by China, the United Kingdom, Ukraine, Bhutan, and El Salvador. Bitcoin holdings on spot exchanges have been plummeting. The last time the FTX collapse occurred in 2022, spot exchange holdings plummeted and the price of Bitcoin hit a new low. There has been a significant increase in Bitcoin ATM installations globally. The US accounts for 81% of the total market. In December last year, the US spot Bitcoin ETF bought around 51,500 BTC. This is nearly three times the 13,850 BTC mined by miners during the same period.
Tether's Foray into AI and Broader Blockchain Developments
Tether moves into AI film production. Tether's CEO has identified AI as an important area of focus, emphasising that it offers significant advantages in scalability, speed, and cost-effectiveness. The Audience market has been in a downturn since May 2024, but has been recovering since the end of 2024. Average monthly Audience registrations have recently increased to between 54,000 and 92,000. Stacks has upgraded its network, increasing network bandwidth by 500 per cent. Solana's second smartphone in nearly two years is about to launch, with 145,000 pre-orders currently available through Solana Mobile. Ripple CEO Brad Garlinghouse claimed that the company's valuation has surpassed $100 billion due to the surge in the price of XRP and the growing demand for blockchain solutions. The Ethereum network recorded $1.1 billion in stablecoin inflows. Solana's inflows remained strong at $424 million, but were down more than $200 million from last week's record. Sui and its ecosystem's flagship projects, TURBOS, DeepBook, and NAVI protocol, have seen a significant uptick in activity.
Crypto Policy and Events in the United States
The first ‘Crypto Ball’, organised by David Sachs, the Trump administration's director of artificial intelligence and cryptocurrency, will be held in Washington DC next week. The event will feature major crypto companies as sponsors, including Microstrategy, Coinbase, and Marathon Digital. USDC issuer Circle, Ripple, Coinbase, and Kraken will also join President-elect Trump's Inaugural Committee in sponsoring the event. An Oklahoma state senator recently introduced the Bitcoin Freedom Act. The bill would allow state officials and employees of private companies to receive their salaries in bitcoin and make it optional. The US Department of Justice is rumoured to have been authorised to sell the 69,370 BTC seized in the Silk Road case. President Trump's nominee to be the next chairman of the Securities and Exchange Commission, Paul Atkins, has begun his campaign to secure congressional support. His long experience at the SEC and in financial regulation heralds a new approach to regulating digital assets and financial markets. Fed officials have voiced strong opposition to the idea of making Bitcoin a part of the National Strategic Reserve. Reports emerged that Bank of America, a major US bank, is using Ripple blockchain technology for its internal payment system.
Global Blockchain Integration and Adoption Trends
The German government is stepping up its strategy to integrate Bitcoin and blockchain technology into its financial system. El Salvador's adoption of Bitcoin as a legal tender has led to a surge in tourism. The country is expected to receive 3.9 million tourists in 2024, up 22 per cent year-on-year, almost doubling the number of visitors when compared to the 2013-2016 period. The Hong Kong Monetary Authority has launched a distributed ledger technology-based ‘supervisory incubator’ to help banks manage risks in their blockchain experiments. Philippine banks are building PHPX, a Philippine peso-based stablecoin, to improve cross-border payments and financial inclusion. The PHPX token is expected to launch between May and July. Kenya is preparing legislation to regulate cryptocurrencies. The governor of the Czech National Bank is now considering acquiring Bitcoin as a potential diversification strategy for the country's foreign exchange reserves. Thailand plans to pilot cryptocurrency payments in Phuket. Tourists will be able to register their bitcoins and make purchases after verifying their identity through a Thai exchange. Standard Chartered will enter the European market with a Luxembourg licence under the MiCA regime, the EU's digital asset regulatory framework. GSR receives authorisation from the Financial Conduct Authority, the UK's financial regulator. Bitfinex's derivatives division has been granted a DASP licence in El Salvador, with plans to relocate to the country in the future.