Market Insights: JAN 2025 | Week3
Wavebridge Research/
US Bitcoin and Cryptocurrency Investments and Regulations
The US Department of Justice said that $12 billion worth of bitcoin stolen from cryptocurrency exchange Bitfinex in a 2016 hack should be returned to the exchange. The Wisconsin Investment Board has invested $105 million in BlackRock's Bitcoin ETF, while the Michigan Pension Fund has invested $12.9 million in the Grayscale Ethereum ETF. Pension funds in the UK and Australia have also recently made small investments in Bitcoin. The US state of Oklahoma has introduced legislation to include bitcoin as part of the state's strategic reserve. Oklahoma is the sixth US state to consider legislation to include bitcoin in its fiscal system. Similar proposals have previously been considered in Texas, Pennsylvania, Ohio, New Hampshire, and North Dakota. MicroStrategy bought more than 256,000 BTC last year, which is more than all the bitcoin mined in 2024, 218,829 BTC. Currently, 70 publicly traded companies hold Bitcoin as a financial asset, and the number is expected to grow. As for the likelihood of strategic Bitcoin hoarding in the US, online forecasting tool Kalshi gives it a 65% chance. Thailand is considering the possibility of allowing Bitcoin spot ETFs to be listed, and BlackRock has launched a Bitcoin spot ETF in Canada. SEC Chairman Gary Gensler has stated that ‘just as we have held gold for 10,000 years, we will hold bitcoin for the future.’ Gary Gensler's comments are interpreted as a recognition of Bitcoin as digital gold.
Trump's Entry into Cryptocurrencies and New Blockchain Developments
Trump launched the TRUMP meme coin on the Solana network. Trump announced it on his Truth social account on 17 November, saying it was to commemorate his ‘victory’. The announcement was followed by suspicions that the account had been hacked, but it was soon confirmed that Trump had become the first US president to launch a meme coin himself. The TRUMP coin reached a market capitalisation of $8 billion within a day of its launch, with Trump's company CIC Digital LLC holding 80 per cent of the coin. According to Cardano founder Hoskins, 78.5 per cent of US President-elect Trump's net worth is invested in cryptocurrencies. This totals an estimated $29.6 billion. Ethereum developers have finalised the release schedule for the Pectra upgrade. The upgrade is expected to roll out on the mainnet in early to mid-March. Ripple overtook Bitcoin as the most traded cryptocurrency on Coinbase. Sony Block Solutions Labs, S-Blocks, and S&NT, the three blockchain-related companies under the Sony Group, officially launched Soneium, a new blockchain mainnet. Soneium has the potential to be linked to Sony's flagship gaming platform, PlayStation. World Liberty Financial, a cryptocurrency project backed by President-elect Trump, announced plans to invest in the Tron token.
US SEC Actions and Cryptocurrency Policy Changes
The US Securities and Exchange Commission fined venture capital firm Digital Currency Group, related companies, and a former executive at Genesis $38 million. US Senator Ted Cruz will file a Congressional Review Act resolution next week to rescind controversial cryptocurrency tax regulations. U.S. Treasury Secretary nominee Scott Becent has expressed staunch opposition to a U.S. central bank digital currency. Ripple CEO Brad Garlinghouse has spoken out in favour of including cryptocurrencies such as XRP, SOL, and USDC in the US National Strategic Reserve. Megan Barbero, the US Securities and Exchange Commission's chief legal counsel, is stepping down. Gurbir Grewal, the SEC's enforcement chief, resigned in October, and Paul Munter, the accounting chief behind the SEC's controversial cryptocurrency accounting policy, also announced his resignation. The Trump administration is reportedly preparing an executive order to repeal the bank accounting policy (SAB 121) that requires digital assets to be classified as liabilities.
Global Adoption and Regulatory Developments in Cryptocurrencies
The Bank of England published a Digital Pound progress report, announcing that it will soon launch the Digital Pound Lab, a body to fully experiment with the design of a digital pound. A campaign was launched by bitcoin supporters calling for the Swiss National Bank to include bitcoin in its official reserves. The movement to enshrine bitcoin in the Swiss constitution is in full swing. Swiss state-owned bank Postfinance launched an Ethereum staking service. Intesa Sanpaolo, Italy's largest bank, purchased 11 Bitcoin. Bitcoin holdings of crypto mining companies listed on US stock exchanges doubled in a year to 92,473 BTC at the end of 2024. Cryptocurrency exchange Crypto.com received a MiCA licence, the European Union's new cryptocurrency regulatory framework. Canadian online grocery and meal solutions provider Goodfoods Market plans to strengthen its financial structure with a Bitcoin investment strategy. HashKey MENA, a subsidiary of Hong Kong-based digital asset group HashKey, announced that it has received in-principle approval from Dubai's virtual asset regulator VARA. The Central Bank of Russia introduced new regulations on foreign exchange transactions involving digital assets. Cryptocurrency exchange FTX is preparing to refund around $1.2 billion to its users. 20 January is a key deadline for creditors to complete the refund process.