Communications
Crypto Bulletin – Week 368
To all our readers, please accept our best wishes for health, happiness, and prosperity in the New Year!
In the cryptocurrency world, the year has started on a mixed note. After nearly a full week of steady gains, yesterday’s trading erased most of these advances. This downturn was triggered by stronger-than-expected U.S. economic data, reigniting fears of potential interest rate hikes by the Federal Reserve (Fed) this year. Two key indicators, the JOLTS job openings and the ISM Services PMI, exceeded expectations, shaking investor confidence and negatively impacting financial markets, including cryptocurrencies.
November’s JOLTS job openings rose to 8.1 million, surpassing the 7.7 million forecast, while December’s ISM Services Index recorded 54.1, beating the expected 53.3. However, it was the spike in prices paid by businesses for services that surprised markets the most, rekindling inflationary concerns. These developments also pushed the 10-year U.S. Treasury yield to near-record highs, increasing pressure on risk assets like stocks and cryptocurrencies. Consequently, the derivatives market witnessed liquidations of nearly $300 million in long positions betting on price increases. This marked the first significant adjustment in leveraged positions this year, underlining the heightened volatility in crypto markets. Investor expectations for Fed rate cuts also dropped, with March easing odds falling to 37% and projections for a single 25 basis point cut in 2025 becoming the baseline.
Bitcoin and Ethereum-based exchange-traded funds (ETFs) had kicked off 2025 spectacularly, attracting $1.1 billion in inflows in just one day on Monday. This momentum highlights the appeal of these funds, which provide investors with cryptocurrency exposure through traditional brokerage accounts. Last year, Bitcoin and Ethereum ETFs garnered significant interest, amassing $38 billion after their historic Wall Street debut. This success continues into 2025, with the funds achieving some of their best daily performances since their inception. For instance, Bitcoin ETFs drew over $900 million in a single day multiple times, including $978 million last Monday. Part of this renewed interest appears linked to the prospect of a U.S. administration more favorable to cryptocurrencies, driven by President-elect Donald Trump. Experts like Juan Leon of Bitwise attribute this to recent pro-crypto appointments within regulatory bodies such as the SEC and the Treasury, spurring investor optimism for favorable policy changes.
The Bitcoin network celebrated its 16th anniversary last Friday, marking the creation of the first block, the “Genesis Block,” by the enigmatic Satoshi Nakamoto on January 3, 2009. This block, containing the first 50 bitcoins, signaled the birth of the world’s most popular cryptocurrency. Today, the network is stronger than ever, with mining difficulty reaching an all-time high. Mining difficulty, which measures the complexity of the calculations needed to add new blocks to the blockchain, has climbed to 109.78 trillion hashes, according to Bitinfocharts. This surge underscores the number of attempts mining machines must make to solve cryptographic equations and validate a block. The rising difficulty strengthens network security, preventing manipulation or takeovers.
Since the Genesis Block, 877,665 blocks have been added to the blockchain. Each block records transactions, and only miners with immense computational power can add them to the network. This heightened security reflects Nakamoto’s original vision: creating a decentralized, resilient system capable of withstanding attacks and functioning without intermediaries. With 16 years of consistent growth and increasing mining difficulty, Bitcoin remains a groundbreaking innovation in the cryptocurrency space. Its durability and network robustness attest to the success of its original design, solidifying its place as a cornerstone of the blockchain ecosystem.
Cryptocurrency exchange Gemini, founded by Tyler and Cameron Winklevoss, has agreed to pay a $5 million civil penalty to resolve a lawsuit with the Commodity Futures Trading Commission (CFTC). This case, initiated in 2022, accused Gemini of providing false or misleading information to gain approval for a Bitcoin futures product. While the company neither admitted nor denied the allegations, the settlement allows it to avoid a trial scheduled for January 21. The lawsuit focused on Gemini’s claims about the resistance of its Bitcoin futures contracts to manipulation. The CFTC alleged that Gemini “knew or should have known” the information provided was inaccurate. These futures contracts, enabling investors to bet on future asset prices, are a vital part of derivatives markets. In 2017, the first Bitcoin futures contract traded on the Cboe Futures Exchange relied on price data from Gemini. Offering exchange and custody services, Gemini has been central to the evolution of cryptocurrency markets. However, this settlement highlights ongoing tensions between crypto firms and regulators as authorities seek to enhance oversight of the sector.
MicroStrategy continues its bold Bitcoin accumulation strategy in 2025, announcing this week the purchase of 1,070 BTC for a total of $101 million. This acquisition, made at an average price of $94,004 per Bitcoin, marks the company’s ninth consecutive week of purchases. Since November, following Donald Trump’s reelection, MicroStrategy has ramped up its weekly buying, although the amounts have decreased as Bitcoin’s price has risen. In total, MicroStrategy now holds 447,470 BTC, valued at over $45.5 billion at the current price of $101,832. Acquired at an average cost of $62,503 per unit, this strategy positions MicroStrategy as the largest institutional holder of the cryptocurrency. Spearheaded by co-founder Michael Saylor, this approach aims to enhance investor exposure to Bitcoin through MicroStrategy shares listed on Nasdaq, offering a more regulated investment avenue.
The Czech National Bank (ČNB) is exploring the possibility of adding Bitcoin to its reserves as part of a diversification strategy, according to recent comments by Governor Aleš Michl. While Michl proposed the idea, he clarified that no concrete plans to purchase cryptocurrencies are in place. He emphasized that this option would be discussed among the seven board members, noting that Bitcoin could offer an intriguing alternative to traditional assets. Concurrently, the ČNB is focused on increasing its gold reserves, aiming to reach approximately 5% of total assets by 2028. While Bitcoin remains a secondary consideration, this exploration aligns with a broader trend in the Czech Republic toward favorable cryptocurrency policies. Since January 1, capital gains on Bitcoins held for more than three years are tax-exempt, encouraging long-term holding strategies. Additionally, crypto transactions generating less than CZK 100,000 ($4,000) annually are also exempt, subject to specific criteria. Prime Minister Petr Fiala hailed this reform as a step toward simplifying taxation and supporting modern technologies. This new framework also applies retroactively under certain conditions, reflecting the Czech Republic’s efforts to foster a crypto-friendly environment while maintaining a balance with traditional financial strategies.
The Coinbase Premium Index (CPI) turned positive for the first time since mid-December 2024, indicating increased Bitcoin demand among U.S. investors, according to CryptoQuant analysis. This shift reflects growing interest, particularly from institutional investors using Coinbase for large transactions. This trend aligns with a strengthening market following the approval of U.S.-based spot Bitcoin ETFs, seen as a key driver of changing investment behaviors.
Meanwhile, market factors such as reduced miner selling pressure are supporting Bitcoin’s recovery. Bitfinex analysts note a sharp contraction in Bitcoin’s available sell-side liquidity, with the Liquidity Inventory Ratio dropping from 41 months in October to just 6.6 months currently. This tightening supply, coupled with rising demand, mirrors patterns observed during market rallies in 2024. Miners, a critical component of the spot market, are now holding onto more Bitcoin, reducing selling pressure. Although miner profitability rose for the second consecutive month in December, reaching its highest level since April 2024, it remains below pre-halving levels, with gross margins still down 52%. Finally, the Bitcoin network continues to grow, albeit at a slower pace, with the hash rate increasing by 6% in December compared to a 103% surge in 2023. These indicators highlight an evolving ecosystem marked by growing demand, tightening supply, and improving conditions for miners, setting a strong foundation for 2025.
The presented information is as of January 7th, 2025, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.
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Crypto Bulletin – Week 374
Inflation in the United States was stronger than expected in January, reaching 3% year-on-year, according to the Bureau of Labor Statistics. This increase caused a slight decline in Bitcoin’s price compared to seven days ago. Economists had expected inflation to be at 2.9%, and this surprise led markets to reconsider the possibility of short-term Federal Reserve (Fed) rate cuts.
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After significant volatility last week following the announcement of U.S. tariffs on Canadian and Mexican imports, Bitcoin’s price has stabilized in a tightening consolidation channel in recent days.
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