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Crypto bulletin

January 14th, 2025

Crypto Bulletin – Week 369

Bitcoin has rebounded to over $97,000 at the time of writing, after hitting its lowest level since November. This bounce reflects a clear rejection of levels below $90,000, briefly reached yesterday morning. The technical candlestick formed during this recovery is particularly encouraging. It remains to be seen whether the $100,000 threshold will be tested again, a level where many speculators are currently taking short positions. Overall, the consolidation channel between $90,000 and $100,000 is becoming increasingly clear.

This resurgence comes amidst significant outflows from Bitcoin ETFs and speculation about the potential stabilization of U.S. interest rates. Interest in Bitcoin seems to have been reignited by rumors of a pro-crypto executive order that newly elected Donald Trump may issue shortly after taking office. This measure could include creating a crypto council composed of industry leaders and repealing SEC regulations to facilitate cryptocurrency adoption by traditional banks.

Earlier in the week, Bitcoin fell to a monthly low of just below $90,000, its lowest level since November. This drop was likely exacerbated by speculation on U.S. monetary policy, with some investors anticipating a delay in interest rate cuts due to promising employment data. This uncertainty has put pressure on assets, including cryptocurrencies.

La Presse published a comprehensive feature on cryptocurrencies last weekend. Martin Lalonde, President of the firm, contributed. We invite you to read the texts in question at this link (French only).

BlackRock recently launched its first Bitcoin ETF in Canada, the iShares Bitcoin ETF, trading under the tickers IBIT (CAD) and IBIT.U (USD) on Cboe Canada. This product aims to provide Bitcoin exposure without the complexities of direct ownership, making access easier for individual investors through traditional platforms. The fund primarily invests in the U.S.-based iShares Bitcoin Trust ETF, addressing concerns related to custody and exchange platforms. This initiative also allows Canadian investors to hold Bitcoin positions in tax-advantaged accounts, increasing the ETF’s appeal. With this addition, BlackRock, a major asset management firm, strengthens institutional credibility in Canada’s crypto market.

BlackRock has noted a growing adoption of digital assets, particularly among younger investors concerned about inflation and attracted by Bitcoin’s potential as a global monetary alternative in uncertain times. According to company data, cryptocurrencies have reached 300 million users in just 12 years, surpassing the adoption rates of the internet and mobile phones.

Intesa Sanpaolo, Italy’s largest banking group, has made a significant acquisition, purchasing 11 Bitcoins for around 1 million euros ($1 million). This makes it the first Italian bank to directly invest in cryptocurrencies, marking a major step forward for the sector in Italy. The bank’s press office confirmed the transaction after an internal email was leaked on the online forum 4chan. The email, attributed to Niccolò Bardoscia, head of Intesa Sanpaolo’s Digital Asset Trading and Investment division, detailed the acquisition. However, the bank declined to comment on its motivations or potential future strategies regarding Bitcoin, leaving it unclear whether this move signals an expansion into crypto services or is merely exploratory.

President-elect Donald Trump plans to sign an executive order related to cryptocurrencies within the first hours of his new term. According to sources, this order may be the first in a series of measures aimed at reforming the U.S. approach to digital assets. Expected provisions include creating a presidential crypto council composed of approximately 20 industry leaders and directing the SEC to repeal Rule SAB 121, which limits American banks’ ability to hold cryptocurrencies. This initial action is likely to be followed by more comprehensive executive orders in the weeks after the inauguration, including forming a joint working group between the CFTC and SEC and introducing guidelines for the State Department to promote international crypto innovation.

These initiatives reflect Trump’s intention to provide broad and favorable guidance for the cryptocurrency industry. However, these reforms may take time to finalize due to the large volume of executive orders under preparation. According to some sources, this delay could be beneficial, allowing for careful consideration of complex and critical industry issues. Ahead of the inauguration, Trump’s transition team has asked crypto policy experts to submit proposals for potential executive orders, with a deadline of January 15. This suggests the first order to be issued may be targeted rather than exhaustive, with more complex measures requiring additional preparation in the weeks to come.

Bitcoin mining difficulty has once again reached a new all-time high of 110.45 trillion, according to CoinWarz data. This level reflects the increased complexity of the process of creating new blocks on the Bitcoin blockchain, requiring increasingly intensive computational operations. Despite the recent decline in Bitcoin’s price, this increase in mining difficulty is seen as a sign of the network’s robustness and security. This development demonstrates that the network is functioning as intended, even as Bitcoin’s price, after reaching a high of $108,000 in December, has slightly receded due to uncertainties surrounding the Federal Reserve’s interest rate policy.

Tether, the issuer of the USDT stablecoin, announced its relocation to El Salvador, a country that made Bitcoin legal tender in 2021. This decision comes after Tether obtained a Digital Asset Service Provider license in the country. Previously incorporated in the British Virgin Islands, the company will relocate all its subsidiaries to this Central American nation. Under President Nayib Bukele, El Salvador is striving to become an attractive destination for tech entrepreneurs. Tether CEO Paolo Ardoino explained that the relocation reflects a shared vision between the company and El Salvador, particularly in terms of financial freedom, innovation, and decentralized technologies. El Salvador’s favorable regulatory environment was highlighted in Tether’s statement. USDT, Tether’s primary product, is currently the most-traded cryptocurrency and the fourth-largest by market cap, reaching $137 billion. Unlike volatile cryptocurrencies, stablecoins like USDT maintain a stable value through reserves of assets such as U.S. dollars and Treasury bonds.

MicroStrategy, the largest corporate Bitcoin holder among publicly traded companies, acquired an additional $243 million worth of Bitcoin on January 13. SEC filings reveal that the company paid an average price of approximately $95,972 per Bitcoin for this recent acquisition, further bolstering its cryptocurrency reserves. Currently, MicroStrategy holds about 450,000 BTC, purchased at an average price of $62,691 per Bitcoin, for a total cost of approximately $28.2 billion. With Bitcoin’s current price at $91,000, the total value of its holdings exceeds $41 billion, representing a significant gain. However, MicroStrategy’s stock has dropped 30.65% since its November peak, currently trading at $328. This acquisition follows a $101 million purchase made a week earlier, comprising 1,070 BTC at an average price of $94,004. Despite the company’s continued expansion of its Bitcoin reserves, its stock performance has lagged, even as the cryptocurrency market sees renewed activity. MicroStrategy now holds over 1% of all existing Bitcoin, continuing its aggressive expansion strategy.

Bitcoin’s price is currently consolidating within a range of $91,000 to $108,268 since its peak in November 2024. However, according to technical analysts and key indicators, this period of stagnation may be nearing its end, paving the way for a significant rebound. Recent signals, including strong support around $91,000, suggest a potential imminent recovery. Crypto analyst Rekt Capital notes that the current 15% correction is milder than historical corrections, which typically range between 30% and 35% and last three to four weeks. He believes that reclaiming the $91,000 support marks a crucial step, potentially signaling the end of this consolidation phase. Buyer congestion near $90,000 further supports this outlook.

 

 

Another analyst, Trader Tardigrade, anticipates a “final capitulation” in the coming days before a possible bullish move. He observes that similar patterns during past consolidations led to significant rebounds. If this trend repeats, a bullish breakout could follow this final stabilization phase. Additionally, the Bollinger Bands indicator shows extremely low volatility conditions, often associated with local bottoms for Bitcoin. Based on similar scenarios in 2024, where compression in Bollinger Bands preceded rallies of 30% to 101%, another technical analyst predicts Bitcoin may be on the verge of an upward move. If historical trends hold, a substantial rebound is expected in the coming days.

The presented information is as of January 14th, 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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