GSG Weekly Recap (Jan 20, 2025)
Market Watch
Things to Watch This Week (Jan 20?- Jan 24)
Random Musing This Week?(Jan 20?- Jan 24)
Last week, the crypto market experienced a rebound following the release of December's core Consumer Price Index (CPI) data, which was softer than expected. The decline in month-over-month core CPI, the first in six months, was viewed positively by the market. Additionally, Federal Reserve Governor Christopher Waller hinted that further rate cuts could come sooner if disinflation meets expectations.
A notable event was the launch of Donald Trump's cryptocurrency, $Trump, which quickly soared to a market cap of nearly $15 billion. The launch, through CIC Digital LLC, underscores Trump's historical support for cryptocurrencies and suggests a potential regulatory shift that could favor the crypto industry as he assumes office.
This week, the spotlight focuses on President Trump's inauguration and its potential implications for the cryptocurrency market. The market eagerly anticipates potential announcements or policy shifts that could emerge post-inauguration, which could further influence the market.
Looking ahead, key events include the Federal Reserve's meeting on January 29 and the release of December Personal Consumption Expenditures (PCE) data on January 31. These events, combined with the new administration's policies, are expected to significantly influence market sentiment.
Recap of Top Stories (Jan 13?– Jan 17)
Interesting
Commentary: US President-elect Donald Trump is reportedly expected to sign an executive order designating crypto as a national priority that could come as soon as he re-enters office on Jan. 20. Bloomberg reported, citing people familiar with the plans, that the order would mean regulatory agencies would be guided to work with the industry. It could also create a crypto council to advocate the industry’s policy wishes. Trump is widely speculated to be lining up a day-one crypto-related executive order as the local industry heavily backed his campaign, and the incoming president promised that the US would be a “crypto capital.”
Commentary: Wyoming Senator Cynthia Lummis sent a letter to the Federal Deposit Insurance Corporation, claiming that whistleblowers informed her that the agency allegedly destroyed documents related to Operation Chokepoint 2.0. Lummis instructed the government agency to cease the destruction of documents and preserve all records related to “digital asset activities,” including the supervision of Signature Bank and the liquidation of Silvergate Bank.? Operation Chokepoint 2.0 — a concerted effort to cut off crypto-related firms from banking services — widely impacted the industry in multiple countries and was a major pain point for industry advocacy groups during the 2024 United States election.
Commentary: Upbit has reportedly received a suspension notice for alleged KYC?violations. The Financial Intelligence Unit of South Korea’s Financial Services Commission has notified Upbit of possible punitive measures. As part of the measures, the authorities seek to suspend new user registrations on Upbit for six months, with existing users unaffected. Upbit can submit its feedback on the restrictions to the FIU by Jan. 20. The authority plans to make a final decision on the penalty on Jan. 21. According to South Korea’s Special Financial Transactions Act, the penalties for KYC violations can be up to 100 million Korean won (around $68,600) per case. As Upbit was found to have at least 500,000 KYC breaches, the violations could potentially cost the company $34.3 billion.
Commentary:?Texas state Senator Charles Schwertner has introduced a bill in the new legislative session to establish a strategic Bitcoin reserve in the Lone Star State.?The Texas Strategic Bitcoin Reserve Act aims to establish a special fund outside the general revenue fund, allowing the state to own and hold Bitcoin?as a financial asset and to accept Bitcoin donations from the public.? The bill proposes implementing secure storage and management systems while mandating cold storage and regular audits for transparency and security. Legislature can appropriate funds to purchase Bitcoin with funding limited to 1% of general revenue.
Commentary: A new bill to establish Bitcoin as a strategic reserve asset was introduced to the Oklahoma House of Representatives by state Representative Cody Maynard. House Bill 1203, known as the Strategic Bitcoin Reserve Act, would allow Oklahoma’s pension funds and state savings accounts to allocate a portion of their assets to Bitcoin?as a hedge against inflation. Several US states have pending legislation to establish a Bitcoin strategic reserve, and several state pension funds have already diversified into Bitcoin as the digital asset gains mainstream, institutional adoption.
Commentary: A federal judge has sentenced HDR Global Trading Limited, the parent company of cryptocurrency exchange BitMEX, to two years of unsupervised probation and a $100 million fine. In a hearing in the US District Court for the Southern District of New York, Judge John Koeltl passed down the sentence against BitMEX, roughly six months after the crypto exchange pleaded guilty to violating the US Bank Secrecy Act (BSA) by operating without “any meaningful” Anti-Money Laundering (AML) program. The US Attorney’s office alleged BitMEX “flaunted” BSA requirements by not implementing an AML program with Know Your Customer standards, instead requesting users provide their email addresses.?In a December sentencing submission to the court, the US government requested the judge conclude that BitMEX unlawfully gained $155 million from US sources as part of its BSA offense from 2015 to 2020 and asked it to impose a $417-million fine. The court dismissed all open counts against the crypto firm as part of the sentencing hearing.
Commentary: Italy’s largest bank, Intesa Sanpaolo, became the first Italian bank to make a Bitcoin investment, purchasing 11 BTC for about 1 million euros. The news emerged from a leaked internal email by Niccolò Bardoscia, head of digital assets trading at Intesa Sanpaolo.?The Italian bank’s investment comes during a period of increasing institutional interest in BTC.
Commentary:?Telegram-linked blockchain project, The Open Network (TON), is set to focus on growth in the United States under the incoming administration of US President-elect Donald Trump, a spokesperson for the TON Foundation confirmed. The US push will be led by newly appointed TON Foundation president and board member Manuel Stotz. Stotz has been serving at the TON Foundation since its official inception in Switzerland in 2023. TON was originally introduced by Telegram co-founders Pavel and Nikolai Durov, who raised $1.7 billion for the TON network and the original Gram token in 2018. Telegram was forced to terminate its involvement in the TON project in May 2020 and subsequently shut down the TON testnet after losing a multi-year legal battle with the US Securities and Exchange Commission over TON and Gram.
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Commentary: Cryptocurrency banking group Sygnum is preparing to enter multiple markets after securing $58 million in an oversubscribed strategic growth round. Sygnum has achieved unicorn status with a post-money valuation of more than $1 billion. Sygnum plans to enter multiple regions with fresh proceeds, develop Bitcoin (BTC)-focused products and pursue strategic acquisitions. The proceeds from the funding round will support Sygnum’s expansion into the European Union and the European Economic Area, as well as its establishment of a regulated presence in Hong Kong.
Commentary: United States Representative Tom Emmer has been appointed vice chairman of the House Subcommittee on Digital Assets, Financial Technology and Artificial Intelligence. The subcommittee was created in 2023 to oversee the development and use of crypto assets and related financial technologies and examine the use and development of AI in financial services.? Earlier in January, Congressman Bryan Steil was chosen to lead the Financial Services Subcommittee. In September, the Wisconsin Representative said that it was “imperative” for US lawmakers to move forward in creating a crypto regulatory framework and that one of the committee’s priorities for 2025 would be to create a regulatory framework for crypto assets.
Commentary: Several artificial intelligence-based tokens have surged following a new Franklin Templeton report predicting that AI agents will revolutionize content generation on social media. “We can envision a future where AI agents revolutionize content generation on social media and play an integral role across various industries and platforms,” wrote Franklin Templeton in a report on AI agents. However, the Franklin researchers said that AI agents were still in the early stages of development.?“Although these agents are not yet fully autonomous, and have little utility in their current state, this emerging sector may hold significant promise and is worth watching closely as it evolves and matures,”?Some of the AI tokens mentioned in the Franklin Templeton report, such as Virtuals Protocol (VIRTUAL) and ai16z (AI16Z), have surged in response.
Commentary: GSR Markets UK, a subsidiary of the global cryptocurrency trading firm GSR, has received regulatory approval from the United Kingdom’s Financial Conduct Authority (FCA), allowing the company to operate as a licensed crypto asset business. The approval makes GSR the first crypto liquidity provider to achieve dual regulatory authorization from both the FCA and the Monetary Authority of Singapore (MAS). GSR’s expansion of its operational scope will enable the firm to facilitate services such as over-the-counter (OTC) and programmatic execution trading for UK clients.
Commentary:?Stablecoin issuer Tether announced that it would move the company and its subsidiaries to El Salvador after it had secured an operating license in the Latin American nation. The company said it planned to relocate its headquarters and subsidiaries to El Salvador due to its “forward-thinking policies, favorable regulatory environment, and [...] growing Bitcoin-savvy community.”
Commentary: The US Court of Appeals for the Third Circuit has issued an opinion in cryptocurrency exchange Coinbase’s civil case with the Securities and Exchange Commission, finding the regulator’s decision to deny rulemaking was “arbitrary and capricious.” In a Jan. 13 opinion issued by the Third Circuit, a panel of three judges granted a petition from Coinbase in part but declined to order the SEC to launch rulemaking proceedings that could clarify the commission’s position on crypto. Coinbase’s appeal stemmed from a 2022 request for the SEC to create “rules to govern the regulation of securities that are offered and traded via digitally native methods, including potential rules to identify which digital assets are securities.” The SEC denied Coinbase’s petition in 2023, prompting the exchange to appeal to the Third Circuit. According to Judge Thomas Ambro, the SEC’s order denying Coinbase’s request for crypto rules was “conclusory and insufficiently reasoned, and thus arbitrary and capricious.”
Commentary: MicroStrategy’s holdings now exceed 450,000 Bitcoin, acquired for a total of $28.2 billion at an average price of $62,691. The milestone came after the company acquired $243 million worth of BTC at an average price of $95,972. MicroStrategy made the purchase during a nearly weeklong correction, during which Bitcoin’s price traded below the $100,000 psychological mark starting Jan. 7.
Commentary: Asset manager BlackRock is launching a new Bitcoin ETF?on Cboe Canada.?The ETF is designed to give Canadian investors access to BlackRock’s flagship US spot Bitcoin fund, iShares Bitcoin Trust (IBIT).? Dubbed iShares Bitcoin ETF, the Canadian fund will trade under the same ticker, IBIT, as BlackRock’s US product.
Commentary: MoonPay, a fiat-to-crypto on-ramp provider, has acquired Helio, a blockchain-based payment processor built on Solana, in a $175 million deal to expand its payments infrastructure. Helio is widely used for e-commerce, digital goods and subscription services, supports over 6,000 merchants and has a transaction history exceeding $1.5 billion. Already integrated with platforms like Discord, Shopify and WooCommerce, Helio’s acquisition by MoonPay will enable the on-ramp provider to provide a more comprehensive payment solution for merchants, developers and consumers.
Commentary: New Hampshire and North Dakota have become the latest US states to introduce legislation for a strategic Bitcoin reserve, signaling a continued push among lawmakers to diversify state treasuries with the cryptocurrency. According to Satoshi Action Fund CEO Dennis Porter, the New Hampshire bill was introduced by Representative Keith Ammon, a Republican who represents the 40th District. On the same day, legislation for a strategic Bitcoin reserve was also introduced in North Dakota, championed by Representative Nathan Toman, Representative Josh Christy and Senator Jeff Barta.
Commentary:?Kenya is preparing legislation to regulate cryptocurrencies, marking a shift from the cautious warnings previously issued by the Central Bank of Kenya. Treasury Cabinet Secretary John Mbadi reportedly said the government is “committed to creating the necessary legal and regulatory framework” for cryptocurrencies. The announcement comes as Kenya drafts a new proposal titled “National Policy on Virtual Assets and Virtual Asset Service Providers.” The draft proposal outlines plans to create a “fair, competitive, and stable market” for cryptocurrencies in Kenya while addressing risks like money laundering, terrorism financing and consumer protection issues.
Commentary: Singapore has blocked access to Polymarket, a cryptocurrency-based prediction market, as part of a crackdown on unlicensed gambling platforms.? Visitors attempting to access the site from Singapore receive a warning referencing Section 20 of the Gambling Control Act 2022. The act imposes fines of up to 10,000 Singapore dollars, jail terms of up to six months, or both, for gambling with unlicensed operators.
Commentary: World, formerly known as Worldcoin, recently announced the milestone of verifying 10 million human beings on its digital identity network. Worldcoin uses a network of orbs to collect biometric data to establish proof of personhood — identifiers that verify an individual is human and who that individual is. Worldcoin has drawn significant legal scrutiny and has been ordered by state regulators in multiple jurisdictions to cease operations. Kenya was the first country to ban Worldcoin on Aug. 2, 2023, citing potential national security and privacy risks from the collection and storage of biometric data. In March 2024, Worldcoin was ordered to stop collecting data in Spain for a three-month period and later agreed to suspend operations for the rest of 2024. More recently, in September 2024, South Korea fined Worldcoin 1.1 billion Korean won, valued at $829,000, for allegedly violating personal data protection laws.
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