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This Week’s Top Stories

“U.S. Court Greenlights Sale of $6.5B in Seized Silk Road Bitcoin.” – Thursday, 9 January 2025

• On Thursday early morning, the news broke the market that the U.S. government's DOJ has secured final approval to liquidate crypto's largest-ever federal seizure: the bitcoin seized in the infamous Silk Road hack. The document states that the DOJ received said approval on December 30, 2024, and it’s unclear how the news came out this week.
• When looking on the blockchain, the 69’370 BTC are still in the respective wallet and have not been moved, raising the question of whether the U.S. government is yet to sell the bitcoin or has already done so. There are some rumors going around that the BTC were, in fact, already sold off, thanks to a credit line sanctioned by Coinbase. Time will tell whether this rumor has any legs and how this situation plays out in the end.

“Governments around the world are debating Bitcoin as a strategic reserve asset.” – Last few weeks

• Over the last few weeks, there have been various reports from all over the world on how national governments, central banks, or political instances are debating whether Bitcoin and/or other cryptocurrencies should be used as a strategic reserve asset.
• The Japanese government has expressed a cautious stance on the national reserve of Bitcoin because crypto assets do not fall into the category of foreign exchange, and the security and liquidity of foreign exchange reserves need to be ensured.
• The former German Finance Minister, Christian Lindner, believes that the European Central Bank and the German Federal Bank should consider including cryptocurrencies such as Bitcoin in their reserves.
• Of course, we all know that campaigners have launched a popular initiative to oblige the Swiss National Bank (SNB) to hold part of its reserves in Bitcoin. The initiative was officially submitted to the Swiss Chancellery and validated on December 31, 2024. The committee now faces the task of gathering 100’000 signatures from Swiss citizens to secure its placement on a national referendum.
• Czech National Bank governor Aleš Michl discussed the possibility of Bitcoin as part of the bank's reserve diversification strategy in an interview published this week. Michl stated that he is considering Bitcoin and will continue to discuss this matter with his colleagues on the board.

FTX officially announced that the bankruptcy plan has come into effect.” – Friday, 3 January 2025

• The reorganization plan for the bankrupt FTX exchange became effective on January 3, allowing users to begin receiving repayments. To qualify for reimbursement, customers must have submitted a claim via the official website. FTX stated that the first group of repayments should be processed within 60 days. According to the plan, the initial recipients will include users with claims of $50’000 or less.

A Quick Crypto Overview: A Lot Of Noise Over Christmas And New Year

When looking at bitcoin, we are currently trading at roughly the same price level as we were when we sent out the last Weekly Wrap on December 20, 2024. However, bitcoin and the crypto market have experienced turbulent times over the last few weeks. Most coins recovered some of their losses from mid-December during the first week of the new year but have since given back those gains over the last couple of days. Bitcoin is currently trading at $94’500 at the time of writing. Bitcoin dominance stands at 58 percent, up from 54 percent at the beginning of December but still down from the end of November, when it peaked at 61 percent.

The total crypto market capitalization remains above $3 trillion at $3.23 trillion, down 13 percent from its high in December. The $3 trillion level is one to watch, as it marked the last cycle’s high at the end of 2021.

The news surrounding the greenlight for the sale of the Silk Road funds by the DOJ has spread worry in the market this week, alongside concerns over macroeconomic data suggesting fewer rate cuts in 2025. The S&P 500 and Nasdaq have also traded to the downside this week, and market participants are likely waiting for today’s U.S. job numbers to further determine the market's direction in the coming weeks.

Trump’s inauguration is ten days away, scheduled to take place on Monday, January 20, 2025. Over the last few weeks, market participants have speculated whether this inauguration could turn out to be a "sell the news" event. However, various market participants now suggest that the recent price action indicates this might not be the case, as the market is already selling off heading into the final week before Trump’s inauguration.

Chart of the Week: Will The U.S. Dollar Strength Continue Or Will History Repeat Itself?

The U.S. Dollar Index has been on a tear in recent months, reaching new multi-year highs. Currently trading at 109, the index is up almost 10 percent since the end of September 2024. Historically, risk assets such as the S&P 500 and bitcoin have not performed particularly well during periods of U.S. dollar strength. However, the last few months have been an exception, likely due to the U.S. presidential election in November.

Interestingly, when looking at the DXY in 2016 and 2017, when Donald Trump took office for the first time, the U.S. Dollar Index was also extremely strong heading into year-end. It then topped out in January 2017, declined for over a year, and bottomed in the spring of 2018. The DXY traded to the downside throughout the first year of Donald Trump’s presidency, while the crypto market rallied to the upside for all of 2017. This pattern may be something to watch for in the coming weeks and months.

What’s Happening On-Chain? AI Agents Really Took Off

Over the past few weeks and months, AI Agents have truly stolen the show. We mentioned this emerging narrative at the end of November in our Weekly Wrap on November 29, 2024. Since then, the market cap of all AI Agents has more than doubled, currently sitting at $15 billion. The number of tracked agents on the platform cookie.fun has increased by nearly tenfold, and overall attention toward AI Agents is at an all-time high.

Even though everyone seems to be talking about them nowadays, when compared to the public attention that NFTs, for example, received during the last bull run, interest in AI Agents still has significant room to grow. As the graph below from Google Trends illustrates, the orange line indicates the interest over time for the term “Dogecoin,” the yellow line represents “NFT,” and the blue line shows “AI Agent.”

AI Agents are an interesting new development in the space, and there are a handful of platforms that enable users to create and monetize such AI personas. Potential use cases for AI Agents range from influencers on social media platforms like X, to monetizing AI personas of famous characters for video games, creating AI chatbots for customer service, or developing AI Agents as companions in video games or other digital spaces for spending time and having conversations.

This development is still in its early stages, and there are also many critics of these advancements, dismissing current AI Agents as nothing more than “ChatGPT Wrappers”.

Binance just announced today that it will list AIXBT by Virtuals and Cookie DAO for trading on its platform.

Digital Asset Fund Flows: Record High Inflows In 2024 & A Strong First Few Days In 2025

Digital asset investment products are reflecting on a record year, with over $44 billion in net inflows globally – more than four times the previous record set in 2021. The new U.S.-based bitcoin spot ETFs, of course, played a major role in this achievement, accounting for most of the inflows overall. Switzerland also ended the year strong, with a total of $630 million in net inflows, while countries like Canada and Sweden both experienced net outflows of roughly $700 million last year.

Last week, bitcoin spot ETFs saw two remarkable days of nearly $1 billion in net inflows each, on January 3 and 6. However, Wednesday's numbers turned negative, with nearly $600 million in net outflows. Let’s see if the numbers rebound today, following the U.S. stock market’s closure yesterday.

Ethereum finished last year in the positive, buoyed by a very strong last quarter. ETH recorded $4.8 billion in net inflows in 2024 – 2.5 times more than in 2021 and an astonishing 60 times more than in 2023. Impressive! Looking ahead to 2025, we are closely monitoring Ethereum as the potential inclusion of staking in Ethereum spot ETFs in the U.S. could significantly shift dynamics, helping Ethereum regain ground compared to bitcoin products.

Market Sentiment: Crypto Back in Neutral Territory, Stocks in Fear

While the stock market has remained in fear territory (currently at 32) since our last update in December, the crypto market sentiment briefly climbed to Greed levels for a couple of weeks but has since dropped back down into the Neutral zone, standing at 50 today.

The funding rates for major cryptocurrencies have remained at muted levels since last spring. They only began to show some signs of overheating in early December but have since returned to muted levels for almost a month. The total liquidations chart also reflects this trend, showing no particularly high liquidation events over the last two weeks. While this week saw nearly $1.5 billion in liquidations, that figure was reached in a single day back in December. Similarly, during the correction before Christmas, total liquidations were higher than they have been this week, as shown in the chart below.

Other Relevant News

• MicroStrategy acquired more than 8’000 BTC in December 2024, bringing the total BTC bought in Q4 of 2024 to 194’180 BTC. As of 01/05/2025, the company now holds 447’470 BTC acquired for $27.97 billion at an average price of $62’503 per bitcoin. – Link
• Do Kwon pleaded not guilty to all charges when he appeared in court after being extradited back to the United States. – Link
• The founder of Pantera predicts that August 2025 should be the peak of this cycle. – Link
• Crypto hacking in 2024 resulted in nearly $2.2 billion stolen, up 21.07% YOY. – Link
• Morgan Stanley’s E-Trade explores offering crypto trading. – Link
• Tether added 7’629 BTC to their reserve address, bringing their total holdings to $7.7 billion. – Link
• South Korea seeks to lift ban on institutional trading of cryptocurrencies. – Link

Looking Ahead: Eyes on Donald Trump & In The Bigger Picture, Nothing Has Changed

The market is still reacting to yesterday’s news about the approved sale of the Silk Road funds. Donald Trump has yet to comment on the situation or indicate how he plans to respond if the current administration proceeds with the sale. The question remains whether the funds have already been sold, are still being sold, or if the process has yet to begin.

Bitcoin had already begun selling off before this week’s news, alongside the U.S. equity market, due to better-than-expected macroeconomic data in the U.S. that dampened hopes for rate cuts in 2025.

So, what does this mean for the crypto market? It seems macroeconomic factors are back in focus, so attention should turn to data releases such as today’s Nonfarm Payrolls and Unemployment Rate from the U.S., which are likely to impact U.S. equities and the crypto market.

Regarding the Silk Road funds, we’ll need to wait for Donald Trump to address the current situation and watch for further developments. There’s still a lot of uncertainty about what’s truly happening.

Additionally, some money will flow back to crypto holders through FTX repayments in the coming two months, potentially offsetting some of the selling pressure from the Silk Road funds. The big question is: What will reimbursed users choose to do with their funds? Will they buy bitcoin? Memecoins? AI Agents? Or will they avoid crypto altogether? These are still open questions.

Looking at the bigger picture, nothing has fundamentally changed. Seasonality favors the bulls, the halving cycle supports bullish momentum, and the year following a U.S. election has historically been a very positive year for crypto. Furthermore, the potential for Donald Trump’s inauguration to trigger a "sell the news" event has diminished given recent price action.

While there is potential for more short-term pain in the crypto markets, the factors mentioned above suggest there could also be room for positive developments in the spring.

Below, you can find some of the key data releases and events to watch out for next week.

Today, Friday, 10 January 2025

• U.S. – Nonfarm-Payrolls
• U.S. – Unemployment Rate

Tuesday, 14 January 2025

• Switzerland – PPI
• U.S. – Core PPI, PPI

Wednesday, 15 January 2025

• Europe – Various Inflation Data
• U.S. – Core CPI, CPI
• Japan – PPI

Thursday, 16 January 2025

• U.K. – GDP
• Europe – Various Inflation Data
• U.S. – Initial Jobless Claims
• China – GDP
• China – Unemployment Rate

Friday, 17 January 2025

• Eurozone – Core CPI, CPI