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This Week’s Top Stories
“DOJ says $9 Billion in bitcoin stolen in 2016 hack should be returned to Bitfinex.” – Wednesday, 15 January 2025
- Back in 2016, the infamous exchange Bitfinex was hacked for roughly 120’000 BTC. This week, the U.S. Department of Justice announced that all the recovered BTC from the hack should be returned to Bitfinex. Of the 120’000 BTC, a total of 94’643 were recovered and will now likely be returned to Bitfinex. At today’s prices, the total value of these BTC is over $9.5 billion.
- It’s important to note that Bitfinex publicly communicated in 2019 that they intended to sell 80 percent of the recovered BTC to buy and burn LEO over a period of approximately 1.5 years. This could create potential sell pressure of 75’000 BTC on the market. While it remains unclear when the BTC will be returned to Bitfinex, it’s worth keeping this in mind once they are.
“Trump plans to designate cryptocurrency as a national priority.” – Friday, 17 January 2025
- Donald Trump is expected to sign an executive order designating crypto as a national priority that could come as soon as he re-enters office this coming Monday, 20 January 2025.
- Bloomberg reported that the order would direct regulatory agencies to collaborate with the crypto industry. It may also establish a crypto council to advocate for the industry’s policy interests.
- Similarly, the New York Times reported on 16 January that several crypto executives had provided input to Trump’s crypto czar, David Sacks, regarding an executive order covering various areas of crypto policy.
- This week, the Washington Post revealed that Trump is expected to sign executive orders on Inauguration Day addressing crypto de-banking and repealing a bank accounting policy that mandates banks holding crypto to list digital assets as liabilities.
- Reuters wrote on Wednesday that Trump’s new SEC leadership will likely begin to reverse and change the agency’s cryptocurrency policies as early as next week, potentially freezing some enforcement actions.
“Treasury yields continue to slide as inflation fears ease.” – Thursday, 16 January 2025
- U.S. Treasury yields fell sharply on Wednesday, with the 10-year yield dropping 13 basis points and the 2-year yield declining by 10 basis points. The decline followed the release of December’s U.S. inflation data.
- While U.S. inflation increased in December, the year ended with some encouraging signs, particularly in the housing sector, as annual core CPI data came in lower than expected (3.2 percent vs. 3.3 percent).
- Christopher Waller of the Federal Reserve commented that he believes rate cuts could be possible in the coming months, as the December CPI data suggests PCE will be closer to the Fed’s target for the sixth time in the past eight months.
A Quick Crypto Overview: A Rough Start To A Wild Week
Last week, we emphasized the importance of the $3 trillion level for total crypto market capitalization. On Monday, the market bottomed out at exactly that level, retesting the 2021 cycle high during a sharp crypto dump. Bitcoin briefly traded below $90’000, while Ethereum dipped under $3’000.
This selloff was likely triggered by panic in the U.S. stock market over the weekend, which intensified during low liquidity conditions when futures opened on Sunday and culminated at Monday's cash open. Crypto mirrored the stock market's movements, experiencing major declines before finding a bottom and starting to recover.
Better-than-expected inflation data midweek provided much-needed positive momentum for both equities and crypto. The S&P 500 is up over 2.5 percent for the week, and Bitcoin is trading just below $102’000 at the time of writing.
Donald Trump’s Inauguration Day on Monday adds another layer of anticipation. High expectations surround the possibility of an executive order benefiting crypto markets.
As the chart below shows, Bitcoin made a new lower low this Monday, surpassing the December 30 low. The question now is whether it can achieve a higher high above the January 7 high of $102’735 – a positive signal for market structure – or if the Inauguration will disappoint, leading to a “sell the news” event.
In the case of a “sell the news”, it remains to be seen whether bitcoin is able to achieve a higher high before the Inauguration, to then potentially put in a higher low next week. Or whether bitcoin makes a lower high now and would then look for a lower low afterwards.
