Anticipating 2025
2025-01-17
Category: None

Happy new year, traders! A few year-end wobbles not withstanding, Bitcoin has remained steadily within, or just above, the $100k price range over the past weeks. Bears briefly pushed Bitcoin below $90k but the dip was slurped up quickly and Bitcoin bounced upwards. Just as in the summer of 2024, when it was clear that Bulls had run out of steam, the same can be said of Bears in this moment in time. For now, Bulls remain at the wheel.

As Bitcoin builds up momentum before hopefully going on the next leg of its cycle growth, the stage is open and capital available for Altcoins to have their moment. So-called 'Boomer Coins' including Litecoin, XRP and others have rallied 30-40%+ over the past week alone. On the other end of the spectrum, memes, AI agent coins in particular, have seen parabolic growth. Market participants are chasing the 'next' pump narrative. But none of the typical 'top' indicators have yet been hit. The Coinbase app is not number 1 in the App Store just yet.

From a regulatory perspective, traders are positioning themselves for the incoming pro-crypto Trump administration. As SEC chairman Gary Gensler is handing in his resignation on January 20th, a new crypto-friendly SEC chair, Paul Atkins, is poised to take over once confirmed by the Senate. This will mark a major step-change from an SEC that brought at least 83 enforcement actions against crypto companies such as Coinbase or Uniswap.

Macro-wise, the outlook is more mixed. On the one hand, latest US inflation readings have come in soft. That keeps the door open for further Federal Reserve rate cuts this year. On the other, both retail sales and job data came in below expectations underperforming. The impact of possible Trump tariffs on the economy and trading partners such as China, Mexico and the EU is a great unknown that spooks markets. In a worst case scenario, tariffs could hurt partner exports which would result in an overall economic backlash for everyone.

Nonetheless, crypto is entering the 2nd year of its Boom Market cycle with more cause for optimism. The regulatory uncertainty is slowly lifting. Institutions including giants such as Blackrock have embraced crypto markets. Beyond the usual noise of crypto markets, Blockchain technology is improving. Areas such as performance, encryption, interoperability and User experience are starting to reach a point where actual adoption becomes feasible. There is certainly a lot to look forward to in 2025. May we all have a great year ahead of us.