January 13, 2025

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Trading Desk Insights

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Bitcoin opened the week at the $90,000 level, extending losses from the weekend as market sentiment remained bearish, driven by ongoing sell-offs in tech stocks. A stronger-than-expected jobs report on Friday boosted yields, which in turn pressured equities as investors reassessed the likelihood of further interest rate cuts by the Federal Reserve. Bank of America now points to increased risk for a potential rate hike, while Goldman Sachs has pushed back expectations for a rate cut to June from March. Rising bond yields have weighed heavily on growth stocks, with the 10-year Treasury yield hitting its highest level since late 2023. Equity futures also dipped on Monday, alongside a continued exodus from key tech stocks that had been major drivers of the bull market.

As always, keep a close eye on the Dollar Index (DXY) and the 10-year yield—market movements are increasingly sensitive to intraday fluctuations in these areas.

With the December Consumer Price Index (CPI) report set for release on Wednesday, any surprise in the data could further fuel the Fed’s hawkish stance.

In the meantime, MicroStrategy continues to accumulate Bitcoin, buying 2,530 BTC for $243 million in its 10th consecutive weekly purchase. The company’s holdings now total 450,000 BTC at an average price of $62,691 each.

Looking ahead to 2025, investor optimism about a pro-crypto Congress and White House has been a key driver for the market. However, the optimism is tempered by growing concerns that the first quarter of this year could bring more volatility than initially expected, particularly in the crypto space.

In other developments, Ondo (ONDO) is set to unlock a circulating supply valued at $2.19 billion on January 18th.

The News Room

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Tether Poised to Relocate to El Salvador After Securing DASP License

Tether, the world’s largest stablecoin issuer, is set to finalize its relocation to El Salvador after acquiring a Digital Asset Service Provider (DASP) license. The move leverages El Salvador’s favorable regulatory environment, forward-thinking digital asset policies, and a growing Bitcoin-savvy community, positioning Tether to support financial inclusion and scale its efforts in emerging markets. CEO Paolo Ardoino emphasized that relocating aligns with the company’s vision of financial freedom, innovation, and resilience, echoing similar strategic moves by firms like Bitfinex Derivatives. This decision comes as El Salvador continues to cement its status as a global digital asset hub, owning 5,750 Bitcoin as of May 2024, and plans to ease Bitcoin legal tender requirements.

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MicroStrategy Acquires Another 2,530 BTC for $243 Million, Holdings Now at 450,000 BTC

MicroStrategy acquired an additional 2,530 BTC for approximately $243 million at an average price of $95,972 per bitcoin between January 6 and 12, according to an SEC filing. This purchase follows the sale of 710,425 shares for the same amount and is part of the company’s ongoing strategy under its expanded "21/21" plan to raise $42 billion for further bitcoin acquisitions, including a potential $2 billion preferred stock offering. With this acquisition, MicroStrategy’s bitcoin holdings now total 450,000 BTC, valued at over $40 billion, acquired at an average price of $62,691 per bitcoin, representing around 2.1% of bitcoin’s total supply. This deal marks the tenth consecutive week of bitcoin purchases by the firm, which has amassed over $18 billion in bitcoin in the past ten weeks alone, despite investor concerns over its valuation premium to net asset value and its funding strategies.

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FDIC Vice Chair Urges More Open Approach to Crypto, Criticizes 'Choke Point-like Tactics'

FDIC Vice Chair Travis Hill called for a more open-minded approach to digital assets and clearer guidance for banks on engaging with crypto during a recent speech, addressing industry concerns that the FDIC had been discouraging crypto-related activities through "pause letters." He criticized the agency's previous case-by-case approach, which he argued stifled innovation and fostered a perception of being closed off to blockchain ventures, drawing parallels to "Operation Choke Point" tactics. Hill emphasized the need to end such restrictive practices, reassess the implementation of the Bank Secrecy Act to prevent banks from closing accounts out of fear of fines, and provide consistent regulatory clarity, while noting that the FDIC does not actively discourage financial institutions from working with crypto.

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Disclaimer

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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.

Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.

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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.

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