January 21, 2025

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Trading Desk Insights

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After President Donald Trump's inauguration, the bullish investor sentiment towards cryptocurrencies has tempered, as there were no immediate plans introduced for the market. The newly launched "Official Trump" token, which tracks the new U.S. president, saw a sharp drop of up to 35% following his speech, while Bitcoin (BTC) also experienced a 5% dip before slowly recovering. However, Trump has previously hinted at potential crypto-friendly policies, including a regulatory framework and the establishment of a Bitcoin reserve. Polymarket now estimates a 34% probability of Trump unveiling a Bitcoin reserve within his first 100 days, a decrease from nearly 50% just a day ago.

Risk assets, including BTC and equities, saw a rally as the market interpreted Trump's initial remarks and actions on international trade as less aggressive than anticipated. Trump mentioned the possibility of 25% tariffs on Mexico and Canada starting February 1, linked to their border policies.

In the options market, expectations for short-term volatility are rising, with increased demand for BTC calls relative to ETH calls. This surge may be driven by several factors, including MicroStrategy’s shareholder vote today, which could authorize more shares to support its Bitcoin acquisition strategy. Additionally, MicroStrategy is set to report Q4 2024 earnings on February 4. Furthermore, the Bank of Japan (BOJ) is expected to raise interest rates on Friday, which could introduce volatility across risk assets.

The U.S. is nearing the $36 trillion debt ceiling, with the Treasury planning to implement extraordinary measures, potentially involving a drawdown of the Treasury General Account. This could support risk assets, including Bitcoin.

Meanwhile, the Department of Government Efficiency’s website now features the Dogecoin logo, fueling a recent uptick in DOGE prices.

MicroStrategy continues to aggressively expand its Bitcoin holdings, purchasing 11,000 BTC for $1.1 billion, marking its eleventh consecutive week of acquisitions.

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The News Room

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MicroStrategy Votes to Boost Share Issuance for Bitcoin Acquisitions

MicroStrategy shareholders have approved amendments to increase the number of authorized Class A common stock and preferred stock, supporting the company's "21/21 plan" to raise funds for further Bitcoin acquisitions. This decision enables MicroStrategy to expand its pool of shares available for sale, with approximately $5.42 billion still accessible toward its $42 billion target for building a Bitcoin treasury reserve. The move aligns with recent actions, including the company's purchase of another 11,000 BTC for about $1.1 billion, which brings its total holdings to 461,000 BTC valued at over $48 billion.

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Osprey and Rex File to Launch ETFs Tracking Trump's Memecoin, XRP, BONK, and Other Tokens

Osprey Funds and Rex Shares have filed for seven new ETFs—including offerings tracking President Trump’s memecoin, Ethereum, Bitcoin, SOL, XRP, and BONK—just a day after Trump’s inauguration. The registration, filed under the Investment Company Act of 1940, seeks SEC approval for funds structured to hold a mix of derivatives, assets, and Cayman subsidiaries, reflecting expectations of a more crypto-friendly administration. These innovative proposals, such as the REX-Osprey TRUMP ETF aimed at mirroring the performance of the TRUMP asset, signal issuers pushing the envelope with novel structures and controversial assets, testing how the new SEC leadership will handle these unique fund configurations.

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Dogecoin Logo Appears on New Department of Government Efficiency Website

The newly launched Department of Government Efficiency (DOGE) website prominently features the Dogecoin logo, aligning with its playful namesake and signaling a nod to the cryptocurrency culture. This coincides with reports that Elon Musk, a known Dogecoin enthusiast and Trump supporter, is now reportedly in sole charge of the department—a unit established under President Trump to streamline government operations through an entrepreneurial approach. Initially co-led by Musk and crypto advocate Vivek Ramaswamy, who now plans a gubernatorial run in Ohio, the department’s branding and leadership underscore its unconventional strategy to cut bureaucracy and promote efficiency while embracing the humor and community spirit associated with Dogecoin.

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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.

The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.

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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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