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A new report by asset manager Fidelity predicts that in 2025, governments around the world will begin investing in Bitcoin, marking a significant shift in their approach to the cryptocurrency. Historically, many nations have been hesitant to include Bitcoin in their reserves due to its volatility and regulatory uncertainties. However, with Bitcoin's recent price surge past $100,000 and the incoming pro-crypto administration of President-elect Donald Trump, the landscape is changing. Fidelity suggests that countries might start buying Bitcoin to hedge against financial instability, similar to how they use gold reserves. This could lead to Bitcoin being recognized as a legitimate store of value, potentially driving up its price. El Salvador has already set a precedent by adopting Bitcoin as a reserve asset. Additionally, Trump's support for the BITCOIN Act, which proposes the U.S. Treasury to acquire one million Bitcoin, could influence other nations to follow suit. However, the report notes that governments might keep their Bitcoin purchases secret to avoid influencing market prices.
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Investors pulled out substantial sums from U.S.-listed spot bitcoin and ether ETFs on Wednesday, driven by macroeconomic uncertainties and fears of inflation. The bitcoin ETFs saw a combined net outflow of $582 million, the second-highest since their launch, with Fidelity's FBTC and BlackRock's IBIT experiencing significant withdrawals. Ether ETFs also faced outflows amounting to $159.3 million, the largest since late July. These withdrawals are linked to recent volatility in the bond market and concerns over inflation, particularly following the Federal Reserve's minutes which hinted at a potential slowdown in policy easing. Despite the current downturn, some market analysts like Valentin Fournier from BRN remain hopeful, anticipating a market recovery following the release of the U.S. nonfarm payrolls report on Friday, which could provide insights into the economic health and potentially stabilize or boost investor confidence in digital assets.
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Cardano's ADA was among the major cryptocurrencies experiencing significant losses on Thursday, as bitcoin's ongoing weakness continued to suppress any potential rally in altcoins. Bitcoin's price dipped to nearly $93,000 following a surge in U.S. treasury yields, triggered by a stronger-than-expected ISM report on U.S. service providers. This economic data led to a broader market downturn, with other major tokens like Solana’s SOL, BNB Chain (BNB), and ether (ETH) also seeing declines of nearly 10% since Monday. The CoinDesk 20 index, which tracks the largest tokens, fell by an additional 2.87% in the last 24 hours after a 7% drop the day before. The market's cautious stance is further reflected in the increased downside risk indicated by S&P 500 options, potentially dampening the appeal of risk assets like bitcoin. Market observers are now focusing on upcoming economic data releases and the implications of President-elect Donald Trump's inauguration, which could either fuel optimism or lead to profit-taking in the crypto market.
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The recent drop in Bitcoin's price from $100,000 to $92,000 has raised concerns about the end of its bull run, especially with unconfirmed reports that the Department of Justice might liquidate 69,370 BTC seized from the Silk Road. This news comes close to President-elect Donald Trump's inauguration, who has promised not to sell the government's remaining 187,236 BTC. However, the market might not be as affected as feared. The market has already absorbed over 1 million BTC since September without a significant price drop, suggesting resilience. Moreover, historical data from the German government's sale of 50,000 BTC in 2023 indicates that such government sales do not necessarily control market trends, as the market had already adjusted to the news before the sales were completed. This suggests that the current market might have already priced in the potential DOJ sell-off, potentially mitigating its impact.
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The article discusses the performance and potential of two leading meme cryptocurrencies, Dogecoin and Shiba Inu, in the context of the recent bull market. Dogecoin has experienced a remarkable 268% increase in value over the past year, boasting a market cap of nearly $50 billion, making it the seventh-largest cryptocurrency. Shiba Inu, while also showing significant growth with a 114% rise, has a market cap of just under $13 billion, ranking 15th. Both tokens, inspired by the Shiba Inu dog breed popularized by memes, are competing for dominance in the meme coin market. Dogecoin's advantage lies in its established history, significant market cap, and the influential support from Elon Musk, who might further promote it through his involvement in the new Department of Government Efficiency (DOGE). Conversely, Shiba Inu offers a lower entry price and potential for higher percentage gains due to its smaller market cap. Additionally, Shiba Inu is enhancing its ecosystem with projects like Shibarium and a metaverse, which could provide fundamental growth opportunities. The article concludes that while Dogecoin might outperform Shiba Inu in 2025 due to Musk's influence, investors should consider broader market dynamics and not base decisions solely on short-term predictions.
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Eden Gallery is defending itself against a class-action lawsuit from 36 NFT holders of the "Meta Eagle Club" collection, arguing that any losses incurred by the plaintiffs are due to market forces rather than fraud or misrepresentation. The gallery, in a motion to dismiss filed in a New York federal court, stated that the NFTs were a digital art product, not an investment, and that the market for NFTs has generally declined since the collection's launch in early 2022. The Meta Eagle Club NFTs, which initially sold for around $1,800 each, are now trading at about $17. The plaintiffs allege that they overpaid due to misrepresentations by the gallery and are seeking damages. However, Eden Gallery contends that the claims do not meet the necessary jurisdictional threshold for aggregation and should be dismissed. Despite a recent uptick in NFT sales, the sector remains significantly down from its peak in early 2022.
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The article discusses the current state of Dogecoin (DOGE), highlighting a significant decline in social media activity and sentiment around the cryptocurrency, which could present a buying opportunity for traders. According to Santiment, Dogecoin's crowd sentiment is at a near-year low, rated as "bearish" with a score of 1 out of 5. Despite this, there's an optimistic outlook for Dogecoin, with potential for substantial gains if the broader crypto market sees an upturn. Dogecoin has lost 28% of its market cap since its peak a month ago, trading at $0.34 at the time of publication. Other memecoins like Shiba Inu and Pepe have also seen declines. However, traders and analysts are hopeful, predicting Dogecoin could be among the top performers in 2025, with some even suggesting it could reach between $3 and $5 based on market indicators. This optimism comes amidst a backdrop of reduced public interest, as evidenced by a significant drop in Google searches for Dogecoin following the U.S. presidential election and the withdrawal of a lawsuit against Elon Musk related to Dogecoin price manipulation.
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US President-elect Donald Trump has intensified his rhetoric regarding the integration of Canada into the United States, suggesting the use of economic rather than military force. During a press conference, Trump highlighted the potential benefits of removing the border between the two nations, citing national security and economic advantages. He claimed that the US subsidizes Canada to the tune of $200 billion a year, although the actual trade deficit was significantly less at $40.6 billion in 2023. In response, Canadian Prime Minister Justin Trudeau dismissed the notion outright, with over 80% of Canadians opposing the idea according to polls. Trump's comments have sparked discussions in Canada about retaliatory measures, including potential export taxes on uranium, oil, and potash. Amidst this tension, Trudeau announced his resignation, citing insufficient support within his party, while other Canadian political figures like Foreign Minister Melanie Joly and Conservative Party Leader Pierre Poilievre have also voiced strong opposition to Trump's proposal. The situation has led to a notable drop in the Canadian dollar's value against the US dollar.
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The U.S. labor market showed signs of stability at the beginning of the year with a decrease in new unemployment claims to 201,000 for the week ending January 4, contrary to economists' expectations. This drop suggests that layoffs remain low, supporting the broader economy. However, the report also highlighted challenges for some laid-off workers in securing new jobs, with an increase in the number of people receiving ongoing unemployment benefits. The Federal Reserve, amidst uncertainties from President-elect Donald Trump's proposed economic policies, is likely to maintain current interest rates in January. Trump's plans include tax cuts, tariffs on imports, and immigration enforcement, which could lead to inflation. Despite the Fed's recent rate adjustments to combat inflation, the labor market's resilience might allow for a cautious approach to further rate changes. The upcoming employment report for December is anticipated to show a job increase of 160,000, with the unemployment rate holding steady at 4.2%.
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Federal Reserve Governor Chris Waller expressed his support for cutting interest rates in 2025, anticipating that inflation will continue to trend towards the Fed's 2% target despite potential new tariffs from the Trump administration. Speaking in Paris, Waller highlighted the uncertainty surrounding the economic impact of these tariffs but suggested that if their effect on inflation is not significant, they would not alter his view on monetary policy. He emphasized the need to observe the actual policies implemented before making any definitive decisions. Waller also noted that the US economy remains robust, with no immediate signs of a weakening labor market, although he expects a gradual cooling in job growth. The next significant data point will be the labor market update for December, with expectations of steady unemployment at 4.2%. Waller's comments come amidst a backdrop of cautious optimism from other Fed officials, who are also monitoring inflation closely as they prepare for their next meeting following Trump's inauguration.
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The article discusses the growing interest in including cryptocurrencies like bitcoin in 401(k) retirement plans, despite skepticism from investment advisors due to the assets' volatility. The SEC's approval of spot bitcoin and ethereum ETFs in 2024 has been a pivotal moment for the crypto industry, with funds like the iShares Bitcoin Trust ETF seeing significant asset growth. President-elect Donald Trump's proposal to establish a strategic bitcoin reserve and his nomination of a crypto advocate to the SEC further signal potential mainstream acceptance. However, the Labor Department has urged caution, advising fiduciaries to consider the high risk associated with crypto investments. Financial advisors are divided; some see crypto as a beneficial non-correlated asset class for diversification, while others warn of the increased risk it poses to retirement savings. The article also notes that nearly 40% of 401(k) plans now offer brokerage windows, allowing for more investment flexibility, including in cryptocurrencies. Despite these developments, the consensus remains cautious, with recommendations for limited exposure to crypto in retirement portfolios.
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Fidelity Digital Assets' recent research report highlights a pivotal year for bitcoin in 2025, predicting a surge in its acceptance and adoption by various global financial entities. The report suggests that macroeconomic issues like inflation and fiscal deficits make not investing in bitcoin riskier than investing. It points out that influential U.S. political figures, including President-elect Donald Trump and Senator Cynthia Lummis, have expressed interest in creating a strategic bitcoin reserve, with Lummis introducing the "Bitcoin Act of 2024" to the Senate. If the U.S. moves forward with this plan, it could trigger a domino effect, compelling other nations to adopt similar strategies to avoid being left behind in the global financial landscape. The report also notes that several countries, including the U.S., China, and El Salvador, already hold significant amounts of bitcoin, primarily from government seizures related to criminal activities. This trend could lead to a significant increase in bitcoin's value as more nations and institutions look to secure their financial positions through cryptocurrency.
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MicroStrategy (MSTR), a company known for its bitcoin development, stands out in the equity market due to its high volatility and trading volume. Despite its market cap being less than $100 billion, MSTR's daily trading volume is comparable to that of the top tech giants, averaging nearly 24 million shares daily, placing it sixth among these companies. This volume surpasses even Microsoft and META, with NVIDIA leading the pack. Over the period from December 2, 2024, to January 7, 2025, MSTR has shown a year-to-date increase of about 14%. Its 30-day implied volatility (IV) stands at 104, significantly higher than that of iShares Bitcoin Trust (IBIT) at 60, indicating MSTR's greater expected price movement. This volatility is the highest among the magnificent seven tech stocks, with Tesla coming in second with an IV of 71.0. This data underscores MicroStrategy's unique position in the market, combining high volatility with substantial trading interest.
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In 2024, Dogecoin experienced a phenomenal 250% increase in value, outpacing other prominent cryptocurrencies like XRP, Bitcoin, and Ethereum. This surge was largely attributed to Donald Trump's crypto-friendly campaign and his subsequent victory in the U.S. presidential election, which led investors to anticipate a more supportive regulatory environment for cryptocurrencies. Elon Musk, a known Dogecoin enthusiast, further fueled the rally by supporting Trump's campaign and being involved in the announcement of a "Department of Government Efficiency" (DOGE) initiative, although the connection to Dogecoin was more symbolic than substantive. Despite reaching a 52-week high of $0.47, Dogecoin's price remains well below its all-time peak, reflecting investor caution. The cryptocurrency's lack of real-world utility and its dependence on speculative trading rather than organic demand highlight its volatile nature. While there's potential for Dogecoin to hit $1 per token in 2025, its long-term value remains questionable due to the absence of solid fundamentals.
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The crypto market has seen a swift shift to bearish sentiment, driven by a head-and-shoulders topping pattern in Bitcoin and the S&P 500, which coincides with changes in market dynamics post-U.S. election. The MOVE index, which tracks expected volatility in the U.S. Treasury bond market, has been rising, signaling tighter financial conditions and triggering risk aversion across financial markets. This uptick in the MOVE index, particularly after stronger-than-expected manufacturing data, has led to higher Treasury yields, with the 30-year note reaching its highest yield since November 23, and the 10-year note since May. This has directly impacted both Bitcoin, which fell 5% to $96,900, and the S&P 500, which saw a decline of over 1%. The market's bullish trend post-election lost steam in mid-December as the MOVE index bottomed out, suggesting that the stability of the Treasury market is crucial for a bullish turnaround in risk assets. Currently, with the MOVE index on an upward trend, the completion of bearish reversal patterns in both Bitcoin and the S&P 500 seems likely.
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Hyperliquid's airdrop of its HYPE token has been hailed as the most lucrative in crypto history, distributing 28% of its supply to early users, now valued at over $7 billion. The project's strategy of excluding venture capitalists and focusing on community engagement has been pivotal in its success, creating a significant demand for HYPE tokens post-launch. Analyst Jae Sik Choi highlighted the role of the HYPE Assistance Fund in maintaining price stability through daily token buybacks. However, experts caution that replicating Hyperliquid's success is not straightforward due to the unique market conditions and the project's focus on rewarding early and loyal users. Despite its achievements, Hyperliquid encountered security issues with North Korean hackers testing the platform, raising concerns about centralization and potential vulnerabilities. The platform's approach to tokenomics and its product's high throughput and low fees have set it apart from competitors, although the sustainability of such strategies remains under scrutiny.
