Building Blocks #37

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Birds Eye View (vs Last 7 Days)

💵 Overall Crypto Market Cap: $3.4 Trillion (+2.7%)

🔶 BTC Dominance: 53.7% (-1 PPT)

💵 Price Snapshot:

🟠 Bitcoin: $96422 (0.03%)

🔵 Ethereum: $3443 (+1.44%)

⚫ XRP: $2.42 (+10.4%)

🟣 Solana: $210 (+10%)

2025 will be crypto’s best year ever — Steno Research

Anticipate 2025 to be the most successful year in cryptocurrency history, with Bitcoin and Ether breaking through previous record highs, alongside other potential "significant market breakthroughs," Steno Research indicated in their analysis.

Steno Research forecasts BTC and ETH spot values will exceed $150,000 and $8,000, respectively. The research team also expresses "growing confidence in an upcoming altcoin rally," according to their December analysis report.

The optimistic BTC and ETH price targets stem from "an exceptionally favorable regulatory landscape for cryptocurrencies, a conducive macroeconomic environment characterized by lower interest rates and enhanced liquidity, and the traditionally strong performance following Bitcoin halving," the study noted.

Steno projects BTC and ETH exchange-traded funds (ETFs) will attract net investments of $48 billion and $28.5 billion, respectively, in 2025.

Ether is expected to demonstrate exceptional performance in 2025, substantially outpacing Bitcoin, Steno indicated. The firm projects the ETH/BTC ratio to reach "minimum 0.06" in 2025. This represents nearly twice the present level of roughly 0.035, based on TradingView data.

This development will trigger a wider alternative cryptocurrency — or "altcoin" — surge in 2025, with Bitcoin's market dominance falling from its current position of approximately 57% to about 45%, the report states.

Bitcoin dominance indicates BTC's share of the total cryptocurrency market capitalization.

Steno's forecast "partially relies on the assumption that Donald Trump's U.S. presidential win creates better conditions for altcoins compared to Bitcoin."

Trump's administration "promotes increased onchain activity, particularly benefiting altcoins like Ethereum and Solana," Steno noted.

The total value locked (TVL) in decentralized applications is predicted to surpass $300 billion in 2025, significantly exceeding 2021's peak of around $180 billion, according to the analysis. Other entities, including asset manager Grayscale, share similar optimism. Grayscale recently incorporated several decentralized finance (DeFi) protocols, including two on Solana, into its top 20 tokens watchlist for 2025's first quarter.

Grayscale highlighted the improving US regulatory climate as a crucial element. Trump has committed to appointing crypto-friendly officials to key regulatory positions and transform the US into "the world's crypto hub."

"In the US, following Trump's victory, I maintain strong bullish sentiment about the US becoming a global industry leader by year-end," Raj Brahmbhatt, CEO of Web3 settlement platform Zeebu, stated during an interview.

Stablecoin adoption, ETFs to propel crypto performance in 2025: Citi

Digital asset performance in 2025 will be driven by increasing stablecoin adoption and cryptocurrency exchange-traded fund (ETF) growth, according to a Citi research report released on Dec. 26.

Following President-elect Donald Trump's victory in the United States presidential election in November, there was a notable increase in crypto ETF inflows, blockchain activity, and stablecoin usage, with these indicators maintaining their elevated levels as the year ends, Citi noted.

"For crypto's long-term performance, adoption remains the most crucial factor to monitor," the report stated.

The report emphasized that crypto ETF inflows deserve special attention since they "typically represent fresh capital and new participants entering the crypto market" more than other trading activities.

These inflows significantly impact price movements, particularly for Bitcoin.

During 2024, BTC ETF inflows were responsible for "~46% of BTC price movement variance, with each $1bn in inflows generating approximately 4.7% returns," according to the asset manager.

Bloomberg Intelligence data showed that US Bitcoin ETFs broke $100 billion in net assets for the first time on Nov. 21.

Asset manager Sygnum Bank predicted in December that rising institutional investments could trigger positive "demand shocks for Bitcoin, potentially driving BTC prices higher in 2025.

Blockchain activity has also intensified, especially regarding stablecoins, which could be a major performance catalyst next year.

Post-Trump election victory, stablecoin market caps surged significantly. The top three stablecoins – Tether's USDt, USD Coin, and Dai – saw their combined market caps grow by over $25 billion, Citi reported.

This trend particularly benefits decentralized finance (DeFi), since "stablecoins serve as the gateway to decentralized finance," the report noted.

Additional on-chain metrics show strong growth. Ethereum network activity, including layer-2 scaling solutions, has increased 210% compared to 2023 averages, according to Citi.

Citi also reported a modest increase in both large and small crypto wallet numbers since the November US election.

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Franklin Templeton predicts Bitcoin reserves to expand globally in 2025

Investment giant Franklin Templeton anticipates several countries will incorporate Bitcoin into their strategic reserves in 2025, as outlined in their digital assets forecast.

The firm released its predictions for the upcoming year on Dec. 30, highlighting its belief that multiple nations will add Bitcoin [BTC$96,534] to their reserves. Franklin Templeton predicts Bitcoin will cement its role as a global digital store of value asset. The company suggests this transition will gain momentum through both institutional and government adoption.

Although Franklin Templeton didn't specify which nations might establish Bitcoin reserves, they anticipate a transformation from speculative interest to practical application in 2025. The investment firm believes cryptocurrency's underlying technology will become essential components of worldwide financial infrastructure next year.

Hong Kong Legislative Council member Wu Jiexhuang suggested incorporating Bitcoin into national reserves on Dec. 30, citing financial stability benefits. He referenced smaller countries such as El Salvador and Bhutan, which have already implemented Bitcoin reserves, as models for Hong Kong to consider.

Jiexhuang highlighted the significance of spot Bitcoin ETF approvals in the United States this January, noting increased institutional participation. He referenced US President-elect Donald Trump's suggestion to designate Bitcoin as a strategic reserve asset and its potential effects on conventional markets.

Industry leaders like Strike's CEO Jack Mallers suggest Trump might implement an executive order to establish Bitcoin as a US reserve asset.

In parallel developments, Germany's Free Democratic Party (FDP) has shown support for adopting Bitcoin as a reserve asset.

The party's 2025 election manifesto endorses distributed ledger technology implementation and recommends that both the European Central Bank and German Bundesbank evaluate Bitcoin as a means to enhance European monetary system stability.

Christian Lindner, who previously served as Germany's finance minister and FDP leader, expressed disappointment in the German government's failure to capitalize on cryptocurrency opportunities and innovations.

Lindner mentioned he hadn't encountered any talks regarding a crypto-positive stance being adopted in the US, and how Germany might benefit from Bitcoin's potential advantages. The former finance minister labeled this oversight a "mistake," stressing that they're failing to capitalize on this prospect.

Odds of 2025 US Solana ETF listing top 77%: VanEck Research Head

The likelihood of a Solana exchange-traded fund (ETF) launching in the United States this year exceeds the already positive predictions of a leading betting platform, according to VanEck's head of research Matthew Sigel.

Cryptocurrency forecasting site Polymarket indicated on Jan. 1 that there's a 77% chance of a US Solana ETF debut in 2025. Sigel took to X platform to suggest that Polymarket's estimate was actually "underpriced."

This confidence aligns with broader market expectations for increased crypto ETF approvals in the US following President-elect Donald Trump's electoral victory in November. Trump, known for his pro-cryptocurrency stance, has expressed his vision of transforming America into "the world's crypto capital."

Prediction platforms enable users to trade event-linked contracts, with prices shifting continuously based on anticipated results. According to its website, Polymarket's projected ETF approval probability rose to roughly 84% by Jan. 2.

Asset managers VanEck and 21Shares submitted applications to US regulators in June seeking approval for spot Solana ETFs.

The US Securities and Exchange Commission reportedly questioned these proposals in August, citing concerns SOL qualified as a security instead of a commodity.

Bitcoin and Ether ETFs — currently the sole cryptocurrency ETFs permitted on US exchanges — utilize a distinctive "grantor trust" framework typically reserved for funds passively holding single commodities. Success may depend on proposed Solana ETFs adopting comparable structures, according to issuers.

Market experts interpret Trump's presidential victory as a positive signal for numerous pending crypto ETF applications awaiting US regulatory clearance.

Following Trump's November election win, Sigel reportedly indicated that US approval chances for a SOL ETF in 2025 had become "overwhelmingly high."

Polymarket leads cryptocurrency betting platforms, recording nearly $2 billion in December trading volume, based on Dune Analytics data.

Betting platforms demonstrated superior accuracy compared to conventional polls during November's US elections, correctly predicting both Trump's victory and his party's control of the House and Senate.

Betting participants anticipate 2025 will mark a milestone year for cryptocurrency markets, predicting record highs for BTC and ETH alongside multiple new crypto ETF launches in the US.

Decentralized exchange volume hits record high of $462B in December

Decentralized exchanges (DEXs) achieved an unprecedented milestone in December, with monthly trading activity reaching $462 billion, as reported by decentralized finance (DeFi) analytics platform DefiLlama.

Statistics released on Dec. 30 showed that December marked the highest monthly DEX volumes ever recorded, building on November's strong performance.

In November, the DeFi sector generated a monthly volume of $374 billion, fueled by expectations of improved regulatory conditions in the United States following Donald Trump's victory in the US presidential election.

Uniswap maintained its position as the dominant DEX by trading volume, achieving $106.4 billion in the last 30 days, according to DefiLlama. PancakeSwap claimed the second position with $96.4 billion in monthly transactions.

Solana's premier DEX Raydium secured third place after processing $58 billion in trading volume over the past 30 days. This increase coincided with revenue growth in Solana's decentralized applications (DApps) during November.

On Dec. 17, analytics firm Syndica revealed that Solana-based DApps generated revenue of $365 million in November, primarily attributed to memecoins launched on the Solana memecoin platform Pump.fun.

Aerodrome and Orca secured the fourth and fifth positions, respectively. Aerodrome processed $31 billion in volume, while Orca reached $22 billion. Lifinity, Curve Finance, and Hyperliquid collectively handled $43.6 billion in transactions.

Despite rising DeFi trading volumes, the memecoin sector experienced a significant downturn in December. CoinMarketCap data indicates that the total memecoin market value surged early in December before declining.

On Dec. 9, memecoins reached $137 billion in market capitalization. However, by Dec. 23, the total value of meme-based tokens had decreased by $45 billion to $92 billion. Currently, the total market capitalization for memecoins stands at $95 billion, 20% below its Dec. 1 value.

The initial December surge was primarily attributed to increased activity from US-based trading platforms listing memecoins and Pepe reaching a new all-time high.

BlackRock’s Bitcoin ETF tops rivals in 2024 net inflows

BlackRock's spot Bitcoin BTC$96,416 exchange-traded fund (ETF) accumulated over $37 billion in net inflows throughout 2024, surpassing all other competitors, based on Farside Investors' analysis.

The iShares Bitcoin Trust (IBIT) from BlackRock generated more than triple the inflows compared to the second-placed Fidelity Wise Origin Bitcoin Fund (FBTC), which drew nearly $12 billion in net inflows during the year, Farside reported in a December 31 X platform update.

BlackRock, being the largest global asset manager, also dominated the Ether ETH$3,444.69 ETF sector. Its iShares Ethereum Trust (ETHA) secured $3.5 billion in net inflows during 2024, Farside data showed.

The Fidelity Ethereum Fund (FETH) claimed the second position again, attracting $1.5 billion in net inflows.

"Fidelity maintains a stronger second position here, reaching 44% of BlackRock's total, versus 31% in Bitcoin," Farside noted.

Collectively, US Bitcoin ETFs amassed over $35 billion in total net inflows for the year. This translates to approximately $144 million in net inflows per trading day, Farside calculated.

This calculation includes over $20 billion in net outflows from Grayscale Bitcoin Trust (GBTC), which the company introduced in 2013, initially as a non-listed trust.

Grayscale's GBTC imposes management fees of 2.5%. The asset manager launched Grayscale Bitcoin Mini Trust (BTC) in July as a more affordable option, with annual management fees of 0.15%.

US regulators approved Bitcoin ETFs in January after prolonged negotiations.

The cryptocurrency market experienced a surge following Donald Trump's presidential election victory, as experts believe his win could benefit the sector, Cointelegraph Research indicated.

US Bitcoin ETFs surpassed $100 billion in net assets for the first time on November 21, according to Bloomberg Intelligence data.

Bitcoin has led the ETF market this year, representing six of the top 10 most successful launches in 2024, stated Nate Geraci, president of The ETF Store, in an X post.

Among roughly 400 new ETFs introduced in 2024, the four largest launches by inflows were all spot BTC ETFs, Geraci mentioned in September.

Weekly Merchandise Giveaway

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