

Weekly crypto wrap: 16th January 2025
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State of crypto
- Bitcoin surges back in a remarkable reversal following light inflation data out of the US
- Trump’s strategic Bitcoin reserve could spark a global crypto arms race
- Bitcoin could drop 17% if key support level at US$90,000 is breached, warns Standard Chartered
- Bitcoin ETFs lead the market with 146% growth in 2024
- JPMorgan predicts altcoin ETFs could attract up to US$14 billion in inflows
Bitcoin surges back above US$100k in a remarkable reversal following light inflation data out of the US
Bitcoin staged a stunning recovery, briefly bouncing back above US$100,000, rising 4% after dipping below the US$90,000 support earlier in the week. The broader cryptocurrency market also saw a 5% increase, driven by light inflation data. The U.S. Bureau of Labor Statistics reported that the producer price index for December rose by only 0.2%, lower than the 0.4% increase economists had anticipated.
This positive inflation data helped bolster risk appetite across markets, including crypto, which has been grappling with economic concerns. The market remains torn between fears of rising inflation under President-Elect Donald Trump’s incoming administration and optimism about potential pro-crypto policies. Despite recent volatility, some analysts, like Fundstrat’s Tom Lee, predict Bitcoin could see further corrections, possibly dropping to US$70,000 before reaching new all-time highs, with year-end projections ranging from US$200,000 to US$250,000.
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Trump’s strategic Bitcoin reserve could spark a global crypto arms race
In his second term, Donald Trump’s controversial proposal to establish a strategic Bitcoin reserve (SBR) for the US could change the global economic landscape. The idea involves the US acquiring large amounts of Bitcoin, like the country's petroleum reserve. While some question the feasibility of such a plan, particularly within the US political system, the growing interest in cryptocurrencies from global powers signals that the shift away from traditional currency systems may already be underway.
The push for an SBR reflects broader trends that threaten the dominance of the US dollar. The rise of emerging economies, such as the BRICS+ countries, and the increasing role of decentralised private currencies could diminish the dollar’s global influence. If major nations, including the US, China, and Russia, begin accumulating Bitcoin, it could spark a global cryptocurrency arms race, with countries vying to boost their reserves.
These changes point to a larger shift in the global economic order, where cryptocurrencies and private money challenge state-controlled currencies. Trump's proposal may be a pivotal moment in this transformation, but the trends are already reshaping the financial system regardless of his plan’s success.
Bitcoin could drop 17% if key support level at US$90,000 is breached, warns Standard Chartered
Standard Chartered analysts warn that Bitcoin could experience a significant downturn if it falls below the crucial US$90,000 support level, with the cryptocurrency potentially dropping as low as US$80,000. A 17% decline from current levels could trigger forced or panic selling, exacerbating an ongoing sell-off. Economic factors, including rising interest rates, have contributed to the recent dip in Bitcoin's price, which is down over 10% from its all-time high of US$108,000. While there are bullish expectations surrounding President-Elect Donald Trump’s crypto-friendly policies, disappointment in their implementation could lead to further price pressure. Despite short-term volatility, analysts maintain a positive long-term outlook for Bitcoin, predicting it could reach US$200,000 by the end of 2025.
Bitcoin leads ETF market returns in 2024 with 146% growth
Bitcoin ETFs were the clear winners in 2024, topping the performance charts with a massive 146.5% return over the year, leaving US and global equities in the dust. This surge in Bitcoin-driven returns comes as the ETF industry itself hit record highs, with net flows reaching US$35 billion, more than doubling the previous record set in 2021.
However, the lion’s share of these flows, particularly in December, went to the top four issuers: Vanguard, Betashares, iShares, and VanEck, which together accounted for nearly 97% of ETF flows. As interest in international equities ETFs soared, Bitcoin's dominance in the market highlighted the growing influence of crypto-themed investments.
Looking forward, VanEck predicts continued growth for ETFs, with market capitalisation expected to top US$250 billion by Q1 2025 and US$300 billion by year-end.

Source: TheBlock.co
JPMorgan predicts altcoin ETFs could attract up to US$14 billion in inflows
JPMorgan analysts forecast that altcoin-based exchange-traded funds (ETFs) could draw up to US$14 billion in investment if approved by the U.S. Securities and Exchange Commission (SEC). The firm estimates that proposed Solana ETFs could attract US$3 billion to US$6 billion, while XRP ETFs could generate between US$4 billion and US$8 billion in inflows over the next six to 12 months.
The bank based its estimates on the adoption rates of existing Bitcoin and Ethereum ETFs. Bitcoin ETFs hold around US$108 billion, about 6% of the token’s market capitalisation, while Ethereum ETFs, which launched six months ago, have accumulated US$12 billion, roughly 3% of Ethereum’s market cap.
Despite Bitcoin’s dominance, JPMorgan sees potential for significant interest in altcoin ETFs, particularly Solana and XRP. However, the analysts raised concerns about investor demand for new crypto products and whether additional ETFs beyond Bitcoin and Ethereum would gain traction.
The push for altcoin ETFs has gained momentum, especially under the incoming administration of President-Elect Donald Trump, whose pro-crypto stance could accelerate regulatory approvals. While regulatory hurdles remain, JPMorgan expects more ETF applications to be filed and potentially approved in 2025.
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Crypto Fear & Greed Index

Source: Fear & Greed Index
BTC Markets in the news
Stockhead: Bitcoin could surge to $US250,000 in 2025 under favourable policies from Donald Trump
Caroline Bowler, CEO of Australian crypto trading exchange BTC Markets, said macroeconomic conditions around interest rates could be a potential shock factor to markets this year.
“Risks here would be any macroeconomic shock pulling up liquidity around the world, or if interest rates remain high or increase. Both events would trim available capital for crypto investment.”
Ms Bowler said that the incoming Trump administration has aligned itself with the crypto industry, but the future was unpredictable.
“It would be folly for any industry to assume a static position in this regard,” she said.
“Cryptocurrency will need to work harder to capitalise on this momentum, beyond solely the US. It will also need to minimise any risk of becoming politicised or aligned to a point of view.”
Read the full article here
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The week ahead: economic events
Thursday, January 16th
- 10:30am Australia employment data
- 5:00pm United Kingdom GDP
- 11:30pm U.S. Retail Sales
Friday, January 17th
- 12:00pm China GDP Annual Growth Rate, Industrial Production & Retail Sales
- 5:00pm United Kingdom Retail Sales
- 11:30pm United States Building Permits & Housing Starts
Tuesday, January 21st
- 5:00pm United Kingdom Unemployment Rate
- 8:00pm Germany ZEW Economic Sentiment Index
- 11:30pm Canada Inflation Rate
Source: trading economics
Market reflections
Overview
The falling Australian dollar has left Australians $100 poorer, increasing costs for imports, fuel, and goods. Despite this, November’s trade surplus hit a 10-month high, driven by strong exports and robust Black Friday retail sales. Globally, US inflation eased with mixed trends, while job growth surged by 256K despite weakening consumer sentiment. China’s inflation slowed to 0.1% as its trade surplus grew, Germany’s trade surplus rose amid government spending, UK inflation dipped slightly, and Canada’s unemployment fell to 6.7%.
Australia
- Falling Aussie dollar makes Australians $100 poorer, impacting imports, fuel, and costs
- Trade surplus hits 10-month high in November, bolstered by strong exports
- Retail sales surge in November, driven by Black Friday shopping season boost
Falling Aussie dollar makes Australians $100 poorer, impacting imports, fuel, and costs
The Australian dollar has taken a hit, dropping from 66 cents to 62 cents against the US dollar since December, which has made everyday imports more expensive. This means Australians are feeling about $100 poorer each month. Car imports from the US and UK are down, while sales of Japanese cars are up. Fuel prices are also climbing due to the weakened dollar. On the flip side, Aussie exporters are benefitting from a cheaper dollar, making Australian goods more attractive abroad.
Retail sales surge in November, driven by Black Friday shopping season boost
Retail sales in November climbed 0.8%, marking the strongest monthly rise since January and extending a streak of eight consecutive increases. Black Friday sales were a key contributor, driving gains across various industries, especially department stores and clothing retailers. Every state and territory reported higher sales, reflecting widespread consumer enthusiasm and confidence.
Trade surplus hits highest level in 10 months, driven by strong exports
Australia’s trade surplus hit its highest point in 10 months in November, thanks to a 4.8% rise in exports, led by rural goods and gold. Imports rose slightly by 1.7%, driven by fuels and machinery. The strong export performance is boosting the economy, with key sectors and trading partners showing solid demand.
Global
- US Inflation slows, but energy prices and mixed trends fuel monthly gains.
- Job growth surges in the US; 256K added, while consumer sentiment weakens.
- China's inflation slows to 0.1% as trade surplus rises with exports.
- Germany's trade surplus climbs as services and government spending offset challenges.
- UK inflation drops slightly in December
- Canada's unemployment rate dips to 6.7% amid labour market shifts
United States
US inflation slows in December as energy prices drive monthly gains
Inflation in the United States showed a mix of trends in December 2024, with the annual rate ticking up to 2.9% from 2.7% in November, aligning with market expectations. On a monthly basis, the Consumer Price Index (CPI) rose by 0.4%, the largest jump since March, driven by higher energy costs.
Core inflation, which excludes volatile food and energy prices, cooled to 3.2% annually, its lowest pace since January 2022. Monthly core price growth also slowed to 0.2%, down from 0.3% in November, reflecting easing pressure in key areas like shelter. These figures underscore both progress in controlling inflation and the lingering impact of energy prices on household costs.
US Fed flags inflation risks and signals caution on rate cuts
Minutes from the December 2024 FOMC meeting revealed that Fed officials see heightened inflation risks due to stronger-than-expected data and potential trade and immigration policy shifts. While inflation is expected to move toward 2%, delays are likely. The Fed cut rates by 25bps in December but signalled a cautious path forward, with only two rate cuts planned for 2025.
PPI rises modestly in December amid mixed trends
In December, the US Producer Price Index (PPI) increased by 0.2%, slowing from November's 0.4% rise, which was the largest in five months, and falling short of the 0.3% forecast.
Goods prices rose 0.6% whilst service prices remained unchanged overall, with a 2.2% rise in transportation and warehousing services offset by declines in other sectors. Annual PPI inflation reached 3.3%, its fastest pace since February 2023, but still below expectations.
Consumer sentiment declines in January amid rising inflation concerns
US consumer sentiment fell in January 2025, below expectations. The decline was driven by a drop in the expectations subindex, while the current conditions measure saw a slight increase. This reflects shifting views, with consumers feeling better about the present cost of living but growing increasingly concerned about future inflation. Year-ahead inflation expectations surged to 3.3%, the highest in eight months, and long-term inflation expectations also rose to 3.3%.
Job growth surges in December, adding 256K positions
The US economy added 256,000 jobs in December 2024, the largest monthly increase in nine months and well above the expected 160,000. Full-year data shows 2.2 million jobs were added in 2024, averaging 186,000 monthly, a steady but slower pace compared to 2023’s 3 million. Despite the deceleration, the labour market remains robust.
The unemployment rate went down to 4.1% in December of 2024 from 4.2% in the previous month, below market expectations of 4.2%. Meanwhile, the labour force participation rate was unchanged at 62.5%, and the employment-population ratio went up to 60% from 59.8%.
China
China's inflation dips to 0.1%, highlighting deflation concerns
China’s annual inflation eased to 0.1% in December, the lowest since March, as food prices fell, and non-food categories saw only modest gains. Core inflation rose 0.4%, a five-month high, but deflation risks persist despite government and central bank interventions. Consumer prices were flat month-on-month.
China's trade surplus surges as exports soar 10.7% in December
China's trade surplus jumped in December 2024, much higher than expected, thanks to a strong 10.7% year-on-year increase in exports. This was the biggest export surge in three years, driven by manufacturers rushing to ship products before anticipated tariffs from the US.
Imports also grew by 1.0%, marking the first increase since September, as companies stockpiled tech products ahead of tighter US semiconductor export controls. For the year, China posted a trade surplus of nearly US$992 billion, with exports up by 5.9%.
Germany
Germany's economy faces challenges, but services and government spending provide a lift
Germany's economy contracted by 0.2% in 2024, following a 0.3% decline in the previous year, in line with analysts' expectations. Manufacturing faced significant challenges, while the service sector saw modest growth. Household spending inched higher, supported by gains in transport and healthcare, and government consumption increased due to higher social benefits. However, foreign trade struggled, with exports shrinking as imports slightly increased.
Germany's trade surplus hits 15-month high as imports plunge
Germany's trade surplus surged in November, the largest since August, as exports rose 2.1%, driven by strong sales to the US, Russia, and the UK. Imports dropped unexpectedly by 3.3%, reaching a five-month low, with sharp declines from China, the US, and Russia.
United Kingdom
UK inflation drops slightly in December
In December, the UK's inflation rate fell to 2.50%, down from 2.60% in November. This shows that the rate at which prices are rising has slowed a bit. Over time, inflation in the UK has averaged around 2.82%, with a high of 11.10% in 2022, driven by soaring costs, and a low of -0.10% in 2015, when prices were falling. The current 2.50% rate is a sign of more stable price growth, which is a positive sign for the economy.
Canada
Canada's unemployment rate dips to 6.7% amid labour market shifts
Canada's unemployment rate edged down to 6.7% in December 2024, below forecasts but still the second highest since September 2021. Employment grew by 91,000, with gains among core-aged and older workers offsetting a rise in youth unemployment. The labour force participation rate remained steady at 65.1%.
Regulation round-up
Court urges US SEC to clarify reasons for rejecting Coinbase's request for crypto regulations
A federal appeals court has ruled that the U.S. Securities and Exchange Commission (SEC) needs to provide a clearer explanation for rejecting Coinbase's request to establish formal regulations for the crypto sector. The 3-0 ruling, issued by the 3rd U.S. Circuit Court of Appeals, partially favoured Coinbase, which had asked the SEC to clarify how existing securities laws apply to digital assets like cryptocurrencies and tokens.
The court criticised the SEC for its vague response, with Judge Thomas L. Ambro stating that the SEC's explanation was "vacuous" and failed to address Coinbase's concerns. While the ruling doesn't overturn the SEC's decision, it demands a more thorough justification. Coinbase, which is currently under SEC investigation for operating as an unregistered broker and exchange, has been pushing for clearer regulations to avoid further legal complications.
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