Happy New Year, traders! A few year-end wobbles notwithstanding, Bitcoin holds strong and has remained steadily within, or just above, the $100k price range over the past weeks. Bears briefly pushed Bitcoin below $90k, but the dip was quickly absorbed, leading to a bounce back upwards. Just as in the summer of 2024, when it was clear that Bulls had run out of steam, the same can be said of Bears in this moment in time. For now, Bulls remain at the wheel.
Old Favorites and New Narratives Take the Lead
As Bitcoin holds strong and builds up momentum before hopefully going on to the next leg of its cycle growth, the stage is open, and capital is available for Altcoins to have their moment. So-called ‘Boomer Coins,’ including Litecoin, XRP, and others, have rallied 30-40%+ over the past week alone. On the other end of the spectrum, meme coins—particularly AI agent coins—have seen parabolic growth. Market participants are chasing the ‘next’ pump narrative. However, none of the typical ‘top’ indicators have yet been hit. For example, the Coinbase app is not yet number 1 in the App Store, signaling that retail euphoria hasn’t peaked.
A Pro-Crypto Trump Administration?
From a regulatory perspective, traders are positioning themselves for the incoming pro-crypto Trump administration. As SEC chairman Gary Gensler prepares to resign on January 20th, a new crypto-friendly SEC chair, Paul Atkins, is poised to take over once confirmed by the Senate. This will mark a major shift from an SEC that previously brought at least 83 enforcement actions against crypto companies such as Coinbase and Uniswap. This regulatory change could open the door for institutional adoption and innovation in the space.
Inflation, Interest Rates, and Trade Policies
Macro-wise, the outlook is mixed. On one hand, the latest US inflation readings have come in soft, keeping the door open for further Federal Reserve rate cuts this year. On the other hand, both retail sales and job data have underperformed expectations. Another factor weighing on markets is the potential impact of Trump’s proposed tariffs on major trading partners such as China, Mexico, and the EU. If these tariffs are implemented, they could harm partner exports, leading to an overall economic backlash that may influence global markets, including crypto.
Crypto’s Boom Market Cycle and Institutional Adoption
Despite macro uncertainties, crypto is entering the second year of its Boom Market cycle with more cause for optimism. Regulatory uncertainty is slowly lifting, and institutions—including giants such as BlackRock—are embracing crypto markets. Beyond the usual market noise, blockchain technology continues to advance in key areas such as performance, encryption, interoperability, and user experience. These improvements are pushing crypto adoption closer to mainstream feasibility.
There is certainly a lot to look forward to in 2025. May we all have a great year ahead!
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