Category: Cryptocurrency

In a recent blog post, VanEck, a leading asset manager, outlined its expectations for the cryptocurrency market in 2025. According to the company’s head of digital asset research, Matthew Sigel, the bull market is expected to reach a "medium-term peak" in the first quarter of next year before surging to all-time highs by the end of 2025.

Projected Price Targets

At the cycle’s apex, VanEck projects Bitcoin (BTC) to be valued at around $180,000, with Ethereum (ETH) trading above $6,000. Other prominent projects, such as Solana (SOL) and Sui (SUI), could exceed $500 and $10, respectively.

Market Consolidation

Before reaching these highs, VanEck expects to see a 30% retracement in BTC, with alternative cryptocurrencies (altcoins) facing sharper declines of up to 60% as the market consolidates during the summer. Alternative cryptocurrencies refer to digital assets besides Bitcoin (BTC).

Sustained Funding Rates and Speculative Excess

VanEck noted that sustained funding rates above 10% on BTC perpetual futures exchanges would indicate "speculative excess," suggesting the crypto market has reached a local top.

Historical Data Trends

Ryan Lee, chief analyst at Bitget Research, echoed VanEck’s sentiments. According to Lee, historical data trends show that Bitcoin may still correct as much as 30% before it reaches its cyclical top. This is partly because United States markets generally correct after presidential inaugurations.

2025 Market Drivers

VanEck also predicts that in 2025, the US will adopt a Bitcoin strategic reserve and that regulators will approve more crypto exchange-traded funds (ETFs), hastening institutional crypto adoption.

• With new SEC leadership, multiple new spot crypto ETPs will be approved.
• Ethereum ETPs will include staking, while both Ethereum and Bitcoin ETPs will allow in-kind transactions and redemptions.

Institutional Adoption

Sygnum Bank, a crypto-focused asset manager, recently said that institutional adoption could trigger "demand shocks" next year, causing BTC’s spot price to spike. BlackRock, the world’s largest asset manager, also weighed in on the matter, saying up to a 2% portfolio allocation is "reasonable" for investors who wish to hold BTC.

Conclusion

In conclusion, VanEck’s expectations for the cryptocurrency market in 2025 are bullish. The company predicts that the bull market will reach a medium-term peak in Q1 2025 before surging to all-time highs by the end of next year. While there may be some corrections along the way, historical data trends suggest that Bitcoin may still correct as much as 30% before reaching its cyclical top.

Key Takeaways

• VanEck expects the cryptocurrency bull market to reach a medium-term peak in Q1 2025.
• The company predicts that Bitcoin will be valued at around $180,000 by the end of next year.
• Ethereum is expected to trade above $6,000 by the end of 2025.
• Institutional adoption is expected to continue driving growth in the cryptocurrency market.
• Sustained funding rates above 10% on BTC perpetual futures exchanges could indicate speculative excess.

Additional Insights

The cryptocurrency market has experienced significant growth over the past year, with Bitcoin’s price surging by over 100%. This growth has been driven by increasing institutional adoption and a growing recognition of the potential for cryptocurrencies to provide returns that are uncorrelated with traditional assets.

VanEck’s expectations for the cryptocurrency market in 2025 are bullish, with the company predicting that the bull market will reach a medium-term peak in Q1 2025 before surging to all-time highs by the end of next year. While there may be some corrections along the way, historical data trends suggest that Bitcoin may still correct as much as 30% before reaching its cyclical top.

Future Developments

The adoption of cryptocurrencies is expected to continue driving growth in the market. As more institutions become comfortable with investing in cryptocurrencies, we can expect to see increased demand and higher prices.

In addition, advancements in technology are also expected to play a key role in the future development of the cryptocurrency market. For example, the development of decentralized finance (DeFi) platforms is expected to provide new opportunities for investors to earn returns on their investments.

Conclusion

In conclusion, VanEck’s expectations for the cryptocurrency market in 2025 are bullish. The company predicts that the bull market will reach a medium-term peak in Q1 2025 before surging to all-time highs by the end of next year. While there may be some corrections along the way, historical data trends suggest that Bitcoin may still correct as much as 30% before reaching its cyclical top.

About VanEck

VanEck is a leading asset manager with over $50 billion in assets under management. The company has been at the forefront of the adoption of cryptocurrencies and has developed several innovative products for institutional investors, including a Bitcoin futures ETF.

Sources

• VanEck’s December 13 blog post
• Cointelegraph article featuring Ryan Lee’s insights
• Sygnum Bank’s recent announcement on institutional adoption

Additional Resources

For more information on VanEck’s expectations for the cryptocurrency market in 2025, please visit their website or contact a financial advisor.

The anticipation of the U.S.-listed ether ETFs’ imminent debut has led to an increase in hedging activity in the options market, as investors seek to protect their existing positions from price swings. The relative richness of ether’s short-term options-induced implied volatility suggests a pick-up in hedging activity.

U.S.-Listed Ether ETFs to Begin Trading Next Week

The impending launch of U.S.-based exchange-traded funds (ETF) tied to ether’s spot price has created a sense of urgency among investors, who are flocking to the options market to hedge or protect their existing market positions from price volatility. Implied volatility (IV), which measures options-derived market expectations for price turbulence over a specific period, has ticked higher across timeframes according to data sources Deribit and Kaiko.

Increased Demand for Options and Derivatives

A call protects against price rallies, while a put offers insurance against price slides. The hedging activity has been more pronounced in short-term contracts, as evidenced by the recent relative richness of implied volatility determined by options contracts expiring on July 19 relative to those expiring on July 26.

IV for Short-Term Contracts

According to Kaiko, the July 19 expiry IV rose from 53% on Saturday to 62% on Monday, topping the July 26 expiry IV. This increase in IV suggests that traders are willing to pay more to hedge existing positions and protect against sharp price moves in the short run.

The increase in IV on the July 19 contract suggests traders are willing to pay more to hedge existing positions and protect against sharp price moves in the short run. This spike in near-term contracts IV indicates a level of uncertainty among traders.

Analysts at Kaiko, Monday’s edition of the newsletter

Ether Volatility Relative to Bitcoin

Traders also expect increased ether volatility relative to bitcoin. According to data source Amberdata, the spread between Deribit’s 30-day ether and bitcoin implied volatility indices (BTC DVOL and ETH DVOL) has consistently averaged around 10% since late May, significantly higher than 5% in the first quarter.

Crypto Exchange Bybit and Analytics Firm BlockScholes Observations

Bybit and analytics firm BlockScholes made a similar observation in a report shared with CoinDesk on Monday. The key findings indicate that investors are increasingly optimistic about ETH, particularly in anticipation of the imminent launch of the first Ether Spot ETFs in the United States.

Key findings indicate that investors are increasingly optimistic about ETH, particularly in anticipation of the imminent launch of the first Ether Spot ETFs in the United States. This optimism is reflected in ETH’s sustained volatility premium over BTC, which has persisted amid heightened market activity.

Report shared with CoinDesk on Monday by Crypto Exchange Bybit and Analytics Firm BlockScholes

Consistency with Uber-Bullish Expectations

The pick-up in hedging activity in ether is consistent with the uber-bullish expectations from the spot ether ETFs, which are expected to begin trading next Tuesday. According to Gemini, spot ether ETFs will likely draw $5 billion in net inflows in the first six months, boosting ether’s market value relative to bitcoin.

Avoiding a Sell-the-Fact Phenomenon

Besides traders, mindful of the ‘sell-the-fact’ phenomenon that followed the debut of bitcoin ETFs on Jan. 11, might be preparing for similar price volatility in ether. However, traders should note that the present market mood and ether’s bullish positioning are significantly more measured than bitcoin in early January.

Traders, however, should note that the present market mood and ether’s bullish positioning are significantly more measured than bitcoin in early January, suggesting low odds of a post-debut sell-the-fact pullback.

BlockScholes report shared with CoinDesk on Monday

As of 2024, the United States accounted for over 40% of the Bitcoin network’s global hashrate. This significant share is largely attributed to two prominent US-based mining pools: Foundry USA and MARA Pool.

Foundry USA: The Largest Mining Pool

According to TheMinerMag, Foundry USA experienced a substantial increase in its hashrate over 2024. At the beginning of the year, the pool controlled approximately 157 exahashes per second (EH/s). However, by December, this figure had risen to roughly 280 EH/s.

Foundry’s impressive growth catapulted it to become the single largest mining pool by hashrate, commanding a significant share of around 36.5% in the Bitcoin network.

MARA Pool: A Close Second

Data from the Hashrate Index reveals that MARA Pool currently controls approximately 32 EH/s or 4.35% of the total hash power in the Bitcoin network.

While Foundry USA dominates the landscape, China-based mining pools still maintain a significant majority of global hashrate.

Market Share of Hash Power by Mining Pool

| Mining Pool | Market Share (%) |
| — | — |
| Foundry USA | 36.5% |
| MARA Pool | 4.35% |
| Other Chinese Pools | 55% |

Hashrate Dominance: A Complex Issue

TheMinerMag reported that the distribution of miners, particularly small-scale participants in mining pools, poses a challenge in accurately estimating true hashrate dominance.

Mining pools often have headquarters in one country but draw computing power from various jurisdictions. This complex landscape makes it difficult to determine which countries or regions contribute the most to global hashrate.

Estimated Breakdown of Hash Power by Country

| Country | Estimated Share (%) |
| — | — |
| United States | 40% |
| China | 55% |
| Other Countries | 5% |

Concerns Over Hasrate Centralization

The concentration of computing power into a small set of mining pools has sparked concerns among industry experts.

In October, Rajiv Khemani, co-founder and CEO of Auradine, expressed his worries regarding Bitcoin decentralization. He emphasized that the lack of national security would be catastrophic if critical mining infrastructure were concentrated in only one jurisdiction.

Khemani urged caution against allowing any single country to control a majority of the Bitcoin network’s hashrate. This, he argued, would undermine the decentralized nature of the currency and expose it to supply chain risks.

A Decentralized Currency Requires Diverse Mining Infrastructure

To maintain the neutrality and security of the decentralized currency, Khemani stressed that critical mining infrastructure should not be manufactured in a single jurisdiction.

In essence, the concentration of hashrate among a few dominant players raises significant concerns about the potential for supply chain disruptions and centralized control over the network.

Sanctions Imposed by South Korea on 16 Individuals and One Group

North Korean hackers have been the focus of governments worldwide, which attribute over half of the value of cryptocurrency stolen in 2024 to these malicious actors. The notorious Lazarus Group is among those prime suspects involved in some of the most high-profile cyber thefts in Web3.

The most recent development comes from South Korea, where the government has imposed sanctions on 15 members of North Korean IT organizations and one related group. These individuals are alleged to have procured funds for North Korea’s nuclear missile development program and the DPRK’s Munitions Industry Department through "overseas foreign currency-earning activities," according to a December 26 news release by South Korea’s Ministry of Foreign Affairs.

The Targets: Kim Cheol-min, Kim Ryu Song, and Others

One of the sanctioned individuals is Kim Cheol-min from the 313th General Bureau. He allegedly earned a "large amount of foreign currency" while working undercover for United States and Canadian companies before delivering the funds to Pyongyang’s nuclear weapons program.

Another individual, Kim Ryu Song, was indicted by US lawmakers on December 11 for violating sanctions, money laundering, and identity theft in generating more than $88 million of revenue over six years. According to South Korean media reports, these individuals are among those who have been sanctioned due to their alleged involvement in the nuclear missile development program.

Total Annual Funds Loss

The total value stolen by North Korean hackers in 2024 was $2.3 billion, a significant increase from the $1.65 billion lost in 2023 (40% more). This highlights the growing concern for the security of cryptocurrencies and the need for governments to take decisive action against these malicious actors.

North Korea Hackers: A Growing Threat to Crypto Security

The increasing success of North Korean hackers has been documented by Chainalysis, a leading provider of blockchain analytics. According to their data, North Korea-affiliated hackers have stolen over $1.34 billion worth of digital assets across 47 incidents in 2024.

This represents more than 61% of the total crypto value stolen during 2024 and nearly one-fifth (20%) of all hacking incidents. The significance of these numbers is underscored by the observation that the DPRK’s involvement in cryptocurrency theft has increased dramatically, marking a 102% increase from the $660 million lost in 2023.

The Numbers Behind North Korea’s Crypto Hacking Activities

• Total value stolen: $1.34 billion
• Number of incidents: 47
• Percentage of total crypto value stolen in 2024: Over 61%
• Percentage of all hacking incidents: Nearly one-fifth (20%)

An Improvement in DPRK’s Hacking Methods

A worrying sign for the future is that despite a decrease in the overall number of attacks, sophisticated attacks by North Korean agents have increased. According to Chainalysis, "notably, attacks between $50 and $100 million, and those above $100 million occurred far more frequently in 2024 than they did in 2023."

This suggests that the DPRK has improved its hacking methods, allowing it to conduct more lucrative exploits. In contrast, DPRK’s exploits in 2022 often resulted in profits of less than $50 million.

Timeline: The Time Between Successful DPRK Attacks

| Year | Average Time Between Successful DPRK Attacks |
| — | — |
| 2024 | <1 year |
| 2023 | Approximately 6 months |
| 2022 | More than a year |

The data from Chainalysis highlights the increasing sophistication and efficiency of North Korean hackers, who are now capable of conducting more lucrative attacks. This trend is concerning for the future of cryptocurrency security and underscores the need for continued vigilance and cooperation among governments worldwide to combat these threats.

Magazine: 13 Christmas Gifts that Bitcoin and Crypto Degens Will Love

Despite the challenges posed by North Korean hackers, there are many in the crypto community who continue to innovate and adapt. The magazine provides a glimpse into the world of cryptocurrency enthusiasts, featuring gifts that cater to their interests.

In conclusion, the pursuit of North Korean hackers continues as governments worldwide work together to combat these threats. With sanctions imposed on key individuals and groups, the pressure is mounting for those involved in nuclear missile development programs to cease their illicit activities.

However, the data from Chainalysis highlights a worrying trend: despite efforts to curb DPRK hacking activity, sophisticated attacks are increasing, suggesting that the North Korean government continues to invest in improving its cyber capabilities.

The future of cryptocurrency security will depend on the cooperation and determination of governments, law enforcement agencies, and the crypto community as a whole.

In a significant development, Terraform Labs co-founder Do Kwon was handed over to United States law enforcement by authorities in Montenegro after a months-long battle over where he would be extradited.

Montenegrin Prime Minister Confirms US Custody

On December 31, Montenegrin Prime Minister Milojko Spajić took to the social media platform X to announce that Kwon was indeed in US custody and would face criminal charges in the case involving the collapse of Terra. The confirmation came just four days after the Montenegrin Justice Minister Bojan Božović approved the extradition, rejecting a petition from South Korea.

Background on Kwon’s Extradition

The extradition process has been ongoing for several months, with both the US and South Korea filing charges against the Terraform Labs co-founder and some Terraform executives. However, Kwon’s whereabouts were unknown until he was arrested in Montenegro in 2023. The prolonged battle over his extradition had left many wondering where he would ultimately be sent.

South Korean Court Issues Arrest Warrant for Impeached President Yoon

In a separate development, the Seoul Western District Court approved an arrest warrant for President Yoon Suk Yeol on December 31, 2024. This marked a significant move against the impeached president, who is accused of attempting to impose martial law in early December.

Yoon’s Impeachment and Subsequent Arrest Warrant

According to reports, Yoon was stripped of power on December 14 when the country’s parliament voted to impeach him. He was replaced by Deputy Prime Minister and Finance Minister Choi Sang-mok as interim president. The impeachment came after Yoon failed to report for questioning for the third time.

A First in South Korean History

This marked a historic moment, as Yoon became the first sitting South Korean president to face an arrest warrant granted by a court. The decision was made after a joint investigative task force requested an arrest warrant for him. The development has sent shockwaves through the country’s political landscape.

Pro-Crypto Lawyer John Deaton Offers to Probe Operation Chokepoint 2.0

In related news, pro-crypto lawyer John Deaton offered to lead a probe into Operation Chokepoint 2.0 on January 4. The initiative, which aimed to cut crypto companies out of the traditional banking system, has raised concerns about regulatory overreach.

Deaton’s Offer and Background on Operation Chokepoint 2.0

Deaton, who is well-known for his efforts to support Ripple’s legal battle with the US Securities and Exchange Commission (SEC), expressed his willingness to lead a probe into Operation Chokepoint 2.0 without salary. He emphasized that the initiative creates a "dangerous precedent" where regulatory bodies can quietly suppress entire industries they disfavor.

Court Order Allows Coinbase to Obtain Unredacted Files

Deaton’s offer followed on the heels of a court order allowing crypto exchange Coinbase to obtain unredacted files from the Federal Deposit Insurance Corporation (FDIC). The unconfirmed operation has raised concerns about regulatory overreach and potential suppression of entire industries.

China Tightens Crypto Trade Oversight with New Forex Rules

In another development, China’s foreign exchange regulator introduced new rules that require banks to monitor and flag risky trades involving crypto assets. The move is aimed at making it harder for residents to purchase digital assets and use them for cross-border gambling, underground banks, and illegal financial activities.

Impact of China’s New Rules

The new rules will also require banks to track the activities based on the identity of the institutions and individuals involved, as well as the sources of their funds and the frequency of their trades. The move is expected to have a significant impact on crypto trade oversight in China.

Conclusion

The extradition of Do Kwon to the US marks a significant development in the ongoing saga surrounding Terraform Labs. Meanwhile, the arrest warrant issued against President Yoon Suk Yeol has sent shockwaves through South Korea’s political landscape. The introduction of new forex rules in China is also expected to have far-reaching implications for crypto trade oversight.

Explore More Articles Like This

Stay up-to-date on the latest developments in crypto laws and regulations with our Law Decoded newsletter. Delivered every Monday, our newsletter provides you with the insights you need to make informed decisions about your crypto ventures.

Subscribe now and stay ahead of the curve!

Subscribe to Our Newsletter

By subscribing, you agree to our Terms of Service and Privacy Policy.

Bitcoin Sees Record High Following Trump’s Election Victory

On Wednesday, the largest cryptocurrency by market value, Bitcoin (BTC), broke records as it climbed over 9% to hit a new high of $76,481. This significant surge comes in the wake of Donald Trump’s U.S. presidential election victory, who voiced support for the crypto industry during his campaign.

According to data from CoinDesk Indices, this is the fourth-best day of the year for Bitcoin, following its previous highs in February, March, and August. The cryptocurrency has shown remarkable resilience, with its price increasing by over 12% after the Aug. 5 yen carry trade unwind.

Trump’s Victory: A Boost to Crypto Industry?

The news of Trump’s election victory may have come as a surprise to some investors, but earlier research indicated that BTC could rise up to 11% on a Trump victory. This prediction has proven correct, with Bitcoin experiencing one of its most significant gains in recent history.

Record-Breaking Inflows into Spot-Listed ETFs

The rally in Bitcoin’s price was accompanied by massive inflows into spot-listed bitcoin exchange-traded funds (ETFs). These funds added a net $621.9 million, snapping a three-day streak of outflows. The total net inflows have now reached $24.2 billion.

Among notable performers, Grayscale’s Bitcoin Mini Trust (BTC) registered $108.8 million, its second-biggest day since the start of trading. Meanwhile, Bitwise Bitcoin ETF (BITB) saw a $100.9 million inflow, also one of its biggest net inflow days.

BlackRock’s iShares Bitcoin Trust: A Contrasting Performance

In contrast to the above-mentioned funds, BlackRock’s iShares Bitcoin Trust (IBIT) posted a second-straight day of net outflows, losing a total of $113.3 million over the period. However, trading volume in the ETF was at a record level, with Senior Bloomberg ETF analyst Eric Balchunas noting that ‘IBIT just had its biggest volume day ever with $4.1b traded.’

Trading Volume: A Record-Breaking Day for Bitcoin ETFs

The group of bitcoin ETFs saw a trading volume of over $6 billion, their best day since the early days of trading. As Balchunas observed, ‘Most of the ETFs did 2x their average. It was just an all-around banger day for an infant category that never ceases to amaze.’

To provide some historical context, ETF trade volume reached a peak of $9.9 billion during the March bull run, according to data from checkonchain. Total trade volume on Nov. 6 reached approximately $76 billion, comprising futures volume of $62 billion, spot volume of $8 billion, and ETF trade volume of $6 billion.

Bitcoin: Futures vs Spot vs ETF Trade Volume

While the trading volume in bitcoin ETFs has been impressive, it still accounts for a small percentage of the total trade volume. The following chart illustrates the trade volume distribution between futures, spot, and ETF markets.

| Market | Volume |
| — | — |
| Futures | $62 billion |
| Spot | $8 billion |
| ETF | $6 billion |

Ether: A Lagging Performer

In contrast to Bitcoin’s impressive performance, Ether (ETH) has been lagging behind. Net inflows into ether U.S. spot ETFs totaled $52.3 million, the most since Sept. 27, according to Farside data.

As of press time, Bitcoin is trading at just over $75,000, up 77% year-to-date, while Ether is trading at $2,822, up 20% year-to-date.

Conclusion

The record-breaking performance of Bitcoin on Wednesday has sent shockwaves through the crypto market. With its price surpassing $76,481, investors are left wondering if this gain is sustainable. However, earlier research and the significant inflows into spot-listed ETFs suggest that Bitcoin’s future looks bright. As the market continues to evolve, one thing is clear: Bitcoin has broken records once again, cementing its position as a leading player in the crypto industry.

Key Takeaways

• Bitcoin (BTC) surpassed $76,481 on Wednesday, marking a new record high.
• The largest cryptocurrency by market value climbed over 9% following Donald Trump’s U.S. presidential election victory.
• Net inflows into spot-listed bitcoin ETFs totaled $621.9 million, snapping a three-day streak of outflows.
• Grayscale’s Bitcoin Mini Trust (BTC) registered $108.8 million in net inflows, its second-biggest day since the start of trading.
• Bitwise Bitcoin ETF (BITB) saw a $100.9 million inflow, one of its biggest net inflow days.

Further Reading

• What is a Bitcoin ETF?
• How to Buy a Bitcoin ETF

As we bid farewell to 2024 and welcome a new year, the decentralized finance (DeFi) space is poised for significant growth. Several industry executives shared their insights with Cointelegraph, predicting that Bitcoin staking, real-world asset (RWA) tokenization, and agentic artificial intelligence will be major catalysts driving DeFi adoption in 2025.

Bitcoin Staking: Unlocking New Opportunities

In 2024, the price of Bitcoin surpassed $100,000 per coin for the first time, with investors pouring over $100 billion into spot BTC exchange-traded funds (ETFs). This milestone is expected to reignite interest in crypto from institutions and regulators alike, revitalizing the entire crypto sector in 2025.

"Bitcoin’s all-time high will spark renewed interest in crypto from institutions and regulators alike and should reinvigorate the entire crypto sector in 2025," said Dean Tribble, CEO of layer-1 network Agoric Systems. "The current state of affairs is a perfect storm for DeFi adoption."

Total value locked (TVL) in DeFi protocols has been steadily increasing, reaching $130 billion in December, nearing its all-time high of around $175 billion in 2021, according to data from DefiLlama.

"By 2025, DeFi infrastructure and blue-chip protocols like Aave, Maple, Maker will have been operating at scale for over four years," said Jacob Phillips, co-founder and head of strategy at Bitcoin staking protocol Lombard. "These platforms will become reliable venues where institutions and new users put Bitcoin to work."

Real-World Asset (RWA) Tokenization: Unlocking New Markets

The tokenization of real-world assets has been gaining momentum in recent years, with the market size estimated to reach $30 trillion globally.

"Tokenizing real-world assets like real estate and carbon credits will unlock unprecedented liquidity," said Raj Brahmbhatt, CEO of Web3 settlement platform Zeebu. "Advancements in payments will further streamline cross-border transfers."

The US Treasury Department has also highlighted the potential benefits of tokenization, including improved liquidity and reduced operational and settlement frictions.

Agentic Artificial Intelligence: Revolutionizing DeFi

In 2024, tokens linked to agentic AIs collectively bootstrapped nearly $10 billion in market capitalization, according to CoinGecko. Analysts expect the fusion of artificial intelligence and blockchain technology to transform Web3, creating a future where self-directed AIs build decentralized applications and transact with human users.

"Agentic AI has already proven central to the future of the industry," said J.D. Seraphine, CEO of AI protocol Raiinmaker. "AI agents are expected to take on a more prominent role within decentralized communities in 2025."

The Rise of Bitcoin Staking ETFs

Matt Hougan, head of research at asset manager Bitwise, predicts that Bitcoin staking ETFs may gain traction in 2025.

"There’s a lot of demand for Bitcoin yield," said Hougan. "Whether it makes it into an ETF structure in the United States, I’m not sure, but in Europe, definitely."

Liquid Staking Tokens (LSTs) and Their Growing Adoption

Liquid staking tokens represent claims on staked BTC and have been proliferating rapidly. As of December 19, Bitcoin LSTs command upward of $2.5 billion in total value locked (TVL), according to stakingrewards.com.

"We have spoken with dozens and dozens of large Bitcoin DeFi users and funds keen to put their Bitcoin holdings to work earning yield," said Alexei Zamyatin, co-founder and CEO of Build on Bitcoin.

The Future of DeFi: Opportunities and Challenges

As the DeFi space continues to evolve, it’s essential to consider both the opportunities and challenges ahead. With agentic AIs, RWA tokenization, and Bitcoin staking ETFs poised to drive growth, the next year is expected to be a pivotal moment for the industry.

"It’s OK if you don’t know exactly what’s going to happen," said Hougan. "As long as you know that something is happening that’s really potentially significant and you want exposure to it."

Conclusion

The decentralized finance (DeFi) space is on the brink of an inflection point in 2025, driven by Bitcoin staking, RWA tokenization, and agentic artificial intelligence. As we look ahead, it’s essential to consider both the opportunities and challenges that lie ahead.

With the potential for significant growth, now is the perfect time to explore the DeFi space and uncover new financial opportunities. Stay tuned for more insights and analysis from Cointelegraph as we continue to break down the latest DeFi developments.

Subscribe to the Finance Redefined Newsletter

A weekly toolkit that breaks down the latest DeFi developments, offers sharp analysis, and uncovers new financial opportunities to help you make smart decisions with confidence. Delivered every Friday.

By subscribing, you agree to our Terms of Service and Privacy Policy.

A Pro-Crypto President? Trump’s Administration Pledges Support for Digital Assets

As Donald Trump prepares to take office, his administration has shown a clear affinity for digital assets. The president-elect himself has acknowledged investing in cryptocurrencies, and several of his nominees have disclosed or discussed their exposure to these assets through asset ownership or business interests.

A Pro-Crypto Cabinet?

One of the most notable examples is Robert Kennedy Jr., Trump’s pick to be Health and Human Services secretary. Kennedy has been a long-time advocate for cryptocurrency and has spoken at numerous bitcoin conferences, including the Bitcoin 2024 conference in Nashville, Tennessee. According to federal filings, Kennedy owns between $100,001 and $250,000 worth of bitcoin.

Another nominee with ties to cryptocurrency is Howard Lutnick, who has been tapped to become Commerce secretary. As CEO of Cantor Fitzgerald, a Wall Street firm that manages the US Treasurys backing Tether’s stablecoin (USDT-USD), Lutnick has a clear conflict of interest in his nomination. However, he has pledged to divest his interests in Cantor and related companies "to comply with US government ethics rules."

Vice President-Elect JD Vance: A Crypto Enthusiast?

Vice president-elect JD Vance has also shown an affinity for digital assets. According to federal filings, Vance owns between $250,000 to $500,000 worth of bitcoin. While it’s not known if he still holds these assets, his enthusiasm for cryptocurrency is clear.

A Conflict of Interest?

While Trump and his nominees have pledged to support digital assets, their investments in these assets could create conflicts of interest. According to the Office of Government Ethics (OGE), government officials are required to divest any assets that present potential conflicts of interest central to their duties. This rule applies to digital assets, which could create a complex web of interests for Trump’s administration.

Trump’s Investment in Ethereum

In August, Trump disclosed owning between $1 million and $5 million worth of ethereum (ETH-USD), the world’s second-largest cryptocurrency. While this investment is not directly related to his duties as president, it suggests that he has a clear interest in digital assets.

The Trump Family Connection

Trump’s sons are also involved in promoting World Liberty Financial, a crypto project they have been touting on social media. In exchange for this promotion, a Trump family-owned limited liability corporation receives 22.5% of the project’s crypto token (WLFI-USD) along with 75% of any net revenues after World Liberty earns $30 million.

A Pro-Crypto President: Implications and Concerns

While Trump’s administration has shown a clear affinity for digital assets, there are concerns about potential conflicts of interest. According to Ian Katz, managing director with Capital Alpha Partners, "Certainly, you have a lot of people in this administration that are coming in that have interests in crypto. They have an interest in crypto doing well and thriving, even if they have to divest holdings."

A Look at Trump’s Nominees

Here is a list of Trump’s nominees and their connections to digital assets:

• Robert Kennedy Jr., Health and Human Services secretary nominee: owns between $100,001 and $250,000 worth of bitcoin
• Howard Lutnick

Powell’s Comments at the DealBook Summit

On December 4th, United States Federal Reserve Chair Jerome Powell reiterated his view that Bitcoin is a direct competitor to gold and not a threat to the US dollar. In an interview with The New York Times-hosted DealBook Summit in New York, Powell made it clear that people use Bitcoin as a speculative asset rather than a form of payment or store of value.

Bitcoin as a Speculative Asset

"People use Bitcoin as a speculative asset," Powell said during the summit. "It’s just like gold, only it’s virtual, it’s digital." This comment highlights the volatility associated with cryptocurrencies like Bitcoin and suggests that they are not a reliable store of value. The Federal Reserve Chair has made these comments before, comparing Bitcoin to gold during an event hosted by the Bank for International Settlements in March 2021.

The Rise of Bitcoin

Since Powell’s previous comments, Bitcoin has seen significant growth, soaring 70% compared to a 52% increase in gold over the same period. This rise can be attributed to various factors, including increased adoption and growing interest from institutional investors.

Bitcoin vs. Gold

Powell’s statement that Bitcoin is not a competitor for the US dollar but rather a competitor for gold has been met with mixed reactions. Some argue that the Federal Reserve Chair’s comments are an attempt to downplay the significance of Bitcoin as a potential threat to the US dollar. However, it’s essential to note that Powell’s comments were made in the context of comparing Bitcoin to gold, which is often seen as a hedge against inflation and market volatility.

Consumer Protection

During the summit, Powell also emphasized the importance of consumer protection when dealing with cryptocurrency companies doing business with banks. The Federal Reserve Chair noted that while they do not directly regulate this area, ensuring the health and well-being of these institutions is crucial for maintaining financial stability.

The Future of Cryptocurrency Regulation

Powell’s comments come at a time when the US government is undergoing changes, with President-elect Donald Trump selecting crypto advocates to lead key departments. Scott Bessent, a hedge fund manager, has been chosen to lead the Secretary of Treasury department, while Howard Lutnik, CEO of Cantor Fitzgerald, will head the Commerce department.

Trump’s Impact on Cryptocurrency

Donald Trump’s presidential election win in November has resulted in an overhaul of the US cabinet. The President-elect has reportedly been critical of Powell’s decision-making, but the Federal Reserve Chair has asserted that he won’t resign if Trump tries to push him out. Meanwhile, Trump selected crypto advocate Paul Atkins to become the new chair of the Securities and Exchange Commission after Gary Gensler announced his resignation when Trump is inaugurated on January 20.

The Rise of Ethereum and Solana

As Bitcoin continues to rally towards its all-time high, other cryptocurrencies like Ethereum and Solana are gaining attention. The price of Ethereum has surged in recent months, pushing it closer to surpassing the $100,000 milestone. Meanwhile, Solana has seen significant growth, with its price increasing by over 70% in the past month.

Conclusion

Jerome Powell’s comments at the DealBook Summit reiterate his view that Bitcoin is a direct competitor to gold and not a threat to the US dollar. The rise of Bitcoin and other cryptocurrencies like Ethereum and Solana highlights the growing interest and adoption of digital assets. As the US government undergoes changes, it will be essential to monitor the impact on cryptocurrency regulation and its potential effects on the market.

Related Articles

• Bitcoin Was Pronounced Dead 415 Times, Now It Battles for $100K
• Comeback 2025: Is Ethereum Poised to Catch Up with Bitcoin and Solana?

Subscribe to the Markets Outlook Newsletter

Get critical insights to spot investment opportunities, mitigate risks, and refine your trading strategies. Delivered every Monday.

By subscribing, you agree to our Terms of Service and Privacy Policy.

The Promise of Bitcoin: Challenges and Opportunities

Bitcoin (BTChas always been touted as a revolutionary technology with immense potential to transform the global financial landscape. Its decentralized and trustless nature has garnered significant attention from developers, investors, and users alike. However, as its popularity grows, so do the challenges that come with it. One of the primary concerns is scalability – the ability of Bitcoin’s underlying infrastructure to handle an increasing number of transactions and users.

Scalability: The Achilles’ Heel of Blockchain

While the core layer of Bitcoin remains robust, the scalability issue becomes increasingly evident during testnets – simulated ecosystems designed to mimic real-world usage. Public testnets, intended for developer testing, often struggle to cope with high demand, exposing weaknesses in the broader blockchain infrastructure.

A recent event has underscored this scalability challenge. The testnet launch of Portal to Bitcoin, a bridgeless crosschain infrastructure, began as a controlled experiment but quickly turned into an unplanned stress test. Initially designed to handle a few thousand testers, the rollout attracted over 100,000 users in just 36 hours.

The Overwhelming Response: Bottlenecks and Challenges

While this overwhelming response demonstrated the platform’s appeal, it also exposed critical bottlenecks in the existing blockchain testnet infrastructure:

• Scalability limitations of current Bitcoin testnets: The inability to handle high demand and user growth.
• Lightning Network constraints: The inherent challenges posed by the Lightning Network, a second-layer scaling solution for Bitcoin.

Addressing Challenges: Lessons Learned

The Portal team effectively addressed these challenges through swift and innovative action, offering valuable insights and guidance for blockchain developers navigating similar obstacles. By forking infrastructure, managing faucets, implementing dynamic fees, and developing exchange protocols, browser extensions, and mobile applications, the team stabilized the testnet and maintained user engagement.

Lessons for the Blockchain Ecosystem

The testnet provided invaluable insights into the complexities of crosschain interoperability and the paramount importance of user experience. The community’s support was a key driver of this progress, with users instrumental in identifying bugs, suggesting features, and validating improvements.

In response to user feedback, Portal introduced a seven-day cohort program, addressing congestion issues while maintaining a balanced testing environment. This community-centric approach solved immediate scalability concerns and laid the groundwork for a more resilient and scalable mainnet launch.

Road to the Mainnet

By the end of the challenging testnet phase, Portal showcased its capability to execute fast, non-custodial swaps between major blockchains. The team made strides in enhancing transaction processing times through innovative optimizations and established a robust, feedback-driven development pipeline for continuous improvement.

Strengthened by the lessons learned during this intensive testing period, the team is focused on expanding blockchain support, improving the platform’s user interface, and conducting comprehensive security audits. The testnet experience has turned the crisis into an opportunity to learn and grow, and Portal is working toward a smooth transition to the mainnet.

The Broader Implications

The lessons learned during this ambitious testnet phase extend far beyond a single project, highlighting the broader challenges and possibilities within the blockchain ecosystem. As decentralized technologies evolve, they must address today’s demands while anticipating tomorrow’s exponential growth.

In conclusion, the promise of Bitcoin is accompanied by significant challenges that require innovative solutions. By addressing these challenges through community-centric approaches and robust development pipelines, projects like Portal to Bitcoin can pave the way for a more scalable and user-friendly blockchain ecosystem.