Token Chronicle - Week 1 February 2025

Top cryptos

Meme of the week

Market update: A market that remains volatile on a daily basis (but stable on a weekly basis) below $100K BTC due to pricing uncertainties, despite all the bullish news in the ecosystem (early signs of strategic BTC reserves, new ETFs, Ethereum upgrade in March). We'll see how it evolves moving forward.

Main points this week:

International Update:

1. Norwegian Sovereign Wealth Fund Earns Billions in 2024 Thanks to Bitcoin (BTC) Exposure:
   While several countries around the world are considering establishing strategic Bitcoin (BTC) reserves, Norway did not wait to create one before exposing its sovereign wealth fund to cryptocurrency. This decision has proven to be wise in the short term, generating a significant profit for the Scandinavian country. The Norwegian Sovereign Wealth Fund was created in 1990 to invest the revenues obtained from the extraction and sale of hydrocarbons (gas and oil) into foreign entities. Its goal: to achieve stable and long-term returns to ensure the country's financial stability once its hydrocarbon reserves are depleted.

2. Donald Trump Suspends Trade War – Crypto Market Reacts Positively:
   After imposing a 25% tariff on products from Mexico and Canada, U.S. President Donald Trump has decided to backtrack—at least temporarily—until a potential agreement is reached. This news has been positively received by the cryptocurrency market.

3. Tariffs, Investigation Against Google, Complaint... China Responds to U.S. Actions:
   The trade war between China and the United States has taken a new turn. Beijing has announced new measures in response to the tariff hikes ordered by Donald Trump. China has launched an investigation against Google, a major player in the U.S. tech industry, accusing it of violating local antitrust laws. Previously, the U.S. had taken a tough stance against the Chinese AI model DeepSeek, alleging it was trained with unauthorized Nvidia chips. On Tuesday, China took another step by adding PVH Corp.—the owner of brands such as Calvin Klein and Tommy Hilfiger—to its list of "unreliable entities." This move aims to "preserve national sovereignty, security, and development interests."

4. Could Donald Trump’s New Sovereign Fund Be Used to Buy Bitcoin?
   On Monday, U.S. President Donald Trump signed an order to create a "sovereign wealth fund," which could, among other things, facilitate the purchase of TikTok. This fund could allow the U.S. to invest budget surpluses into various companies or assets. However, given the U.S. government's current significant budget deficit, the source of assets for this fund remains unclear. Speculation is already circulating regarding its potential use. According to Wyoming Senator Cynthia Lummis, the fund could also be used to buy Bitcoin (BTC), a link she hinted at on X (formerly Twitter).

5. El Salvador Continues Bitcoin (BTC) Purchases, Defying IMF Agreement:
   In December, El Salvador, under President Nayib Bukele, reached an agreement with the International Monetary Fund (IMF), committing to reduce Bitcoin’s (BTC) role in its economy. While some of the negotiated concessions have been respected, others appear to be ignored.

6. India's long-awaited crypto policy discussion paper remains under review as the government reevaluates its stance on digital assets amid shifting global perspectives. Economic Affairs Secretary Ajay Seth stated that the revision is necessary due to changing regulatory approaches in multiple jurisdictions, emphasizing that crypto assets "don't believe in borders" and require a coordinated strategy. While India ranks #1 on Crypto Adoption Index, regulatory clarity remains elusive, with the Reserve Bank of India softening its previously hardline stance and the Securities and Exchange Board of India pushing for shared oversight. Seth's remarks signal a possible shift toward a more crypto-friendly approach, mirroring trends in the US under the Trump administration.

Compliance/Regulation/Justice:

1. North Korean Developer Steals Over $1 Million via Solana Trading Bot:
   Nearly a year ago, hundreds of crypto community members realized their wallet funds had disappeared. Initially, they suspected the team behind the trading bot was responsible, but the truth was slightly different. In March 2024, Solareum—a well-known trading bot that automatically trades Solana (SOL) for users—fell victim to a massive hack. As it turns out, in December 2023, Solareum unknowingly hired a North Korean developer. Leveraging his position within the development team, he managed to steal 6,045 SOL, worth over $1.2 million at current market prices.

2. Kraken and Coinbase Expand in Europe with New Licenses:
   U.S. crypto firms Kraken and Coinbase are strengthening their European presence after obtaining regulatory licenses in the EU and the UK. On Monday, both firms announced major regulatory advancements in Europe. Kraken secured the EU’s MiFID license, which allows it to operate across the continent. Meanwhile, Coinbase focused on the UK market, obtaining a VASP license from the Financial Conduct Authority (FCA).

3. Crypto Seed Phrase-Stealing Virus Downloaded 242,000 Times – What is SparkCat?
   In a recent report, Kaspersky warned about a virus called SparkCat, capable of stealing crypto wallet recovery phrases. According to their research, this malware—disguised as seemingly harmless apps—has been downloaded at least 242,000 times via platforms like Google Play and the App Store in Europe and Asia. Some compromised apps include ComeCome, ChatAi, and WeTink. The malware is particularly dangerous because it doesn’t only target crypto-related apps; it also disguises itself as messaging, AI, or food delivery apps. SparkCat operates stealthily, requesting permissions only at key moments. Once granted access, it scans the device for images resembling recovery phrases using Optical Character Recognition (OCR) technology.

4. Tornado Cash Developer Alexey Pertsev Granted Conditional Release:
   On Friday, Alexey Pertsev, one of the developers of Tornado Cash, was released on conditional bail in the Netherlands. He will now be able to prepare for his trial appeal outside of prison.

Traditional Finance:

1. A Spot Polkadot (DOT) ETF Coming Soon? 21Shares Submits Application:
   The wave of crypto ETF applications continues. Asset manager 21Shares—already offering Bitcoin and Ethereum ETFs—has now filed for an innovative Polkadot (DOT) ETF with the U.S. Securities and Exchange Commission (SEC).

2. BlackRock to Launch a Bitcoin ETP in Europe:
   In just over a year, BlackRock has shattered ETF records with its iShares Bitcoin Trust ETF (IBIT), which now holds $57 billion in Bitcoin exposure. Having secured dominance in the U.S. market, the financial giant is now setting its sights on Europe with a new Bitcoin-based investment vehicle.

3. Will Crypto Exchange Gemini Go Public in 2025?
   Experts agree: 2025 will be a major year for cryptocurrencies. This is especially true for U.S.-based crypto firms, which will benefit from tailored regulatory and legislative frameworks. With companies like Coinbase already publicly traded, other exchanges—such as Gemini—are preparing to follow suit. Gemini had previously announced similar plans in 2021 when the Winklevoss twins expressed interest in acquiring companies to create the world's largest crypto platform. However, their target—Digital Currency Group—went bankrupt, and the deal was further complicated by FTX’s collapse, as it was supposed to help finance the acquisition alongside Coinbase.

4. The Fed Sees Stablecoins as a Key Tool to Strengthen the U.S. Dollar:
   Could stablecoins replace the idea of a central bank digital currency (CBDC)? With Donald Trump banning CBDCs and the Federal Reserve questioning their necessity, Fed Governor Christopher Waller sees stablecoins as a valuable asset for the dollar. He also emphasized that regulating digital currencies is now a bipartisan priority. To that end, a group of senators recently introduced the "GENIUS Act," a bill aimed at strengthening the U.S. dollar while ensuring innovation in the sector.

5. Citi predicts the correlation between stocks and crypto markets will weaken as the digital asset space matures, adoption expands, and technology advances. While equities have historically been the primary macro driver for crypto, the bank expects this relationship to diminish over time. However, Citi cautions that crypto’s speculative nature could still lead to heightened correlations during risk-off events. Notably, the bank highlighted that crypto was the only asset class whose market cap grew relative to U.S. equities last year.

6. Standard Chartered’s Head of Digital Assets Research, Geoffrey Kendrick, predicts Bitcoin will reach $500,000 before President Trump leaves office, citing improved investor access and declining volatility. Kendrick attributes this growth to increasing institutional inflows, maturing financial infrastructure, and expanding options markets. He likens Bitcoin’s trajectory to gold’s post-2004 ETF surge, expecting similar gains within two years. The recent launch of U.S. spot Bitcoin ETFs, which have already attracted over $40 billion in net inflows, alongside potential regulatory shifts like the repeal of SAB 121 and Trump's executive order on digital asset reserves, could further enhance Bitcoin’s institutional appeal.

7. Swiss banking giant UBS has completed a proof-of-concept for its UBS Key4 Gold offering on the Ethereum layer-2 network ZKsync, marking a renewed interest in blockchain among traditional financial institutions. The test was conducted on a ZKsync test network as UBS explores scaling its existing UBS Gold Network while maintaining privacy. Key4 Gold allows Swiss clients to invest fractionally in physical gold with real-time pricing, deep liquidity, and optional physical delivery. While UBS has not committed to launching its own layer-2 solution, the trial suggests an interest in leveraging zero-knowledge technology for financial applications.

8. Cboe BZX Exchange has filed 19b-4 forms with the SEC to list spot XRP ETFs for Bitwise, 21Shares, and Canary Capital, marking the next step in the approval process following their S-1 registrations. The filings will be published in the Federal Register once acknowledged, initiating the SEC’s review. With spot Bitcoin and Ethereum ETFs already approved, growing institutional interest and the Trump administration’s pro-crypto stance have accelerated a wave of XRP ETF filings, including submissions from WisdomTree, NYSE Arca for Grayscale’s XRP Trust, and CoinShares.

9. BlackRock has increased its stake in Strategy (formerly MicroStrategy) to 5%, acquiring an additional 1.78 million shares valued at nearly $600 million, according to an SEC filing. This brings BlackRock's total investment in the company—known as the largest corporate holder of bitcoin—to over $3.7 billion, as Strategy's BTC holdings now exceed 471,107 BTC worth $46 billion.

Tech News:

1. Vitalik Buterin: Ethereum’s Next Major Upgrade Expected in March:
   The long-awaited Ethereum (ETH) Pectra upgrade is expected in Q1 2024, with Vitalik Buterin announcing that it could arrive in March. Pectra combines the Prague and Electra updates, improving both the execution and consensus layers. Key features include increasing the number of data blobs per block, enhancing Layer 2 capabilities, and implementing several Ethereum Improvement Proposals (EIPs) to optimize data management and reduce blockchain size. One of the most crucial changes, EIP-7251, will allow validator nodes to stake up to 2,048 ETH, reducing the overall number of nodes and simplifying validator management.

2. The Ethereum network’s transaction capacity improved late Monday as validators agreed to raise the gas limit for the first time since 2021, reaching nearly 32 million gas units, with a maximum expected capacity of 36 million. The change, supported by over half of the validators, was enacted automatically without requiring a hard fork. This increase enhances Ethereum’s throughput, enabling more transactions and complex operations per block, which benefits DeFi applications by reducing congestion and downtime.

3. Ondo Finance introduced Ondo Global Markets (Ondo GM), a platform designed to bring traditional assets like stocks, bonds, and ETFs onto the blockchain. Aiming to address inefficiencies in the current investment ecosystem—such as high fees, limited access, and platform fragmentation—Ondo GM will enable freely transferable tokens tied to these assets while maintaining regulatory controls over who can trade them. The initiative draws inspiration from stablecoin liquidity models to enhance accessibility and efficiency in capital markets.

4. The cost of using Avalanche, a DeFi-focused smart-contract blockchain, has dropped significantly since the Avalanche9000 upgrade on Dec. 16, leading to a 38% increase in daily transactions. The upgrade slashed gas fees by roughly 75% and replaced the previous 2,000 AVAX validator fee with a monthly subscription of 1 to 10 AVAX, making it more accessible for projects to launch layer-1 protocols. Avalanche, the fifth-largest smart-contract blockchain, operates a multichain structure, with its C-Chain handling smart contracts, P-Chain managing staking, and X-Chain processing asset transfers. The update aimed to lower costs across the network, particularly by reducing C-Chain fees and easing validator capital requirements.

5. Arbitrum, a leading Layer-2 network, has integrated with Bitcoin through BitcoinOS, a smart contract system designed to expand Bitcoin’s utility. The integration enables a "hybrid rollup," allowing Bitcoin holders to interact with Ethereum-based decentralized finance (DeFi) applications while maintaining Bitcoin’s security principles. Nina Rong, Head of Partnerships at Arbitrum Foundation, highlighted that this move showcases Arbitrum's ability to facilitate trustless bridging and programmability for Bitcoin, potentially unlocking Bitcoin’s $2 trillion liquidity pool for DeFi. Arbitrum currently leads all Ethereum L2s with $16 billion in total value locked (TVL) and holds 8,333 Wrapped Bitcoin (WBTC).

6. Layer 1 blockchain Berachain’s BERA token traded at $8 in pre-launch markets ahead of its highly anticipated airdrop of nearly 80 million tokens. The DeFi-focused network is set to go live later Thursday, with an initial supply of 500 million BERA, 48.9% of which is allocated for community engagement, including airdrops and ecosystem development. Users can check their allocations on the Berachain airdrop checker and claim tokens via EVM-compatible wallets like Metamask and OKX Wallet. Known for its proof-of-liquidity consensus model and cult-like social media following, Berachain has fueled speculation with its signature catchphrase: "Was it even real?"

Adoption:

1. MicroStrategy Becomes "Strategy," Rebranding as the World’s Largest Bitcoin Treasury Firm:
   Ahead of its quarterly earnings announcement, MicroStrategy has rebranded itself as "Strategy." This name change signals the company’s shift from software development to its new primary focus—becoming "the first and largest Bitcoin treasury company in the world."

2. Neptune Digital Assets, a publicly traded Canadian blockchain firm, acquired 1 million DOGE ($270,000) through a strategic derivative purchase on Dec. 27 and added 20 BTC ($2 million) between Jan. 26 and Feb. 3, bringing its total Bitcoin holdings to 376 BTC ($37.4 million). CEO Cale Moodie emphasized Neptune’s commitment to growth while managing leverage risk via the Sygnum credit line. The firm is now the second publicly traded company to invest in Dogecoin, following Spirit Blockchain, as institutional interest in DOGE rises, with firms like Bitwise, Osprey Funds, and Rex Shares seeking to launch spot DOGE ETFs.

Disclaimer: The information disclosed here does not constitute an investment advice ; it is for informational purposes only and does not constitute investment advice. You should do your own research while investing in crypto and only invest money you are ready to lose.