Token Chronicle - Week 1 January 2025

Top cryptos

Meme of the week

Market update: We had returned above $100K for BTC, but yesterday saw another drop, and today BTC is at $94K. This significant decrease has affected the entire financial markets and is linked to short-term concerns about the US market (regarding inflation and bond yields, which could influence a further rate cut or not). However, analysts view this as a short-term correction that suggests a major rebound afterward.

Main points this week:

International:

1. Syria Considering Bitcoin to Address Economic Reconstruction Challenges: Devastated by years of conflict, Syria must rebuild its economy while overcoming rampant inflation and a monetary crisis. Bitcoin, due to its resilience and neutrality, is seen as a promising solution to address financial challenges and foster sustainable economic recovery. The Syrian Center for Economic Research, a Syrian think tank, has proposed that the transitional government legislate Bitcoin and undertake the digitization of Syria's economy and currency. A think tank is an independent organization dedicated to research, analysis, and recommendations on public interest issues.

2. Czech Republic: Central Bank Governor Supports Bitcoin Reserve Creation: Similar to the US, Switzerland, and Hong Kong, the Czech Republic is considering establishing a strategic reserve in Bitcoin (BTC). The idea, proposed by the governor of the Czech National Bank (CNB), supports diversifying the country's reserve assets. Aleš Michl believes that a strategic BTC reserve could help the Czech Republic diversify its reserves and mitigate potential future financial uncertainties. However, the CNB would not make a significant investment in Bitcoin, as it is not considered a major investment by the national bank.

3. Canada: Potential Bitcoin-Pro Prime Minister Backed by Elon Musk and Michael Saylor?: Following Justin Trudeau's announcement of his resignation as Canada's Prime Minister, Pierre Poilievre emerges as a leading contender for the position.

4. In late 2024, Cango (CANG), a Chinese auto loan company, shook up the bitcoin mining industry by acquiring 50 EH/s of mining power, making it a major player in the sector. The Shanghai-based firm, valued at $363 million, invested $256 million in Bitmain mining equipment and issued $144 million in shares for additional capacity. This diversification has significantly boosted Cango's stock, which rose over 362% by the end of 2024. Senior Director Juliet Ye highlighted the company's history of adaptation and newfound attention following its entry into bitcoin mining.

5. South Korea’s financial regulator, the FSC, plans to gradually lift its ban on institutional crypto trading, beginning with non-profit organizations, according to local reports. Currently, only government-verified retail traders can trade cryptocurrencies, with banks advised to restrict institutional access to crypto exchange accounts. This phased lifting aligns with the ruling People Power Party’s election promises to boost the crypto sector, which also include promoting the launch of local spot crypto ETFs.

Regulation/Compliance/Justice:

1. FTX Case: Celsius Appeals to Recover $444 Million: As FTX prepares to reimburse its creditors and has unveiled its reorganization plan, Celsius also claims to have been harmed by the actions of the exchange led by Sam Bankman-Fried. However, the court has twice rejected claims from the crypto platform, which also faced bankruptcy.

2. FTX Reimbursements Begin: After more than two years of complex proceedings, FTX has started the long-awaited redistribution of funds to its creditors. This initial reimbursement phase hints at a resolution to a case that has significantly impacted the crypto market. According to shared details, 98% of investors should receive about 119% of their declared fund value, including capital and interest. However, this percentage is based on the value of cryptocurrencies at the time of FTX's bankruptcy, when Bitcoin was below $20,000. Despite criticisms, this large-scale fund redistribution could significantly impact the cryptocurrency market, potentially injecting around $2.4 billion into the crypto ecosystem, sparking a new bullish trend as Donald Trump's inauguration approaches.

3. China's State Administration of Foreign Exchange (SAFE) has issued new regulations requiring banks to enhance monitoring of foreign exchange transactions, focusing on activities like underground banking, cross-border gambling, and cryptocurrency-related operations. Banks must evaluate transactions based on factors like party identities, funding sources, and frequency, implementing risk controls and limiting services for flagged entities. Despite banning crypto transactions in 2021, China's 2024 Financial Stability Report highlights ongoing financial risks associated with crypto. Legal experts expect further tightening of anti-money laundering (AML) laws targeting emerging technologies, including cryptocurrencies.

4. Crypto exchange Gemini agreed to pay $5 million to settle a case with the U.S. Commodity Futures Trading Commission (CFTC) over allegedly misleading statements about bitcoin futures contract manipulation in 2017. The settlement, made without admitting or denying liability, includes an injunction against making false statements to the CFTC. This resolves a trial initially set for January 21. Gemini also faces a separate lawsuit from the SEC for alleged securities law violations. U.S. regulators, in the absence of specific crypto legislation, have increasingly pursued legal action against exchanges like Coinbase and Binance for similar issues.

Traditional Finance:

1. BlackRock Expands Influence in DeFi with Frax Finance: The line between traditional and decentralized finance (DeFi) is increasingly blurred. Frax Finance has chosen BlackRock's tokenized BUIDL fund to support its stablecoin, FraxUSD, allowing users to benefit from US Treasury bond yields. This partnership is a win for both the protocol and BlackRock, whose influence in the crypto sector grows daily. Through BlackRock's tokenized fund, FraxUSD stablecoin users can enjoy low-risk benefits such as earning US Treasury bond interest, with minimal to no risk since the fund is backed by BlackRock, which manages $10.4 trillion in assets.

2. Fidelity Digital Assets predicts 2025 will be pivotal for bitcoin adoption, driven by concerns over currency debasement and rising fiscal deficits. Their report suggests that not allocating to bitcoin could be riskier than investing in it. Notably, both President-elect Donald Trump and Senator Cynthia Lummis have advocated for a strategic bitcoin reserve. Fidelity posits that if the U.S. adopts this strategy, other nations may follow, likely accumulating bitcoin covertly to avoid influencing market prices. This potential geopolitical move could significantly boost bitcoin's status as a global reserve asset.

Innovation:

1. a16z: Blockchain Will Revolutionize AI by Ensuring Content Authenticity: As identifying AI-generated content becomes more complex, a16z crypto's founder highlights the potential value blockchain could add. "Another fundamental property that blockchains can enforce is identity. If you are who you claim to be, you can cryptographically sign a statement attesting to it. [...] In the coming years, we will see more 'proof of humanity' on the Internet due to recent technological advancements." Additionally, the unalterable nature of blockchain could help combat falsification. Associating content with a cryptographic hash means that any modification of the content would change the hash, indicating intellectual property violation.

2. Blockchain hardware manufacturer Canaan has launched the Avalon Mini 3, a 37.5 TH/s Bitcoin miner that also functions as a home heater, making mining more practical for residential use. The device, priced at $899 for preorders, offsets energy costs by recycling heat from the mining process to warm living spaces. Additionally, Canaan introduced the 6 TH/s Avalon Nano 3S at CES 2025 in Las Vegas, offering a beginner-friendly and portable Bitcoin mining solution.

3. Avalanche, the tenth-largest Layer 1 blockchain by total value locked (TVL), has implemented its Avalanche9000 upgrade, the most significant update since its 2020 launch. This upgrade introduces features aimed at reducing transaction costs, simplifying validator operations, and facilitating application development. Avalanche's leaders hope these improvements will attract developers to build customized blockchains, known as subnets or “L1s,” using Avalanche's technology.

Adoption:

1. Metaplanet Plans to Quintuple Bitcoin (BTC) Reserves by 2025: In 2024, Metaplanet followed in MicroStrategy's footsteps by adopting a strategic Bitcoin reserve to boost its treasury. Now the largest private BTC holder in Asia, the Japanese company aims to quintuple its strategic Bitcoin reserve. To achieve this, Simon Gerovich plans to leverage partnerships forged by the company in recent months and those to be established in the future.

2. MARA Now Lends Bitcoin (BTC) to Generate New Returns: With a significant Bitcoin (BTC) reserve from its crypto mining activities and a strategy of acquiring as much as possible, MARA has decided to lend part of its reserve to trusted third parties to generate more returns. As of December 31, 2024, MARA has used 7,377 Bitcoins, or 16.4% of its strategic reserve, for short-term loans aimed at generating returns for its shareholders.

3. Coinbase Secures License to Offer Derivative Products in Europe: Coinbase continues its European expansion by acquiring a subsidiary of Bux, granting it a key license to offer derivative products. This acquisition provides Coinbase with the coveted MiFID II license, officially allowing it to offer crypto derivatives in Europe. It includes gathering and storing customer information.

4. Crypto App Backpack Acquires FTX EU to Expand in Europe: Backpack, a crypto app combining a wallet and exchange platform, announces the acquisition of FTX EU. This move aims to offer regulated crypto derivatives in response to growing demand in the EU and comply with new MiCA regulations. FTX's former European branch holds a MiFID II license, a key asset that will enable Backpack, founded by former FTX and Alameda Research employees, to offer compliant crypto derivatives in the European Union.

5. MicroStrategy purchased 1,070 BTC for $101 million at an average price of $94,004 per bitcoin between December 30-31, as disclosed in an SEC filing. The acquisition was funded by selling 319,586 shares, boosting its stock price by over 7%. The company now holds 447,470 BTC, valued at over $44 billion, with an average purchase price of $62,503 per bitcoin. Co-founder Michael Saylor celebrated bitcoin's $100,000 milestone in Miami. Meanwhile, Japan’s Metaplanet plans to expand its bitcoin holdings to 10,000 BTC this year, over five times its current position.

Partnerships/Founding:

1. Blockchain development firm Movement Labs is nearing a $100 million Series B funding round, co-led by CoinFund and Nova Fund, part of Brevan Howard's digital assets arm. The round values the company at $3 billion and includes a mix of equity and Move tokens for investors, with the deal expected to close by the end of January. Movement Labs previously raised $38 million in a Series A round led by Polychain Capital in April 2025 and $3.4 million in a 2023 pre-seed round. The funding supports their mission to integrate Facebook's Move Virtual Machine with Ethereum.

2. Blockchain oracle firm Pyth Network has partnered with neobank Revolut to integrate digital banking data into decentralized finance (DeFi), covering over 500 markets including forex, equities, and commodities. While Revolut operates a crypto exchange, it doesn't disclose volume data. Competing with ChainLink, Pyth provides accurate price feeds for DeFi protocols and airdropped its native token (PYTH) in 2023. With $7.5 billion in value secured, Pyth receives data from crypto exchanges like Bitstamp, Bybit, Binance, and trading firms such as Jane Street and Cumberland DRW, according to DefiLlama.

3. Arbitrum, Ethereum's largest layer-2 network, is set to strengthen its partnership with Lotte Group, a major South Korean conglomerate. Offchain Labs and the Arbitrum Foundation announced a forthcoming financial deal that will establish Arbitrum as the primary blockchain infrastructure for Lotte's "Caliverse" metaverse gaming platform. This collaboration aims to integrate Arbitrum’s technology into Lotte's expansive portfolio, enhancing its metaverse initiatives.

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.