Token Chronicle - Week 3 January 2025

Top cryptos

Meme of the week

Market update: A week that was very volatile, with BTC fluctuating within a range of $101K-$109K, but marking the beginning of a very bullish period following announcements and decisions made by the new U.S. government. Expectations were met, and it is likely that the coming week will push BTC and the rest upward. There has also been a lot of movement and discussions within the Ethereum Foundation—let's see if the decisions made strengthen the marketing aspect of the network (which is currently lacking, though the tech side and roadmap remain solid).

Main points this week:

Focus USA:

1. Donald Trump Jr. appointed advisor to the predictive betting platform Kalshi:
   Donald Trump Jr. will become an advisor for the predictive betting platform Kalshi. This appointment comes as these platforms have played a key role during the last presidential elections and are now facing bans, investigations, and lawsuits worldwide.

2. The launch of the TRUMP and MELANIA memecoins sparks mixed reactions within the crypto community:
   The launch of the TRUMP and MELANIA memecoins, just days before Donald Trump’s inauguration, has sparked mixed reactions within the crypto community. While some see it as an opportunity, others fear negative repercussions for the ecosystem. Indeed, the TRUMP and MELANIA tokens are very poorly distributed, with over 80% of the tokens in circulation reserved for their creators and concentrated in a handful of wallets. Thus, the TRUMP and MELANIA memecoins, which will likely end up like most memecoins—tending toward a near-zero value in the long term—will provide critics with additional arguments to denounce Bitcoin and any initiative linked to it that the new Trump administration may undertake, whether in terms of mining, self-custody protection, or creating a strategic reserve. Over the long term, Bitcoin should withstand these associations. However, in the short term, traditional financial institutions and Bitcoin's adversaries will likely exploit Donald Trump's actions to tarnish Bitcoin's image and its role in improving the global economy and the energy industry.

3. The co-founder of a pro-Trump association accused of rug pull:
   Hoping to capitalize on the lifting of the TikTok ban in the United States, one of the co-founders of the Students for Trump association created a memecoin in connection with this event. However, the main individual involved appears to have devised a crypto scam to profit at the expense of investors. In the United States, the Students for Trump association has pursued one goal since its creation in 2015: ensuring that Donald Trump is elected in presidential elections and remains president of the country. Ryan Fournier had already been arrested and accused of physical assaults in 2023. Now, he is at the center of another controversy surrounding cryptocurrencies. The co-founder of Students for Trump is accused of conducting a rug pull after acquiring and selling half of the supply of a memecoin created to celebrate the lifting of the TikTok ban in the United States.

4. World Liberty Financial: DeFi project holders purchase $113 million in cryptocurrencies:
   January 20, 2025, will forever be etched in history as the inauguration day of Donald Trump as the 47th President of the United States. To mark the occasion, World Liberty Financial decided to acquire new cryptocurrencies to strengthen its treasury. The transactions carried out by World Liberty Financial focused on six tokens. Thus, $47 million in Ether (ETH) and $47 million in wrapped Bitcoin (wBTC) were purchased. In parallel, WLFI invested $4.7 million each, totaling $18.8 million, in AAVE, LINK, TRX, and ENA.

5. Silk Road: Ross Ulbricht pardoned by Donald Trump and released:
   Donald Trump has pardoned Ross Ulbricht, the creator of Silk Road, bringing an end to his life sentence. This decision, announced last night, follows a campaign promise and marks a key moment in Bitcoin’s history.

6. The SEC launches a crypto task force:
   To finally establish a clear regulatory framework for cryptocurrencies in the United States, the Securities and Exchange Commission (SEC) has announced the creation of a task force. The goal here is to provide the regulatory clarity so desperately sought by the ecosystem, which the SEC acknowledges was lacking in the past.

7. With the Stargate project, Donald Trump announces a $500 billion investment in artificial intelligence (AI):
   During the electoral campaign, Donald Trump announced that he would emphasize innovation if elected. Just after taking office, the 47th President of the United States unveiled the Stargate project aimed at developing AI infrastructure on American soil with the help of several industry players. Donald Trump announced that $500 billion would be invested to fund Stargate, a project focused on AI infrastructure, primarily in Texas. This funding was secured with the support of several industry leaders: OpenAI, the AI company behind ChatGPT; Japanese investment fund SoftBank; MGX, an AI investment firm; and cloud computing specialist Oracle.

8. Strategic Bitcoin reserve: Donald Trump officially launches the initiative:
   Although the new president did not mention cryptocurrencies during his inauguration, he has just signed an executive order that will go down in history, marking the launch of the United States’ strategic Bitcoin and cryptocurrency reserve. On Thursday, January 23, Donald Trump signed an executive order titled “Strengthening American Leadership in Digital Finance Technologies.” Behind this complex name lies a series of amendments related to cryptocurrencies and the mining industry. In total, seven sections divided into several points outline the main lines of the United States’ future policy on cryptocurrencies. “The task force will evaluate the feasibility of creating and maintaining a national stockpile of digital assets and propose criteria for establishing such a stockpile, potentially sourced from cryptocurrencies legally seized by the federal government.”

9. Several U.S. states consider creating their own strategic Bitcoin reserves:
   Several U.S. states are taking the lead in drafting laws to establish strategic Bitcoin reserves. This initiative, supported by companies like MARA, marks a potential turning point in the institutional adoption of Bitcoin in the United States. According to Forbes, seven states have already proposed such laws, including Texas, Alabama, Pennsylvania, New Hampshire, Florida, Ohio, and North Dakota. MARA, the leading mining company in the United States, is exerting its influence to encourage more states to follow suit, particularly by supporting the Bitcoin Voter Project initiative.

10. The SEC removes a controversial crypto accounting rule:
    The Securities and Exchange Commission (SEC) has repealed the widely criticized SAB 121 directive on cryptocurrency accounting. SAB 121 required companies holding cryptocurrencies on behalf of their clients to include them on their balance sheets. This accounting rule created a heavy burden by inflating companies' liabilities, presenting a misleading picture as if the cryptocurrencies belonged to the company. Furthermore, this treatment contradicted expectations for other asset classes, discouraging ecosystem players from offering cryptocurrencies to their clients due to the accounting complications it entailed.

11. Donald Trump orders the abandonment of CBDC projects in the United States:
    After a year of promises, Donald Trump officially acted on Thursday to ban central bank digital currencies (CBDCs) in the United States. According to him, CBDCs threaten the stability of the financial system, pose privacy risks to citizens, and could compromise U.S. sovereignty.

12. President-elect Donald Trump is reportedly open to creating an "America-first" crypto reserve, prioritizing U.S.-based coins like USDC, SOL, and XRP, according to the New York Post. Trump has met with the founders of these assets and is receptive to the idea, though insiders caution it could undermine efforts to promote bitcoin, a key element of his campaign. Despite potential industry disagreements, sources suggest a "crypto golden age" is imminent, with broader promises such as appointing a crypto-friendly SEC Chair, commuting Ross Ulbricht's sentence, forming a Crypto Presidential Advisory Council, and making the U.S. a bitcoin mining hub. A Crypto Ball, ahead of Trump's Jan. 20 inauguration, reflects Washington's shifting stance, with sponsorship from major industry players like Coinbase and Solana.

International News:

1. Bhutan plans to adopt BTC, ETH, and BNB as part of its strategic reserves:
   As the fifth-largest Bitcoin holder, Bhutan is now considering integrating BTC, Ether, and BNB into its strategic reserves. A decision on this matter will be made in March 2025, marking another milestone in King Jigme Khesar Namgyel Wangchuck’s urban development and economic innovation plans. In March 2025, GMC plans to organize a high-level meeting in Bhutan, bringing together government officials and industry leaders to discuss recognizing digital assets in strategic reserves and establishing an international advisory group for digital assets under GMC.

2. MiCA: Crypto.com set to be the first platform to obtain its license in Europe:
   On Friday, Crypto.com announced that it had received an agreement in principle to obtain a “MiCA license.” This new step will enable the platform to officially serve all investors in the European Union, eliminating the need for separate regulatory processes in each targeted jurisdiction.

3. Cuba’s Ministry of Foreign Affairs accused of a rug pull after promoting memecoins:
   On Monday, Cuba’s Ministry of Foreign Affairs’ X account (formerly Twitter) was accused of rug pulling after promoting memecoins. While the Trump family’s crypto antics might inspire others, this incident involved a pump-and-dump scheme with at least three tokens. One token reached a $29 million market cap before losing over 90% of its value. Although hacking is the likely explanation, it highlights Cuba’s cybersecurity shortcomings.

4. El Salvador buys $1.1M worth of Bitcoin despite IMF agreement:
   Despite an agreement with the IMF limiting government Bitcoin purchases, El Salvador continues to invest in Bitcoin. Its latest purchase of 12 BTC for $1.1 million reflects President Nayib Bukele’s ongoing commitment to the cryptocurrency. El Salvador now holds 6,044 Bitcoins acquired for $278 million, currently valued at $617 million—a 122% profit.

5. OKX secures MiCA pre-authorization: a key step for European expansion:
   Cryptocurrency exchange OKX announced that it has obtained pre-authorization under the European Markets in Crypto-Assets (MiCA) regulation. Granted by Malta’s Financial Services Authority (MFSA), this positions OKX as a significant player in adopting new European regulations.

6. South Korea plans to draft a new crypto regulatory framework by late 2025, focusing on transparency and accountability for exchanges and stablecoin issuers. The Financial Services Commission aims to introduce stricter standards, including disclosure rules akin to traditional finance. The country's first crypto regulation, focused on investor protection, took effect in July 2024. South Korea boasts one of the largest crypto markets, with Upbit ranking as the third-largest centralized exchange globally by trading volume last month.

7. Taiwan's Financial Supervisory Commission (FSC) has finalized the draft of a special law on virtual assets, according to local reports. The draft includes seven chapters covering areas such as licensing conditions for Virtual Asset Service Providers (VASPs), stablecoin management, and penalties. It aligns with global standards from the EU, Japan, and others, and will undergo consultation with industry experts in early 2025 before being presented to the Legislative Yuan in June. This follows Taiwan's recent tightening of VASP regulations, expanding oversight to overseas entities and enhancing consumer protection and cybersecurity measures.

Compliance/Regulation/Justice:

1. The Securities and Exchange Commission (SEC) is suing Elon Musk: Just weeks after being named co-chair of the Department of Government Efficiency (DOGE) within the Trump Administration, Elon Musk is facing legal troubles. The Securities and Exchange Commission has decided to file a lawsuit against the businessman. The agency claims that Musk failed to timely disclose that he had "acquired beneficial ownership" of Twitter, now X, on March 14, 2022, allowing him access to the social network’s shares at more favorable prices. Specifically, the SEC alleges that Elon Musk did not disclose his acquisition of more than 5% of Twitter’s shares within 10 days, as required by law. The world's richest man reportedly made the disclosure 21 days after the initial transaction.

2. Bitfinex hack: The exchange could recover part of its 120,000 Bitcoins (BTC): After pleading guilty in court and signing plea agreements, the two main suspects in the Bitfinex hack have been sentenced to prison. Simultaneously, the centralized exchange is expected to be compensated through the Bitcoins seized by law enforcement during the hackers' arrest.

3. Tornado Cash: U.S. justice overturns OFAC sanctions, TORN surges 120%: Accused by OFAC of facilitating illegal activities, the Tornado Cash protocol has ultimately won its appeal. The court ruled that its smart contracts cannot be equated to sanctionable properties, challenging regulators' overall approach to decentralized technologies. TORN’s price reacted immediately, soaring upward.

4. Elon Musk: The DOGE faces multiple lawsuits: The Department of Government Efficiency (DOGE), a controversial initiative created under Donald Trump’s presidency and led by Elon Musk, is facing multiple legal actions. These lawsuits accuse DOGE of lacking transparency and bypassing Congress. The National Security Counselors, Citizens for Responsibility and Ethics, and Public Citizen criticize DOGE for violating the Federal Advisory Committee Act (FACA), which mandates transparency and fair representation in federal committees. Critics also highlight that DOGE's creation was approved solely by Donald Trump without Congressional consent, contrary to established procedures.

5. A judge has ordered BitMEX to pay $100 million in fines for operating without proper anti-money laundering controls from 2015 to 2020. Despite calling these charges "old news" in July 2024 and expressing confidence that no further penalties would follow, BitMEX's optimism was misplaced. The Department of Justice initially sought $417 million, citing $155 million earned from U.S. users during the period. Reducing the penalty to $100 million may be seen as a relative win for the exchange.

6. Changpeng "CZ" Zhao is set to play an "active role" at YZi Labs, the rebranded Binance Labs, now focusing on investments in biotech and AI alongside crypto. Previously a top crypto venture firm, Binance Labs invested in major projects like CertiK, Dune Analytics, and Polygon. After resigning as Binance CEO in 2023, Zhao served four months in prison following money laundering charges, with Binance settling for over $4 billion. YZi Labs is now a "family office investment vehicle," free from Binance's operations.

Traditional Finance:

1. JP Morgan predicts Bitcoin (BTC) will retain dominance over Ether (ETH) and altcoins in 2025: Will Bitcoin (BTC) remain the most capitalized cryptocurrency on the market in 2025, far ahead of Ether (ETH)? For JP Morgan analysts, the answer seems obvious: Bitcoin’s dominance over other cryptocurrencies will persist for various reasons. JP Morgan highlights comparisons between Bitcoin and gold, noting Bitcoin's increasing reputation as digital gold, evidenced by the net inflows into Bitcoin spot ETFs compared to Ethereum spot ETFs, which remain modest. The institution also references the growing number of companies and governments considering holding strategic reserves in BTC. JP Morgan points to MicroStrategy as an example. Additionally, it mentions the rise of Bitcoin-based Layer 2 solutions enabling support for smart contracts, positioning Bitcoin on par with competitors like Solana and Ethereum.

2. Swiss bank PostFinance ventures into Ethereum (ETH) staking: While already offering cryptocurrency services, Swiss bank PostFinance is now turning to staking on Ethereum (ETH).

3. Toward the launch of a TRUMP spot ETF in the U.S.? A request has been submitted to the SEC: For many analysts, 2025 could be the year for cryptocurrency-focused ETFs, riding on the success of Bitcoin spot ETFs and Ethereum spot ETFs. While requests for ETFs based on Solana (SOL), Litecoin, or XRP have already been submitted to the SEC, asset managers are now proposing more "original" ETFs. On Monday, Rex Shares and Osprey Fund jointly submitted a request to the SEC to issue cryptocurrency-focused ETFs. While the two asset managers aim to offer American investors Bitcoin spot ETFs and Ethereum spot ETFs, they have also proposed launching ETFs based on memecoins like Dogecoin (DOGE), BONK, and TRUMP.

4. Bitwise files for a Dogecoin (DOGE) ETF: Following its Bitcoin (BTC) and Ethereum (ETH) ETFs, asset manager Bitwise now plans to launch a Dogecoin (DOGE) ETF.

5. Bitcoin (BTC) could reach $700,000, says BlackRock CEO Larry Fink: Speaking at the World Economic Forum in Davos, BlackRock CEO Larry Fink explained how Bitcoin (BTC) could reach $700,000. He presented the cryptocurrency as a hedge against weaknesses in global monetary policies. Fink described a scenario where BTC could hedge positions exposed to government bonds or equities. Under this strategy, allocating 2–5% of BTC in portfolios could lead to such high valuations.

6. Morgan Stanley could expand its crypto offerings, says its CEO: Morgan Stanley, which has already taken steps into the crypto ecosystem in recent years, may accelerate its initiatives. So far, banks in the U.S. have been prohibited from holding spot cryptocurrencies. Morgan Stanley initially ventured into crypto in 2021, offering clients investments in Galaxy Digital and NYDIG funds. More recently, in August 2024, it was revealed that Morgan Stanley held $185 million in Bitcoin ETFs.

7. Nasdaq seeks to modify BlackRock’s Bitcoin ETF for real BTC exchange: On Friday, Nasdaq requested authorization from the SEC to allow the exchange of BlackRock’s Bitcoin spot ETF shares for actual BTC.

8. A Litecoin ETF may be the next spot crypto ETF approved in the U.S., according to Bloomberg analyst Eric Balchunas. Canary Capital's amended S-1 registration for its Litecoin ETF application suggests engagement from the SEC, a precursor to past ETF approvals. U.S. Bancorp Fund Services is set to administer the ETF, with Coinbase and BitGo acting as custodians for the fund's litecoin. Nasdaq's filing of a 19b-4 form for the ETF has initiated the SEC's decision process, which fellow Bloomberg analyst James Seyffart sees as a strong indication of potential approval.

9. EToro, a retail-focused stocks and crypto trading platform, has confidentially filed with the U.S. SEC to go public on the New York Stock Exchange, potentially as early as Q2, with a valuation exceeding $5 billion, according to the Financial Times. Goldman Sachs, Jefferies, and UBS are advising on the deal. If successful, eToro would join Coinbase and Robinhood as a public company offering crypto trading, though at a smaller scale. This move follows a previous SPAC deal attempt at a $10.4 billion valuation, which was abandoned in 2022 due to market conditions. In 2023, eToro raised $250 million at a $3.5 billion valuation and settled SEC charges for $1.5 million.

10. Deutsche Bank predicts bitcoin's price will remain elevated in 2025, supported by favorable U.S. regulatory and political conditions, growing institutional interest, and looser Federal Reserve policies. While President Trump hasn't issued crypto-related orders yet, Deutsche Bank expects clarity on a strategic BTC reserve soon. Analyst Marion Laboure highlights the administration's pro-crypto stance as vital for sustaining the current bull run and fostering a "crypto golden era." The appointment of Paul Atkins as SEC chair further signals an innovation-friendly regulatory shift.

Tech News:

1. Soneium: Sony’s Layer 2 mainnet is officially live: After announcing its Ethereum-based Layer 2 last summer, Sony has officially launched the Soneium mainnet this week. Sony also unveiled S.BLOX, its cryptocurrency exchange, following its acquisition of WhaleFin. To celebrate, Sony is offering new Japanese users ¥3,000 in BTC upon signing up.

2. Unlimited leverage and no liquidations: InfinityPools launches next-gen crypto trading platform: InfinityPools debuts its decentralized exchange with innovative features to redefine leveraged trading. The platform launches with trading pairs wstETH/sUSDe and sUSDe/USDC on Base through a partnership with Ethena. Additional pairs will become permissionless after a few months.

3. USDT soon compatible with all blockchains? Enter USDT0: Through the USDT0 initiative and LayerZero technology, Tether’s stablecoin USDT may become compatible with all blockchains. Using LayerZero’s OFT standard, USDT0 creates synthetic versions of USDT across any compatible blockchain by leveraging Ethereum’s liquidity.

4. Coinbase introduces USDC loans backed by Bitcoin (BTC): Coinbase has partnered with the DeFi protocol Morpho to allow customers to borrow USDC by collateralizing Bitcoin. Users can deposit BTC directly on Coinbase to borrow up to $100,000 USDC, with competitive rates provided via the Morpho protocol.

5. f(x) Protocol enables liquidation-free trading with its V2: The upgraded f(x) Protocol introduces fixed leverage up to 7x (and later up to 10x), alongside an automated rebalancing mechanism to minimize liquidation risks, offering traders more strategic flexibility.

6. Uniswap (UNI) V4 deployment begins this week: After 18 months of anticipation, Uniswap (UNI) is rolling out V4, featuring customizable liquidity pools via smart contract "hooks" for added functionality like limit orders and fee reinvestments.

7. Bubblemaps, the blockchain analytics service, announced it will launch a token called BMT and introduce an "Intel Desk" to empower token holders in guiding investigative efforts. The platform, which recently unveiled its V2, is known for its visually intuitive clusters that help uncover ownership patterns of tokens, often revealing suspicious activities in the crypto space. Bubblemaps V2, rolling out since November, enhanced AI-clustering features and improved the ability to track token distributions over time. The BMT token will be airdropped to users of the V2 platform, granting them a say in proposing and voting on investigations, influencing how Bubblemaps deploys its investigative resources.

8. Babylon Labs, the leading BTC staking protocol developer, is advancing Bitcoin's interoperability by building a trust-minimized bridge with the Cosmos network. Collaborating with Fiamma, Babylon employs the BitVM2 computing paradigm to enable Ethereum-style smart contracts on Bitcoin, paving the way for zero-knowledge (ZK) technology. ZK computations verify information without disclosing it, crucial for bridging digital assets across blockchains. This initiative aims to leverage Bitcoin's vast value to support other ecosystems and enhance transaction capabilities beyond Bitcoin's inherent speed and scale limitations.

9. Ethereum's developers have announced a March 2025 target for the Pectra upgrade, a significant enhancement combining eight major EIPs aimed at improving speed and efficiency. Among these, EIP-7702 will allow wallets to function like smart contracts, simplifying user experience through account abstraction, an idea initially proposed by co-founder Vitalik Buterin. Another key upgrade, EIP-7251, will raise the maximum staking amount for validators from 32 to 2,048 ETH, alleviating the need for multiple nodes and addressing delays in node setup. Pectra is set to be Ethereum's most substantial hard fork since the 2024 Dencun upgrade.

Adoption:

1. Cannes to train merchants in crypto payments: After hosting the Ethereum Community Conference (EthCC) next summer, Cannes will train its merchants to accept cryptocurrency payments, setting a precedent for a city of such prestige.

2. Luxury brand S.T. Dupont integrates crypto payments via Lyzi: Luxury house S.T. Dupont now accepts cryptocurrency payments in two Paris boutiques through a partnership with payment provider Lyzi.

3. MicroStrategy acquires $1.1 billion in Bitcoin: Michael Saylor’s firm recently announced the purchase of 11,000 BTC at an average price of $101,190 per coin.

4. Google searches for buying crypto surge: With rising crypto prices, Google searches for terms like “buy bitcoin” are at their highest in 12 months, suggesting a renewed interest from retail investors.

5. Bitcoin adoption among U.S.-listed public companies is accelerating, with NYSE-listed Genius Group (GNS) boosting its Bitcoin holdings to $35 million, ahead of its $120 million target. GNS acquired 372 BTC at an average price of $94,047 per coin following its "Bitcoin-first" strategy announced in November. Meanwhile, Nasdaq-listed Ming Shing Group (MSW) purchased 500 BTC at an average price of $94,375 per coin, with its shares up 43% year-to-date. This trend reflects a surge in Bitcoin treasury adoption, with four companies reporting acquisitions and seven others outlining Bitcoin strategies without yet making purchases.

6. HashKey Group predicts bitcoin will surpass $300,000 and ether $8,000, driving the crypto market cap to $10 trillion. They foresee DEXs using AI and memecoins to grow, while centralized exchanges adopt DeFi strategies. Stablecoin market cap is expected to exceed $300 billion due to demand for yield-bearing digital dollars. New crypto ETFs and security tokens could add $3 trillion by 2025. HashKey also anticipates a U.S. bitcoin strategic reserve and stronger market oversight under the incoming Trump administration.

Fundraising and Partnerships:

1. Phantom raises $150 million to develop its wallet: Web3 wallet Phantom raised $150 million in Series C funding, valuing the company at $3 billion.

2. Circle acquires Hashnote, the world’s largest tokenized fund issuer: As part of efforts to accelerate USDC adoption, Circle announced the acquisition of Hashnote. Simultaneously, Circle partnered with DRW to bolster USDC’s institutional presence.

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.