Welcome to our last update for the year. We thought we would start with a little bit of a look back on the year and the big events. A quick reminder, on Jan 1st 2024 BTC was $44,204, ETH was $2,350, XRP was 0.62c and SOL was $101. Merry Christmas 🎉

The big (yuuuuge) events of the year by our reckoning were; 1) the launch of the Bitcoin ETFs in January, 2) the growth of Polymarket, 3) Pump.fun and memecoin mania, 4) AI (everything needs AI in a post), 5) the US election and the radical change in regulatory personnel, 6) MicroStrategy, 7) The XRP resurgence and finally 8) breaking $100k per BTC.

Coming back to this week’s news. MicroStrategy has been accepted into the Nasdaq composite index, this means all those passive funds who buy the ETF are now indirectly buying BTC. Big news. Bigger news (possibly) Donald Trump reiterated his plan to make BTC a strategic reserve asset. Microsoft on the other hand declined to put BTC on the balance sheet as they are too conservative (I’m a mac).

Bitwise and Van Eck put out their 2025 predictions for the year and Kaiko gave us the surprising datapoint of the best performing crypto sector.

In wider economic news, US CPI came in right as expected and the markets are saying the 25 bps rate cut tomorrow is a near certainty. US debt is growing at a staggering rate and PMIs are unchanged.

In Europe, ECB cut rates as expected while Industrial production remains in decline. The Swiss central bank cut rates to pre Covid levels and the UK’s GDP fell again.

Turning to APAC, Japan’s manufacturing sector is contracting, but services are doing pretty well. In China exports and imports were both down, as were their housing prices. However, things are going much better in India with CPI down and PMIs going in the right direction.

In Australia, they had a surprise drop in unemployment. The RBA also did a risk assessment on their economic exposure to tariffs highlighting their alarming exposure to China.

A bunch of New Zealand data came out this week. In short the economy continues to soften, employment is down, GDP is negative and immigration continues to fall. The only ray of hope was retail card spending flattening off.

Market sentiment has ramped up as it follows the Bitcoin price and we remain in extreme greed territory.

Highlights this week:

At the time of writing, it has been another solid week of gains with most top 30 assets posting gains north of 10%. Some well north.
With the recent price rises, our Buy-Sell ratios have trended towards a sell side bias. This is particularly evident in our base of smaller crypto holders who appear to be banking some gains.
BTC was very popular on the buy-side and no surprise that XRP continues to be bought above its long term average.
Sell activity is uniform across all coins highlighting that most assets have posted healthy gains.
At the time of writing BTC was up 12% for the week. XRP was up 28% while ETH, SOL and BNB were all up 10%.
Utrust (UTK) was our best performer this week, up 107% for the week.
BEAMX was the worst performer this week, down 3%.

View all top gainers: Visit the top gainers page to find out more.

Highlights from the crypto space

MicroStrategy stock has been moved into the Nasdaq 100 composite index and the QQQ ETF from the 23rd of December. CNBC is saying that this will essentially mean more people able to buy the stock. MicroStrategy also bought some more BTC.

President elect Trump reiterated his plans to include BTC as a strategic reserve asset for the US.

Exchange traded products have now recorded 10 straight weeks of inflows.

Bitwise put out its ten predictions for 2025. Lots in there but this bit will get the most attention;

CryptoQuant is saying demand and onchain metrics are pointing to an ETH run to $5k USD. Staying with Ethereum, the validators are proposing to increase the ETH gas limit by ~$6m to $36m per block.

Microsoft shareholders, led by their conservative board of directors, voted no on holding Bitcoin as a balance sheet item.

Kaiko data out shows that a layer 1 index was the best performing part of the ecosystem this year.

And options traders on Derebit are betting that BTC hits $120k on or before the 27th of December. Kaiko gives that a 10% chance.

Other notable highlights:

A16 thinks that Stablecoins will eat payments.
The issuer of wBTC is suing Coinbase for delisting it, claiming that they only did it because they wanted to launch their own wrapped Bitcoin.
Van Eck put out its top 10 crypto predictions for 2025.
Grant Thornton put out their latest liquidators report on Cryptopia and there are rumours that they are distributing BTC and DOGE.
PSA – pay your taxes. A Satoshi era bitcoiner got 2 years for tax avoidance.

🌎 Macro news TLDR:

…All quiet as we wait on US CPI

Containerised shipping rates are well down on their peak of September and trending flat.

U.S. economic news

November’s CPI reading came in as expected with headline CPI drifting up to 2.7% annualised and core CPI static at 3.3%. Much of the rise came from housing costs, which are a lagging indicator, and so many are seeing this as a green light for the next rate cut. CME Fedwatch has it as a 95% chance. PPI for November surprised to the upside at 0.4%. The US budget shortfall is up 64% on last year alone, $1.8 tn (1,800,000,000,000). PMI’s for the US show an expanding services sector but a contracting manufacturing base.

On Thursday the FOMC is scheduled to make the last rate announcement of the year. CME Fedwatch has it at a 98% chance of a 0.25% cut.

Elsewhere, the Bank of Canada cut its rates by 50 bps to 3.25%. It is now down 1.75% from its peak. Canada missed its GDP forecast and per capita is in decline, sound familiar?

Over in Europe….

The ECB cut its policy rate by 0.25 bps as expected. They think disinflation is well underway. No wonder, industrial production numbers marked their 18th straight decline in October. German exports fell 2.8% in October.

The Swiss central bank surprised markets by going for a 50 bps cut. Burrowing costs are now just 0.5%.

In the UK, GDP fell by 0.1% for the 2nd straight month. Manufacturing is the main culprit.

And in Asia Pacific…

Japan’s PPI for November topped estimates coming in at 3.7%. PMIs paint a different picture with Services hanging on but Manufacturing in contraction. Chine se exports and imports both weakened more than expected. To prop up the export sector they are considering letting the Yuan weaken. Industrial produ ction is up, but housing prices continue down.

India’s CPI came in at 5.5%, down from 6.2% in October. Industrial production was 3.5%. PMIs for both Services and Manufacturing are up in December.

Over in Australia the RBA has undertaken a risk assessment of the incoming tariffs. TLDR; direct exposure is minimal, but 2nd order effects could be huge. Their exposure to China is the problem. In something of a surprise and something that will definitely give the RBA reason to pause, unemployment fell to 3.9%. Australia’s population grew 2.1% or 550k people.

Stats NZ reported that employment fell 0.7% on the June quarter, continuing the trend we’ve seen in the labour market. Interestingly gross earnings are up 5.9% year on year. The ANZ truckometer provided mixed results, heavy truck movements were up 1.2% year on year, while lite traffic ( a proxy for demand) was flat. Retail card spending is also flat, just like the economy. Immigration continues to soften at a net level with us posting a record number of migrant departures in the year to October of 131k. GDP for September is out Thursday and is forecast to drop for the 3rd straight quarter.

The Half Yearly Economic and Fiscal Update (HYEFU) from Treasury is pretty dire and shows an economy tracking worse than the May update. Tax revenue is down, so is GDP (probably) while any good news is shifting out.

That’s a wrap for this week, and for this year!

We’re taking a holiday break, so stay tuned for the next update in January!

Stay tuned for the next update.

Did you miss the last weekly update? Catch-up on the previous market update.