Cryptocurrency Market Update 2025
The beginning of the year brings numerous events in the world of cryptocurrencies. Bitcoin has experienced significant changes in the past few days, and much more lies ahead.
Macroeconomics and Bitcoin
The first major factor contributing to the decline and outflow of Bitcoin from the market at the beginning of the year is the state of the U.S. economy. Data indicates that the FED does not have full control over inflation, as shown by much higher-than-expected figures from the previous month. The FED’s measures to reduce inflation are not yielding the desired results, sparking speculation about lowering interest rates in the coming period.
Interest rates directly influence the economic decisions of individuals and companies. Higher interest rates mean more expensive borrowing, which slows down economic activity. When rates are reduced, inflation increases, leading to further challenges. An additional problem is the ever-growing U.S. debt, which continues to rise without showing signs of stabilization. This is something that could potentially have a significant impact on our bull market.
One piece of information caused panic
Another negative event involves confirmation that the U.S. can sell 69,370 Bitcoins from a legal case, valued at approximately $6.5 billion. This news caused panic in the market. Interestingly, this is happening just before the new U.S. president takes office.
However, in the long term, this might not have a significant impact, as it is possible that the US will either retain Bitcoin as a reserve or sell it. A sale would lower the price, after which it would start rising again. This rise is exactly what happened when Germany sold Bitcoin last year.
Some other noteworthy events from the recent period include:
A few days ago, Bitcoin experienced a sharp drop of nearly 4%, trading around $90,000. This decline comes amidst uncertainty caused by the strong U.S. labor market and the Federal Reserve’s “hawkish” stance on interest rates. Most altcoins were also affected, although they are now slowly recovering. At the time of writing this article, Bitcoin is trading around $99,000.
Partnerships and Innovations
Ripple announced a partnership with Chainlink aimed at improving the adoption and functionality of their stablecoin Ripple USD (RLUSD) in the decentralized finance (DeFi) sector. Chainlink will provide a secure and accurate oracle network for supplying price data for RLUSD transactions on Ethereum and the XRP Ledger.
International Purchases and Strategies
The Kingdom of Bhutan has garnered attention by adopting a crypto reserve strategy that includes Bitcoin, Ethereum, and Binance’s BNB token. El Salvador continued its Bitcoin purchases, investing an additional $1 million. Meanwhile, the Italian bank Intesa Sanpaolo SpA also invested approximately €1 million in Bitcoin, which is a rare instance of banks showing interest in this asset class.
Some companies, such as Hive Digital Technologies and Thumzup Media Corp, are increasing their Bitcoin reserves or starting to purchase them. We will only learn which companies have made purchases once they announce it, as each country has different regulations regarding what companies are required to disclose.
When an altcoin emerges on South Korean exchanges, there are often massive pumps, and the country has implemented an institutional ban that prevents trading. Now, there is news that the South Korean Financial Services Commission (FSC) allegedly wants to lift this ban, which would open up opportunities for institutions to access crypto once again.
Conclusion
The start of the year highlights how dynamic the crypto market is and how it is influenced by various factors, from macroeconomic indicators to specific events. Despite the challenges, positive trends such as international purchases and new partnerships provide a foundation for cautious optimism.