Gm friends,
Curious why Bitcoin and the crypto markets have had such a solid week, especially after all the recent lackluster price action? Well we’ve got the answers for you in our first two news stories.
So pour that coffee and buckle up, because here’s your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- Chart of the day: New XRP ATH soon?
- David shares his thoughts on Trump’s crypto executive orders on day one, cooling CPI data, JP Morgan’s SOL and XRP ETF estimates, more nation-state and corporate adoption & Soneium is live.
- Today on chain.
- Altcoin Alpha.
- Lark’s technical analysis on the market.
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Chart of the Day
We don’t give XRP a lot of love, so here it is. Yesterday, XRP hit $3.02, which is its highest price since January 2018. Back then, XRP hit $3.31. But from everything that we’re seeing, a new ATH will probably be hit sooner rather than later.
Current catalysts for XRP are the following: (1) persistent warfare from the US government is gone; (2) a pro-crypto administration will soon take office; (3) Ripple’s CEO has a good relationship with Trump; (4) all signs indicate that a US XRP ETF will go live this year; and (5) Ripple’s new stablecoin, RLUSD, appears to be a success.
News Now
Trump’s Crypto Executive Orders on Day 1
The Washington Post dropped a bombshell on Monday, and it no doubt helped buoy the crypto markets. Per the Post, Trump is expected to issue a series of crypto-related executive orders (EOs) within hours of assuming office. It’s still a fluid situation, but as of now, these initial EOs may include the repeal of SAB 121, the establishment of a presidential crypto council, and an order to streamline cooperation between the SEC and CFTC.
Repeal of SAB 121 is Huge. Here’s Why.
SAB 121’s repeal sounds like a bunch of legal mumbo jumbo, but it’s not, and you need to be paying attention.
Saylor famously quipped that three things must happen for Bitcoin to reach $1M per coin: (1) spot Bitcoin ETFs; (2) FASB fair value accounting rules for corporations; and (3) US banks custodying Bitcoin. The first two are done, and it appears that Trump is about to check off the third.
So here’s the deal. Under SAB 121, banks that custody Bitcoin must count it as liabilities on their balance sheets. This means that these banks have to hold higher capital reserves in order to offset these “liabilities”. And higher capital reserves means that banks are disincentivized to custody Bitcoin. So the repeal of SAB 121 eliminates this disincentive.
And the implications here really are massive. Trump’s EO could unleash a tidal wave of pent up demand, as banks step in to offer Bitcoin custody solutions for institutions and retail. And this also means that banks will begin to issue loans with Bitcoin as collateral. Seriously, take a moment to think about the implications of all this.
What’s After the Day 1 EOs?
Per the reporting, it’s expected that this initial EO batch will be the first of several. Trump’s crypto czar, David Sacks, is working with other policy makers and industry leaders on other crypto EOs and legislation that’s all a bit more complex. So hopefully, we’ll be hearing some news soon about that much anticipated strategic Bitcoin reserve, along with other announcements.
Cooling CPI Data Sends Crypto Higher
The other reason for this week’s crypto rally was due to the latest Consumer Price Index (CPI) data that was released yesterday. The data showed a much needed cooling in US inflation.
So it all centers around the Core CPI reading. Month-over-month core CPI rose 0.2% in December, which is less than November’s 0.3% gain. And year-over-year core CPI came in at 3.2%, which is a noticeable decline as this metric has been stuck at 3.3% for the last four months.
So long story short, this cooling inflation data helped alleviate fears about sticky US inflation. Thus, if inflation might be less of a concern, then there’s a higher likelihood of more Fed rate cuts in 2025, which is a boost for risk assets like stocks and crypto.
You’ll remember last week’s dip over the high US Bureau Labor Statistics data (i.e. which ultimately pointed to sticky inflation). So yesterday’s CPI report mitigated some of those concerns, which means number go up.
JP Morgan Says XRP and SOL ETFs Could Pull $13B
On Tuesday, analysts at JP Morgan said that new US XRP and SOL ETFs could pull in $13B in fresh capital within six to twelve months of launch. Specifically, the analysts said that the XRP ETFs could see $4B to $8B in inflows, while the SOL ETFs could see $2B to $5B.
As good as all this sounds, the analysts did state that these altcoin ETFs probably won’t replicate the insane demand that we saw with the Bitcoin ETFs (i.e. $35B in total year one inflows). Still, the probable approvals of these ETFs does show that institutions and retail do want some diversity in their crypto portfolios.
Also, the analysts noted that the regulatory shifts under the incoming Trump administration are a major tailwind for these ETF approvals. And a new SEC chair will probably provide clear guidance, which can help fast-track the XRP and SOL ETF approvals, and bolster broader investor confidence in altcoins.
Nation-State and Corporate Adoption Round-Up
Another week, another round of nation-state and corporate Bitcoin adoption news. This is three weeks in a row running, people.
- Thailand: Government officials are now considering the legalization of local Bitcoin ETFs to launch on Thailand’s stock exchange.
- Intesa Sanpaolo: Italy’s largest bank purchased $1M worth of Bitcoin on Monday. The bank’s CEO said the purchase is due to “very sophisticated clients that may ask for this kind of investment.”
- Ming Shing Group (MSW): The publicly traded Hong Kong construction company announced Monday that they purchased 500 Bitcoin for $94.3K per coin. This is the company’s first purchase. However, the company did characterize the purchase as a “short-term investment.”
- Genius Group (GNS): The Singapore-based AI education company announced this week the purchase of an additional 53 Bitcoin for $94.2K per coin. This brings the company’s total to 372 coins, for a total cost basis of $35M. The company has stated that they have an initial target of spending up to $120M on Bitcoin.
- MicroStrategy (MSTR): The world’s largest corporate holder announced for the 10th consecutive week that they’ve purchased more Bitcoin. This time, it was 2,530 Bitcoin at an average price of $93K per coin. MicroStrategy now HODLS 450,000 BTC.
Sony’s Soneium L2 is Live
On Tuesday, Sony announced the launch of its “Soneium” blockchain. Developed by a joint venture between Sony and Singapore-based Startale Labs, Soneium is a “general-purpose” Ethereum L2 that’s supposed to be a bridge between web2 and web3 for gaming, finance, and entertainment.
Apparently, Soneium went through a four-month testing phase that involved 14 million wallets. The blockchain is built with Optimism’s OP Stack, which is a customizable framework for executing transactions on Ethereum quickly and for cheap. You’ll remember that Coinbase’s Base and Kraken’s Ink L2s were also built with the OP Stack.
It’s thought that Sony received millions of OP tokens from the Optimism Foundation, as part of the deal for using the OP Stack. The Optimism Foundation struck similar deals with both Coinbase and Kraken.
It will be interesting to see how Sony can use Soneium with regards to their PlayStation console. There’s a good chance that some Soneium blockchain-based games will run on the PlayStation. And I’m still waiting for a blockchain-based betting system to be launched, which allows for gamers to bet stablecoins and crypto in their PvP matches.
Today On Chain
Hold onto your butts. From CryptoQuant, the amount of Bitcoin on exchanges is at 2.35M, a multi-year low. In fact, the last time exchange reserves were this low was in mid-2018, nearly seven years ago.
Analysts from Bitwise attribute the current lows in part to hedge funds, as these institutions are continuing to accumulate via OTC. Moreover, the miners haven’t been able to refill the reserves, as the ETFs last month purchased 3X what the miners were able to produce.
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Altcoin Alpha
- Aerodrome [AERO] is releasing Slipstream V2 at some point this month. Slipstream V2 is described as a major upgrade for this Base DEX.
- aothecomputer [AO] is a new hyper parallel computer that will be having its mainnet launch on February 8th. This computer will be used as infrastructure for the building of AI agents. AO will be having a 100% fair launch.
- BLAST recently announced that they are launching their mobile platform and a tokenomics update this month. Blast is the Ethereum L2 that offers native yield for ETH and stables.
- Sharpe AI [SAI] is a newer AI-powered crypto super app for professional traders. The app offers a unified platform for intelligence, investing, and automation. Sharpe AI is still a microcap, but has some serious backers, and is getting some buzz across X.
- Solv Protocol [SOLV] is launching its native token – SOLV – tomorrow. Solv Protocol is a decentralized Bitcoin reserve backed by over 25K Bitcoin. Binance Labs is one of the protocol’s backers.
Market Analysis
Well… that was a crazy week! Keep in mind that CPI data later today can quickly change market sentiment. So be prepared.
Bitcoin
Bitcoin has been one of the strongest coins during the market sell off. The move down to 89k was only about 17% under the previous high at 108k. A baby correction for Bitcoin.
The two orange lines on the chart represent the trading range for Bitcoin with 102k at the top and 92k at the bottom. The vast majority of the price action in the last 2 months has been here.
Sellers keep appearing aggressively over 100k and buyers keep buying aggressively near the lower 90k range.
The move down to 89k and the subsequent recovery was impressive. Wicks under the range bottom are fine. What we don’t want is to start putting in daily candle closes down there. That would indicate a deeper correction and trend change.
This chart here shows that on the sell off, Bitcoin came back down and almost hit the 100 day EMA (yellow line), but most importantly ended the day back at the 50 day EMA (blue line). At the time of writing we were even trading back above the 20 day EMA (purple line).
MACD daily has once again flipped bullish. Possibly the start of a new uptrend after the fake out last week.
Orange line on the chart represents the downtrend.
SIGNAL: Long a break of…
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Final Notes
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
If you really want to take advantage of fastest growing asset class EVER, I highly recommend that you check out my new altcoin course: Mastering Altcoin Investing
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See you next time!
Lark and the Wealth Mastery Team
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Legal Disclaimer
Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.
You can find a full disclosure of all my crypto & venture investments here.
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
