Bitcoin Briefly Dips Below $90k

Bitcoin's price tanked below $89,000, marking a 5-week low and dipping under $90,000 for the first time since mid-November, amid concerns over the Federal Reserve's monetary policy. BTC held onto critical support above $90k for most of the week, but saw a swift sweep of its lows to then bounce back to now trade at $97,000.

As mentioned last week, the market uncertainty has been fueled by doubts about potential Fed rate cuts in 2025, as recent strong employment data suggests a robust U.S. economy, reducing the likelihood of rate reductions.

On the other hand we have the inauguration of Donald Trump happening next week. Trump has positioned himself as a "crypto president," promising friendlier regulations and a strategic Bitcoin stockpile, which could influence global adoption.

Weekly Price Update

^‍Weekly Reporting 15th of January 2025

Bitcoin Briefly Dips Below $90k

Bitcoin's price tanked below $89,000, marking a 5-week low and dipping under $90,000 for the first time since mid-November, amid concerns over the Federal Reserve's monetary policy. BTC held onto critical support above $90k for most of the week, but saw a swift sweep of its lows to then bounce back to now trade at $97,000.

As mentioned last week, the market uncertainty has been fueled by doubts about potential Fed rate cuts in 2025, as recent strong employment data suggests a robust U.S. economy, reducing the likelihood of rate reductions.

On the other hand we have the inauguration of Donald Trump happening next week. Trump has positioned himself as a "crypto president," promising friendlier regulations and a strategic Bitcoin stockpile, which could influence global adoption.

Weekly Price Update

U.S States Consider Bitcoin Reserve

Several U.S. states are considering establishing strategic Bitcoin reserves to hedge against economic uncertainties and promote financial innovation. In December 2024, Texas State introduced a bill proposing the creation of a Bitcoin reserve, emphasising the state's commitment to digital asset innovation. Similarly, Pennsylvania's House of Representatives proposed a bill in November 2024 that would allow the state treasurer to invest up to 10% of certain funds into Bitcoin, aiming to keep pace with inflation and economic changes. Ohio and New Hampshire have also introduced similar proposals, reflecting a growing trend among states to explore Bitcoin as a strategic asset.

These initiatives align with broader national discussions about the role of Bitcoin in government reserves. The increasing interest at both state and federal levels indicates a significant shift towards integrating digital assets into traditional financial frameworks, potentially influencing the future of cryptocurrency adoption and regulation in the United States.

GameFi in 2024 and 2025: A look ahead

The GameFi sector currently boasts a market capitalisation of $23.11B, up 53% from its 2024 low. GameFi blends gaming with finance, enabling players to accrue real world value through blockchain based in game activities. This economic model is redefining gaming, offering players financial incentives which aims to propel GameFi to claim a larger portion of the traditional gaming market.

Challenges and Sustainability Issues

Despite its early booming popularity, drawing in billions in 2021-2022, GameFi has hit several roadblocks. An alarming 93% of GameFi projects have failed, averaging a lifespan of just 4 months. Venture capital investments in 2024 was $859 million, down 13% from 2023 and an 84% drop from the 2022 peak of $5.5B, highlighting a more conservative approach with a preference for elite teams and projects. A key reason behind this is the quality of games were not there, they were simply rushed to capitalise on the hype. AAA games require 3-5 years to develop, and serious blockchain integration in gaming only began around 2020-2021.

Opportunities in GameFi

Even as the initial hype around GameFi has stalled in terms of select metrics, venture capitalists are strategically investing in projects that promise longevity and quality. The success of GameFi in 2025 will hinge on delivering engaging gameplay and creating value driven ecosystems. Here are two projects that are turning heads.

Echelon Prime (PRIME): This is not just about betting on a single game but an entire ecosystem where the $PRIME token acts as the utility token. Multiple games can thrive within the Echelon Prime framework, and with a mobile app in development, Prime aims to increase its user base through cross platform compatibility. Backed by Coinbase and VanEck, it supports flagship games like Parallel and Colony and operates on the Base chain.

Perion (PERC): A key focus for many in the Web 3 gaming industry is the mission to seamlessly onboard millions of Web2 gamers into the Web3 space, making the transition as user-friendly as possible. Perion plan to reshape this by incorporating blockchain into gaming, empowering gamers and the gaming industry. XP, their game-centric product, is a platform that rewards gamers for playing their favourite games, by incorporating Web3 features on top of the world's largest Web2 games.

Looking Ahead to 2025

The focus for GameFi in 2025 will be on sustainable development. The sector needs to move beyond the initial hype and demonstrate real, long-term value to both gamers and investors. Projects like Prime and Perion are at the forefront of this transition.

BTC ETF Success

In their debut year, spot Bitcoin exchange-traded funds (ETFs) have achieved unprecedented success, amassing $107 billion in assets under management (AUM) and capturing over 6% of Bitcoin's total supply. This milestone marks the most successful ETF launch in history, reflecting a significant shift in investor confidence toward cryptocurrency.

Among the 11 providers, BlackRock's iShares Bitcoin Trust (IBIT) stands out, accumulating over $57 billion in AUM within a year. This is 74% more than there Gold ETF that has been around for 20 years.

Some analysts even project that institutional ownership of Bitcoin ETFs will rise to 40% in 2025, potentially doubling inflows and further solidifying Bitcoin's status as a mainstream asset class

The success of Bitcoin ETFs has paved the way for additional cryptocurrency investment products such as Ethereum ETF’s that launched in July. Some fund managers have also applied for other digital assets, like Solana, indicating a desire for broader acceptance and integration of cryptocurrencies into traditional financial markets.

Inaugration Watch: January Turbulence

This time next week, the world's biggest economy is going to have a new leader in office, and he's set to shake things over the next four years. Trump gets sworn in on January 20th, and that's largely a reason why we're seeing this market turbulence. The big divide right now is whether it'll be a "sell the news" or "buy the news" event. Time will tell, but we believe the grass will definitely be greener on the other side.

BTC's Price Action in Post Halving Years

Historically, January has been a tough month for crypto, especially in post halving years, but it often sets the stage for strong rallies in the months that follow.

For context:

January 2017: BTC dropped from $1,185 to $800 (-32%).

January 2021: BTC dropped from $42,000 to $28,000 (-33%).

So far in January 2025: We’ve seen a drop from $103,000 to $89,000 (-11%), which by comparison has been much less severe, but does leave the door open for speculation we can go lower.

US Bitcoin Auction Unlikely Before Trump’s Inauguration

The U.S. Department of Justice (DOJ) has plans to auction $6.5 billion worth of Bitcoin seized from the Silk Road, part of the 198,000 BTC held by the government. While concerns about market sell pressure loom, we believe it is unlikely the sale will occur before Trump’s inauguration on January 20th. Moreover, Trump has previously stated he would not sell any U.S. held Bitcoin if elected, making a sale during his presidency equally improbable.

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