ARP's Crypto Digest

General Digital Asset Market View:

The market experienced significant volatility from December 23–27, 2024, with outflows dominating the trend. December 23 and 24 saw major outflows of $226.5M and $338.4M, signaling strong sell-offs. A recovery occurred on December 26 with inflows of $475.2M, but uncertainty returned on December 27 with another outflow of $287.9M.

Blackrock’s Bitcoin ETF (IBIT) showed more stability, with smaller fluctuations. It saw a $31.7M inflow on December 23, a $188.7M outflow on December 24, and inflows of $56.5M and $79.4M on December 26 and 27, respectively. Despite market-wide volatility, Blackrock’s ETF attracted more capital.

Macro:

A fairly light release schedule this week with the New Year’s Day holiday falling on Wednesday. In the US, the data docket will focus mostly on the manufacturing and construction sectors (incl the usual weekly claims updates). Elsewhere, the run of month-end global PMIs will be in focus, alongside a handful of important high-frequency data out of Korea (IP, CPI & trade). There is just one key event this week from a monetary policy POV with the Fed’s Barkin giving a keynote address on Friday.

More Crypto:

North Korea-affiliated hackers stole approximately $660.50 million across 20 incidents; in 2024, this number increased to $1.34 billion stolen across 47 incidents — a 102.88% increase in value stolen. These figures represent 61% of the total amount stolen for the year, and 20% of total incidents.

Bitcoin’s supply in profit dropped from over 99% in November to 88.89% by Dec 24, despite prices staying above $95,000. This decline reflects significant distribution, with 11% of supply bought near the $106,800 ATH now underwater. These levels may act as resistance as holders seek to break even. While the drop aligns with “smart money” selling to retail, supply in profit above 80% historically signals strong market health in bull cycles.

Stablecoins Metrics and News:

Metrics:

Stablecoin mints often generate significant engagement in crypto twitter, interpreting them as bullish signals, assuming they indicate new capital entering the market. However, most issuances are operational, driven by liquidity needs or institutional demand, rather than immediate buying. Historical data shows mints don’t always correlate with price increases and can even signal caution, making most of this activity more noise than a reliable market indicator.

News:

• The Stablecoin Market Surpasses $200 Billion, A Historic Turning Point.

• XRP Community Gains New Rewards With Ripple’s RLUSD Stablecoin Launch

• Tether grapples with new FUD as MiCA regulations take effect on Dec. 30.

• Ethereum layer 2s hold $13.5B stablecoin supply

What Happened This Week:

• Bonk Dao burned 1.69T $BONK (~$52M) for BURNmas.

• Russia’s finance minister has said that bitcoin can be freely used in foreign trade.

• Usual, the decentralized stablecoin protocol, announces a $10M Series A funding round led by Binance Labs and Kraken Ventures.

• Strive Asset Management, led by Vivek Ramaswamy, has filed with the SEC for a “Strive Bitcoin Bond ETF” to offer investors access to MicroStrategy’s convertible bonds.

What to Look Out For:

• The US Internal Revenue Service (IRS) has officially announced that cryptocurrency staking is taxable.

• Trump nominated outgoing a16z partner Sriram Krishnan to serve as senior policy advisor for AI in the White House Office of Science and Technology Policy.

• Frax Finance has launched a governance vote to onboard Blackrock $BUIDL as a backing asset for the Frax USD (frxUSD) stablecoin.

• $280M worth of SUI will be unlocked on Jan. 1. Most of it will go to early investors & contributors.

• Movement Mainnet is confirmed to launch in January. Movement is the first Move-based Ethereum L2.

What we enjoyed reading and listening to:

• a16z recommended AI apps to try — Link

• What’s Happening at Robinhood? — Link

• The Alpha Podcast List — Link

• By default, capital will matter more than ever after AGI — Link

• AI launches are going to become like NFT launches — Link

ARP Digital is regulated by the Central Bank of Bahrain as a Category 3 Crypto Asset Service Provider. All communications and services are directed at Professional Clients only, persons other than Professional Clients, such as Retail Clients, are NOT the intended recipients of our communications or services. ARP Digital does not provide investment advice, and nothing herein shall be considered, construed as, or deemed to be, investment advice. Furthermore, nothing herein is intended to be, or shall constitute, an offer or invitation to buy securities or any form of financial instrument or investment product by ARP Digital or any of its related parties or persons.