January 22, 2025

🔮New Honcho New Memes (and Policy), M2 vs. BTC, Strategic Reserves, Who Owns RWAs, DOGE (Coin?)

Top Stories

Global M2 vs. Bitcoin: A Complex Relationship, Not a Fight

The global M2 money supply, a measure of physical cash, bank deposits, and retail money market funds, often correlates with Bitcoin prices, trailing by about 70 days. Historically, increases in M2 have aligned with Bitcoin rallies, but recent declines in M2 signal potential downward pressure on Bitcoin in the coming months. However, a potential dip may mimic patterns from past bull runs, acting as a temporary breather before renewed growth. Catalysts for recovery include anticipated rate cuts and money printing by the U.S. government in late 2025 to refinance COVID-era debt, injecting liquidity into the system. This scenario highlights the importance of hard assets like Bitcoin in an era of aggressive monetary policies. See more: Crypto Markets Bounce as Data Shows Cooling U.S. Wholesale Inflation

Source: X (Formerly Twitter)

Donald Trump’s Solana Meme Coin TRUMP Sparks Frenzy Ahead of Inauguration

President-elect Donald Trump has launched a Solana-based meme coin called TRUMP, promoting it via his official X and Truth Social accounts. The announcement caused a trading frenzy, with the coin reaching a $1.5 billion market cap based on circulating supply and $680 million in trading volume shortly after launch. While initial skepticism flagged potential red flags, such as connections to non-U.S. exchanges, further analysis linked the coin to CIC Digital, the same entity behind Trump's previous NFT collections. The move aligns with Trump’s pro-crypto stance, adding to his campaign promises to revolutionize the crypto landscape through executive orders.

Web3 Adoption Surges with 202% YOY Growth in 2024, Driven by Stablecoins, Memecoins, and AI

The "State of Web3 Adoption Report 2025" highlights significant growth in the Web3 space, with daily active crypto users surpassing 18 million in December 2024, marking a 202% year-over-year increase. Key drivers include a 500% surge in memecoin market cap to $120 billion, $24 trillion in stablecoin transactions, and the integration of tokenized AI agents. The U.S. presidential election played a pivotal role, spurring activity in PolitiFi tokens like the Patriot memecoin, which peaked at $82 million following Donald Trump’s victory. Institutional activity also rose, with 70% of North American crypto transactions exceeding $1 million, underscoring the sector's mainstream evolution.

Source: Token Terminal

Solana's TVL Surges to $9.77 Billion Amid Trump Memecoin and DeFi Growth

Solana's total value locked (TVL) has skyrocketed to $9.77 billion, a 600% increase from $1.4 billion a year ago, driven by the high-profile launch of President Trump's $TRUMP memecoin and growing DeFi adoption. Raydium, Solana's leading DEX, accounts for $2.59 billion of the TVL, showcasing the network's expanding decentralized trading infrastructure. With 300 million daily transactions and over 4 million active addresses, Solana's robust activity metrics reflect increasing user engagement. Key projects like $PENGU from Pudgy Penguins and $TRUMP have drawn significant attention, generating over $11 billion in trading volume since the memecoin's debut. While still trailing Ethereum's $68 billion TVL, Solana's rapid growth underscores its maturing ecosystem and potential for further DeFi expansion.

Source: The Block

Ethereum’s Pectra Upgrade Set for March Launch

Ethereum’s highly anticipated Pectra network upgrade is slated for a March mainnet launch, pending successful hard forks on test networks Sepolia and Holesky in February. Split into two phases due to its ambitious scope, Pectra’s first package will introduce key Ethereum Improvement Proposals (EIPs) aimed at enhancing user experience and network efficiency. Highlights include EIP-7702, which improves account abstraction to enhance security during transactions, and EIP-7251, which raises the ETH staking cap for validators from 32 to 2,048 to streamline operations. The second phase, Fusaka, is expected later in the year.

Regulation

Pro-Crypto 119th U.S. Congress and Trump Administration Usher in Optimism for Digital Asset Industry

The pro-crypto 119th U.S. Congress, featuring key crypto advocates in leadership positions, promises a favorable regulatory environment for digital assets. Tim Scott chairs the Senate Banking Committee, with plans to advance crypto legislation, while French Hill leads the House Financial Services Committee, prioritizing stablecoin regulation and the FIT21 Act. Cynthia Lummis is expected to head a proposed Senate digital assets subcommittee. Incoming President Donald Trump has signaled strong crypto support, appointing pro-crypto figures like Paul Atkins to lead the SEC, Summer Mersinger as a potential CFTC chair, and David Sacks as AI and Crypto Czar. His Crypto Council aims to foster collaboration between regulators and industry leaders, as optimism grows for streamlined legislation and innovative policies under the new administration. See more: Musk Takes Over as Sole Leader of DOGE as Ramaswamy Exits for Ohio Governor Bid

Wyoming and Massachusetts Join Push for Bitcoin Reserves as Momentum Grows

Wyoming and Massachusetts have proposed legislation to establish Bitcoin reserves, joining nearly one-fifth of U.S. states considering similar measures. Wyoming's bill restricts investments to Bitcoin only, capping allocations at 3% of public funds. Massachusetts' proposal, more permissive, would allow up to 10% of its rainy day fund to include Bitcoin or other digital assets. These state-level initiatives align with President Trump’s call for a federal Bitcoin reserve, which has spurred Republican-led proposals nationwide. Coinbase CEO Brian Armstrong endorsed the idea, likening Bitcoin’s strategic importance to gold and emphasizing its potential in a global digital economy arms race.

Trump’s Day-One Crypto Executive Order: A Starting Point for Sweeping Reforms

President-elect Donald Trump is expected to sign a targeted crypto executive order within hours of taking office, creating a presidential crypto council of industry leaders and directing the SEC to repeal SAB 121, a rule discouraging banks from holding crypto. While this initial order addresses pressing concerns, sources indicate it will be followed by more comprehensive directives in the coming weeks. These could include fostering collaboration between the CFTC and SEC, revisiting rules affecting decentralized finance (DeFi), and promoting international crypto innovation through the State Department. As the administration prioritizes broad industry reforms, insiders note the importance of a measured, thoughtful approach to implementing these sweeping changes.

RWA Protocols Surge to $7.3 Billion TVL, Dominated by Government Securities

Total value locked (TVL) across real-world-asset (RWA) protocols has exceeded $7.3 billion, a 200% increase year-over-year, with government securities now comprising two-thirds of the market, up from 36% last year. Leading protocols include Hashnote USYC and Usual Protocol, each with $1.48 billion in TVL, emphasizing regulated, transparent investments and tokenized real-world assets, respectively. This shift highlights growing confidence in lower-risk, government-backed digital assets. Market dynamics are influenced by policy expectations, including President-elect Trump's reported plans to prioritize crypto via executive orders and advisory councils, potentially bolstering RWA protocol legitimacy. The sector's rapid growth underscores increasing institutional adoption of blockchain-based financial instruments.

Source: The Block

Dogecoin Featured on U.S. Government Website as 'Efficiency' Symbol

The Department of Government Efficiency (DOGE), an entity working with the White House and Office of Management and Budget, prominently displayed the Dogecoin logo on its website alongside a dollar sign and the slogan "the people voted for major reform." Led by Dogecoin enthusiast Elon Musk, DOGE aims to streamline federal operations using an entrepreneurial approach. While operating outside official U.S. government structures, it collaborates on eliminating waste and improving efficiency. Musk's long-standing admiration for Dogecoin, rooted in its humor and meme appeal, reflects the lighthearted yet impactful integration of the cryptocurrency's symbolism in public initiatives.

Other Domestic Regulation Updates

Other International Regulation Updates

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Important Legal Notices

This reflects the views MJL Capital LLC (“MJL”), but it should in no way be construed to represent financial or investment advice. Nothing in this correspondence is intended to constitute or form part of, and should not be construed as, an issue for sale or subscription of, or solicitation of any offer or invitation to subscribe for, underwrite, or otherwise acquire or dispose of any security, including any interest in any private investment fund managed by MJL. Any such offer may only be made pursuant to a formal confidential private placement memorandum of any such fund, which may be furnished to potential investors upon request and which will contain important information to be considered in connection with any such investment, including risk factors associated with making any investment in any such fund. Further, nothing in this correspondence is, or is intended to be treated as, investment or tax advice. Each recipient should consult their own legal, tax and other professional advisors in connection with investment decisions.

Domenic Salvo

Domenic Salvo is a Managing Partner at MJL Capital, helping lead Portfolio Research and Investor Relations.

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