🔮Market Bounce, Quantum Threats, Microstrategy Buys, BTC Milestones

Crypto Giveth and Crypto Taketh Away

As a parting gift to 2024 the Fed announced its decision to cut rates by 25 basis points while signaling a higher terminal rate for 2025—adjusting the expected fed funds rate to 3.9% and projecting only two cuts instead of three. Although market participants had expected an incrementally hawkish tone at the press conference, Powell’s commentary around stagflationary dynamics in the economy caught many offsides.

Stock, bond, and crypto markets unwound, with the 10 year yielding heading meaningfully higher. The seasonal "Santa rally" optimism quickly turned to profit-taking after a generally great year for investors. With the VIX (volitily index) rising sharply and high yield bonds selling off, most expect another shoe to drop.

Only time will tell…

Top Stories

Bitcoin Remains Safe From Quantum Threats, Community Revisits Satoshi's Guidance

Amid concerns over Google’s Willow quantum chip and its impact on Bitcoin's security, the community reassured that the chip's 105 qubits fall far short of breaking Bitcoin's encryption algorithms, such as ECDSA and SHA-256. Experts noted that millions of qubits would be needed to compromise Bitcoin’s cryptography, with SHA-256 requiring hundreds of millions. The community revisited Satoshi Nakamoto's 2010 guidance, where he suggested transitioning to a new hash function or locking in the blockchain's state if quantum threats materialize. Analysts at Bernstein emphasized that practical quantum risks are likely decades away and encouraged buying the price dip, citing strong ETF demand and institutional acquisitions.

DEX Volumes Hit $300B in November, Driven by Uniswap and Raydium

Decentralized exchange (DEX) volumes soared to $300 billion in November 2024, surpassing the previous cycle peak of $260 billion from May 2021. Uniswap maintained its dominance with 40% market share, while Raydium captured 18%, fueled by memecoin trading and pump.fun projects. The DEX to CEX ratio rose to 11%, reflecting growing user comfort with decentralized trading and improved infrastructure, including better interfaces, Layer-2 scaling solutions, and advanced liquidity management tools. However, sustainability concerns persist, particularly regarding memecoin-driven activity, with regulatory developments under the incoming U.S. administration likely to influence future growth.

Step Finance Acquires Moose Capital to Launch Tokenized Stock Trading on Solana

Step Finance has acquired Moose Capital to bring tokenized trading of major stocks, such as Nvidia and Tesla, to the Solana blockchain. The acquisition includes Moose Capital’s product, team, and regulatory licenses, enabling Step Finance to launch Remora Markets in Q1 2025. This initiative aims to attract traders with faster, cheaper, and globally accessible tokenized stocks while tapping into the $14 billion real-world asset market. Step Finance’s move positions Solana to compete with Ethereum, which dominates tokenized RWA markets, and aligns with its broader goal to expand Solana’s DeFi ecosystem.

NFT Market Rebounds as Crypto Bull Run Sparks Renewed Activity

The ongoing Bitcoin bull run has reignited the NFT market, with “blue chip” collections driving the recovery. Pudgy Penguins surged over 40% to a record $62,000+, while Bored Ape Yacht Club and CryptoPunks gained 69% and 31%, respectively. The NFT sector reached an $8.8 billion market cap in December, rising 17.3% in one week, with November sales hitting $562 million—57.8% higher than October. Ethereum led with $216 million in sales, followed by Bitcoin’s $186 million, which jumped 99.44%. Platforms like Blur ($271M volume) and OpenSea ($161M) saw significant activity, though unique buyers dropped to 662,000 from May’s one million. Analysts liken this surge to a "splurge effect," as crypto wealth fuels luxury-like NFT purchases.

Regulation

MicroStrategy Mucho Bitcoin

MicroStrategy has acquired an additional 15,350 BTC for $1.5 billion at an average price of $100,386 per coin, bringing its total holdings to 439,000 BTC—roughly 2.1% of Bitcoin's total supply (a few days after: MicroStrategy acquires another 21,550 bitcoin for roughly $2.1 billion). The purchases were funded by the sale of 3.88 million shares as part of its $42 billion capital raise strategy. This marks the sixth consecutive week of substantial acquisitions, with $17.5 billion in Bitcoin added over the past six weeks alone. MicroStrategy's year-to-date Bitcoin Yield now stands at 72.4%, as its stock continues to trade at a premium, gaining over 490% this year. The firm will join the Nasdaq 100 index on Dec. 23, boosting liquidity and visibility, while analysts project further equity and debt issuances to fund its Bitcoin strategy, with S&P 500 inclusion eyed for 2025.

Source: Company Filings

Ray Dalio Endorses Bitcoin and Gold as "Hard Money" Amid Rising Global Debt

Billionaire investor Ray Dalio, founder of Bridgewater Associates, has endorsed bitcoin and gold as "hard money" alternatives to debt assets like bonds, citing unprecedented global indebtedness. Speaking at Abu Dhabi Finance Week, Dalio warned that increasing debt levels across major economies, excluding Germany, could trigger debt crises and fiat currency devaluation. His stance marks a shift from prior criticisms of bitcoin, where he questioned its stability and utility as money. Despite skepticism, Dalio admitted to owning bitcoin in 2021, and his recent comments highlight growing recognition of its role alongside gold as a hedge against economic instability.

Ripple to Launch RLUSD Stablecoin on XRP Ledger and Ethereum

Ripple will launch its U.S. dollar-pegged stablecoin, RLUSD, on Tuesday across the XRP Ledger and Ethereum networks. Fully backed by U.S. dollar deposits, government bonds, and cash equivalents, RLUSD will undergo monthly reserve attestations by an independent auditor. Following approval from the New York State Department of Financial Services, RLUSD will debut on platforms like Uphold, MoonPay, and Archax, with further listings on Bitstamp and Bitso expected soon. Ripple Payments, which has processed $70 billion in transactions, will integrate RLUSD for enterprise use in early 2025. Ripple enters the competitive $200 billion stablecoin market alongside major players like Tether and Circle, with plans to expand RLUSD to other blockchains and DeFi protocols.

Source: DefiLlama

Bitcoin Hits $100K: From Pizzas to a $1.91T Market Milestone

Fourteen years after a Florida man bought two pizzas for 10,000 Bitcoin, the cryptocurrency surged past $100K, reaching an all-time high of $103,900 on December 4, with a market cap of $1.91 trillion. Bitcoin’s 2024 journey began at $45K, fueled first by January's launch of U.S. spot Bitcoin ETFs. After stagnating through spring and summer, the fall presidential election reignited momentum, especially with Trump’s crypto-friendly platform and significant congressional gains for pro-crypto candidates. This political trifecta, coupled with relentless Bitcoin accumulation by MicroStrategy, pushed November gains to 37.3%. While profit-taking briefly dropped prices to $91K, Bitcoin decisively crossed the $100K mark, solidifying its place as a dominant global asset.

Incoming Crypto Czar Targets Operation Choke Point 2.0

David Sacks, the incoming White House Crypto Czar, has pledged to address Operation Choke Point 2.0 (OCP2), a regulatory effort to debank crypto firms. Sacks highlighted its damaging impact on the web3 and financial industries, referencing Silvergate Bank's forced bankruptcy after regulators limited its exposure to digital asset clients. Documents reveal federal agencies instructed banks to pause crypto-related activities, leading to the widespread debanking of crypto firms. Sacks, a long-time crypto advocate and co-founder of Craft Ventures, aims to bridge the web3 sector and the White House, bolstering industry confidence in the upcoming administration.

Other Domestic Regulation Updates

• Citi says stablecoins challenge the idea of bitcoin ending US dollar's dominance
• Microsoft Shareholders Vote “No” on Bitcoin Reserve 
• Bitcoin Critic Peter Schiff Urges US to Sell Seized BTC
• BlackRock recommends bitcoin allocation of up to 2% in multi-asset portfolios
• First criminal crypto tax evader in US sentenced to two years in prison
• Think Tank Says Amazon Should Invest 5% Of Its Assets Into Bitcoin

Other International Regulation Updates

• El Salvador plans to ease bitcoin acceptance requirement to unlock $3 billion in loans
• South Koreans Flocking to XRP as Political Crisis Deepens
• El Salvador May Have to Drop Mandatory Acceptance of BTC to Get IMF Loan
• UK Crime Agency Busts Multi-Billion Dollar Global Crypto Money Laundering Ring 

Pain & Gain

Pain

• Largest altcoin liquidation since 2021 hits amid crypto market selloff
• Crypto exchange Gate.io dismisses rumors of security breach
• Aave contributor suggests exiting Polygon amid 'risky' bridge proposal
• Radiant Capital reveals North Korean hackers behind $50M attack

Gain

• Avalanche raises $250 million locked token sale led by Galaxy Digital, Dragonfly and ParaFi Capital