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- Bitcoin, Ethereum, Cosmos and More Week 1 2025
Bitcoin, Ethereum, Cosmos and More Week 1 2025
Keeping you updated on crypto, web3 and blockchain
TL;DR
Switzerland Explores Bitcoin as National Reserve
IRS Delays New Crypto Tax Rules
Vitalik Criticizes Musk's Approach to Free Speech
Ethereum Holders Rise as Bitcoin Holders Decline
Osmosis Pay Launches Visa-Compatible Card
Binance Stops Support for DYDX ERC20
Do Kwon Pleads Not Guilty to Fraud Charges
China Hacks U.S. Treasury Department
and much more!
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Bitcoin Highlights of the Week
Switzerland is advancing a proposal to include Bitcoin in its national reserves, alongside gold. Registered on December 31, 2024, the initiative requires 100,000 signatures by June 30, 2026, to trigger a public referendum. Advocates like Yves Bennaïm and Giw Zanganeh argue Bitcoin’s decentralized nature boosts financial stability and sovereignty, while critics cite volatility and regulatory concerns.
The Swiss National Bank and FINMA are cautious about risks, including energy use and money laundering. If approved, this move could set a global precedent, influencing central bank strategies worldwide, as grassroots Bitcoin adoption grows in cities like Lugano and beyond.
Hong Kong legislator Wu Jiexhuang has proposed using the "one country, two systems" framework to incorporate Bitcoin into the region’s national reserves. Drawing inspiration from countries like El Salvador and Bhutan, Jiexhuang believes Bitcoin could stabilize financial markets and attract investment.
He suggested starting with Bitcoin ETFs before expanding holdings. Hong Kong's financial regulators aim to create crypto regulations based on the principle of "same business, same risks, same rules." The region’s growing interest in Bitcoin aligns with China’s substantial Bitcoin holdings, positioning Hong Kong to take a leading role in integrating digital assets into traditional financial systems.
The IRS has provided temporary relief regarding a rule that would have defaulted crypto holders on centralized exchanges to the FIFO (First In, First Out) accounting method for tax reporting. Previously, investors without a preferred accounting method would have been automatically assigned FIFO, potentially increasing capital gains taxes.
This ruling was seen as problematic, especially during bull markets, as it could unintentionally result in higher tax liabilities. The relief allows taxpayers to maintain their preferred accounting method until December 31, 2025, giving brokers time to adjust. The IRS’s broader tax rules are set to take effect in 2027.
BlackRock's Spot Bitcoin ETF, IBIT, has achieved remarkable success, becoming the fastest-growing ETF in history by accumulating over $50 billion in assets within just 11 months of its January 2024 launch. This milestone has significantly impacted Bitcoin’s price, pushing it above $100,000.
Bloomberg has called the launch the "greatest in ETF history," highlighting the growing institutional interest in cryptocurrencies. Alongside BlackRock's ETF, others like Fidelity’s FBTC have also seen substantial inflows, underscoring the increasing integration of digital assets into mainstream finance. The growth of Bitcoin ETFs signals a transformative shift in institutional investment strategies.
Hive Digital, a Bitcoin mining firm, announced its move from Vancouver, Canada, to Texas, attributing the relocation to a more favorable regulatory climate under President-elect Donald Trump's administration. The company cited Texas' business-friendly environment, energy infrastructure, and skilled workforce as key factors in the decision.
Hive Digital emphasized the benefits of being in the U.S., particularly in terms of access to capital markets, liquidity, and visibility. Texas has become a prominent hub for Bitcoin mining, with major players already operating in the state. Hive Digital's move reflects the growing optimism for cryptocurrency policies under Trump..
Ethereum Highlights of the Week
Ethereum co-founder Vitalik Buterin criticized Elon Musk over his approach to free speech on X, urging him to "turn down the temperature" amid controversy surrounding foreign tech workers. Buterin expressed admiration for Musk’s commitment to free speech but cautioned against using the "banhammer" to censor users.
He emphasized the importance of leaders setting a positive tone in discourse, warning that censorship and heavy-handed moderation could undermine public dialogue. Buterin stressed that respecting free speech, even when disagreeable, is crucial for healthy discourse and the long-term benefit of society.
Ethereum (ETH) spot exchange-traded funds (ETFs) recorded a historic $2.1 billion in inflows during December 2024, marking an 83% increase from the previous month. This surge was primarily driven by BlackRock’s ETHA fund, which attracted $1.4 billion in 13 consecutive days of positive contributions.
Cumulatively, ETH ETFs have raised $2.6 billion since their launch in July 2024. Investor interest in ETH surged as Bitcoin (BTC) approached $100,000, along with a favorable regulatory outlook under President-elect Trump. Despite some outflows in December, ETH ETFs continued a consistent growth streak, reflecting growing investor confidence in Ethereum.
Vitalik Buterin contributed 50 Ether (approximately $170,000) to the legal defense fund for Tornado Cash developers Roman Storm and Alexey Pertsev. This donation, part of a broader campaign, represents 25% of the $650,000 raised for their trial.
Pertsev faces charges of money laundering, and Storm is also accused of similar offenses related to Tornado Cash. The crypto mixer was sanctioned by the US Treasury in 2022, which led to legal and regulatory disputes. Buterin had previously donated 100 ETH in October, while legal challenges against the sanctions continue.
In 2024, the percentage of long-term Ethereum holders surged from 59% in January to 75% by December, signaling growing confidence in ETH. Conversely, the proportion of long-term Bitcoin holders dropped from 70% to 62%. This trend suggests that investors are increasingly holding ETH as a more stable investment.
The rise in Ethereum long-term holders also correlates with a significant increase in Ether ETF inflows, which reached $2.1 billion in December. Analysts predict a bullish outlook for ETH heading into 2025, citing favorable regulatory changes and ongoing developments in Ethereum’s ecosystem.
10x Research’s Markus Thielen warned that Ethereum may struggle to deliver significant rallies in 2025, potentially underperforming Bitcoin. Thielen pointed to a negative growth rate in active Ethereum validators, indicating a lack of demand beyond staking.
Ether’s price growth has also lagged behind Bitcoin’s, with Bitcoin ETFs attracting $35.3 billion in 2024 compared to Ethereum’s $2.66 billion. While some analysts remain cautious, others, like Michael van de Poppe, suggest Ether may break out relative to Bitcoin. However, Thielen remains pessimistic, especially regarding Ethereum’s recent network upgrades and their impact on price performance.
Cosmos Highlights of the Week
Osmosis has launched Osmosis Pay, a new payment solution that allows users to spend assets on the Osmosis platform just like cash. Powered by Cypher, the card uses the VISA network and is accepted by over 40 million merchants in 140+ countries.
Users can fund their card with assets like USDC and USDY, with compatibility for Apple Pay and Google Wallet. The service offers both a virtual card for online shopping and a physical card for in-store purchases, with added security features like 3D Secure and customizable card controls to manage international payments safely.
Injective, in collaboration with Sonic SVM, has launched the first-ever cross-chain AI Agent Hub, designed to connect the Solana and Injective ecosystems seamlessly. This platform enables AI agent tokenization, cross-chain asset transfers, and shared ownership, aiming to revolutionize gaming, DeFi, and social platforms.
The Smart Agent Hub supports both native and wrapped tokens, facilitating two-way asset interoperability through the Inter-Blockchain Communication Protocol (IBC). Early 2025 testnet trials are planned, with applications centered on decentralized finance and gaming.
Binance has announced it will stop supporting dYdX token deposits and withdrawals on the Ethereum (ERC20) network, effective February 12, 2025. This move has already triggered a 2% drop in the token’s price, now at $1.48, with a market cap of $1 billion.
The decision raised concerns regarding liquidity and market stability, as users may face issues transferring tokens via ERC20. While the exchange is optimizing its supported assets, it’s also bolstering its portfolio with new tokens like Phala Network and dForce, which have experienced price increases following their inclusion on the platform.
DeepSeek-V3, the latest open-source AI model, has launched on AkashChat, marking a significant milestone for Akash Network. The model is touted as one of the most capable in the industry, directly competing with the benchmark performance of GPT-4 and 3.5 Sonnet.
By integrating DeepSeek-V3, Akash aims to solidify its position in the AI landscape, providing robust, scalable, and high-performance solutions. This launch is expected to drive innovation and further enhance Akash's offerings within the AI space, demonstrating its commitment to advancing decentralized technologies and attracting more developers to its ecosystem.
Secret (SCRT) is now live for trading on BitMart Exchange, with the trading pair SCRT/USDT available for users. The listing, effective from December 31, 2024, allows users to trade SCRT starting at 11:00 AM UTC.
Secret Network, known for its privacy-preserving smart contracts, ensures encrypted data usage without exposing it to nodes in the network. This new addition to BitMart is expected to boost the accessibility and visibility of Secret (SCRT) in the market, further promoting privacy in blockchain applications.
Other Highlights of the Week
Do Kwon, co-founder of Terraform Labs, has pleaded not guilty to fraud charges in Manhattan court after being extradited from Montenegro. He faces allegations including securities fraud, wire fraud, commodities fraud, and money laundering conspiracy.
Prosecutors claim Kwon misled investors about the stability of TerraUSD, which contributed to the 2022 collapse of Terra and its tokens, leading to an estimated $40 billion in losses. The case highlights the need for regulatory scrutiny and transparency in the crypto space, following the downfall of TerraUSD and Luna, and may set a precedent for future crypto-related legal actions.
A Chinese intelligence agency has successfully hacked the U.S. Treasury Department, gaining access to government workstations and unclassified documents, the Biden administration confirmed. The breach, which occurred after a third-party service provider, BeyondTrust, alerted the Treasury on December 8, is believed to be an espionage operation rather than an attack on critical infrastructure.
The compromised systems were taken offline, and there is no evidence of ongoing access. The hack comes amid growing concerns over Chinese cyber operations, including the Salt Typhoon breach, which compromised U.S. telecommunications systems and sensitive counterintelligence data.
ai16z, an AI agent platform based on the Solana blockchain, is considering a major tokenomics overhaul and a potential Layer 1 blockchain launch. The platform’s Eliza framework allows developers to create AI agents across various networks.
In Q1 2025, ai16z plans to launch a token launchpad to deploy AI projects, making its native token the central currency for agent interactions. The token, with a market cap of $1.4 billion, serves governance and utility purposes within the ecosystem. Despite its decentralized governance, the core team retains substantial influence over the platform’s direction.
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