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- Swiss Bank Eyes Bitcoin as National Reserve | Crypto Alpha Week 1 of 2025
Swiss Bank Eyes Bitcoin as National Reserve | Crypto Alpha Week 1 of 2025
To keep you updated on all things 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
Solana Adds $1B in Stablecoins in December
Pump.fun Deposits to Kraken Exceed $300 Million
Osmosis Pay Launches Visa-Compatible Card
Binance Stops Support for DYDX ERC20
Avalanche AI Launches on $AVAX
InfraBUIDL(AI) Program Invites Innovation on Avalanche
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.
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VaultCraft launches V2, TVL skyrockets above $100M
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Daily Alphas of the Week
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.
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Solana Highlights of the Week
In December, Solana onboarded an additional $1 billion in stablecoins, boosting its total stablecoin value locked (TVL) to around $5 billion. The majority of these inflows were in USDC, with USDT also contributing approximately $1 billion.
This surge highlights Solana’s growing prominence in decentralized finance (DeFi), with stablecoin adoption accelerating on the network. Solana’s TVL rose significantly in 2024, outpacing Ethereum’s performance. Despite Ethereum’s lead in stablecoin TVL, Solana’s rapid growth and recent DeFi success position it as a strong challenger to Ethereum’s dominance, with increasing retail participation in Solana-based tokens.
Polymarket now assigns an 85% chance of SEC approval for a Solana ETF in 2025, a dramatic increase from just 3% in September. The platform suggests that approval is likely before August, with over a 50% chance by July 31. This optimism follows Brazil's approval of the first Solana ETF and growing market confidence.
Grayscale’s Solana ETF application faces a key SEC deadline on January 23, just days before SEC Chair Gary Gensler’s expected resignation. While Gensler's stance has been unfavorable, the shift in market sentiment indicates a stronger likelihood of approval.
The Solayer restaking protocol on Solana has launched the Solayer Foundation, a non-profit organization to support its development. Alongside, the LAYER governance token is introduced to accelerate growth and protocol development, though the token's utility details will be revealed later.
LAYER is an SPL-2020 token, with distribution occurring in three phases. The restaking protocol, modeled after Ethereum’s EigenLayer, allows users to earn additional rewards by locking staked assets in different protocols. Solayer is currently the 12th largest on Solana. The project has backing from major investors, including Polychain Capital and Binance Labs.
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