### Major Market Movements
Posting a **24% annual return**, the **SPDR S&P 500 Trust (SPY)** has attracted **$16.49 billion** in inflows in 2024. This marks the first annual rise of more than **20%** for the S&P 500 since **1997-1998**, highlighting the ongoing **bull market** on Wall Street that began in **October 2022**. The year saw notable gains across major indexes:
- **Dow Jones Industrial Average**: +13%
- **S&P 500**: +24%
- **Nasdaq**: +30%  

### Bitcoin ETFs Soar
In the realm of cryptocurrency, the **iShares Bitcoin Trust (NASDAQ: IBIT)** emerged as a standout, recording a **historic inflow of $34.29 billion**. Bitcoin itself skyrocketed by **109.89%** in 2024, crossing the **$100,000 mark** for the first time on **December 14**, largely influenced by political events, notably **Trump's electoral success** in November 2024. Bitcoin closed the year at **$93,398.60**.

### Diverging Sector Performance
Despite these overall positive trends, **six of the eleven S&P 500 sectors** experienced outflows for the year, indicating a mixed investor sentiment across different sectors. Digital assets like Bitcoin have largely benefited from shifting investment patterns, prompting a closer look at the evolving market dynamics.

SPY and Nasdaq lead gains; Bitcoin ETFs dominate with record inflows, crossing $100K milestone in 2024

Bitcoin ETFs Break Records as SPY Surges 24%: What You Need to Know About 2024's Bull Market

## The Next Wave of Corporate Bitcoin Adoption Seems to Be on Its Way

As **interest in digital assets** continues to rise, a new phase of **corporate adoption for bitcoin (BTC)** appears to be taking shape. Publicly listed firms are following **MicroStrategy's lead** by adding BTC to their **balance sheets**.

It all started with **MicroStrategy (MSTR)** adopting BTC as a treasury asset in 2020. Since then, its share price has skyrocketed by almost **2,500%**. Over the years, the company has increased its coin holdings through various methods such as cash purchases, at-the-market (ATM) equity offerings, convertible debt, and more recently, preferred stock offerings.

In 2024, we saw multiple companies adopt a **bitcoin treasury strategy**, including **Metaplanet (3350)**, **Semler Scientific (SMLR)**, and **MARA Holdings (MARA)**, along with several publicly traded miners experiencing significant success.

Now, more firms are joining the trend. For instance, **KULR Technology Group (KULR)** announced a **$21 million bitcoin purchase**, bringing its total holdings to **430 BTC** at an average price of **$98,393** per token. KULR has utilized a combination of an ATM equity program and surplus cash to fund its acquisition, achieving a **BTC yield strategy** of **93.7%** from December 2024 to January 2025. Their share price has surged **847%** since November 19.

As of January 7, several publicly traded companies have announced a bitcoin treasury strategy, although they have yet to make acquisitions:
- **Acurx Pharmaceuticals (ACXP)** approved a purchase of up to **$1 million** in bitcoin but has not acquired any yet. Its share price is down **35%** since November 19, although it has increased **30%** year-to-date.
- **Hoth Therapeutics (HOTH)**, also on Nasdaq, similarly approved a **$1 million bitcoin purchase** with no acquisitions yet, but its share price is up **2%** since November 19.
- **LQR House (YHC)** announced a **$1 million bitcoin purchase** and plans to retain up to **$10 million** in bitcoin from cryptocurrency payments. Their share price is up **56%** since November 19.
- **SOS Limited (SOS)** approved a **$50 million** bitcoin purchase on November 27, with its share price down **30%** since November 19.

In this second wave, **KULR** has seen significant share price appreciation compared to its peers, while **LQR House** stands out with a **57%** increase in share price.

![Wave 2 BTC Adoption](https://www.coindesk.com/_next/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2Fs3y3vcno%2Fproduction%2F668f0a11751cf59228777bc9dc96b80b51db0fac-1140x1092.png%3Fauto%3Dformat&w=1200&q=75&dpl=dpl_EY98mg2CffmP7TFmnb8io9BMwWsv)

*Wave 2 BTC Adoption*  

*Disclaimer: The analyst who wrote this piece owns shares of MicroStrategy (MSTR) and Semler Scientific (SMLR).*

Multiple public companies have announced a bitcoin strategy, but there has been no acquisition yet. 

Corporate Bitcoin Adoption: The Next Big Wave is Here!

### Elon Musk's Doge Department and Its Implications

Elon Musk's **Doge department** has stirred significant attention in Washington, with implications that could affect the prices of **Bitcoin**, **Dogecoin**, and other major cryptocurrencies. Following the election of **Donald Trump**, both Bitcoin and Dogecoin have seen a surge in value, with traders optimistic about Musk's influence in establishing a pro-crypto administration.

### Inflation Concerns and Cryptocurrency Pricing

Musk has stated that if his Doge department successfully combats **inflation**, it may lead to a **drop in cryptocurrency prices**. He emphasized that the important factor is the **ratio of dollars to crypto**, highlighting that if dollar inflation is resolved, the price of cryptocurrencies could decrease, all else being equal.

### The Current Economic Landscape

The U.S. debt has reached over **$34 trillion**, exacerbated by COVID-19 stimulus measures that have contributed to inflation. Musk's initiative aims to address excessive government spending, which he believes could potentially cut **$2 trillion** from U.S. expenditures.

### The Connection to Dogecoin

The Doge department, named after the **meme-inspired Dogecoin**, reflects Musk's commitment to this cryptocurrency, which he has publicly declared as his favorite. Tesla also holds around **10,000 Bitcoin**, valued at approximately **$1 billion**.

![Elon Musk and Cryptocurrency](https://specials-images.forbesimg.com/imageserve/677cfbdb006cf1f600c88662/Elon-Musk--Doge--bitcoin--bitcoin-price--dogecoin--dogecoin-price--crypto--image/960x0.jpg?fit=scale)

The **dogecoin price** is nearing its 2021 peak, driven by Musk's efforts and the broader market sentiment influenced by his actions. As the market anticipates further developments from Musk's initiatives, the potential impact on Bitcoin and Dogecoin remains a topic of intense speculation.

Elon Musk has said that if his Doge department is successful in combating inflation, it could drive down the price of bitcoin, dogecoin and other major cryptocurrencies...

Elon Musk's Bold Prediction: Will Dogecoin's Success Sink Bitcoin Prices?

### Bitcoin Mining Profitability on the Rise

According to a recent **JPMorgan** report, **Bitcoin (BTC)** miners have seen their daily revenue and gross profit increase for the **second consecutive month** in December, reaching levels not seen since **April**. This uptick in mining profitability comes as the price of Bitcoin continues to rally, outpacing the growth of the network's hashrate.

### Key Findings from the Report

- **Average Earnings**: Miners earned an average of **$57,100 per exahash per second (EH/s)** in daily block reward revenue last month, marking a **10% increase** from November.
- **Hashrate Growth**: The network hashrate rose by **6%** in December, averaging **779 EH/s**. In 2024, the hashrate has grown by **54%**, a slowdown compared to **2023's** impressive **103%** gain.
- **Mining Difficulty**: Mining difficulty rose by **7%** from the previous month and is now **27% higher** than before the reward halving event in April.

### Market Performance

Despite the increase in mining profitability, the total market cap of the **14 publicly listed bitcoin miners** tracked by JPMorgan fell by **23%** to **$28 billion** in December, following a **52% increase** in November. Notably, **TeraWulf (WULF)** was the only miner to outperform Bitcoin last year, achieving a **136% gain** compared to Bitcoin's **120% increase**.

For more information on the profitability trends of Bitcoin miners and the impact of market dynamics, check the full report.

The bitcoin network hashrate rose 54% in 2024, versus a 103% gain in 2023, the report said.

Bitcoin Miners Experience Profit Surge: What You Need to Know!

## Capital Flight from China Fuels Bitcoin's Rise

As we step into the new year, **Chinese assets** continue to decline sharply, potentially accelerating the **ongoing Bitcoin (BTC) bull run**. The **Chinese yuan (CNY)** hit a low of **3.22 per U.S. dollar**, marking its weakest point since **September 2023**, as noted by **TradingView**. This month alone, the yuan has dropped **0.4%**, extending a three-month trend of losses, despite the **People's Bank of China's (PBOC)** attempts to stabilize investor confidence amid looming **U.S. tariffs** under President-elect **Donald Trump**.

On the stock market front, the **CSI 300** index has plummeted to its lowest since September, while the **ChiNEXT Index**, which tracks high-growth SMEs, has fallen **8% since December 31**. Additionally, the yield on **10-year Chinese government bonds** has dropped to **1.6%**, a stark decline of **100 basis points** from a year ago, indicating deepening concerns over deflation.

These economic pressures are likely to trigger **capital flight** from China, with **Bitcoin** emerging as a prime alternative investment. According to the **LondonCryptoClub**, "China appears to be letting the currency slide and no longer defending it, which will accelerate capital outflows. Bitcoin will be an obvious destination for some of those flows."

Historically, during **China's devaluation in 2015**, Bitcoin's price surged more than **300%**. Currently, the PBOC is using its daily fix and liquidity measures rather than direct intervention, which could pose challenges for cryptocurrency stability.

On a related note, the PBOC has recently set the daily reference rate stronger than **7.20 per USD** to counteract bearish expectations for the yuan. At the same time, it has tightened liquidity in the offshore market, pushing the **offshore yuan's overnight interbank interest rate** to **8.1%**, the highest since June 2021.

However, BTC enthusiasts should remain vigilant for any significant interventions by the PBOC that could impact the dollar index and, consequently, the attractiveness of Bitcoin as a risk asset. The dollar index has already surged from **100 to 108** in just over three months, largely due to rising **Treasury yields**, which could dampen risk appetite for assets like Bitcoin.

Capital flight from China could find home in alternative assets like bitcoin. 

How China's Economic Turmoil Could Ignite a Bitcoin Bull Run

Authorities in **Kazakhstan** have taken decisive action to block more than **3,500 cryptocurrency exchanges** operating illegally, as revealed by the **Kazakh regulator, AFM RK**. This crackdown is the result of collaborative efforts between the **National Security Committee** and the **Ministry of Culture and Information**.

### Liquidation of Illegal Crypto Platforms
In **2024**, the regulator successfully liquidated **36 illegal crypto exchanges** that had a combined turnover of **60 billion Kazakhstani tenge** (over **US$113 million**). Additionally, assets worth **4.8 million USDT**, a widely used stablecoin, were frozen and confiscated from these platforms. Authorities also uncovered **two cryptocurrency pyramid schemes**, managing to return **545,000 USDT** to victims and freezing **120,000 USDT** held by the platforms.

> “**AFM** continues to collaborate with international partners to strengthen control over crypto transactions and combat their criminal use. Legislative amendments are being developed to introduce liability for digital asset providers in cases of money laundering violations,” the regulatory announcement stated. 

### Major Exchanges Betting on Kazakhstan
In a contrasting trend, major global crypto exchanges are expanding into Kazakhstan. In **2023**, **Bybit** secured a full crypto exchange license from the **Astana Financial Services Authority (AFSA)**, and **Binance** received formal consent from the AFSA to pursue a full regulatory license. Furthermore, the **National Bank of Kazakhstan** has initiated a pilot program for the development of the **digital tenge**, a central bank digital currency (CBDC), showcasing enhancements in value-added tax (VAT) reimbursement processing using digital fiat.

![A flag of Kazakhstan](https://images.financemagnates.com/images/A%20flag%20of%20Kazakhstan_id_898e94dc-eba5-4065-bf17-3aefec8e9909_size775.jpg)
*Image Source: Unsplash*

Authorities in Kazakhstan have blocked more than 3,500 cryptocurrency exchanges operating illegally, according to an announcement by the Kazakh regulator, AFM RK.

Kazakhstan's Bold Move: Over 3,500 Illegal Crypto Exchanges Shut Down!

### This Crypto Fund Blew Past Bitcoin's 121% Price Gain in 2024

Bitcoin (BTC), the leading cryptocurrency by market value, surged **121% last year**, crossing the six-figure mark and outshining traditional assets. However, this performance falls short in comparison to **Pythagoras Investment Management’s Alpha Long Biased Strategy**, which pushed the envelope even further.

The fund, which combines a **BTC base position with two uncorrelated strategies**, achieved an impressive **return of 204% in 2024**, according to Pythagoras in an email to CoinDesk. This translates to a **3x gain**, significantly outperforming the **2x return** typical buy-and-hold Bitcoin investors would have realized. Notably, the fund charges an incentive fee only when it outperforms Bitcoin.

The fund's base position in Bitcoin provides **direct exposure** to long-term appreciation, while the two uncorrelated strategies – a **momentum market timing strategy** and a **long-short market selection strategy** – generate alpha.

The **momentum strategy** employs **machine learning** and pattern recognition to dynamically adjust and optimize exposure, allowing it to capture short-term market fluctuations. Meanwhile, the **long-short strategy** utilizes a proprietary **AI-based forecasting model** to create a dollar-neutral portfolio, investing in tokens expected to yield superior returns while shorting those anticipated to underperform.

Despite its stellar performance, the Alpha Long Biased Strategy was Pythagoras' smallest fund, with **assets under management (AUM) of $7 million**. It suffered a **2% drawdown in December**, as Bitcoin fell from record highs above **$108,000** to **$93,000**.

In contrast, Pythagoras' **Arbitrage strategy** delivered a **3% return** in December, ending the year with an **18% gain** and **$45 million** in AUM. The **Quant Long Short Fund** generated a **30% return** in 2024, while the **Absolute Return Strategy** gathered **$158 million** in client funds with a **41.7% return**. The combined AUM of the four funds grew to over **$230 million** from **$80 million** in 2023, driven by a bullish market.

### Bullish Outlook

Pythagoras expects the **bull market** to continue this year, driven by **positive regulatory developments** in the U.S. and **corporate demand** for Bitcoin. 

"The incoming Trump administration, with its proposal on creating a **national strategic Bitcoin reserve** and appointing individuals favorable to our industry, is expected to be a major catalyst. With over **290 members of Congress** who are pro-crypto, we anticipate that supportive legislation for the cryptocurrency industry will gain momentum," said **Mitchell Dong**, CEO of Pythagoras.

As the U.S. Congress explores the idea of a **national strategic Bitcoin reserve**, Pythagoras anticipates some countries may try to **front-run the U.S.** in accumulating Bitcoin, should this initiative materialize. Dong also mentioned the likelihood of more companies following **MicroStrategy's** lead in adopting BTC.

Pythagoras Alpha Long Biased Strategy combines a base position in BTC with two uncorrelated strategies to outperform buy and hold play. 

Discover How Pythagoras Crypto Fund Achieved a Whopping 204% Return in 2024, Outshining Bitcoin!

## Bitcoin's Remarkable Surge

The **macroeconomic factors** are significantly influencing Bitcoin's evolving status as an asset increasingly favored by **Wall Street**. A recent report from the **Washington Post** suggested that President **Trump's tariffs** might not be as extensive as previously believed, leading to a **decline in the dollar** and a subsequent **2% spike** in Bitcoin's price. However, Trump later refuted this report, causing Bitcoin to trim its gains during evening trading.

Despite this, Bitcoin has retained its **momentum** at the start of 2025, reclaiming the **$100,000 mark** on Monday. This resurgence is bolstered by rising inflows into Bitcoin **ETFs**, with a **CoinShares report** indicating over **$500 million** invested in Bitcoin ETFs during the first three trading days of the year.

## MicroStrategy's Continued Investment

**MicroStrategy** continues to expand its Bitcoin holdings, purchasing an additional **$100 million** in Bitcoin for the ninth consecutive week. This brings the company's total Bitcoin stash to nearly **$45 billion**. As Bitcoin prices rebound, MicroStrategy's stock is also rising, which could potentially lead to more share issuances to fund further Bitcoin acquisitions.

## Macroeconomic Environment and Its Impact

The **macroeconomic landscape** is expected to be a focal point for crypto markets as 2025 unfolds. The dollar's fluctuations, spurred by rumors of potential **rollback of Trump tariffs**, will likely inject volatility into global markets. Bitcoin's recent price movements illustrate this dynamic, with traders closely monitoring the **dollar index** for cues.

This week, the economic calendar includes the **release of FOMC minutes** and the **December jobs report**, both crucial for understanding the **Federal Reserve's** policy direction. While expectations for fewer rate cuts this year have already affected market sentiment, the key question remains regarding the Fed’s long-term plans for 2025. These macroeconomic developments will be vital in shaping the crypto market's trajectory in the upcoming months.

As we step into 2025, the interplay between macroeconomic factors and **crypto adoption** continues to steer market narratives. With increasing **institutional interest** and improving **regulatory clarity**, the crypto market is poised to leverage the shifting economic landscape.

The dollar finally rolled over to trigger a big surge in Bitcoin to continue its hot start to 2025.

Bitcoin ETFs Break Records as SPY Surges 24%: What You Need to Know About 2024's Bull Market

Summary:

Major Market Movements

Bitcoin ETFs Soar

Diverging Sector Performance

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Bitcoin Soars Over $102,000 as Dollar Dips Amid Trump Tariff Speculations