On January 7th, Bitwise unveiled its January 2025 Bitcoin Macro Investor Report, highlighting the challenges faced by the crypto market in December 2024. The report noted factors such as profit-taking, diminished institutional investment, a stronger USD, and tightening Fed policies. However, it emphasized that Bitcoin continues to gain support from robust on-chain data. While immediate risks exist, the report identifies several long-term bullish catalysts, including the forthcoming Bitcoin halving and strategic reserves that could drive substantial price increases, projecting a standout performance for Bitcoin over traditional assets in 2025 and beyond.
The Federal Reserve’s recent decision to cut rates by 25 basis points during its December meeting signals potential future hikes. This monetary backdrop, coupled with a decrease in global liquidity and the strengthening dollar, poses challenges for Bitcoin, mirroring trends seen in traditional markets like the S&P 500. Nonetheless, on-chain dynamics indicate a growing supply gap fueled by ETFs, corporate treasury allocations, and strong retail demand. Despite a slowdown in on-chain activities, critical indicators, such as diminishing exchange balances and an uptick in hashrate, suggest continued market resilience.