Jan. 15, 2025

CoinDesk 20 Index: 3,532.15  +2.51%
Bitcoin (BTC): $96,700.60  +0.17%
Ether (ETH): $3,199.03  -0.6%
S&P 500: 5,842.91  +0.11%
Gold: $2,686.80  +0.68%
Nikkei 225: 38,444.58  -0.01%

Bitcoin made another ascent above $97,000 during the Asian morning as traders await the latest inflation data from the U.S. The latest consumer price index (CPI) release, due at 08:30 ET, is expected to show the cost of living rose 0.3% month-on-month in December, matching November's pace. Should it come in hotter-than-expected, however, it would further dampen hopes for rate cuts by the Fed, possibly prompting another pullback in risk assets like crypto. These concerns, bolstered by Friday's blowout jobs report, were partly responsible for BTC falling below $90,000 on Monday. Bitcoin trades at around $96,750 at the time of writing, around 0.16% higher in the last 24 hours. 

BTC is at risk of falling to the low $80,000s should it drop below $90,000 as a result of a macro-driven sell-off, Standard Chartered has said. The bank noted that investors who took on bitcoin exposure after the U.S. election in November, are now "only breaking even," and there is a risk that forced or panic selling could add to the sell-off. This includes ETF buyers and BTC acquirer MicroStrategy. "The risk of mark-to-market pain is building," wrote Geoff Kendrick, head of digital assets research at Standard Chartered. The bank advises adding bitcoin once the retracement is over. Standard Chartered still expects bitcoin to hit $200,000 by the end of the year, fueled by the resumption of institutional inflows under the new Trump administration.

Bitcoin adoption by U.S.-listed public companies continues in full steam as NYSE-listed Genius Group (GNS) increasing its bitcoin holding to $35 million, which was ahead of its scheduled target of $120 million. In the process, it acquired 372 BTC at an average price of $94,047 per bitcoin. The first announcement came on Nov. 12, when it announced its "Bitcoin-first" strategy. Nasdaq-listed Ming Shing Group (MSW), a wet trades works service provider, also purchased 500 BTC at an average price of $94,375 per bitcoin. MSW shares were up 43% higher year-to-date. The new wave of bitcoin treasury adoption surges ahead with four publicly traded companies announcing bitcoin buys and seven companies announcing a strategy, but no acquisition.

Despite BTC's seemingly strong recovery following its plunge at the start of the week, one factor casts doubt on the sustainability of these gains, indicating scope for significant downside volatility.

That factor is the supply of major stablecoins, which has stalled, indicating the absence of fresh capital inflows into the market. Data tracked by Glassnode shows that the supply of the top four stablecoins by market value – USDT, USDC, BUSD and DAI – has stabilized around $189 billion, representing a 30-day net change of just 0.37%.

The latest slowdown in new liquidity via stablecoins, which suggests a weakened buying environment while heading into the U.S. consumer price index (CPI) release, starkly contrasts the expansion of stablecoin liquidity observed during the November-December rally and early last year.

"The fact that the late-2024 rally required almost 2x the capital inflow for a smaller price gain underscores the speculative demand and liquidity-driven momentum that has since cooled," Glassnode said in a Telegram note.

- Omkar Godbole