In 2022, 2023, 2024, and 2025, this cycle has reached its fourth year, with the preceding three years laying the groundwork, and the last year reaping the rewards. As usual, just let the bull arrive on schedule. Happy New Year 2025 and Happy New Year's Day.
Back to the point:
The IRS has issued a temporary relief measure, expected to benefit cryptocurrency holders on centralized finance (CEFI) platforms in 2025. This regulation will take effect on January 1, 2025, requiring the use of a first-in, first-out (FIFO) accounting method for crypto assets unless opting for other preferred methods like highest-in, first-out (HIFO) or Spec ID. The IRS's temporary relief allows taxpayers to continue using their own records or tax software to identify specific assets being sold. This relief period only applies to CEFI trades between January 1, 2025, and December 31, 2025. After this date, taxpayers will need to formally choose an accounting method with their brokers. Bitcoin Magazine reported that Switzerland has officially begun reviewing a proposal for a nationwide referendum called "Building a Financially Strong and Responsible Switzerland (BTC Initiative)." The proposal has been published in the Federal Gazette and has entered the signature collection phase, aiming to incorporate BTC into the Swiss national financial system through a constitutional amendment. According to The Block data, in December 2024, CEX spot trading reached $2.94 trillion, the highest since May 2021, with a nearly 10% month-on-month increase from November. DEX spot trading reached $323.25 billion, setting a historical high, with a 7.89% month-on-month increase from November. X (Twitter) platform CEO Linda Yaccarino stated that in 2025, X will connect users in unprecedented ways, such as X TV, X Money, Grok, etc. This means that the payment feature X Money will be launched this year.
Musk posted a tweet containing frog elements at midnight on January 1: After multiple deaths, we enter the hardcore rankings, everything we have in life will echo in eternity! (with a frog emoji). CZ retweeted a crypto KOL's viewpoint, which stated that historical trends indicate that the first quarter of 2025 might see an altcoin season, with the first quarter of 2025 being the most promising period for altcoins in the past 36 months, just like in 2021 and 2017. QCP Capital noted that due to weak liquidity at the end of the year, there has been a net outflow of $1.8 billion from BTC spot ETFs since December 19, and the S&P 500 and Nasdaq indices have fallen over 1% for the third time in eight trading days. Looking ahead to Q1 2025, catalysts may appear in January as institutions will readjust asset allocations, and as BTC is widely adopted by many institutions, allocations may increase. CoinDesk analyst James Van Straten stated that U.S. Treasury Secretary Yellen wrote to Congress indicating that the U.S. is expected to hit the debt ceiling as early as between January 14 and 23, 2025, and may need to take measures to avoid falling into debt default; Trump's inauguration on January 20 may signal a bottom for BTC. Matrixport stated: The performance of ETH in 2024 was disappointing, and looking forward, ETF issuers may need to take responsibility for creating and promoting a more attractive narrative for ETH in 2025. Without additional support and market positioning, it may be difficult to bridge the gap with BTC relying solely on ETH itself.
In 2024, BTC started the year at $42,258, reached an annual high of $108,364 on December 17, and ended the year at $95,331, with an annual increase of 125.32%. ETH hit an annual low of $2,127 in August, reached an annual high of $4,105.53 on December 16, and ended the year at $3,404, with an annual increase of 48.57%. In 2024, BTC spot ETFs saw a cumulative net inflow of $35.246 billion, with a cumulative net inflow of $4.586 billion in December in the U.S. BTC spot ETF. In 2024, ETH spot ETFs had a cumulative net inflow of $2.6609 billion, with a cumulative net inflow of $2.1 billion in December. In 2024, for BTC spot ETFs, BlackRock topped the list with a total annual inflow of $37.2 billion, followed by Fidelity with $11.7 billion. For ETH spot ETFs, BlackRock led with a total annual inflow of $3.5 billion, followed closely by Fidelity with $1.5 billion. MicroStrategy's stock MSTR saw a cumulative increase of 342% this year, nearly doubling Nvidia's increase (185%), being the highest return among crypto-related assets in traditional finance. Over the past five years, BTC had three quarters of increases and two quarters of decreases, where the increase in Q1 2024 was 68.68%; the increase in Q1 2023 was 71.77%; the decrease in Q1 2022 was 1.46%; the increase in Q1 2021 was 103.17%; the decrease in Q1 2020 was 10.83%. Since 2013, the average increase in Q1 has been 56.47%, with six increases and six decreases, with an average increase of 3.35% in January, also with six increases and six decreases. The performance in January over the last five years has been good, with four increases and one decrease, where the increase in January 2020 was 29.95%, and the increase in January 2023 was 39.63%.
Federal Reserve's Daly stated: Cryptocurrency is a complex thing, and the service we provide for everyone is to truly interpret its meaning; once we achieve this, we can define it. It can be a medium/stock/store of value/depreciating asset, we just need to define these terms rather than mixing them up with gold as usual. Allianz chief economic advisor Mohamed El-Erian stated: In 2024, the U.S. did not weaken as most economists expected, U.S. stocks remained relatively stable, and the S&P 500 index set nearly 60 new closing highs this year. In 2025, the Federal Reserve faces two choices, "either accept inflation above the target or risk dragging the U.S. economy into recession by lowering inflation." The probability of the Federal Reserve maintaining interest rates in January is 88.8%, while the probability for March is 47.1%, with a 47.7% chance of a 25 basis point cut and a 5.3% chance of a cumulative 50 basis point cut. In 2022, 2023, 2024, and 2025, this cycle has reached its fourth year, with the preceding three years laying the groundwork, and the last year reaping the rewards. Many veteran investors have joked that holding coins is harder than holding watermelons. I hope everyone can achieve their goals and profit and exit during the peak years of the bull market. I won't write much today; as usual, just let the bull arrive on schedule, Happy New Year 2025.