Bitcoin on hold
The crypto market experienced a week that alternated between hope and uncertainty. President Trump took significant steps toward crypto-friendly policies. Despite this, Bitcoin's price remained in the range it has held in recent months. Ripple (XRP) attracted attention with rumors of a role in America's strategic crypto reserve. Read more on these developments in this edition of Bitvavo Market News.
Market update
It has been a turbulent week. Following Trump's inauguration on Monday, 20th January, the rest of the week focused on possible presidential orders targeting the crypto market. Each announcement triggered market movements, yet after a week of volatility, prices are still sitting steadily in the ā¬87,500 to ā¬103,000 range.
After two months in this price range, many investors' patience is beginning to run out. With so much positive news, why havenāt we seen new all-time highs? This sentiment is typical with a period of consolidation, when the market incorporates previous price increases. On January 20, the price was 70% higher than on November 4, and 125% higher than on September 6. While some investors are taking profits, others are seizing the opportunity to buy in.Ā
Itās wise to prepare for a few more weeks of market weakness. Things are unsettled outside the crypto world too. What will the U.S. central bank decide about interest rates Wednesday? How will the Chinese AI model DeepSeek impact U.S. tech companies? These crosswinds will settle in time.
The wider crypto market has been weaker than Bitcoin in recent months. Bitcoin's market share is on the rise and within the altcoin market there are substantial variations. Overall, risk appetite seems to have declined, with retail investors taking a wait-and-see approach.
Sentiment around the Ethereum ecosystem and its token, ETH, may serve as a good indicator of the risk appetite. The mood around Ethereum has been quite negative lately, even though decentralized finance in particular could benefit greatly from more lenient policies from US regulators.
Viewed from a broader perspective, ETH's chart isn't that negative. We could be in the final stages of a Cup & Handle or an inverted Head & Shoulders bottom pattern - both of which tend to break out upward. This could well coincide with renewed enthusiasm in the altcoin market.
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Ripple (XRP) steals the spotlight
What happened in the United States last week was extraordinary. Efforts to address challenges faced by the industry saw a turning point. Ross Ulbricht was released, and Tornado Cash was removed from the sanctions list. Hester Peirce, known for her crypto-friendly stance, was appointed a key position at the SEC, while Trump signed an executive order to foster innovation in the crypto sector.
And this is just a selection of the news. A year ago, such a dramatic shift would have been unthinkable. The turnaround is complete - a bigger shift in a government's attitude is hard to imagine.
And yet the market is cautious. Bitcoinās price has barely moved, reflecting lingering hesitation among investors who seem uncertain whether itās truly time to go all in.
This hesitation is not surprising. The blows of recent years are still fresh - FTX, Celsius, the brutal market correction of 2022 have all left deep scars. Investors want to be sure that this US policy shift is more than optimistic words, executive orders, and hopeful committees. They want proof. They need assurance that this policy shift in the US is genuine and enduring, not just a fleeting political maneuver. And until that proof is forthcoming, the market remains cautious, despite the bullish undercurrent.
This wait-and-see approach provides room for divisions to emerge.
This week, Ripple Labs (the company behind the XRP token) is at the center of attention. XRP's price has risen sharply in recent months, fueled by speculation about the possible inclusion of XRP in a U.S. strategic crypto reserve. The topic has sparked heated debate, with many seeing it as a story layered with opportunities, risks, and underlying tensions.
Ripple has a knack for putting itself in the spotlight. The rumor that Trump is consideringĀ an "America-first" crypto reserve, including a role for XRP, has sparked a wave of reactions. Bitcoiners see it as an attack on everything they stand for, while fans of Ripple are already popping the champagne. This divide touches on a deeper fault line within the cryptocurrency community: decentralization versus centralization, principles versus pragmatism.
On paper, the idea sounds appealing. A U.S. strategic reserve of digital assets designed to ensure the country's technological edge. But what might it contain? For many bitcoiners, the answer is simple: Bitcoin and nothing else. XRP, with its close ties to Ripple Labs, simply does not fit the bill in their view. Yet Ripple's appeal is strong, especially among policymakers seeking a pragmatic bridge between the traditional and new financial worlds.Ā
Ripple has always had the image of a company that is mostly focused on its own interests. The founders have retained significant control over the token since its inception, and the way the network is managed appears at odds with the decentralized ideals that crypto began with. To many critics, Ripple feels like a step backward toward the old financial system.
Despite this, there are reasons why XRP remains attractive, especially for novice investors. The price is low compared to Bitcoin, which plays a significant role psychologically. Three dollars for a token feels like a bargain, especially when Bitcoin is priced well into six figures. For many, this creates the impression that XRP has massive growth potential. However, the critical factor of total market capitalization is often overlooked in this reasoning.
Added to this is the hype surrounding Trump's possible involvement. If XRP actually becomes part of a strategic reserve, it would send a powerful message. It could position Ripple as a company with institutional legitimacy, driving further demand for XRP.
For investors, this is a time to tread carefully. XRP's price rise may be enticing, but it comes with inherent risks. Ripple's centralized structure and the high level of XRP held by the company make it vulnerable. At the same time, the hype surrounding a possible strategic reserve could open up new opportunities. Ultimately, it all depends on which side you choose: idealism or pragmatism.Ā
In a world where attention is the most valuable currency, Ripple certainly knows how to command the spotlight.
In other news
Wave of ETF applications floods Washington amid "new rules". According to Bloomberg analyst James Seyffart, there have been nearly 30 ETF applications in a short period, including for Dogecoin, Trump's memecoin TRUMP, and BONK. Applicants hope for a swift green light thanks to Trump's crypto-friendly policies. Analysts suggest some of these filings are more about marketing in an increasingly competitive market. Despite the buzz, BlackRock's Bitcoin fund continues to attract the most attention and the largest assets.
Unrest at Ethereum Foundation over leadership and vision. The Ethereum community is grappling with increasing criticism of the foundation's influence over the network's development. Concerns include a lack of effective marketing, alleged centralization, and ineffective leadership. Ethereum co-founder Vitalik Buterin felt obliged to publicly defend Executive Director Aya Miyaguchi against calls for her resignation. Meanwhile, there is talk of a "Second Foundation" led by Lido's founder.Ā So far, these internal tensions have not impacted critical upgrades planned for 2025.
SEC clears path for banks to hold crypto. The SEC's new leadership has removed a major obstacle for banks,Ā by repealing the controversial SAB 121. This policy made it virtually impossible for banks to hold crypto for customers. SEC Commissioner Hester PeirceĀ was happy to see the repeal of SAB 121, while Senator Cynthia Lummis criticized the rule for stifling innovation in the US. The US banking industry has also welcomed the change.
Younger generations see crypto as a retirement option, according to Bitget study. A striking shift in retirement planning is underway: 20% of Gen Z and Gen AlphaĀ prefer cryptocurrency to traditional options such as real estate, private pensions, and savings accounts. The survey found that 40% of young adults have already invested in crypto and 78% have greater trust in alternative savings options than traditional pension systems. Although interest in digital assets is growing, challenges such as volatility, regulation, and security remain barriers to broader adoption.
Satoshi Radio: During his campaign, Trump made huge promises to the crypto world. InĀ the latest episode of Satoshi Radio, the hosts discuss which promises he has kept. Does this inspire confidence, or was Trump only concerned with his own memecoin? Of course, we also discuss the dead end the market seems to be in: so much positive news, but no price appreciation. How is that possible?