‘Golden Age’ for crypto?
The crypto market continues to be in a state of flux. From historic price spikes to price corrections and strategic decisions at the highest political level - there is plenty to discuss. In this edition of Bitvavo Market News, we look at the latest Bitcoin developments, including the introduction of a new plan by the U.S. government. What do these changes mean for investors? And is there really a "Golden Age" of crypto? More on this after our market update below.
Market update
On Monday 20th of January, Bitcoin reached an all-time high at €106,000, just before Donald Trump's inauguration. Since then, the new administration has made a series of decisions that contribute to a more crypto-friendly environment. Despite this, the market as a whole has dropped significantly over the past three weeks.
The chart below shows the decline since the peak. BTC is down 12%, ETH, XRP, and SOL, the three largest coins after Bitcoin, are all down between 20% and 25%. Most of the smaller altcoins have generally performed a lot worse. For comparison, we have added three memecoins: DOGE, the largest, has fallen by 33%, while TRUMP is down as much as 72%.
Market sentiment is noticeably less upbeat than in November and December. The Fear & Greed Index has dropped back to "fear" for the first time since October. These are the same conditions in which we have often seen local bottoms form over the past two years.
The chart below illustrates the pattern of this bull market so far. Bitcoin has doubled in price four times, followed by a correction of roughly 20%. Each time the growth rate has peaked at about 70% over a 13-week period. If this pattern repeats, Bitcoin's price could rise above €150,000 by the second quarter.
Things could get even more extreme as seen on the left side of the chart, showing the last heady rise of the 2021 bull market, when the growth rate spiked past 200% in 13 weeks. Just as importantly for many investors, altcoins also rallied during that euphoric phase - something we haven’t seen in this bull market yet.
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A 'Golden Age' of crypto?
David Sacks is no ordinary figure. A Silicon Valley veteran, former COO of PayPal, and venture capitalist with early investments in giants like Facebook and SpaceX. Late last year, he was named the "AI and Crypto Czar" by Trump, and tasked with bringing the United States back to the top of the tech world. A heroic role you might say, but with that comes the expectation of bold action. This week, the crypto community was eager to hear more about what that might look like.
There were two major questions leading up to Sacks' first press conference. Will there be a strategic Bitcoin reserve? And perhaps even more exciting, what does Trump's new sovereign wealth fund mean for the crypto sector?
David Sacks speaking at his first press appearance. He stands among members of the Senate and Congress who are part of the committee he represents. (Source)
In the press conference video, Sacks is seen smiling and talking about a "Golden Age" of crypto. This was the key word of the day, prominently featured in the script. A good start you might think. But there remained deafening silence on the topics people were there for: no confirmation of a Bitcoin reserve and nothing concrete about the new fund.
What followed in a statement to the press failed to add clarity either. Sacks announced three key points:
The creation of a Bitcoin reserve is "under review."
Not all key members have been appointed yet.
The new fund is entirely separate from these plans.
In other words, don't expect too much in the short term. It sounded more like a delay than a promising start.
This didn't sit well with some. After all, political language like "under review" often means that a proposal is being shelved. And when Trump wants something, he usually makes it happen without delay, something he demonstrated this week with other decisions.
But perhaps, as has happened before, the crypto community's expectations were simply too high. This press conference seemed more like an introduction to Sacks and his team. Many crucial players have yet to be sworn in. This was a starting gun, not a sprint to the finish.
And yet... let's not forget Sacks' words at CNBC after his press conference where he re-emphasized his confidence in Bitcoin:
"Bitcoin was the first digital currency. It's the original, it's the strongest one. Nobody has ever hacked it. Nobody has ever cracked the security around it. It is an excellent store of value."
In short, patience is key. The fact that the US has a commission seriously evaluating the viability of a Bitcoin reserve is remarkable in itself. Who could have predicted that a year ago?
We expect it to be another six months or so before any real steps are taken toward a Bitcoin reserve. Until then, the "Golden Age" of crypto may remain a golden smokescreen for the market.
In other news
Trump's media company plans to launch Bitcoin and energy ETFs under the name Truth.Fi. The company announced three ETFs, including a "Bitcoin Plus ETF." However Trump's ties to the financial market raise ethical questions. A U.S. watchdog has already filed a complaint with the Justice Department, raising concerns about possible conflicts of interest surrounding Trump's support for his own memecoin. This combination of politics, crypto, and personal business interests is likely to spark much controversy.
MicroStrategy rebrands as Strategy and doubles down on Bitcoin as a core business strategy. The company, which owns as much as 471,000 BTC, worth $44 billion, remains the largest corporate owner of Bitcoin. The rebrand includes a new orange color scheme and a prominent Bitcoin symbol in its logo. This is more than a cosmetic tweak; it marks a full integration of Bitcoin into the company's operations. Strategy is positioning itself as a leveraged play on Bitcoin's growth, attracting investors and institutional parties alike.
Operation Choke Point 2.0 is over, but the battle for crypto continues. Nic Carter, who coined the term has declared the operation at an end. According to FDIC documents, banks were urged to cut ties with crypto businesses. Under Trump, that is changing: banks are now preparing to re-enter the crypto market. The FDIC is easing guidelines, making it simpler for banks to offer crypto services.
Institutional traders are increasingly embracing crypto, according to a JPMorgan survey. Nearly 30% expect to trade cryptocurrencies this year, up substantially from 21% in 2024. Analysts see this as evidence that crypto is no longer just a speculative gamble, but an increasingly serious component of diversified portfolios. The prospect of clearer regulations under the Trump administration is further boosting confidence in the market.
Satoshi Radio: Have we witnessed the first “omega candle” ever? A week ago the price moved up and down considerably. In the latest episode of Satoshi Radio you learn all about it, accompanied by the hosts’ interpretation, of course. You'll also learn about turmoil in Ethereum land, Sacks' press conference, an empty mempool and AI agents.
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.