Crypto Volatility Continues as Macroeconomic Worries Grow
Bitcoin broke below $90,000 before recovering as the dollar and bond yields jumped
By: Zack Guzman
January 14, 2025
Crypto suffered another leg lower to new local lows Monday with Bitcoin slipping below $90,000, Ethereum dropping below $3,000 before both held those key support levels — and the AI DAO space facing backlash over a token launch gone awry.
As always, we recapped all the biggest headlines in our news recap alongside the Rollup co-founder Andy in our video above.
Why is Crypto Tanking?
According to CoinShares, digital asset investment products recorded modest inflows of $48 million last week, but Ethereum suffered $256M in outflows — its worst performance in months. Analysts attribute the downturn to a broader tech sell-off, recession fears, and uncertainty surrounding Trump's upcoming inauguration.
In general, both the dollar and U.S. treasury yields are continuing to strengthen — which are usually both negative things for Bitcoin price. There’s also the overhang remaining from last week where reports indicated the U.S. could be selling some of its Bitcoin that was once seized from the nefarious darkweb platform The Silk Road. While Trump has said the government wouldn’t sell that under his watch, President Biden still has about a week left in the White House.
Nonetheless, as bad as things look, people are optimistic an incoming Trump admin might be able to institute early policies to reverse the selloff. Bitcoin author Fred Krueger told us Friday that those moves are not priced into the market yet.
While short-term market sentiment appears bleak, onchain metrics like the Spent Output Profit Ratio (SOPR) suggest we could be nearing a turning point. Historical data shows that SOPR dipping below 1 often signals an opportunity for accumulation, as short-term holders sell at a loss. Similarly, the Market Value to Realized Value (MVRV) ratio highlights Bitcoin’s potential upside, with current levels far from historical cycle tops. For long-term investors, this dip might be less of a red flag and more of a green light.
We’ll highlight more price predictions with Fundstrat’s Sean Farrell on Wednesday (he was basically right again on predicting Bitcoin’s price in 2024 after nailing it in 2023.)
MicroStrategy Keeps Buying Bitcoin
Michael Saylor’s MicroStrategy made headlines yet again, purchasing 2,530 BTC for $243M at an average price of $95,972 per Bitcoin. This brings MicroStrategy’s holdings to an eye-popping 450,000 BTC, acquired for $28.2B at an average price of $62,691 per Bitcoin. Despite the buy, recent market moves have pushed this latest tranche temporarily into the red.
Critics continue to voice concerns about the sustainability of MicroStrategy’s aggressive Bitcoin strategy, with fears of a “death spiral” resurfacing. However, hedge fund experts like Bitwise’s Jeff Park argue these concerns are overblown, pointing to Saylor’s long-term vision and strategic share issuances. Whether you see this as reckless or revolutionary, one thing is clear: Saylor is betting big on Bitcoin’s future with his 10th consecutive weekly Bitcoin purchase.
Tether Moves to El Salvador
The world’s most profitable company is setting up shop in El Salvador. Tether announced its plans to move to what President Bukele has tried to build into a Bitcoin Haven. Tether’s relocation is a big win for Bukele on selling that vision.
Tether said it had acquired a license to operate in El Salvador as a digital asset service provider and stablecoin issuer. The company cited El Salvador’s “forward-thinking policies, favorable regulatory environment, and [...] growing Bitcoin-savvy community.”
The move comes after reports indicate Tether’s CEO and chief operating officer, Claudia Lagorio, bought real estate and became naturalized citizens in the Latin American nation in 2024.
Solana ETF Approval Unlikely in January
Optimism around a potential Solana ETF hit a wall this week, with analysts tempering expectations for SEC approval by January 25. Experts believe the first deadline will likely be delayed, pushing the decision to March 11 at the earliest. Current Polymarket odds place the likelihood of a Solana ETF approval by July 31 at just 45%. Solana has now fallen about 30% since highs back in November.
The delay underscores the complexities of ETF approvals under a transitioning SEC leadership. With SEC Chair Gary Gensler stepping down and Paul Atkins poised to take the reins, market participants are eager to see whether the new administration will deliver on crypto-friendly reforms. For now, Solana investors will have to wait.
Nonetheless, Solana has still landed a spot in our final for Crypto Project of the Year. Voting to crown a winner is now open for NFT holders. If you’re not a Coinage member, mint today to become eligible to vote and earn patronage dividends!
AI DAO Controversy Rocks Crypto
In what might be one of the most fumbled launches to date, a new project featuring most every big influencer in crypto was widely panned on crypto Twitter this weekend and dominated headlines for all the wrong reasons.
The so-called Aiccelerate DAO was hyped as a transformative AI crypto initiative bringing together many of the founders building AI agent frameworks. The project planned to distribute tokens to people who had joined ahead of launch — but one sleuth compiled a brilliant dashboard that tracked all the allocations and movements post-launch. Multiple influencers turned $1,000 allocations into $1,000,000 at the token’s launch.
The project triggered swift backlash when influencers and investors — including Bankless Ventures — dumped tokens on day one. With no vesting schedule and minimal product development, early retail buyers were left holding the bag as the token plummeted 40% Monday.
The fiasco has sparked renewed debate about transparency, accountability, and ethics in Web3. Andy, co-founder of The Rollup, joined Coinage to break down the controversy and called for better standards in token launches. As Andy put it, “This isn’t just a bad look for AI DAOs — it’s a systemic problem for the industry.”
Other Web3 Headlines:
Donald Trump Jr. Takes Advisory Role in Polymarket Competitor Kalshi
Bitcoin Exchange Reserves Near 7-year Low as Hedge Funds Buy the Dip
With volatility dominating crypto markets and Trump’s inauguration just a week away, the road ahead promises to be eventful. Regulatory changes, macroeconomic trends, and the next chapter in the AI meta are all on the radar. Keep an eye on whether Bitcoin can hold the $90,000 level, Ethereum’s recovery efforts, and Solana’s ETF approval timeline as the year unfolds.
Stay tuned as we bring you the full year price predictions from top crypto analyst Sean Farrell on Wednesday. For more updates, insights, and exclusive interviews, subscribe to Coinage and follow us across our platforms. You can support our community-owned outlet by sharing this newsletter with friends, by scooping up a Coinage NFT, or by staking with our community validator!
