Eagerly Waiting

Since President Trump’s inauguration, BTC has consolidated within a range of $100-104K, left somewhat disappointed by the failure to mention any crypto-specific executive orders. Even yesterday’s news of a new SEC crypto taskforce has not supported price significantly. 

This was the same for Ethereum too. Previous events related to the SEC, such as Gary Gensler announcing he would step down as SEC Chair, resulted in ETH temporarily outperforming BTC – we have highlighted that in the chart below. This time, however, it followed the rest of the market down, a possible sign that the clearer regulatory framework the task force aims to provide was at least partly priced in. This has resulted in the ETH/ BTC pair continuing to underperform BTC, though recent news regarding a complete overhaul to the Ethereum Foundation leadership team may be a catalyst to reverse this trend in the near future.

It seems as though the wider crypto market is hinging on some news from President Trump or his administration before the next leg up. Derivatives markets are showing more tempered sentiment: short-tenor BTC skews are close to 0% after trading at 6% in the hours both before and after the inauguration. This neutral level shows no clear preference for OTM puts over calls for short-dated options. Longer tenor options remain persistently call-skewed however, with levels close to 6% as a pro-crypto congress and supply-demand factors push expectations for higher prices over a longer horizon. 

In turn, our Senti-Meter index is also signalling that tempered mood. The pre-inauguration move has completely been reversed and sentiment has returned almost back to its average for the past 30 days. It mirrors something we have been mentioning for some time now – crypto-assets have largely been left at the helms of macro headwinds in the absence of pro-crypto administration news, as can be seen by the negative sentiment values from the December 6th flash crash through to the beginning of January 2025.

On the topic of macro, the Bank of Japan is widely expected to raise interest rates by 25bps to 0.5%, a level last seen 17 years ago. This will be the first hike from the BoJ since its surprise hike back in July 2024 which, alongside a shakier U.S. jobs market, sent the market into turmoil. This time the BoJ has given multiple clear signs of a hike and the market expects one with near certainty.

Amidst the quietened sentiment, Spot BTC ETFs have been showing more of the insatiable demand we have seen previously – there have been four consecutive days of inflows, with BlackRock’s IBIT fund in particular saw inflows of just over $1B in the past two days. CEO Larry Fink even stated that if more funds adopted 2-5% of their capital into Bitcoin, its price could eventually reach $700,000. 

Crypto-ETF filing mania continues too, with even more having been filed in the past 24 hours. Notably, Bitwise has submitted a filing for a Dogecoin ETF, which follows that of RexShares who filed 7 ETFs on Tuesday, including a DOGE and TRUMP ETF, tracking the President’s own memecoin. 

In other news, an upcoming Ethereum layer 2 blockchain, SOON (Solana Optimistic Network) interestingly built using the Solana Virtual Machine (SVM), has raised $22M through its fair launch token distribution programme. SOON’s development goal is to create a blockchain with quick and efficient block production. They also claim to have created a solution which processes blocks in approximately 50ms (in comparison to Solana’s 400ms) using horizontal scaling techniques.