Pre-Inauguration Blues

1️⃣ Bitcoin Stumbles Amid Macro Uncertainty

Bitcoin has had a tumultuous week, jumping to ~$102K on Monday before crashing as low as ~$91K on Thursday. It’s since stabilized a bit, but overall, there is a palpable air of uncertainty (and thus anxiety) around the Fed (not) cutting rates in 2025.

The U.S. job market on Friday added to this, showing greater job growth, which traders have interpreted as a potential impetus for the Fed to cut rates even less in 2025. Overall, CT has become fixated on Macro news, which is usually a sign to press pause and spend time touching grass. Remember, the long-term view has not changed… higher.

2️⃣ Hyperliquid Responds to Validator Centralization Concerns

In recent weeks, Hyperliquid has grappled with criticism around validator centralization. This week, the team took to Twitter, clearing up misunderstandings and sharing plans to make the system more open and secure.

First, it explained that validators were chosen based on their performance during testing, not because they paid for a spot. The network will add more validators over time to ensure it stays fair and decentralized. They also shared plans for a support program to help the best-performing validators succeed and grow the network. While the code for running nodes isn’t public yet, they promised to release it once it’s more stable and secure. Security expert TayVano, who was a vocal critic of HYPE and sparked much of this examination, gave her approval of these changes, labeling them a positive step forward.

3️⃣ Anticipation for Berachain Q5 Launch Builds

Excitement for Berachain’s fabled "Q5" mainnet launch continues to ramp up with key updates this week in the form of Boyco and Broposals:

• Boyco Pre-Launch Liquidity Platform: Developed with LayerZero, Stargate, and others, Boyco’s initiative looks to set up pre-launch liquidity markets for major assets (not BERA-assets) to address the cold start problem for Berachain DeFi. Only select projects, like Ethena, Lombard, and Dinero, were included, but Berachain hinted at retroactive support for others. The full list of projects can be found here.
• RFA Program Update (Request for Broposal): Berachain announced its selection of projects that would receive BERA tokens upon mainnet launch, prioritizing those active on testnets with functional frontends and liquidity integrations. You can see the full list of projects here.

4️⃣ CFTC Targets Coinbase and Gemini Settles

It was a big week for CFTC news, most notably the announcement of their subpoenaing Coinbase for customer data tied to Polymarket, the predictions market banned in the U.S. since 2022. As a result, some users have received emails from Coinbase saying they may have to turn over their user data if the case proceeds. This follows the agency's $1.4M fine against Polymarket for failing to register its services.

Meanwhile, Gemini settled its CFTC case with a $5M fine over alleged misleading statements related to a Bitcoin futures product, and CFTC Chair Rostin Behnam announced he would step down next month, marking the end of his tenure, which saw significant crypto enforcement. His departure signals potential changes under the incoming administration, with crypto-friendly Brian Quintenz rumored as a possible successor. 

5️⃣ Circle Donates $1M to Trump’s Inaugural Committee

As the inauguration looms, Circle CEO Jeremy Allaire announced the company donated $1M in USDC to President Donald Trump’s inaugural committee. More and more companies are finding seats at the table, and with Tether finding allies in the administration, it makes sense Circle wants to get in its good graces, too.

Overall, this donation is part of a broader strategy by tech companies to secure favor with the incoming administration. Trump's election has already boosted the crypto markets, but it remains to be seen how much his policies will benefit the industry once he takes office.