Central Banks USD Reserves Drop To New Lows As Dedollarization Continues

Hindenburg Research has announced that it will be shutting down, effective immediately. The decision was made after the firm completed its pipeline of ideas and emphasized that there are no personal or health-related reasons behind the closure.

The Time Was Right

Hindenburg gained widespread attention for its investigative reports on companies such as the Adani Group, Nikola, and Carvana, which stirred major controversies, particularly in India. The firm accused Adani of corporate wrongdoing, triggering significant financial losses and political turmoil.

Known for publishing research sold to hedge funds and investors while simultaneously making the findings public, the firm capitalized on market shorts. Still, the plan all along was to wind down once the pipeline of ideas was finished.

Stocks Rise
The closure occurs amid increased regulatory scrutiny, particularly by the U.S. Department of Justice, the SEC, and SEBI (based in India). Hindenburg faced allegations of breaching regulations by using offshore instruments to short the Indian market, with SEBI issuing a show-cause notice to the firm.

The Adani case remains unresolved, though Adani Enterprises saw a sharp rise in its stock price at the start of trading today. Other companies in the Adani Group, such as Adani Power, also saw significant gains.

The United Arab Emirates (UAE) is set to build a 17-story Crypto Tower in Dubai by 2027, according to DMCC and REIT Development. The tower will include office floors for crypto startups, blockchain incubators, an AI innovation floor, a crypto club, and an NFT art gallery.

A Top Destination

Dubai has long been a top destination for crypto enthusiasts due to its progressive regulations, strong infrastructure, and government support for digital innovation. The city offers a thriving ecosystem for crypto startups, investors, and professionals.

This project follows a pre-existing crypto center in Uptown Tower, which supports crypto-oriented firms with licensing and regulatory services. DMCC expects the new tower to be completed by Q1 2027, with operations beginning shortly after.

Global Expansion

Elsewhere, a Bitcoin Hotel in Tokyo, planned by Metaplanet, will open in Q3 2025, aiming to promote Bitcoin adoption, education, and community. Other crypto-themed projects include IKAR Holdings, which is currently planning a chain of Bitcoin Hotels in Portugal and Cyprus.

Similarly, the Satoshi Island project, aiming to create a blockchain-based economy on an island near Vanuatu, is progressing with villa designs, while Akon City, a crypto-powered smart city in Senegal named after the famous singer, has faced setbacks, with local authorities threatening to reclaim 90% of the land unless progress is made soon.

Oklahoma has introduced House Bill 1203, aiming to allow state pension funds and savings accounts to allocate assets to Bitcoin (BTC) as a hedge against inflation.

Several States Consider Bitcoin

Representative Cody Maynard, who proposed the bill, highlighted the decentralized nature and fixed supply of Bitcoin, positioning it as a safeguard against inflation risks driven by government currency manipulation.

Other states like Pennsylvania, Texas, North Dakota, and New Hampshire are also proposing Bitcoin-related legislation. Pennsylvania is considering allocating up to 10% of state assets to Bitcoin, Texas has proposed a five-year holding period for Bitcoin reserves, North Dakota has introduced a bipartisan-backed Bitcoin reserve bill, and New Hampshire is exploring a broader initiative that includes other digital assets.

A Much Needed Alternative

These efforts reflect growing concerns over inflation and economic instability, with Bitcoin offering a potential alternative for preserving purchasing power. Still, as many states look toward BTC as a store of value, critics remain wary of its volatility and regulatory uncertainties.

Despite these challenges, states like Oklahoma are pushing forward, recognizing the potential benefits that Bitcoin adoption can offer, despite the risks.

Sony Group has officially launched the Soneium Mainnet, a new Ethereum (ETH) Layer-2 protocol developed by Sony Block Solutions Labs and powered by the Optimism Foundation and their Superchain technology.

Transforming The Internet

First announced in August, Soneium is designed to offer innovative use cases for creators and fans, aiming to enhance creativity, engagement, and profit-sharing in both the digital and physical worlds.

Sony believes that Web3 can transform the Internet, empowering millions globally to collaborate, innovate, and onboard new users. Since its testnet launch, Soneium has garnered over 14 million active wallets and processed more than 47 million transactions.

Growing Potential

Sony is currently integrating various blockchain tools into the Soneium ecosystem, including a Fan Marketing Platform, which leverages NFTs for digital marketing purposes. Additionally, users will be able to trade crypto assets through the BLOX platform.

In any case, the launch underscores the growing potential of Web3 across entertainment, gaming, music, art, and community apps. It highlights how creativity can be amplified and supported using blockchain technology.

Intesa Sanpaolo has made history as the first Italian financial institution to invest in Bitcoin (BTC), acquiring 11 BTC for approximately $1.02 million on January 13th, 2025.

This move follows closely on the heels of Bitcoin surpassing the $100,000 threshold in December, with the acquisition coming just over a month after that milestone.

Timing Is Everything

The news broke through a leaked internal email by Niccolò Bardoscia, the Head of Digital Assets Trading at Intesa Sanpaolo. Though Intesa Sanpaolo itself has yet to make any kind of public announcement, the bank did confirm the Bitcoin purchase to the media outlet Wired.

The timing of the investment coincides with a surge in institutional interest in Bitcoin. On January 13th, Bitcoin exchange reserves dropped to a near seven-year low as crypto hedge funds capitalized on the price dip, further fueling expectations of a supply shock.

This phenomenon occurs when strong demand by buyers meets a dwindling supply of BTC, leading to potential price gains.

Buying The Dip
Bitcoin remained below the $100K psychological barrier since January 7th, as institutional investors seized the opportunity to buy BTC at a lower price. While some analysts predict an end to the current correction, BTC remains susceptible to macroeconomic factors in the absence of favorable regulatory news.

According to Bybit, Bitcoin and crypto have become reactive to macroeconomic events at the close of 2024 and into 2025, especially with the Federal Reserve not making as many rate cuts in the new year.

Despite these macroeconomic concerns, some analysts anticipate that Bitcoin could reach a new cycle high above $150,000 by late 2025, spurred by a projected $20 trillion increase in global money supply, which could drive $2 trillion of new investment into BTC.

South Korea has officially initiated discussions to develop the second phase of its cryptocurrency regulatory framework, with plans to draft the legislation by the second half of this year.

The Financial Services Commission (FSC) of South Korea convened a meeting on Wednesday to identify the key areas that the upcoming bill will address, as reported by the news outlet Edaily.

Protecting Investors

During the meeting, FSC Vice Chairman Kim So-Young highlighted that major global economies are speeding up the development of crypto regulations to protect investors and reduce regulatory uncertainty.

The initial crypto regulatory framework came into effect in July of last year, after being passed the year before. This framework focused on investor protection by imposing stricter requirements on exchanges, such as mandating that service providers store at least 80% of customer crypto deposits in cold storage, separate to their own assets.

A Comprehensive Approach

According to the Vice Chair of the FSC, the next phase of regulatory measures should take a thorough and structured approach that addresses service providers, crypto users, and the broader crypto market.

During the meeting, several topics were discussed, including improving transparency in the listing of new cryptocurrencies on exchanges and applying the same disclosure requirements for crypto entities as those for companies in traditional finance.

The meeting also covered stablecoin regulation, with authorities examining global practices regarding reserve asset management for issuers and user redemption rights.

Tom Emmer has been appointed Vice Chair of the Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence.

Collaborating with Bryan Steil and French Hill, Emmer aims to create policies that support the growth of digital assets, opposing restrictive federal regulations and advocating for a fair environment for cryptocurrencies, stablecoins, and CBDCs.

Power To The People

A long-time supporter of crypto in Congress, Emmer introduced the Anti-Surveillance CBDC Act, which passed the House in May 2024, preventing the issuance of CBDCs that could track individual spending, thus protecting privacy and keeping monetary policy in the hands of the people.

Emmer has also often criticized the SEC and proposed reforms to limit what the agency and its Chairman, Gary Gensler, were allowed to do, especially since Gensler has been anti-crypto since the beginning, according to Tom.

Key Appointments

As the inauguration of President Donald Trump approaches, the crypto industry expects swift pro-crypto policies to be executed, with key appointments including Elon Musk as head of the Department of Government Efficiency (D.O.G.E.), and Paul Atkins as SEC Chair.

Other notable appointments include David Sacks as White House Advisor on Crypto and AI, Bo Hines leading the Presidential Advisory Council on Digital Assets, and Sriram Krishnan as Senior AI Policy Advisor. With Emmer at the helm, the subcommittee is poised to play a key role in shaping the future of U.S. crypto and AI policy.

AI-driven tokens have surged after a Franklin Templeton report predicted that AI agents will transform content creation on social media.

Still A Ways To Go

The report, released on January 14th, envisions AI agents launching brands, products, and content, much like human influencers, driving significant economic value across industries.

AI agents are systems capable of autonomous decision-making and goal-directed behavior. However, Franklin Templeton noted that they are still in early development stages with limited utility.

Market Reacts

AI researcher, s4mmy, commented that crypto allows AI agents full control over finances, and predicted that evolving on-chain agentic solutions will drive the next crypto cycle. OpenAI CEO Sam Altman also predicted that AI agents could impact company productivity by 2025.

In response, AI tokens like Virtuals Protocol (VIRTUAL) and ai16z (AI16Z) have surged, with VIRTUAL up over 8% and ai16z rising 20%. Other AI-related tokens, including Near Protocol (NEAR), Internet Computer (ICP), and Freysa AI (FAI), have also seen notable gains.

Sygnum is expanding into new markets after raising $58 million in an oversubscribed strategic growth round, bringing its valuation to over $1 billion.

Global Expansion

The funds will help Sygnum grow its presence in the European Union, the European Economic Area, and Hong Kong, while developing Bitcoin-focused products and pursuing acquisitions. Fulgur Ventures, a key investor known for supporting Blockstream, was involved in the funding round, however Sygnum will maintain majority ownership.

Room For Improvement

The company saw its trading volume surge by over 1,000% in 2024, driven by partnerships with Swiss state-owned bank PostFinance and more than 20 other banks. Sygnum is also working with AsiaNext and Hidden Road to expand its 24/7 multi-asset settlement network, Sygnum Connect.

Despite its success, CEO Mathias Imbach expressed concern that Switzerland is losing its competitive edge as a crypto hub and emphasized the need for continued innovation. Founded in 2017, Sygnum holds licenses in Switzerland and Singapore and manages over $5 billion in client assets.

The ETF Store President, Nate Geraci, predicts 2025 will be a transformative year for crypto ETFs, with at least 50 new crypto-related ETFs launching.

These include covered call ETFs, Bitcoin-denominated equity ETFs, and Bitcoin bond ETFs. Geraci also expects Bitcoin (BTC) spot ETFs to surpass gold ETFs in asset size, signaling the growing prominence of digital assets in mainstream investments.

Paving The Way Forward

While Geraci anticipates approval for spot ETFs tied to SOL and XRP, regulatory challenges may delay their debut. Analysts Eric Balchunas and James Seyffart believe Litecoin and Hedera have a better chance of SEC approval, as they are not classified as securities like Solana and XRP.

Concurrently, Ethereum (ETH) will have a much bigger role going forward, with Geraci predicting approval for spot Ether ETF options trading in 2025, providing new ways for investors to hedge or speculate. Additionally, both Bitcoin and Ethereum ETFs are expected to adopt in-kind redemption processes to improve liquidity and efficiency.

The ETF Race Is On

The market will also see crypto index ETFs by Bitwise and Grayscale, broadening access to crypto-related investments. Geraci highlights the potential of the Bitwise Bitcoin Standard Corporations ETF, which he believes could quickly reach over $1 billion in assets.

Meanwhile, Vanguard, traditionally focused on equities and bonds, is also expected to enter the crypto ETF market, reflecting a wider trend of traditional firms embracing digital assets.

A proposed export restriction on AI chips by the outgoing Biden administration has sparked backlash by the tech industry, with concerns that it could stifle innovation and diminish U.S. leadership in the sector.

The restrictions will enter a 120-day comment period before being decided by the incoming Trump administration.

A Misguided Approach

On January 13th, the White House unveiled a plan that would impose caps and licensing restrictions on semiconductor sales to all but 18 allied nations. Nvidia criticized the framework as misguided, arguing it would hinder innovation and weaken overall competitiveness.

The proposal sets import caps of up to 50,000 semiconductors per country, with government-to-government deals potentially raising the cap to 100,000. Some institutions could purchase up to 320,000 microchips over two years, with small orders not requiring a license.

Mixed Reactions

Daniel Castro warned that pressuring nations to choose between the U.S. and China could alienate key allies. He also noted that foreign competitors could bypass the regulatory burdens faced by U.S. firms.

John Neuffer of the Semiconductor Industry Association expressed concern over the rushed policy, fearing it could harm U.S. economic and technological standing. On the other hand, U.S. Commerce Secretary Gina Raimondo supported the move, emphasizing that it would protect national security while maintaining technological leadership.

Charles Hoskinson has confirmed ongoing talks with Ripple about integrating the Ripple USD (RLUSD) stablecoin onto the Cardano blockchain.

Integration Details
Hoskinson revealed that his team is exploring the feasibility of adding RLUSD to Cardano (ADA), following past criticism over missed opportunities to adopt popular stablecoins like USDC.

The RLUSD stablecoin, launched last month, has already gained traction with listings on exchanges like Bitstamp and Bullish. Ripple President Monica Long has hinted at more exchange listings to come.

Community Reactions
The announcement has sparked excitement among both Cardano and Ripple communities, as stablecoins are crucial in DeFi, offering stability during market volatility. Integrating RLUSD could enhance Cardano significantly, attract new users, and increase competitiveness. However, the market response has been negative, with ADA dropping over 9% in the last 24 hours.

Regardless, Hoskinson praised the RLUSD team and stressed the importance of building a solid stablecoin ecosystem on Cardano, which already includes USDM and Djed. If successful, the RLUSD integration could strengthen Cardano while broadening its user base.