💡 Welcome back to DV Chain's Weekly Market Commentary!  Over the last week, both crypto and traditional finance markets experienced heightened volatility amid lower volume and liquidity. Notable developments included Tether adding $700M in BTC to reserves, MicroStrategy tapering its buying, and contrasting ETF flows with Ethereum seeing $349M in inflows and Bitcoin experiencing $388M in outflows. As we close out the year, several positive catalysts are on the horizon, including FTX repayments, the potential for a staked ETH ETF, and continued pro-crypto sentiment from the Trump administration. Dive in below for insights and upcoming catalysts shaping the market:
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Market Recap

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• Crypto and Tradfi markets experienced high realized vol and bearish sentiment in low volume and low liquidity trading this past Holiday week
  
  
• Tether adds 7,629 BTC ($700M) to reserve address, bringing total holdings to $7.7B
  
  
• MicroStrategy has acquired 2,138 BTC for ~$209 million at ~$97,837 per Bitcoinsome text
  • Last 4 weekly purchases were 2.1b —> 1.5bn —> 561m —> 209m
  • Earnings estimated to be on 2/4/25
  • The slowdown in buying suggests that Microstrategy will stop buying altogether as we approach their earnings day
  • Bitcoin dropped below $92,000 as ETFs started to see outflows and Microstrategy tapers down buying, down from its all-time high of $108,000 reached on December 17
    
    
• Last week, from December 23 to December 27, the Ethereum spot ETF had a net inflow of $349 million while Bitcoin spot ETFS had a net outflow of $388 million
  
  

• As the year comes to a close, we have plenty of positive catalysts to look forward to:
  • FTX repayments in Q1
  • Staked ETH ETF
  • Trump’s pro crypto and DeFi Admin
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Upcoming Catalysts
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• $BTC
  • MSTR blackout period upcoming, so the MSTR ~2B/week avg btc buying could be put on pause until after their earnings
    
    
• $ETH
  • ETF flows have been robust since the election
  • Future flows aren’t fully priced in yet, which has been the biggest driver of the cycle
  • Likely the staking ETF gets approved earning in Trump’s term (signaled by Hester Pierce)
    
    
• $LDO
  • DeFi as a sector is going to benefit from the shift in regulatory environment
  • LDO fundamentally is a very strong project, clipping almost $200m in fees on an annualized basis to its treasury
  • It has maintained majority of market share in the LST/LRT space, despite higher temporary yields in new competitor’s liquidity bootstrapping farms
  • From an institutional standpoint, it is much stronger than competitors in terms of safety and network effects. The Lido Dao’s roadmap prioritizes institutional adoption, which we think is an astute plan, given the recent interest in crypto and tokenization from Wall Street
  • It’s likely a Staked ETH etf will be coming under the Trump admin
  • Fee Switch likely incoming
  • Consensys lawsuit thrown out
  • Lido V3
    
    
• $ONDO, 1/18/25
  • 3.2B unlock, representing about 10x the Avg Daily volume
    
    
• FTX creditor distributions in Q4 ‘24 - Q1 ‘25

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