Bitcoin investors are eagerly anticipating the potential “January effect” as they eye a rally in financial assets with the start of the new year. However, recent developments in the cryptocurrency market have painted a mixed picture for the leading digital currency.
Bitcoin (BTC) saw a significant retreat to $94,830, marking a decrease of over 12% from its highest level this month. The anticipated “Santa Claus rally” failed to materialize, with the volume of Bitcoin dropping to $22 billion on Sunday, Dec. 29, down from $41 billion a day earlier, according to CoinGecko.
Historical data shows that January has been a mixed month for Bitcoin, with gains in only six of the last 10 years. This year, Bitcoin recorded a modest 0.62% rise in January. In contrast, February has been a more consistent month for Bitcoin, experiencing losses only twice during the same period.
In other news, Montenegrin Justice Minister Bojan Božović has signed an order to extradite Terraform Labs founder Do Kwon to the United States instead of South Korea. Meanwhile, FTX executive Ryan Salame’s prison sentence has been reduced by over a year, with his release now scheduled for March 2031. Salame had been serving a 7.5-year sentence for his involvement in the collapse of the exchange.
The National Bank of Cambodia has authorized commercial banks and payment firms to offer services for Category 1 crypto assets, including stablecoins like USDC and USDT, while maintaining restrictions on unbacked cryptocurrencies. On the other hand, Japan’s government has stated that it has no plans to include Bitcoin in its foreign exchange reserves due to concerns about volatility and limited understanding.
MicroStrategy, led by Michael Saylor, has continued its weekly buying spree, adding $561 million to its Bitcoin holdings. The company, which is the largest corporate holder of Bitcoin, has seen its share price climb by 402% in 2024, making it the best-performing cryptocurrency stock of the year.
Legal drama has also unfolded in the cryptocurrency space, with Solana (SOL) Labs co-founder Stephen Akridge facing legal action from his ex-wife over allegations of withholding staking rewards following their divorce agreement. Additionally, the BONK community celebrated “BURNmas” by burning 1.69 trillion tokens valued at over $51 million.
Russian authorities have announced crypto mining restrictions or outright bans from Jan. 1, 2025, to March 15, 2031, citing energy shortages and subsidized bandwidth prices in certain markets. In terms of investments, Binance Labs and Kraken Ventures led a $10 million Series A funding round for Usual, a decentralized fiat-backed stablecoin issuer.
Overall, global regulatory changes have dominated the cryptocurrency headlines, with Bitcoin experiencing fluctuations and various updates from around the globe shaping the market outlook for 2025.