The Market in December
December marked a period of cooling after November’s historic momentum. Bitcoin reached a new milestone by breaking through the $100,000 barrier for the first time, even reaching a peak of $108,000.
The euphoria was tempered by the Federal Reserve’s interest rate decision on December 18, which put global markets on edge with its future rate expectations. Although rates were lowered by 0.25%, Fed Chairman Powell’s speech provided a cold shower. The Fed expects only two rate cuts for 2025, while the market was counting on 4-5 reductions. Bitcoin has cooled by 11% since December 18.
Alongside traditional market movements, we saw remarkable growth in Decentralized Finance (DeFi) in December. Decentralized exchanges (DEXs) reached a record volume of $463 billion, a significant increase from the previous record of $374 billion in November. This growth is partly driven by the prospect of a more favorable regulatory climate under the upcoming Trump administration, combined with significant improvements in technology and user experience.
We’d like to take you through the most important developments within the Web3 sector and what they mean for the future of digital assets.
Trump’s Pro-Crypto Team Takes Shape
In December, Trump appointed three key roles that further strengthen his crypto agenda. Paul Atkins is nominated as the new SEC chairman, where his experience with crypto companies and involvement with the Token Alliance instills confidence in the industry.
David Sacks becomes “AI and Crypto Czar” to shape digital asset policy, while Stephen Miran as head of the Council of Economic Advisers can translate his pro-crypto views into innovative economic policy.
With the SEC, technology policy, and economic advisory body in the hands of crypto advocates, 2025 looks to be a promising year for the Web3 sector.
In The News
- Institutional interest in Ethereum grows. The Ethereum ETFs launched in July attracted an initial significant inflow of $1 billion in November, followed by a doubling to $2 billion in December. This shift shows that institutional investors are beginning to diversify their strategies within the Web3 landscape.
- MicroStrategy joins Nasdaq-100. As the largest publicly listed Bitcoin holder, with $42 billion in Bitcoin on its balance sheet (2% of all Bitcoin in circulation), the company has been included in the Nasdaq-100 index. A popular index among institutional investors, who now also have indirect exposure to Bitcoin.
- FTX announces repayments. The bankrupt trading platform announced it will start repayments. $14 billion will be distributed to creditors via Kraken or BitGo, with them receiving approximately 120% of their original balance in dollars and euros. After years of waiting, this capital becomes directly available, which could act as a potential catalyst for the market.
- Coinbase predicts 2025 trends. According to a new report from the crypto exchange, stablecoins, tokenization, ETFs, DeFi, and regulation will be the main themes. These trends are already visible in 2024, with growing stablecoin adoption and increasing digitalization of traditional assets.
Six Capital’s Vision
The Core Fund achieved a return in December of: -9.54%
December showed a sharp contrast between the beginning and end of the month. The first half was driven by optimism, fueled by the pro-crypto appointments in Trump’s upcoming cabinet. However, this positive sentiment abruptly changed after the Fed’s disappointing rate expectations on December 18. The subsequent correction in stock markets, the longest losing streak during a year-end since 1966, also pulled the crypto market into its fall.
2024 was dominated by Bitcoin’s strong performance, while the rest of the crypto market lagged behind. Since November, however, an important shift is emerging. Momentum is moving to other digital assets, with increasingly clear trends in specific sectors such as DeFi.
Looking ahead to 2025, we see several catalysts:
- Trump’s inauguration on January 20 as a key turning point
- Regulatory shift towards innovation-stimulating policy
- Increasing institutional interest in sectors beyond just Bitcoin
As an active fund manager, Six Capital follows these developments closely. Through our deep market knowledge and experience, we can quickly capitalize on opportunities in this rapidly evolving sector, focusing particularly on fundamentally strong projects that are still trading at attractive valuations.
Web3 At The Table: An Inspiring Lunch
Want to experience the latest developments in the Web3 world up close? Join our monthly Business Lunch! In a relaxed setting, we share our expertise about the latest trends and possibilities in the Web3 sector over an excellent lunch. These interactive sessions not only offer valuable insights but also the opportunity to network with like-minded individuals and ask your questions directly to our experts.
Reserve your place or schedule a personal meeting via https://calendly.com/sixcapital
