By Omkar Godbole (All times ET unless indicated otherwise)
It’s still early in 2025, and already we’re witnessing a significant divergence between Bitcoin (BTC) and the S&P 500. As BTC seeks to solidify its position above $100,000, insights from Deribit-listed options suggest a bullish sentiment surrounding the cryptocurrency. Conversely, the S&P 500 seems to be navigating a more cautious landscape, having a reputation for signaling risk appetites in markets, including that of BTC.
The scenario is further underscored by Cboe data indicating that the SPX options skew now mirrors heightened downside risks—an increase compared to the prior year. This defensive positioning may be attributed to concerns surrounding potential market reactions to President-elect Donald Trump’s upcoming inauguration on January 20, 2025. Speculation exists that the event could prompt a ‘sell-the-news’ response, especially after a period of significant economic optimism spurred by anticipated pro-corporate and pro-economy reforms under Trump’s administration.
Bruce J Clark, head of rates America at Informa Connect, commented on LinkedIn, “Broadly speaking, we see some cracks in the data and think that Trump’s inauguration later this month has a decent chance of being a ‘sell the news’ event after nearly three months of unbridled economic optimism across most sectors.” Such a prospect raises pertinent questions about BTC’s potential resilience.
Expectations of regulatory clarity under Trump appear to have fueled the cryptocurrency’s rise from $70,000 to over the coveted $100,000 mark in a mere two months. Yet, a broader market decline on January 20 could potentially weaken the dollar index and bond yields, a shift that might paradoxically bolster BTC’s standing.
Currently, several factors are driving BTC’s momentum. According to the LondonCryptoClub newsletter, about $400 billion in liquidity that was drawn from the financial system toward the end of 2024 is expected to return, which could invigorate asset prices. Furthermore, capital inflows from China could seek refuge in cryptocurrencies, enhancing BTC’s allure.
Notably, Bitcoin is trading at a premium on Coinbase, indicating robust demand in the U.S. market, while miners seem poised to reduce sales amidst favorable net unrealized profit and loss (NUPL) metrics. Analysts from Bitfinex report that miners’ NUPL remains solidly positive at around 0.5, a sign that they are likely to retain their BTC as unrealized profits mount.
In a broader context, traders are experimenting with December 2025 Ethereum (ETH) calls at striking prices reaching up to $11,000, although ETH is presently hovering below $4,000. Over 70% of the top 100 cryptocurrencies by market value witnessed gains within a 24-hour period, providing further evidence of a risk-on sentiment in the market.
Nevertheless, vigilance is necessary as the bond market rout expands beyond U.S. borders. The Japanese 10-year bond yield recently reached a 13-year high, while the 30-year British counterpart nears its highest point since the late 1990s. Such dynamics threaten to siphon energy from risk assets, necessitating alertness among investors.
What to Watch
Crypto Events:
Several noteworthy developments are on the horizon, including:
- Jan. 7: Dusk (DUSK) mainnet launch.
- Jan. 8: Bybit terminates withdrawal and custody services for nationals or residents of the French Territories.
- Jan. 8: Xterio (XTER) plans to initiate its token generation event.
- Jan. 9, 1:00 a.m.: Cronos (CRO) zkEVM mainnet upgrade to ZKsync’s latest release.
- Jan. 12, 10:30 p.m.: Binance to halt Fantom token (FTM) deposits and withdrawals.
- Jan. 15: Derive (DRV) token generation event.
- Jan. 15: Mintlayer version 1.0.0 release, introducing atomic swaps for native BTC.
- Jan. 16, 3:00 a.m.: Trading for Sonic token (S) commences on Binance.
Macro Events:
Key macroeconomic indicators include:
- Jan. 7, 8:55 a.m.: U.S. Redbook YoY for the week ending Jan. 4.
- Jan. 7, 10:00 a.m.: BLS releases the November Job Openings and Labor Turnover Summary (JOLTS).
- Jan. 8, 8:30 a.m.: Fed Governor Waller discusses the “Economic Outlook” in Paris.
- Jan. 10, 8:30 a.m.: BLS presents the December Employment Situation Summary report.
- Jan. 10, 10:00 a.m.: University of Michigan’s preliminary Michigan Consumer Sentiment report.
In conclusion, while Bitcoin appears to be positioning itself for a robust performance amid fluctuating market sentiments, the ongoing developments in both the cryptocurrency and macroeconomic landscapes merit close observation. Investors are encouraged to remain vigilant as interconnected events could ultimately shape market trajectories in the coming weeks.
