Here’s what you’ll find in today’s edition:

• It’s been exactly a year since the SEC approved spot bitcoin ETFs.

• Why a really strong jobs report sent stocks lower. 

• This week’s economic data recap. 

Looking back (and ahead) a year after bitcoin ETF approval

Investors learned one year ago today that US spot bitcoin ETFs finally had the go-ahead to launch, with those products hitting the market the following day. 

We now have 12 months of data to look back on.

It was fun reading my piece published the morning of Jan. 10, 2024, which recapped what led to that milestone.

The Winklevoss twins filing for a bitcoin ETF in 2013; BTC futures funds hitting the US market in 2021; the SEC blocking Grayscale’s GBTC conversion the following year — and the firm then suing the regulator; BlackRock’s head-turning proposal in mid-2023; and, finally, Grayscale’s legal win. 

Predictions seeking to quantify the demand for these then proliferated, with many expecting the bitcoin ETFs to shatter records. 

Spoiler: They did.

Bloomberg Intelligence analyst James Seyffart reflected on his $15 billion year-one net inflow expectation from a year ago. These were higher expectations than most in the TradFi research world, he told me. Yet lower than some projections from those in the crypto space.

“Still, even issuers who expected these to be blockbuster hits did not expect them to do this well,” Seyffart told me. “They now hold over 1.13 million bitcoin and have $100 billion in assets after taking in almost $38 billion of net inflows in their first year — more than double what we thought would have been a very successful launch.”

In its 2025 outlook report, Bitwise argued that bitcoin ETFs will attract more flows in 2025 than they did in 2024. 

Others have a bit more of a nuanced perspective.

Seyffart noted that after the products welcomed roughly $16 billion in assets during Q4 alone, another $15 billion inflow year (matching his initial year-one prediction) seems like “a foregone conclusion assuming the economy avoids a recession.” 

Though he didn’t share a precise 2025 inflow projection, Seyffart believes bitcoin ETFs will grow to triple the size of gold ETFs within the next three to five years. 

The biggest bitcoin ETF — BlackRock’s iShares Bitcoin Trust (IBIT) — has well surpassed its iShares Gold Trust (IAU) in AUM — ~$52 billion to ~$33 billion. IBIT is still chasing the category-leading SPDR Gold Shares (GLD), which manages roughly $74 billion.

Seyffart highlighted bitcoin’s various use cases: a hedge against currency debasement, as well as a form of “hot sauce and satellite positions” in a portfolio given the asset’s volatility. 

He and Neena Mishra, director of ETF research at Zacks Investment Research, also pointed out more wirehouses greenlighting bitcoin ETFs in 2025 as a potential catalyst. Remember Morgan Stanley’s move in August?

Meanwhile, BlackRock and Fidelity — as powerhouses in the asset management industry — are set to continue “legitimizing” bitcoin, which cannot be overlooked, Mishra added.

“However, much will depend on bitcoin’s performance, as ETF flows tend to follow performance trends,” she said.

Alongside macro factors, set to be a major factor on BTC price in 2025 is whether (and how quickly) the promise of crypto regulatory progress is fulfilled.

— Ben Strack

This is the amount of seized bitcoin the US government can now legally liquidate. 

The coins were taken from an unidentified Silk Road hacker, dubbed “Individual X” in court documents. 

If President-elect Donald Trump gets his way (and makes good on a campaign promise), this bitcoin could be the start of the strategic reserve some Republicans want to create. We’ll be watching for any movement in Congress on this front.

It’s US Employment Report Day! December’s figures came in much stronger than expected. 

Nonfarm payrolls grew by 256,000 and blew past analysts’ forecast of 155,000 — significantly higher than November’s 212,000 positions added. The unemployment rate edged down just slightly, coming in at 4.1% vs. the expected 4.2%. 

There is such a thing as a too hot report, though. 

“There is a growing worry on Wall Street that inflation is making a comeback. While a strong labor market is good for the US, there are worries that too strong of a jobs market will put reflation back on the table,” said Bret Kenwell, US investment analyst at eToro. 

The odds of an interest rate cut later this month are all but out the window, and chances central bankers opt to lower fed funds in March or even May aren’t looking great, either. 

US equities, after a decent start to the new year, are now solidly in the red for 2025 — likely an impact of diminished rate cut expectations and growing concern that the devastating fires in Los Angeles will come with significant financial consequences. 

Still, a resilient labor market and economic growth — which, according to the data, is where we currently stand — isn’t bad for stocks, according to Jessica Rabe, co-founder of DataTrek Research. 

The employment situation bodes well for corporate profitability.

— Casey Wagner

Happy Friday! It’s been a busy week of labor data and whipsawing markets. 

Here’s a recap: 

• After a solid performance on Monday, US equities quickly lost steam. The S&P 500 and Nasdaq Composite indexes closed 1.4% and 2.2% lower, respectively, on Tuesday. The downward trend continued through the rest of the week — except for Thursday, when markets were closed for Carter’s National Day of Mourning. Following Friday’s employment report release, the S&P 500 and Nasdaq Composite each lost around 2% in the first half of the trading session. 

• First-time unemployment filers fell to an 11-month low for the week ended Jan. 4, data released Wednesday showed. Initial claims fell by 10,000 from the week prior, coming in at 201,000 vs. the expected 218,000. 

• November’s Job Openings and Labor Turnover Survey dropped this week, showing that job openings are on the rise and, as of November, make up 4.81% of the labor force. Remember, JOLTS runs on a one-month delay, as opposed to the US employment report published Friday. The number of employed persons per job opening in November was 0.9, which is a bit higher than we saw earlier in fall 2024 — but not high enough (probably) to make the Fed concerned.

— Casey Wagner

• FDIC Vice Chair Travis Hill said in a new speech that he expects the agency to take “a more open-minded approach to innovation and technology adoption.” Hill also addressed claims of debanking within the crypto sector, noting “there is no place at the FDIC for anyone who has pushed — explicitly or implicitly — banks to stop serving law-abiding customers.” 

• After dropping to nearly $92,000 early Friday, BTC’s price surged in the afternoon to hover around $95,000 by 1:30 pm ET — a 2.6% rise in the past 24 hours. ETH markets experienced a similar bump in that time, trading at around $3,300.

• On the topic of bitcoin ETFs covered today, I connected with Matt Horne, Fidelity Investments’ head of digital asset strategists. More on that early next week.