🔄 Bitcoin cycles reassessed

Spot Bitcoin ETFs in the US have recorded inflows of $1.18 billion last Monday, which is the second highest daily figure since inception. This means that over $3.4 billion flowed into the Bitcoin funds in October alone, while the total inflow of capital since launch is about $60 billion. BlackRock in particular dominates the IBIT ETF with almost $100 billion worth of Bitcoin.

The S&P 500 has also reached new records, but has fallen 88% behind Bitcoin since 2020. An investment of $100 in BTC back then would be worth around $1,470 today, compared to just $210 with the S&P 500. Despite different risk profiles, the ratio shows that Bitcoin remains the best-performing store of value of the decade.

Meanwhile, Arthur Hayes questions the long-held halving-based four-year cycle narrative. Today, price dynamics are more determined by global liquidity and macroeconomic trends, such as the $2.5 trillion that the US Treasury recently injected into the market or China's efforts to stop deflation. Hayes sees the next upturn being driven by these monetary policy stimuli, not by rigid cycles.

At the same time, macro signals are increasing the upward pressure: according to VanEck analyst Matthew Sigel, the gold rally to almost $4,000 per ounce suggests an "equivalent Bitcoin value of $644,000" if BTC reaches half of the gold market capitalization in the medium term.

Long-term macroeconomic conditions are also changing. According to a study by the Federal Reserve Bank of Kansas City, the combination of an ageing population and growing global prosperity will lead to a massive demand for assets by 2100, including cryptocurrencies. Analysts from Bitget and Bitfinex see Bitcoin on the way to achieving the status of gold within 75 years.

Following the flash crash of the past few days, traders like Alex Becker and Samson Mow are nevertheless talking about a possible restart of the bull market. This "overreaction" has cleared the market, while fundamental indicators continue to point to expansion.

The 2025 cycle is fundamentally different from previous ones. Global liquidity, geopolitical uncertainty and institutional capital flows seem to be driving Bitcoin in a much stronger way than the traditional halving pattern. The macroeconomic flood of money remains the real driving force and could herald the end of classic bull market cycles.

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🇱🇺 Bitcoin now in the Luxembourg state fund

Last week Luxembourg has made its entry into the Bitcoin ETF game with its sovereign wealth fund FSIL, which allocated 1% of its assets (around $9 million) into exchange-traded Bitcoin products. Finance Minister Gilles Roth speaks of a "significant step in the maturation of this asset class". The move follows a realignment of the national investment strategy: in the future, up to 15% of the fund may be invested in alternative assets such as crypto, real estate or private equity.

Government Bitcoin adoption is also moving closer in the US: Senator Cynthia Lummis confirmed that funding for a Strategic Bitcoin Reserve could "start at any time", although legislative hurdles are still holding it back. The reserve is initially to be capitalized with confiscated bitcoins held by the US Treasury Department and later supplemented by budget-neutral purchases.

Meanwhile, Pantera Capital manager Cosmo Jiang emphasized in an interview that it is "not too late in the game" as over 60% of investors still don't hold any digital assets. ETF inflows in the billions and increasing institutional acceptance show that traditional capital flows are only now moving permanently towards crypto.

Michael Saylor has also reported last week unrealized gains of $3.9 billion on Strategy's Bitcoin holdings for the third quarter, which underscores the strength of his long-term accumulation strategy. Although Bitcoin recently reached a new all-time high of $125,000 Saylor paused buying for the first time:

Institutional players are taking over the next phase of the Bitcoin narrative. The treasury trend that started with Strategy is now expanding into sovereign wealth funds and state policies. This shift from private to governmental legitimacy is fundamentally changing the market equilibrium, and as result Bitcoin continues its road to becoming a geopolitical reserve asset.

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💰 Ethereum's treasury boom

Ethereum treasury companies such as SharpLink Gaming and BitMine Immersion Tech keep driving the institutional accumulation of ETH. The debate about staking outflows is also growing, while the Ethereum Foundation is launching new initiatives for data protection and wallet security.

SharpLink reported almost $1 billion in unrealized gains on its ETH holdings last week. The company holds 838,730 ETH worth around $3.9 billion, or 0.69% of the total supply. Together with other treasury firms and ETFs, institutional investors now control over 10% of all ETH. BitMine leads the ranking with 2.83 million ETH ($13.25 billion), followed by SharpLink and The Ether Machine. According to Strategic ETH Reserve, there is a total of more than 12.4 million ETH ($58 billion) in corporate and ETF holdings.

Ethereum co-founder Joseph Lubin describes this trend as the beginning of a new era of productive capital management. Referring to Michael Saylor's Bitcoin strategy, he speaks of "Ethereum digital asset treasuries as the Berkshire Hathaway of the decentralized economy". SharpLink, which has invested over $2 billion in ETH under Lubin's chairmanship, is designed not just to accumulate, but to actively stake, invest and use the proceeds to promote the ecosystem's development.

"ETH is a productive, revenue-generating asset that generates organic demand", says Lubin.

Despite this expansion, Ethereum recorded the largest validator migration in its history: over 2.4 million ETH (around $10 billion) are currently in the exit queue. However, experts see this less as selling pressure and more as a consolidation. Many validators are indeed bundling their stakes of 32 ETH into larger units in order to increase efficiency.

According to RedStone Labs and Nansen, a significant portion of the withdrawn funds is being reused in DeFi protocols. At the same time, staking demand from institutional investors has increased: Grayscale has deposited more than $1.2 billion of capital into ETH staking products in recent days. In total, treasuries and funds now hold over 10% of the total ETH supply.

In parallel, the Ethereum Foundation is strengthening its technological basis. With the Privacy Cluster initiative and the new Kohaku roadmap, tools for wallet privacy, zero-knowledge-based recovery mechanisms and decentralized transaction forwarding are being developed. The goal is to reduce dependence on centralized RPC services and increase user control over their data. According to Vitalik Buterin, data protection has become a crucial part of the Cypherpunk philosophy, especially in light of growing government surveillance and EU legislative initiatives such as the Chat Control Directive.

Market analysis also provides a tailwind for Ethereum: it currently shows a close correlation with the Russell 2000 Index, which tracks small, interest rate-sensitive US equities. Analysts expect that upcoming interest rate cuts by the US Federal Reserve will boost both small caps and ETH. According to chart analysts, technical indicators point to a consolidation above $4,350 with price targets between $5,200 and $8,500.

Ethereum has developed into a multidimensional ecosystem in 2025, between productive treasury investments, a growing staking market, institutional holders on the one hand and regulatory-driven privacy research on the other. The network is thus moving towards a capital-rich but data-sensitive infrastructure that is increasingly assuming the role of a global financial layer.

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💶 Europe and euro stablecoins

Following the US stablecoin boom as a result of the American GENIUS legislation, Pierre Gramegna from the European Stability Mechanism (ESM) warned: "Europe must not remain dependent on US dollar stablecoins."

He called for euro-denominated stablecoins to be promoted in order to counter the dominance of the dollar in digital commerce. Eurogroup President Paschal Donohoe and ECB representative Piero Cipollone also support this line, but at the same time warn that the digital euro will not be ready for use until 2029 at the earliest, a gap that private issuers could now fill.

At the same time, the EU is now considering sanctions against the ruble-linked stablecoin A7A5, which rose to become the largest non-USD stablecoin despite international punitive measures. The token issued in Kyrgyzstan reached a market capitalization of $500 million, a growth of 250% in just one day.

According to analyses, Russian and Central Asian banks are using the coin for foreign trade and to circumvent Western sanctions. EU diplomats are therefore considering a trading ban on A7A5 transactions, which 27 member states would have to confirm unanimously. The case illustrates how stablecoins are increasingly becoming part of geopolitical financial strategies.

The EU is also pushing ahead with the restructuring of its market supervision. The European Securities and Markets Authority (ESMA) is to directly supervise crypto companies and stablecoin issuers in the future to standardize the fragmented implementation of MiCA.

François Villeroy de Galhau, head of the French central bank, is calling for this supervision to be pooled at the Paris-based ESMA, which is the only way to avoid regulatory arbitrage and ensure uniform control over stablecoin issues, he says. He warns that multiple issues - the same stablecoin inside and outside the EU - could weaken the euro. Italy's central bank and the European Systemic Risk Board (ESRB) are also in favor of a ban on such structures.

Europe is facing two paths: either it succeeds in securing technological sovereignty with a clearly regulated euro stablecoin and centralized supervision, either the digital market will remain dependent on the dollar system and politically fragile alternatives. MiCA and ESMA will thus become the litmus test of Europe's ability to act in the digital monetary order.

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🔎 The fight for privacy in the digital age

Telegram founder Pavel Durov warns of a "dystopian future" in which governments systematically curtail the freedom of the internet. He criticizes the EU plans for chat control, the UK's digital ID systems and Australia's age verification for social media as a path to total surveillance.

For him, this is a loss of the openness on which digital culture was once founded. Although Germany's resistance has put the brakes on the chat control law for the time being, according to Signal CEO Meredith Whittaker, the battle is not yet won. Every loophole jeopardizes encryption, and therefore the security of all users.

The Web3 ecosystem is responding with technological counter-measure. With the Kohaku Roadmap and the Privacy Cluster, the Ethereum Foundation is introducing new tools for wallet security, zero-knowledge-based identity and decentralized communication as a deliberate counterpoint to state surveillance. These developments show that data protection and decentralization are no longer just ideals, but strategic infrastructure issues.

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🧠 The Great Debasement Trade

Following Bitcoin's recent all-time high of $125,000 the markets are turning their attention to a macroeconomic megatrend that analyst Lark Davis calls the "Great Debasement Trade".

The idea behind is the flight of money from fiat currencies into scarce, inflation-resistant assets such as Bitcoin and gold. The latter has gained over 20% in just 34 days, a movement that typically spreads to Bitcoin two to three months later, according to Davis.

The cause of this migration lies in the dwindling confidence in the fiscal discipline of nations: debt, money creation and falling interest rates are forcing investors to hedge with "hard" assets.

The "debasement trade" is more than just a short-term rotation. According to financial journalist Phil Rosen, it reflects the structural devaluation of traditional asset classes: shares and real estate are losing value in real terms, measured in stable values such as gold or Bitcoin. Swan Bitcoin also sees the narrative as the core trend of the year: the global economy is moving from trust in national currencies to acceptance of permanent currency devaluation. In this environment, Bitcoin is seen as the digital counterpart to gold: non-confiscable, programmable and globally liquid.

At the same time, new bridges are being built between traditional and digital finance. With the new Digital Markets 50 Index, S&P is launching a benchmark index that includes for the first time 15 cryptocurrencies and 35 blockchain companies like Strategy, Coinbase and Riot Platforms. The tokenized version of the index "dShare" is intended to give on-chain investors direct access to this basket from the end of 2025. Crypto will thus increasingly become part of the institutional benchmark universe, similar to the S&P 500 for equities.

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