Every week, Amdax summarizes what's happening in the crypto market for you. Want to learn more? Click through for further insights. 

This newsletter is a co-production with our partner Bitcoin Alpha.

Market Update 

Stay informed in three steps:

1. Crypto market reacts to fears of prolonged inflation
   After Bitcoin opened the week in the green, its price fell on Tuesday in response to strong economic data from the U.S. The robust U.S. economy has sparked concerns about persistent inflation, leaving the Federal Reserve with fewer reasons to cut interest rates. Key employment data from the U.S. is expected on Friday, which could further influence the markets.
2. No signs of a major correction despite the dip
   On Tuesday, Bitcoin fell by around 5%, from $102,000 to $97,000. Ether dropped from approximately $3,700 to $3,400, an 8.5% decline. Looking at the bigger picture, these decreases are minor compared to the significant gains seen earlier.
3. Record month for Ether funds
   While December didn’t deliver a full-blown Santa Rally, U.S. Ether funds experienced a record-breaking month. Spot Ether ETFs saw nearly $1.3 billion in inflows in December, marking their best performance since launching in July 2024.

News Overview

Signal out of the noise:

• Ethereum is preparing for a major upgrade, Pectra.
  "The ecosystem will start 2025 on a high note," wrote Aave founder Stani Kulechov on X. He was referring to Q1 when the Pectra upgrade is set to go live. For users, this means faster, cheaper, and more user-friendly Ethereum. However, these benefits will only become apparent once decentralized applications adopt the new features.
• Uniswap teases a major upgrade in 2025 after last year's delay.
  The decentralized exchange hinted at launching the fourth version of its platform on January 1. Both developers and traders eagerly anticipate the upgrade, particularly the Hooks feature. This addition promises long-awaited functionalities like limit orders, dynamic fees, and smart liquidity management. A specific launch date is yet to be announced.
• Bitcoin celebrates its 16th birthday with new records.
  On January 3, 2009, Bitcoin’s first block was mined. On its anniversary, miners collectively delivered over one zetahash of computing power for the first time. This represents a mind-boggling 1 followed by 21 zeros in computational attempts to produce new blocks. In 2024, the difficulty of mining surged by over 50%, reaching a new high last Friday.

Amdax’s Take

The expectation for two interest rate cuts by the U.S. Federal Reserve in 2025 has now been adjusted to just one. Lower rates benefit financial markets, so the news was met with a negative reaction. If Friday’s U.S. employment data deviates from expectations, it could introduce additional uncertainty. From a long-term perspective, current price movements are minor compared to previous bull markets. For now, we still appear to be in a typical bull market.