2025 is shaping up to be a heater of a year for crypto. 

Trump’s inauguration is on the 20th of January, hinting at a new era for crypto-friendly regulation—or at least a wildly unhinged series of tweetstorms. Your guess is as good as ours.

But before that, some FTX creditors start seeing their cash again beginning today. That’s $12 billion in stablecoins flowing back into the market, potentially turbocharging alt season.

Ethereum’s Q1 upgrade is looming, with promises of improved scalability. 

And then there’s AI, a freight train that no investor can afford to ignore.

We’re ready for a firehouse of events but keeping our eye on the prize.

The big players barely budged this week. Bitcoin climbed 2%, holding steady above $94,700, while Ethereum ticked up 2.5% to $3,407. 

Some alts stole the spotlight. AI16Z skyrocketed 153.6%, riding the AI h.ype wave as it continues to make moves in predictive trading analytics. Bitget Token (BGB) surged 59.8%, while Tokenize Xchange (TKX) posted a solid 51.9% gain. 

On the DeFi front, Movement (MOVE) rose 17.7%.

Over in NFT land, Pudgy Penguins (PENGU) squeaked out a respectable 13.4%. 

The real action seems to be bubbling beneath the surface, with smaller projects outshining the blue chips. 

This week, we’re getting into: 

1. 🟡 MicroStrategy’s Bitcoin Binge

2. 🤖 AI Agents: Hype or the Real Deal?

3. 🦴 Crypto Scammers Go Cannibal

4. 🟦 Exodus Hits the NYSE

5. 🦟 Uncle Sam’s DeFi Clampdown

MicroStrategy Buys Another 2,138 Bitcoin, Stock Mirrors Volatility

According to an SEC filing, MicroStrategy purchased an additional 2,138 BTC for approximately $209 million at an average price of $97,837 per Bitcoin. 

This brings the company’s total holdings to about 446,400 BTC, acquired for approximately $27.9 billion, with an average purchase price of $62,428 per Bitcoin.

MicroStrategy’s stock (MSTR) has mirrored Bitcoin’s recent price volatility, dropping over 6% after Bitcoin fell from $108,000 to around $92,500.

🤖Are AI Agents Utility or Hype?

AI agents are steadily embedding themselves into crypto, offering automation, analysis, and decision-making tools. 

These systems aren’t just bots flipping trades on an exchange—they’re advanced, machine-learning-driven programs capable of processing vast datasets, from market sentiment to technical indicators, at a pace, no human can match.

It’s worth noting pace doesn’t equal quality, but still, it’s impressive. 

Take platforms like Cryptohopper or Pionex, with AI-enhanced trading tools that allow users to automate strategies across multiple exchanges, 24/7. These aren’t just simple buy-and-sell scripts; they adapt based on market conditions, potentially making informed decisions when humans might falter. 

Another example is Injective and Sonic’s new cross-chain AI hub, which aims to integrate AI into DeFi applications, hinting at a future where automation might optimize everything from token swaps to liquidity provision.

But as always, the devil’s in the details. Critics argue that AI agents promise efficiency but are also vulnerable to algorithmic biases, security risks, and unpredictable outcomes in volatile markets. 

So, what’s next? More adoption, certainly, but also more scrutiny. As AI agents become integral to trading and DeFi, their reliability and ethical use will be tested. Whether they’re a genuine evolution in finance or just another bubble remains to be seen—but their impact is already impossible to ignore.

🦴 It’s a Dog Eat Dog World Out There

Scammers are now preying on each other in a cunning twist within the cryptocurrency underworld, employing deceptive tactics to outwit fellow fraudsters. 

A recent report by cyber security firm Kaspersky highlights this trend, revealing how seasoned scammers bait would-be thieves with fake crypto wallets. 

Here’s how it works: Scammers post seed phrases to crypto wallets in the comment sections of finance-related videos. These wallets often claim to hold valuable assets, like $8,000 worth of USDT on the Tron network. To access these funds, however, a thief must send a small amount of Tron to the bait wallet to cover transaction fees.

The catch? The bait wallet is set up as a multi-signature wallet, meaning multiple approvals are required for any transaction. As soon as the would-be thief sends TRX to the bait wallet, that TRX is immediately siphoned off to a separate wallet controlled by the original scammers. 

The thief is left empty-handed, unable to access the USDT bait, and the scammers profit from the transaction fees.

It’s not exactly a high-ticket theft, but still a noteworthy intricate scheme to part anyone, even their own kind, of their cryptocurrency.

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🤔 What’s New at CoinCentral: DeFi and KYC: A Hate-Hate Relationship

DeFi was supposed to be the wild west of finance—no middlemen, no rules, just code and coins. Enter the IRS, cowboy hat in hand, demanding Know Your Customer (KYC) compliance from decentralized platforms. Suddenly, the “wild west” has a sheriff.

Here’s the kicker: KYC rules force DeFi platforms to collect user IDs and tattletale to Uncle Sam about your transactions. Sure, centralized exchanges like Coinbase have been doing this for years, but DeFi? That’s like asking an anarchist to join a homeowners’ association.

The IRS plans to enforce this fully by 2027, leaving DeFi platforms scrambling. Do they play ball and risk losing their “decentralized” badge of honor? Or do they hold the line and brace for the regulatory smackdown?

One thing’s clear: the next few years will decide if DeFi can stay decentralized or if it becomes just another cog in the financial machine. Either way, keep your popcorn handy.

Check it out here!

Exodus Goes NYSE

Exodus Movement, Inc., a crypto software wallet, secured approval to list its Class A common stock on the NYSE American exchange under the ticker “EXOD,” effective December 18, 2024.

This development follows an initial delay in May 2024, when the U.S. Securities and Exchange Commission (SEC) postponed Exodus’ listing pending a comprehensive review of its registration statement.

This move signifies a broader acceptance of cryptocurrency-focused companies within traditional financial markets, reflecting a shift in regulatory sentiment toward digital assets. Exodus’ successful uplisting may pave the way for similar firms seeking integration into established financial systems.

🦟 Uncle Sam’s DeFi Clampdown

The IRS just dropped a bombshell: by 2027, DeFi platforms facilitating digital asset sales must implement Know Your Customer (KYC) measures. 

This means collecting user IDs, reporting holdings, and barring access to anyone who won’t comply. 

The publicized aim is tax transparency and closing loopholes for crypto tax evaders. 

However, the fallout is a direct challenge to the ethos of decentralization, and several industry leaders are up in arms. 

Uniswap’s Hayden Adams calls this “the dying gasp of anti-crypto forces,” while legal challenges loom from industry groups. 

Still, projects are drawing lines in the sand. For instance, Trump’s World Liberty Financial embraces no-KYC tokens, suggesting a potential workaround.

DeFi protocols thrive on anonymity and user autonomy, and this mandate effectively centralizes platforms designed to avoid exactly that. Critics warn it could dry up liquidity, drive users away, and stifle innovation in an industry built on privacy and freedom. 

The IRS’s insistence on “clear information reporting” could turn DeFi into a shadow of its current self if this goes through successfully. 

🥊 This is Round Two of the IRS’s crackdown on crypto. 

Earlier this year, centralized exchanges got hit with reporting rules. In June 2024, the IRS issued final regulations requiring custodial brokers (centralized cryptocurrency exchanges) to report sales and exchanges of digital assets, including cryptocurrencies, to the IRS and taxpayers.

The regulations mandate that brokers begin reporting gross proceeds from digital asset sales starting in 2025, with additional requirements to report cost-based information starting in 2026. 

DeFi is a different beast. DeFi platforms often operate without intermediaries, making it difficult to enforce traditional reporting requirements. By nature, it resists regulation, leaving many wondering if these rules are enforceable without gutting the ecosystem entirely.

Why it matters: 

The stakes are high. It’s not just about taxes—it’s a battle over the future of decentralized finance. 

Will DeFi bend to the regulatory will or pivot its way out? 

Better yet, is it even possible to regulate DeFi? The rise of project founder anonymity makes it difficult to impose action meaningfully.

Regardless, KYC rules could redefine DeFi, forcing it to choose between compliance and its founding principles.

The next few years will be a litmus test for crypto’s resilience in the face of increasing scrutiny.

We’ll see you next week!

AM

DISCLAIMER: This newsletter is provided for educational purposes only and does not constitute financial advice. The content herein is not an investment recommendation or a solicitation to buy or sell any financial instruments or assets. Readers are advised to conduct their own research and exercise caution in making any financial decisions.