Crypto Update | Will 2025 Be the Year of More Custodians and More Competition? - Markets Outlook

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[00:00]
Adam Morgan McCarthy
What isn't priced in, I think is sort of the follow through that we might see from President Trump. You know, he's promised to commute sentences on day one for Silk Road Ross Ulbricht. So if we see that happen and we see that follow through, maybe that could again cause another sort of push.
[00:20]
Jen Sanasi
We all want to believe in something.
[00:22]
Adam Morgan McCarthy
In Chinese, belief also means trust.
[00:26]
Jen Sanasi
We want to trust our systems and.
[00:28]
Adam Morgan McCarthy
Each other so we can build a future beyond what we know. Trust.
[00:31]
Jen Sanasi
Join us at Consensus Hong Kong, where belief becomes real. Happy New Year, everyone. It is January 2nd and this is Markets Daily, hosted by me, Jen Sanasi. On this show, we navigate the currents shaping the crypto markets, providing insights against the broader financial landscape. So whether you are actively trading or simply fascinated by the volatility of the crypto markets, this show is your compass to understanding what's happened, where we are and where we're going. Joining today's show is Kaiko research analyst Adam Morgan McCarthy. Adam, welcome to the show.
[01:02]
Adam Morgan McCarthy
Thanks for having me again, Jen. And Happy New Year.
[01:04]
Jen Sanasi
Of course. Happy New Year to you. Happy 2025. I gotta just ask you, how were your holidays?
[01:10]
Adam Morgan McCarthy
Yeah, they're good. I was back in Ireland visiting, so if you couldn't tell from the accent, that's where I'm from. But yeah, I had a nice two weeks there and now back in the office in Paris and ready to get back into it.
[01:21]
Jen Sanasi
Amazing. Back at it. Well, it looks like the markets are ready to get back into it, too. We were talking before the show, Both Bitcoin and ETH are up about 3%. ETH is up up over 3%, Bitcoin up over 2% at time of recording. Talk to me about what you expect to see as we get deeper into 2025, the holidays. While we had that rally just before we all went on break, it kind of fell flat a little bit. Disappointing when you looked at the markets, but it looks like we're picking back up.
[01:48]
Adam Morgan McCarthy
Yeah, I think we wrote about one of the last things we did before we kind of checked out for the holidays, was talking about the possibility of a Santa rally. And I think mid December, people were positioning for 120k bitcoin by the 27th. And yeah, we kind of, we tempered expectations there a bit. We thought there's better, less than 10% chance of that happening. And it kind of played out that way that things kind of pulled back a little bit. Market took a breather and I don't think that's surprising. I mean, this time last year when we were coming up to that bitcoin ETF approval date. We saw a massive sell off in the market when there was some kind of mixed reports about potential of an etf. And you know, that that has similarly followed a massive run up into the end of December. So I think it's a time of year for where there's, there's, there tends to be some sort of kind of, you know, consolidation in the market. And I wouldn't be surprised to see a little bit more of that throughout January, especially with the sort of like, you know, December ended, I think, you know, from the first of 38. Bitcoin ended up kind of down overall after that massive push, up over 100k on the 5th and then again up to around 108k a week or so later. So I wouldn't be too shocked if that kind of, that consolidation or kind of, you know, range things remain range bound for the next few weeks as we approach sort of the end of the month. But there's some catalysts coming up, I think. Then again, regulatory wise and just, you know, in general.
[03:09]
Jen Sanasi
Talk to me a little bit more about what you expect to see in January. Of course you mentioned catalysts. We have the inauguration coming up here in the United States on January 20th. I've seen a mixed bag of what analysts are expecting to happen this month. Tell me a little bit more about what you expect to see bitcoin do in January.
[03:31]
Adam Morgan McCarthy
I think a lot of it's probably priced in, I think with the announcement of Paul Aikens last month that kind of coincided with bitcoin pushing above 100k. But what isn't priced in, I think, is the follow through that we might see from President Trump. You know, he's promised to commute the sentence of commute sentences on day one for Silk Road Ross Ulbricht. So if we see that happen and we see that follow through, maybe that could again cause another sort of push. I think there's certain things that he might do in the first week after inauguration that we could say reinforces the narrative a bit and that might not be repriced in right now. Maybe it is and maybe he doesn't do those things and it goes the other way. But that'll be certainly something I'll be watching sort of that follow through, the commitment that he made to the industry back in August when he appeared at the bitcoin conference, things like that. You know, I don't know if we're going to see anything on crypto in the first week of the new Administrative, the new commissions sitting. But it will be interesting if we do get anything there. And you know, those things I'll be watching kind of regulatory wise, like the repeal of SAB121, the accounting standard for custodians looking to custody bitcoin and Ethan, or crypto assets in the US that would be very big as well. I think if that comes early this month or that'll probably be something that comes maybe February, March or later on. But once that does happen, it kind of increases competition. You know, I think BMI Mellon might be one of the only major custodians in the US that's able to get involved with crypto at the moment. So if that is repealed, then you might see more firms that are comfortable to do it. I know NASDAQ had their own etf, their own custody project kind of put on hold two years ago or so. So we might see things like that come back in. And we know that when those big names and when firms like that start getting involved in the market, it kind of sheds more light and it brings more attention to this space, which is, which is always a good thing.
[05:23]
Jen Sanasi
Of course. I want to talk a little bit more about the trends that you expect to see in 2025, but I want to come back to what we were just talking about. You mentioned that $120,000 price for target in December as folks were expecting a Santa rally. When do you think Bitcoin hits 120k since we didn't get it in December?
[05:42]
Adam Morgan McCarthy
I don't know. I'm not, I don't. I'm not one for the predictions. I don't have a Magic 8 ball, but I think, you know, if we're looking at sort of how things played out last year, I would, I would say, you know, where liquidity is right now. Last year we saw that kind of what we like to call the Alameda gap, the kind of gap left in the liquidity from the collapse of ftx. And it's sister company Alameda Research, that's closed out now fully in 2024. And that means there's a good, solid, solid, strong base in the market, you know, And I think when you see prices going up and volumes going up, that means, you know, there's a broad base of this move and it's kind of supportive. If prices were going up and volumes were staying down, I'd be worried. But we've seen those volumes build a bit. If we are to get close to 120k price, I think volumes need to Pick up a little bit more and on a consistent basis. So if we're to mirror kind of things that happened last year, obviously history doesn't repeat, but it sort of rhymes. We could see volumes grow and then maybe that price come in later on. H1 H2 this year. I'm not going to put a date on it, but I think if volumes pick up and momentum builds the way it has been, certainly it's not out of the realms of possibility. I think another thing that plays into that is the more products that we have on these, on these assets. So, you know, I'd like to see a sort of dual asset ETF for Bitcoin Elite be interesting. More things there. Obviously the big play in 2024 was the Bitcoin ETF and the basis traded, the CME. So if we can kind of broaden that a bit more and see like, you know, the option, now that we have options on ibid ETFs and we have order trades there, all of those things together can kind of, you know, increase the overall liquidity and the overall volume and can only benefit the price then in the long run.
[07:27]
Jen Sanasi
You know, folks who are waking up this morning are thinking about, you know, what are the narratives I should be watching for 2025? What kinds of projects should I be watching? We mentioned a few big changes coming for the industry, of course, the new administration taking over here in the United States, more crypto friendly. We're going to have an SEC change. What narratives, what projects do you think are going to take off on the back of catalysts like these?
[07:52]
Adam Morgan McCarthy
I think the one big thing I haven't touched on it already is the custody. We're going to see more custodians and more competition. Coinbase had 100% of the custody market this time last year. I think now it's just below 80% maybe with fidelity, Bitco, Anchorage, others coming in there. And obviously that competition is healthy. I think Gemini works with Vaneck on theirs as well. So there's a good healthy ecosystem developing there. I wouldn't be surprised to see that, you know, Coinbase share maybe fall a little bit lower again this year. Obviously they're growing their, their overall like you know, whole assets under custody. But the, their share of the whole market has come down a bit as, as that competition grows, which is healthy, which is good. I think that's something that's going to continue to play out this year especially as we get some clearer regulation around that. Some clear regulation around stable coins as well like would be great as We've already seen in Europe with Mica, this regulation has benefit euro denominated stable coins. And if we can get some sort of similar regulation in the US I mean it might just grow that leaf for USD stable coins even further. I don't think Micah. I don't think Micah can do enough to peg back that massively that your USD stable coins have as it mirrors FX markets and other markets. It's only natural. But I think it has helped to sort of solidify a base for euro dominant stable coins which is healthy. So similar regulation on stable coins in the US would be great. Which, you know, as we've seen, stable coins are sort of trading vehicles and when there's higher velocity of movement through stable coins, prices tend to be going up. When the whole market cap of stable coins is going up, price tend to be going up. So stablecoin regulation would be a great thing as well as clarity on custody and regulation around, you know, defi decentralized exchanges and whether they're broke. You know, I know there were some issues where they're brokers and how it works and if we just need clarity really. I think what we have, and we discussed this on a webinar we had in December, is that there's optimism in the US now, which is a great thing. Before there wasn't optimism. There was always this hurdle of the regulatory kind of barrier. But with that sort of out of the way now maybe we can get back to doing interesting things and innovations and yeah, moving beyond it because I think it's not just regulation that's going to help the industry and going to grow. I'm going to increase asset prices. In the end of the day it's going to be more interesting innovation and bolder kind of developments. So we can't just rely on, you know, having mixed basket ETFs or having options on these funds. It has to be actual exciting things that get people interested in using crypto assets and getting involved in the space. That will also help. So I'd like to see some more stuff there. I really like what Athena is doing with ITSD T USDT stablecoin that's investing in build give it a little bit more security as well. Solidity and its platform is great. So some more stuff like that that's interesting. I mean we saw the hyper liquid airdrop in November which was super beneficial for holders and users. If we can get more things like that that kind of keep people coming back, then it'll be a good year.
[10:50]
Jen Sanasi
All right. And the last thing I want to touch on are altcoins and Meme Coins. Meme coins really drove the narrative at the end of last year. I different firms are predicting that they will continue to drive that narrative in 2025, especially on the back of AI implementations and AI agents being able to spin up these coins and trade. Talk to me about how you're looking at meme coins and how you're looking at altcoins and how they might play into the narrative as we move forward.
[11:19]
Adam Morgan McCarthy
Yeah, I think, you know, meme coins are hard to, hard to ignore. I don't think they're going to go anywhere. They're, they're, they've been around a long time. Was interesting this year was last year was that more of the, more of the kind of moves came from Salana Blockchain. Obviously we had the kind of initial bonk rally in December 2023 that played into our first half of 2024 as well. In March I think we had a massive rally. You're getting all these tokens that were being spun up pretty quickly that led to the, led to the launch of Pump Fun which was, you know, a massive hit. I think it did nearly 400 million in revenue last year after only only being live for about seven or eight months of the year. So those will continue to be a thing. But I think while AI agents are interesting and while that, that kind of intersection between AI and crypto is like very tempting to get kind of drawn into and go down the rabbit hole of that whole thing, I think in the end of the day these Meme coins that do stick around have a narrative and they have a community. I mean the peanut, the Squirrel meme coin which I, I, I got drawn to at the end of October before the election that had a narrative, I guess it was political and it was also, you know, this, this, this iconic squirrel that had a massive following on social media already. Other Meme coin, other memes that spin up quickly and kind of tend to run out of flames quite fast as well. I think you need, it's all well and good how quickly you can create these things, but there needs to be a solid narrative and a kind of community there, almost cult like followings. So without that it doesn't really, it doesn't really stick in my mind anyway. But beyond Meme Coins and onto Altcoins, I think there's been a lot of talk since last two years maybe. When's the altcoin rally going to be Bitcoin? Obviously June 23rd, the BlackRock filing started picking up momentum. XRP had a spike that summer after its SEC case. We saw a similar spike at the end of this year for the election. So I think that might be another regulatory based thing where there's going to be clarity around some of these coins that were kind of dubbed crypto asset securities by the previous administration that might be priced in now when Paul Aikens takes over and when the new commission is in, we might get more clarity. There might be some other moves higher, but I don't know if it's necessarily going to follow the trajectory of previous cycles where money starts flowing further out the risk curve into these smaller assets with less liquidity. I think we're looking at a kind of different type of market here where there's a lot of institutional interest and demand and they're going to drive the narrative a little bit more. And I don't know how comfortable a lot of these institutions are getting involved in, you know, these old coins that are just a little bit too far out there with a little less trading volume, less liquidity, you know, it's hard to get out of those positions in size, so they might not get into them. If we get ETFs for Litecoin XRP H Bar, you know, there's a mixed basket ETF from Grayscale looking to convert. I think it's got Avax. If you're unsol in it, maybe those things could see a boost. But there also could be a negative impact if they don't get its trading volumes. So I'm not as bullish on, you know, this, that things necessarily have to flow into altcoins like they have in previous cycles. I think Meme Coin is definitely going to stick around once it's a solid narrative.
[14:22]
Jen Sanasi
All right, Adam, and before we wrap up, I want to hear your hottest take. What should people who are watching the crypto markets be aware of? What should they be watching? What's the one thing they should be focusing on as we head deeper into 2025?
[14:36]
Adam Morgan McCarthy
The one thing for me is maybe focusing a little bit more on use cases and a little less on regulatory issues. We had a, we had a good focal point for all of our disappointment over the last few years. And Gary Gensler and he's going to be leaving at the end of the month and I kind of be wary of how we, how we treat that now because a lot of time in crypto we kind of build a lot people up into being heroes or being villains so that we can focus our energy in a sort of zero sum way. I think we need to move beyond that in 2025 and look a little bit more at what we can do to entice people to use the products and use the use tokens and and get involved in a healthy way.
[15:10]
Jen Sanasi
It's been such a pleasure having this conversation with you. Thanks for joining the show this morning and Happy New Year to you again.
[15:17]
Adam Morgan McCarthy
Happy New Year and thanks for having me.
[15:19]
Jen Sanasi
And thank you to everyone who watched Markets Daily Today who listened to Markets Daily. If you enjoy listening to this, you can subscribe to the Coindesk Podcast network that is available on all podcast platforms. If you prefer to watch, we are on YouTube. Hit subscribe. Give us a thumbs up, leave us a comment, leave us feedback. We read it all. We apply your feedback if it is constructive. Thanks again for watching, thanks for listening and we will see you tomorrow.

Summary5 min read

Markets Daily Crypto Roundup: Crypto Update | Will 2025 Be the Year of More Custodians and More Competition?

Released on January 2, 2025 | Host: Jen Sanasi | Guest: Adam Morgan McCarthy, Kaiko Research Analyst

Introduction

In the latest episode of Markets Daily Crypto Roundup, hosted by Jen Sanasi from CoinDesk, the discussion centers around the current state and future prospects of the cryptocurrency market as we usher in 2025. Joined by Kaiko Research Analyst Adam Morgan McCarthy, the conversation delves into market movements, regulatory developments, the evolving landscape of custodians, and the potential trajectories for both major cryptocurrencies and altcoins in the coming year.

Market Performance: Bitcoin and Ethereum Rally

Jen opens the discussion by highlighting the recent market trends, noting that both Bitcoin (BTC) and Ethereum (ETH) have experienced gains of approximately 2% and 3% respectively at the time of recording.

Adam Morgan McCarthy elaborates on this rally, mentioning the tempered expectations around a "Santa rally" that saw Bitcoin briefly surge over $100k. He states:

"[01:48] Adam Morgan McCarthy: ... we thought there's better, less than 10% chance of that happening. And it kind of played out that way that things kind of pulled back a little bit."

He draws parallels to the previous year's market behavior, suggesting that a period of consolidation is typical during this season, especially following significant price increases and regulatory milestones.

January Forecast: Market Consolidation and Potential Catalysts

As January unfolds, Jen probes Adams's expectations for Bitcoin’s performance amid mixed analyst predictions surrounding the upcoming U.S. inauguration on January 20th.

Adam Morgan McCarthy responds by emphasizing both priced-in factors and emerging catalysts that could influence Bitcoin's trajectory:

"[03:30] Adam Morgan McCarthy: ... what isn't priced in, I think, is the follow through that we might see from President Trump... he’s promised to commute the sentence of Ross Ulbricht... maybe that could again cause another sort of push." [03:30]

He anticipates that regulatory actions, such as the potential repeal of SAB121—an accounting standard for custodians handling crypto assets—could significantly enhance competition within the custody sector. This, in turn, might bolster market liquidity and investor confidence.

Regulatory Developments: Custody and Stablecoins

A significant portion of the conversation revolves around regulatory changes anticipated in 2025, particularly regarding custodians and stablecoins.

Adam Morgan McCarthy notes the current state of the custody market:

"[07:52] Adam Morgan McCarthy: ... Coinbase had 100% of the custody market this time last year. I think now it's just below 80% maybe with Fidelity, BitGo, Anchorage, others coming in there." [07:52]

He underscores the importance of increased competition for fostering a healthier ecosystem, asserting that more custodians entering the market will drive innovation and reliability. Additionally, he highlights the potential impact of stablecoin regulations similar to Europe’s MiCA (Markets in Crypto-assets Regulation), which could stabilize and expand the use of USD-denominated stablecoins in the U.S.

"If that comes early this month or that'll probably be something that comes maybe February, March or later on. But once that does happen, it kind of increases competition." [03:30]

Adam believes that clear regulatory frameworks will not only enhance market stability but also encourage the development of new financial products and services within the crypto space.

Trends for 2025: Innovation and Use Cases

Looking ahead, Jen and Adam explore the broader trends that will shape the crypto industry in 2025. Adam advocates for a shift in focus from regulatory obstacles to actual use cases and product innovations that can drive mainstream adoption.

"[14:36] Adam Morgan McCarthy: The one thing for me is maybe focusing a little bit more on use cases and a little less on regulatory issues." [14:36]

He emphasizes the necessity for tangible applications and user-centric innovations to sustain growth and interest in crypto assets. Examples cited include the development of secure stablecoins like ITSD T USDT and platforms enhancing security and functionality, which are crucial for long-term viability and user trust.

Altcoins and Meme Coins: Navigating the Narrative

The discussion then shifts to the role of altcoins and meme coins within the crypto ecosystem. Jen references the significant influence of meme coins in the previous year and anticipates their continued presence, especially with the integration of AI technologies.

Adam Morgan McCarthy provides a nuanced perspective:

"[11:18] Adam Morgan McCarthy: ... meme coins that do stick around have a narrative and they have a community... you need to have a solid narrative and a kind of community there, almost cult-like followings." [11:18]

He acknowledges the persistent allure of meme coins but stresses that only those with strong narratives and dedicated communities will endure. Regarding altcoins, Adam expresses caution, noting that while institutional interest is growing, the willingness of large institutions to invest in less liquid, higher-risk assets remains uncertain. He suggests that clarity in regulation will be pivotal in determining which altcoins gain traction and investor confidence.

Hottest Take: Emphasizing Use Cases Over Regulatory Hurdles

As the episode concludes, Adam shares his "hottest take" on what the crypto community should prioritize in 2025.

"[14:36] Adam Morgan McCarthy: ... focusing a little bit more on use cases and a little less on regulatory issues... look a little bit more at what we can do to entice people to use the products and use the tokens and get involved in a healthy way." [14:36]

He advocates for a balanced approach where innovation and practical applications take precedence over continuous regulatory debates. By doing so, the crypto industry can foster sustainable growth and broader adoption.

Conclusion

Jen Sanasi wraps up the episode by thanking Adam Morgan McCarthy for his insights and reminds listeners to subscribe to the CoinDesk Podcast network for more updates. The episode underscores a pivotal moment for the crypto market in 2025, highlighting the interplay between regulatory developments, market dynamics, and the crucial role of innovation in shaping the future of digital assets.

Notable Quotes:

Adam Morgan McCarthy [01:48]: “We thought there's better, less than 10% chance of that happening. And it kind of played out that way that things kind of pulled back a little bit.”
Adam Morgan McCarthy [03:30]: “What isn't priced in, I think, is the follow through that we might see from President Trump... maybe that could again cause another sort of push.”
Adam Morgan McCarthy [07:52]: “Coinbase had 100% of the custody market this time last year. I think now it's just below 80% maybe with Fidelity, BitGo, Anchorage, others coming in there.”
Adam Morgan McCarthy [11:18]: “Meme coins that do stick around have a narrative and they have a community... you need to have a solid narrative and a kind of community there, almost cult-like followings.”
Adam Morgan McCarthy [14:36]: “Focusing a little bit more on use cases and a little less on regulatory issues... entice people to use the products and use the tokens and get involved in a healthy way.”

This comprehensive summary encapsulates the key discussions from the episode, providing valuable insights for both active traders and enthusiasts eager to understand the evolving landscape of cryptocurrency in 2025.

Loading summary

Transcript24 lines

[00:00]
Adam Morgan McCarthy
What isn't priced in, I think is sort of the follow through that we might see from President Trump. You know, he's promised to commute sentences on day one for Silk Road Ross Ulbricht. So if we see that happen and we see that follow through, maybe that could again cause another sort of push.
[00:20]
Jen Sanasi
We all want to believe in something.
[00:22]
Adam Morgan McCarthy
In Chinese, belief also means trust.
[00:26]
Jen Sanasi
We want to trust our systems and.
[00:28]
Adam Morgan McCarthy
Each other so we can build a future beyond what we know. Trust.
[00:31]
Jen Sanasi
Join us at Consensus Hong Kong, where belief becomes real. Happy New Year, everyone. It is January 2nd and this is Markets Daily, hosted by me, Jen Sanasi. On this show, we navigate the currents shaping the crypto markets, providing insights against the broader financial landscape. So whether you are actively trading or simply fascinated by the volatility of the crypto markets, this show is your compass to understanding what's happened, where we are and where we're going. Joining today's show is Kaiko research analyst Adam Morgan McCarthy. Adam, welcome to the show.
[01:02]
Adam Morgan McCarthy
Thanks for having me again, Jen. And Happy New Year.
[01:04]
Jen Sanasi
Of course. Happy New Year to you. Happy 2025. I gotta just ask you, how were your holidays?
[01:10]
Adam Morgan McCarthy
Yeah, they're good. I was back in Ireland visiting, so if you couldn't tell from the accent, that's where I'm from. But yeah, I had a nice two weeks there and now back in the office in Paris and ready to get back into it.
[01:21]
Jen Sanasi
Amazing. Back at it. Well, it looks like the markets are ready to get back into it, too. We were talking before the show, Both Bitcoin and ETH are up about 3%. ETH is up up over 3%, Bitcoin up over 2% at time of recording. Talk to me about what you expect to see as we get deeper into 2025, the holidays. While we had that rally just before we all went on break, it kind of fell flat a little bit. Disappointing when you looked at the markets, but it looks like we're picking back up.
[01:48]
Adam Morgan McCarthy
Yeah, I think we wrote about one of the last things we did before we kind of checked out for the holidays, was talking about the possibility of a Santa rally. And I think mid December, people were positioning for 120k bitcoin by the 27th. And yeah, we kind of, we tempered expectations there a bit. We thought there's better, less than 10% chance of that happening. And it kind of played out that way that things kind of pulled back a little bit. Market took a breather and I don't think that's surprising. I mean, this time last year when we were coming up to that bitcoin ETF approval date. We saw a massive sell off in the market when there was some kind of mixed reports about potential of an etf. And you know, that that has similarly followed a massive run up into the end of December. So I think it's a time of year for where there's, there's, there tends to be some sort of kind of, you know, consolidation in the market. And I wouldn't be surprised to see a little bit more of that throughout January, especially with the sort of like, you know, December ended, I think, you know, from the first of 38. Bitcoin ended up kind of down overall after that massive push, up over 100k on the 5th and then again up to around 108k a week or so later. So I wouldn't be too shocked if that kind of, that consolidation or kind of, you know, range things remain range bound for the next few weeks as we approach sort of the end of the month. But there's some catalysts coming up, I think. Then again, regulatory wise and just, you know, in general.
[03:09]
Jen Sanasi
Talk to me a little bit more about what you expect to see in January. Of course you mentioned catalysts. We have the inauguration coming up here in the United States on January 20th. I've seen a mixed bag of what analysts are expecting to happen this month. Tell me a little bit more about what you expect to see bitcoin do in January.
[03:31]
Adam Morgan McCarthy
I think a lot of it's probably priced in, I think with the announcement of Paul Aikens last month that kind of coincided with bitcoin pushing above 100k. But what isn't priced in, I think, is the follow through that we might see from President Trump. You know, he's promised to commute the sentence of commute sentences on day one for Silk Road Ross Ulbricht. So if we see that happen and we see that follow through, maybe that could again cause another sort of push. I think there's certain things that he might do in the first week after inauguration that we could say reinforces the narrative a bit and that might not be repriced in right now. Maybe it is and maybe he doesn't do those things and it goes the other way. But that'll be certainly something I'll be watching sort of that follow through, the commitment that he made to the industry back in August when he appeared at the bitcoin conference, things like that. You know, I don't know if we're going to see anything on crypto in the first week of the new Administrative, the new commissions sitting. But it will be interesting if we do get anything there. And you know, those things I'll be watching kind of regulatory wise, like the repeal of SAB121, the accounting standard for custodians looking to custody bitcoin and Ethan, or crypto assets in the US that would be very big as well. I think if that comes early this month or that'll probably be something that comes maybe February, March or later on. But once that does happen, it kind of increases competition. You know, I think BMI Mellon might be one of the only major custodians in the US that's able to get involved with crypto at the moment. So if that is repealed, then you might see more firms that are comfortable to do it. I know NASDAQ had their own etf, their own custody project kind of put on hold two years ago or so. So we might see things like that come back in. And we know that when those big names and when firms like that start getting involved in the market, it kind of sheds more light and it brings more attention to this space, which is, which is always a good thing.
[05:23]
Jen Sanasi
Of course. I want to talk a little bit more about the trends that you expect to see in 2025, but I want to come back to what we were just talking about. You mentioned that $120,000 price for target in December as folks were expecting a Santa rally. When do you think Bitcoin hits 120k since we didn't get it in December?
[05:42]
Adam Morgan McCarthy
I don't know. I'm not, I don't. I'm not one for the predictions. I don't have a Magic 8 ball, but I think, you know, if we're looking at sort of how things played out last year, I would, I would say, you know, where liquidity is right now. Last year we saw that kind of what we like to call the Alameda gap, the kind of gap left in the liquidity from the collapse of ftx. And it's sister company Alameda Research, that's closed out now fully in 2024. And that means there's a good, solid, solid, strong base in the market, you know, And I think when you see prices going up and volumes going up, that means, you know, there's a broad base of this move and it's kind of supportive. If prices were going up and volumes were staying down, I'd be worried. But we've seen those volumes build a bit. If we are to get close to 120k price, I think volumes need to Pick up a little bit more and on a consistent basis. So if we're to mirror kind of things that happened last year, obviously history doesn't repeat, but it sort of rhymes. We could see volumes grow and then maybe that price come in later on. H1 H2 this year. I'm not going to put a date on it, but I think if volumes pick up and momentum builds the way it has been, certainly it's not out of the realms of possibility. I think another thing that plays into that is the more products that we have on these, on these assets. So, you know, I'd like to see a sort of dual asset ETF for Bitcoin Elite be interesting. More things there. Obviously the big play in 2024 was the Bitcoin ETF and the basis traded, the CME. So if we can kind of broaden that a bit more and see like, you know, the option, now that we have options on ibid ETFs and we have order trades there, all of those things together can kind of, you know, increase the overall liquidity and the overall volume and can only benefit the price then in the long run.
[07:27]
Jen Sanasi
You know, folks who are waking up this morning are thinking about, you know, what are the narratives I should be watching for 2025? What kinds of projects should I be watching? We mentioned a few big changes coming for the industry, of course, the new administration taking over here in the United States, more crypto friendly. We're going to have an SEC change. What narratives, what projects do you think are going to take off on the back of catalysts like these?
[07:52]
Adam Morgan McCarthy
I think the one big thing I haven't touched on it already is the custody. We're going to see more custodians and more competition. Coinbase had 100% of the custody market this time last year. I think now it's just below 80% maybe with fidelity, Bitco, Anchorage, others coming in there. And obviously that competition is healthy. I think Gemini works with Vaneck on theirs as well. So there's a good healthy ecosystem developing there. I wouldn't be surprised to see that, you know, Coinbase share maybe fall a little bit lower again this year. Obviously they're growing their, their overall like you know, whole assets under custody. But the, their share of the whole market has come down a bit as, as that competition grows, which is healthy, which is good. I think that's something that's going to continue to play out this year especially as we get some clearer regulation around that. Some clear regulation around stable coins as well like would be great as We've already seen in Europe with Mica, this regulation has benefit euro denominated stable coins. And if we can get some sort of similar regulation in the US I mean it might just grow that leaf for USD stable coins even further. I don't think Micah. I don't think Micah can do enough to peg back that massively that your USD stable coins have as it mirrors FX markets and other markets. It's only natural. But I think it has helped to sort of solidify a base for euro dominant stable coins which is healthy. So similar regulation on stable coins in the US would be great. Which, you know, as we've seen, stable coins are sort of trading vehicles and when there's higher velocity of movement through stable coins, prices tend to be going up. When the whole market cap of stable coins is going up, price tend to be going up. So stablecoin regulation would be a great thing as well as clarity on custody and regulation around, you know, defi decentralized exchanges and whether they're broke. You know, I know there were some issues where they're brokers and how it works and if we just need clarity really. I think what we have, and we discussed this on a webinar we had in December, is that there's optimism in the US now, which is a great thing. Before there wasn't optimism. There was always this hurdle of the regulatory kind of barrier. But with that sort of out of the way now maybe we can get back to doing interesting things and innovations and yeah, moving beyond it because I think it's not just regulation that's going to help the industry and going to grow. I'm going to increase asset prices. In the end of the day it's going to be more interesting innovation and bolder kind of developments. So we can't just rely on, you know, having mixed basket ETFs or having options on these funds. It has to be actual exciting things that get people interested in using crypto assets and getting involved in the space. That will also help. So I'd like to see some more stuff there. I really like what Athena is doing with ITSD T USDT stablecoin that's investing in build give it a little bit more security as well. Solidity and its platform is great. So some more stuff like that that's interesting. I mean we saw the hyper liquid airdrop in November which was super beneficial for holders and users. If we can get more things like that that kind of keep people coming back, then it'll be a good year.
[10:50]
Jen Sanasi
All right. And the last thing I want to touch on are altcoins and Meme Coins. Meme coins really drove the narrative at the end of last year. I different firms are predicting that they will continue to drive that narrative in 2025, especially on the back of AI implementations and AI agents being able to spin up these coins and trade. Talk to me about how you're looking at meme coins and how you're looking at altcoins and how they might play into the narrative as we move forward.
[11:19]
Adam Morgan McCarthy
Yeah, I think, you know, meme coins are hard to, hard to ignore. I don't think they're going to go anywhere. They're, they're, they've been around a long time. Was interesting this year was last year was that more of the, more of the kind of moves came from Salana Blockchain. Obviously we had the kind of initial bonk rally in December 2023 that played into our first half of 2024 as well. In March I think we had a massive rally. You're getting all these tokens that were being spun up pretty quickly that led to the, led to the launch of Pump Fun which was, you know, a massive hit. I think it did nearly 400 million in revenue last year after only only being live for about seven or eight months of the year. So those will continue to be a thing. But I think while AI agents are interesting and while that, that kind of intersection between AI and crypto is like very tempting to get kind of drawn into and go down the rabbit hole of that whole thing, I think in the end of the day these Meme coins that do stick around have a narrative and they have a community. I mean the peanut, the Squirrel meme coin which I, I, I got drawn to at the end of October before the election that had a narrative, I guess it was political and it was also, you know, this, this, this iconic squirrel that had a massive following on social media already. Other Meme coin, other memes that spin up quickly and kind of tend to run out of flames quite fast as well. I think you need, it's all well and good how quickly you can create these things, but there needs to be a solid narrative and a kind of community there, almost cult like followings. So without that it doesn't really, it doesn't really stick in my mind anyway. But beyond Meme Coins and onto Altcoins, I think there's been a lot of talk since last two years maybe. When's the altcoin rally going to be Bitcoin? Obviously June 23rd, the BlackRock filing started picking up momentum. XRP had a spike that summer after its SEC case. We saw a similar spike at the end of this year for the election. So I think that might be another regulatory based thing where there's going to be clarity around some of these coins that were kind of dubbed crypto asset securities by the previous administration that might be priced in now when Paul Aikens takes over and when the new commission is in, we might get more clarity. There might be some other moves higher, but I don't know if it's necessarily going to follow the trajectory of previous cycles where money starts flowing further out the risk curve into these smaller assets with less liquidity. I think we're looking at a kind of different type of market here where there's a lot of institutional interest and demand and they're going to drive the narrative a little bit more. And I don't know how comfortable a lot of these institutions are getting involved in, you know, these old coins that are just a little bit too far out there with a little less trading volume, less liquidity, you know, it's hard to get out of those positions in size, so they might not get into them. If we get ETFs for Litecoin XRP H Bar, you know, there's a mixed basket ETF from Grayscale looking to convert. I think it's got Avax. If you're unsol in it, maybe those things could see a boost. But there also could be a negative impact if they don't get its trading volumes. So I'm not as bullish on, you know, this, that things necessarily have to flow into altcoins like they have in previous cycles. I think Meme Coin is definitely going to stick around once it's a solid narrative.
[14:22]
Jen Sanasi
All right, Adam, and before we wrap up, I want to hear your hottest take. What should people who are watching the crypto markets be aware of? What should they be watching? What's the one thing they should be focusing on as we head deeper into 2025?
[14:36]
Adam Morgan McCarthy
The one thing for me is maybe focusing a little bit more on use cases and a little less on regulatory issues. We had a, we had a good focal point for all of our disappointment over the last few years. And Gary Gensler and he's going to be leaving at the end of the month and I kind of be wary of how we, how we treat that now because a lot of time in crypto we kind of build a lot people up into being heroes or being villains so that we can focus our energy in a sort of zero sum way. I think we need to move beyond that in 2025 and look a little bit more at what we can do to entice people to use the products and use the use tokens and and get involved in a healthy way.
[15:10]
Jen Sanasi
It's been such a pleasure having this conversation with you. Thanks for joining the show this morning and Happy New Year to you again.
[15:17]
Adam Morgan McCarthy
Happy New Year and thanks for having me.
[15:19]
Jen Sanasi
And thank you to everyone who watched Markets Daily Today who listened to Markets Daily. If you enjoy listening to this, you can subscribe to the Coindesk Podcast network that is available on all podcast platforms. If you prefer to watch, we are on YouTube. Hit subscribe. Give us a thumbs up, leave us a comment, leave us feedback. We read it all. We apply your feedback if it is constructive. Thanks again for watching, thanks for listening and we will see you tomorrow.