Structural Tailwinds Strengthen

Markets Seek Direction, Crypto Strengthens

Stock markets saw another variable and occasionally restless week. Smaller value stocks continued their strong relative performance, while large growth stocks lagged slightly after last week's record levels. This reflects broader market rotation and confidence that economic growth will continue without immediate inflation pressure.

Bitcoin and the broader crypto market, however, enjoyed a clearly more positive week. Bitcoin rose toward the technically significant $98,000 level, which corresponds to a 38.2% Fibonacci retracement from all-time highs to November lows. The same factors supporting value stocks—easing financial conditions and improving growth expectations—are now beginning to appear in the crypto market as well.

Options Markets Anticipate Upward Momentum

In options markets, interest is strongly focused on late January call options at $98,000 and $100,000. If Bitcoin succeeds in breaking above $98,000, the technical setup supports accelerating upward momentum as market makers are forced to buy Bitcoin to hedge their positions as prices rise. Such gamma squeeze situations have historically often accelerated moves upward.

$98,000 Is More Than a Technical Level

This price level is also significant from an on-chain data perspective. Short-term investors' average acquisition price is around $98,300. Historically, reclaiming this level and staying above it has often signaled a transition from correction to a more sustainable uptrend.

Bitcoin's recent weaker relative performance compared to stocks as well as gold and silver has largely been due to structural selling pressure and technical weakness. However, this dynamic is changing. Long-term holders' and large investors' sales have clearly slowed toward the end of the year, and new demand has begun absorbing supply. The market structure now looks clearly healthier.

ETF Flows Return Strongly

This is also visible in the ETF market. The week brought a clear return to positive flows. Bitcoin ETFs collected approximately $1.42 billion in net inflows and Ethereum ETFs about $479 million. This indicates the return of institutional demand at the same time as selling pressure eases.

Macro Supports Risk-Taking

The macroeconomic picture remains broadly constructive. In the United States, core inflation rose at its slowest annual pace since spring 2021 in December, and retail sales surprised positively. The economy continues to grow strongly while price pressures moderate. This so-called Goldilocks environment supports risk assets in 2026 as well.

The start of earnings season confirmed this picture. Taiwan Semiconductor Manufacturing reported record results, strengthening confidence in AI-related technology companies. Since the crypto market is still partially correlated with growth technology, this is also reflected in digital asset classes. Late-year headwinds are beginning to turn more favorable.

Macro Risk Emerges from Japan

The most significant source of macro volatility is currently found in Japan. News of Prime Minister Sanae Takaichi's plans for early elections increased expectations of new fiscal stimulus. This led to sharp weakness in both Japanese government bonds and the yen, forcing the Finance Minister to verbal interventions in currency markets.

Japan's situation is structurally challenging. The country must choose between bond market and currency stability, and both cannot be defended simultaneously. Historically, in such situations, the currency acts as a release valve. This supports assets like gold and silver, but also Bitcoin, which has been seen benefiting from yen weakness. At the same time, the situation increases pressure on the central bank to expand its balance sheet further, which means more global liquidity.

Geopolitics Brings Short-Term Uncertainty

President Trump's tariff talk has again made headlines. New threats target both countries dealing with Iran and European NATO allies. Historically, however, these statements have been more negotiating tactics than permanent measures.

In the short term, geopolitical uncertainty increases volatility and requires investor caution. At the same time, it's noteworthy that Bitcoin didn't react significantly to the latest tariff headlines, even though it was the only open risk market. In extreme scenarios where institutional structures waver, Bitcoin's role as a borderless, non-sovereign asset may become even more prominent.

London's New ETP Combines Bitcoin and Gold

Significant things are happening beneath the surface of the crypto market. In London, a new exchange-traded product began trading that combines Bitcoin and gold in the same physically-backed package. The product rebalances risk monthly and aims to offer smoother returns by combining two alternative stores of value.

BitGo Targets Stock Market Listing

Meanwhile, crypto custody specialist BitGo is targeting a stock market listing at nearly $2 billion valuation. In a market environment where investors favor regulated and infrastructure-focused players, BitGo is seen as a more defensive and higher-quality way to gain exposure to the crypto sector.

Crypto Card Usage Has Exploded

On the payments side, development has been exceptionally strong. Crypto card usage has grown from about $100 million per month to over $1.5 billion. Visa currently dominates blockchain-based card volume and stablecoins have established themselves as the backbone infrastructure of global payments.

Particularly interesting is that in certain countries, such as India and Argentina, USDC usage is approaching USDT levels.

CME Expands Crypto Derivatives Offerings

On the institutional side, development is progressing steadily but purposefully. CME is expanding its crypto derivatives offerings by bringing Cardano, Chainlink, and Stellar futures to market. Both micro and larger contracts will be available, improving capital efficiency and enabling risk management for a broader investor base.

Germany's Second-Largest Bank Received MiCAR License

In Europe, Germany's second-largest banking group received a MiCAR license and is bringing a retail-oriented crypto trading service to market. This is a significant step in European banking sector crypto integration.

State Street Launched Digital Asset Platform

Global custody and securities services firms are also progressing. State Street launched a digital asset platform that supports tokenized products and blockchain-based cash management. This isn't speculative DeFi development but modernization of financial market core infrastructure.