Bull in a China Shop: The Year Ahead
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As we step into 2025, the financial markets are bracing for another year of unpredictability, hinging on whether the incoming administration can deliver on its ambitious promises.
Donald Trump’s return to the White House has already signaled a pro-business agenda poised to reshape both traditional finance and emerging technologies. From crypto-friendly policies to AI deregulation, this administration’s approach represents a clear shift from its predecessor’s stance.
At the center of this potential transformation are two pivotal figures: Trump himself and his newly appointed "AI & Crypto Czar," David Sacks.
Trump’s pledge to establish a U.S. Bitcoin Strategic Reserve—intended to stabilize market liquidity and position the U.S. as a global crypto leader—has buoyed investor optimism. Sacks, known for his advocacy of clearer crypto regulations and a light-touch approach to AI oversight, complements this vision.
Bitcoin’s projected rise to $180,000-$250,000 by late 2025 and the anticipated expansion of stablecoin use cases underscore the broader financial implications of these policies.
Yet, as in Trump’s previous tenure, much remains uncertain until actions replace rhetoric. Can these proposals withstand political and economic headwinds?
Market Implications: Navigating Volatility
The interplay between U.S.-China relations and domestic policies is likely to create a volatile trading environment in 2025. Trump’s pro-growth measures, such as deregulation in the crypto and AI sectors, could boost investor sentiment. Escalating trade tensions may weigh heavily on global supply chains, particularly in technology sectors reliant on semiconductors.
The specter of a renewed trade war looms large as the U.S. and China clash over tariffs, technology exports, and intellectual property rights—threatening to deepen economic fragmentation.
In crypto markets, progress on stablecoin legislation or new ETFs holding assets like Solana or XRP could serve as key catalysts for growth. However, these opportunities are tempered by geopolitical risks, particularly as China leverages its digital yuan to strengthen trade alliances and challenge the dollar’s hegemony.
This dynamic creates urgency for U.S. initiatives like the Bitcoin Strategic Reserve to maintain competitiveness.
A News-Heavy Year
The year 2025 promises to be as eventful as 2024, when U.S. spot Bitcoin ETFs gained approval—a watershed moment for cryptocurrency adoption on Wall Street. This year’s focus shifts to legislative progress on initiatives such as the FIT21 bill and stablecoin regulation, alongside potential leadership changes at the SEC under Trump’s nominee, Paul Atkins. These developments carry immense stakes: they could either cement crypto’s position in mainstream finance or reignite uncertainty in regulatory frameworks.
Trump’s ambitious proposals have already energized parts of the market. The creation of a Presidential Advisory Council on Digital Assets and plans for a Bitcoin Strategic Reserve underscore his administration’s commitment to integrating digital assets into America’s financial strategy. Meanwhile, David Sacks faces the dual challenge of dismantling aggressive oversight from agencies like the SEC while fostering innovation in blockchain and AI. Sacks’ track record as a tech entrepreneur and investor lends credibility to his push for crypto clarity and AI deregulation—key components of a broader strategy to position the U.S. as a global leader in technological advancement.
Despite these bold plans, uncertainty looms large. The initial euphoria following Trump’s election has given way to cautious optimism as investors await concrete actions. Will Congress rally behind key crypto adoption measures? Can regulatory clarity attract institutional capital without exacerbating market volatility? And how will these domestic policies intersect with escalating geopolitical tensions?
U.S. and China: Divergent Paths
The crypto landscape highlights contrasting approaches between the U.S. and China:
The U.S., with its proposed Bitcoin Strategic Reserve and potential leadership changes at the SEC under Paul Atkins, is pushing for greater integration of digital assets into national financial strategy.
China continues expanding its digital yuan initiative while maintaining strict bans on private cryptocurrencies. This effort aims to challenge the dollar's dominance in global trade while advancing state-controlled alternatives.
The past year was marked by economic turbulence, technological rivalry, and geopolitical tensions:
U.S. GDP Growth: Expanded by an estimated 2.7%-2.9%, driven by robust consumer spending despite high interest rates.
China’s GDP Growth: Grew by approximately 5%, meeting its target through government stimulus despite weak consumer demand.
Inflation Trends: Global inflationary pressures eased overall, but China faced deflationary risks with CPI growth of just 0.3%.
Trade Tensions: Worsened significantly as Trump pledged tariffs of up to 60% on Chinese imports; China responded with threats of currency devaluation.
Tech Rivalry: The race for quantum computing supremacy intensified with Google’s "Willow" chip advancing beyond classical supercomputers while China made strides with its Zuchongzhi 3.0 processor.
As we enter 2025, financial markets stand at an inflection point where bullish ambitions collide with fragile geopolitical realities. Trade wars threaten global supply chains while deepening economic fragmentation; meanwhile, competition in quantum computing, AI, and blockchain innovation intensifies between global powers.
Cryptocurrency markets remain at a crossroads as Trump’s pro-crypto agenda faces logistical hurdles while China advances its state-controlled alternatives. As demonstrated by last year’s approval of spot Bitcoin ETFs and shifting regulatory attitudes, staying informed is not just advisable—it is essential for navigating what promises to be one of the most eventful years yet for global finance and geopolitics.
This Week By the Numbers 📈
🌐 Global Economy & Politics
💰 Cryptocurrency & Blockchain
Bitwise and Strive propose Bitcoin Treasury ETFs, eyeing institutional demand
Steno Research: 2025 poised to be crypto's most successful year yet
Polymarket gives SOL ETF 79% approval odds, boosting Solana confidence
📜 Rules & Regulations
IRS mandates DeFi platforms enforce KYC and report trades by 2027
Tether’s market cap drops $3B as Europe’s MiCA rules take effect
🏢 Corporate & Finance
Top Stories 🗞️
Mike Johnson clinches Speakership in stunning first ballot
Speaker Mike Johnson (R-La.) was reelected to the top post in the House in a stunning floor vote on the opening day of Congress on Friday, securing the gavel on the first ballot.
The vote is also a victory for President-elect Trump, who had endorsed Johnson and was instrumental in rallying Republicans around the Speaker. Several members had warned that a delay in electing the Speaker could have complicated certification on Jan. 6.
Johnson will now be tasked with balancing requests from Trump with the priorities of his members — which could, at times, clash.
More than 30 Republicans voted against a short-term spending bill in December that included a last-minute debt ceiling increase. Trump had requested that Republicans raise the debt limit before he takes office in order to prevent Democrats from using it as a leverage point next year. But GOP fiscal hawks balked at raising the nation’s borrowing limit without slashing federal spending, and the bill did not pass.
US sanctions China's Integrity Technology over alleged hacking sweep
The U.S. on Friday sanctioned China's Integrity Technology Group, accusing it of being behind a prolific hacking group known as "Flax Typhoon." In a statement, the State Department said that Integrity Tech was a large Chinese government contractor with ties to the Ministry of State Security and that its hackers were working at the direction of Beijing to target critical infrastructure in the U.S. and overseas.
Western officials have previously accused The Beijing-based company of being behind Flax Typhoon. In September, FBI Director Christopher Wray accused the company of having "collected intelligence and performed reconnaissance for Chinese government security agencies."
In an advisory published at the same time, U.S., British, Canadian, Australian and New Zealand cyber officials accused Integrity of having compromised more than 250,000 devices around the world.
Biden blocks Nippon Steel’s $14.1 Billion takeover of US Steel
President Joe Biden has blocked the $14.1 billion sale of United States Steel Corp. to Nippon Steel Corp., killing a high-profile deal that sparked a political firestorm and tensions between the US and Japan.
Biden announced his formal decision on Friday after the case was referred to him by a US security review panel, ahead of a deadline early next week.
“We need major US companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said in a written statement, adding that the deal “would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.” Shares of US Steel dropped 5.8% to $30.71 at 1:04 p.m. in New York.
US Steel and Nippon Steel said in a joint statement they plan to challenge the order, saying “we are left with no choice but to take all appropriate action to protect our legal rights.”
The promises to challenge Biden’s decision mean that the future of the deal could remain in dispute for months. President-elect Donald Trump, who is set to take office later in January, has also pledged to block the transaction.
Net neutrality rules about corporate control over internet speeds blocked by federal appeals court
A federal appeals court on Thursday ruled that US regulators overstepped their authority by reinstating "net neutrality" rules governing internet service providers, dealing a blow to the Biden administration.
In a published opinion, the appellate court in the state of Ohio said an order last year by the Federal Communications Commission "resurrected the FCC's heavy-handed regulatory regime."
Net neutrality advocates argue that internet service is a vital utility in modern life and that companies providing it should be regulated to stop abuses such as giving speed advantages to those who pay more.
Internet service giants have fought against being regulated, arguing they should be left to run their businesses as they see fit. The court sided with internet service providers, saying the FCC lacks statutory authority "to impose its desired net-neutrality policies."
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Tatiana Koffman & Katherine MacLellan
About the Author: Tatiana Koffman
Hi there and thanks for reading! If you stumble upon my newsletter, you will notice that I write about money, economics, and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital, and Cryptocurrencies. I write to make financial topics more accessible and create equal opportunity for the next generation of investors. Currently working as a proud General Partner at Moonwalker Capital.
(More about me 👉 here).
About the Author: Katherine MacLellan
Katherine holds an MA (Hons) in Economics and International Relations from the University of St. Andrews, and a JD from Osgoode Hall. She has been thinking and writing about Bitcoin and blockchain technology since 2012.