January Market Commentary
Volatility is not a strange bedfellow for crypto markets. We saw a run up in BTC from 70,000-110,000 leading into the Trump administration. After taking office, during the 'Crypto Ball' inauguration party, Trump launched his own meme coin which went parabolic in a speculative fervor. Solana also reached all time highs because the coin launched on the Solana blockchain meaning you needed to hold $SOL to purchase $TRUMP. On the back of all of this hype, we have seen memecoins get decimated. $TRUMP itself is off its highs over 50%. Solana is trading under $200.
Sharp pullbacks are the nature of volatile, risk assets especially cryptocurrency. During previous bull markets we have seen similar dips, mostly leverage washouts. This time is not different.
Five Notable things that happened in Crypto this past month -
1. $TRUMP memecoin mania
President Donald Trump has launched his own meme cryptocurrency, $TRUMP, alongside a coin from First Lady Melania Trump, both of which experienced extreme volatility, sparking questions about their potential impact on his political and financial future and raising concerns over conflicts of interest as he embraces the crypto sector despite past criticisms.
What to know about Trump cryptocurrency meme coins
The meme coins yo-yoed in value as Trump took office. Here is what you should know about the coins and cryptocurrency's future under the Trump administration.
2. Deepseek - OpenSource as the Blueprint
DeepSeek, an open-source AI developed by a Chinese company, is disrupting the industry with its cost-effective, energy-efficient model that rivals major players like ChatGPT, offering a more inclusive and transparent approach to AI development, though it also raises concerns around data privacy, censorship, and potential misuse.
What is open-source AI and how could DeepSeek change the industry?
Fans of open-source AI hail its democratizing effect. Others argue it will be abused. One thing they agree on: DeepSeek has upset the AI hierarchy.
3. Banks can fully serve crypto customers."
On January 29, 2025, Federal Reserve Chair Jerome Powell addressed cryptocurrency during a press conference, emphasizing that banks can serve crypto customers if they manage risks properly. Powell stated that the Fed’s role is to oversee banks engaged with crypto, ensuring safety within the banking system, especially given the sector's novelty. He advocated for a balanced approach, supporting innovation while maintaining regulatory oversight. Powell also expressed support for increased regulation around crypto, highlighting ongoing discussions with Congress to enhance regulatory frameworks.
Fed Chair: Banks Are Perfectly Able to Serve Crypto Customers - Featured Bitcoin News
The Federal Reserve sees a future for crypto in banking, with Chair Jerome Powell saying banks can serve crypto customers-if they manage risks responsibly.
4. Abstract Chain Launches
Abstract Chain, an Ethereum Layer-2 blockchain developed by Igloo Inc., the team behind Pudgy Penguins, launched its main net on January 27, 2025. The blockchain is designed to be consumer-focused and integrate the digital and real worlds. At launch, Abstract's ecosystem will feature over 100 NFT collections, games, tools, and apps, including popular projects like Onchain Heroes, Playember, and Magic Eden.
Abstract Chain To Hold Mainnet Launch on January 27
Abstract, the Ethereum Layer-2 blockchain created by the team behind Pudgy Penguins, will hold its mainnet launch on January 27.
5. Solana - New All-Time Highs
Solana (SOL) reached an all-time high (ATH) of $277.99 on January 18, driven by heightened activity surrounding the launch of the $TRUMP memecoin. This surge in network activity pushed SOL's price and opened interest to new records. As of the latest data, SOL's open interest sits at an all-time high of $8.57 billion, indicating strong market participation and confidence. The positive funding rate for Solana futures suggests bullish sentiment.
Solana Hits $277 All-Time High as Open Interest Soars to $8 Billion
Solana (SOL) reached an all-time high (ATH) of $277.99 on January 18, driven by a surge in activity surrounding the newly launched TRUMP memecoin. The buzz around the meme coin ahead of Donald Trump'
+Additional article written for our Cosimo Codex
Layer 1 tokens are more than just assets—they're the currencies of decentralized economies.
Read on to understand their true value. 👇
Back to Basics: Understanding Layer 1 Tokens as Currencies
Introduction In the ever-evolving world of cryptocurrencies, narratives often shift, leading to confusion about the true nature and purpose of blockchain tokens. Amid the noise, it's crucial to return to the fundamentals, particularly when it comes to layer 1 tokens-the native cryptocurrencies of blockchain platforms like Ethereum, Bitcoin, and Solana.
++ Find more things to read this month on our Substack
Things We're Reading - January 2025
Monthly compilation of crypto news, analysis, and think pieces
To access more of Cosimo's insights or recommendations,
please contact info@cosimo.fund
Cosimo Capital
Cosimo is a digital asset management company based in Chicago
Disclaimer: This newsletter is intended solely for informational purposes. It does not constitute investment advice or an offer to sell securities. The insights and projections are based on current data and are subject to change. Past performance is not indicative of future results. Please keep contact us with any questions.
