Happy Monday, all, and welcome back to this week’s market newsletter. Please see below this week’s market data.

Bitcoin Market Update and News

• Bitcoin falls alongside the broader market: Bitcoin tumbled last week, falling from roughly $99,000 to $94,500 by the end of Friday. Bitcoin slipped at market open this week, as well, and at the time of publication, bitcoin is trading at ~$91,800. 
• Blackrock’s bitcoin ETF was the most successful ETF launch of all time: According to Bloomberg data shared by James Seyffart, Blackrock’s IBIT ETF had the most successful ETF launch of all time on both a nominal and inflation-adjusted basis. Fidelity’s, Ark’s, and Bitwise’s bitcoin ETFs were also in the top 20 of all-time ETF launches; collectively as of January 10, these four bitcoin ETFs accrued $80.234 billion one year out from their launch on January 11, 2024.

Interesting Reads and Videos

• Spot Bitcoin ETF Biggest Winners and Losers One Year On
• The criminal question in the coming wave of pro-crypto legislation
• Next wave of US crypto ETFs already in the pipeline

 Bitcoin Mining Market News and Trends

• MARA to hold vote to increase share cap by 300 million: MARA is calling a vote to increase its total shares from 500 million to 800 million, a 60% increase. The company also issued 13 million Series X Preferred Stock to MARA’s lead independent director. These shares carry 1,000 votes each, and they will be used to proportionally match votes in favor of or against the proposal from holders of common stock. According to The Miner Mag, MARA raised $1.1 billion in the first nine months of 2024 through stock offerings, diluting its outstanding shares by 49%.
• Creditors sue Compute North executives over a year after bankruptcy close: A handful of former creditors of defunct bitcoin mining hosting company Compute North felt like they didn’t get a fair shake during the company’s Chapter 11 bankruptcy, so they are suing its former executives more than a year after the bankruptcy's close. The creditors are suing Compute North’s CEO and co-founder David Perrill and other former c-suite employees for breach of fiduciary duty, unjust enrichment, and other claims. Once one of the largest bitcoin mining hosting companies in North America, Compute North filed for Chapter 11 in September 2022, and the bankruptcy was closed in September 2023. 

Market Overview

• Equities fall for the second week in a row: Equities fell across the board last week, making for two weeks in a row in the red; the Dow fell 1.31% to 41,938.45, the S&P 500 fell 1.09% to 5,827.04, the Nasdaq fell 1.21% to 19,161.63, and the Russell 2000 fell 2.31% to 2,189.23. 
• Dividends rose substantially in 2024: Companies in the S&P 500 dished out significantly more dividends last year than in 2023, according to data from S&P Dow Jones Indices. S&P 500 companies issued $53.3 billion in dividends last year, a 46% increase from $36.5 billion in 2023, and S&P Dow Jones Indices expects dividend payouts to increase another 8% this year. 
• Oil, natural gas surge:
  • Oil went on a tear last week, with Brent Crude rising for the third week in a row. Brent Crude closed on Friday up 6.68% week-over-week to $79.68/barrel. 
  • Henry Hub likewise increased significantly after falling for two consecutive weeks. The popular natural gas index gained a staggering 19.1% week-over-week and closed at $3.99/MMBtu last Friday.
• Treasury yields continue to rise: U.S. Treasury yields surged on Friday last week, continuing an upward trend for both short term and long term note yields that runs counter to the Federal Reserve’s rate reduction in December. The 10-year ended the week at 4.76%, an increase of 15 bps week-over-week and 36 bps month-over-month; the 5-year at 4.58%, an increase of 17 bps WoW and 33 bps MoM; and the 2-year at 4.38%, an increase of 12 bps WoW and 14 bps MoM.

• DXY inches closer to 2022 high: The U.S. Dollar Index rallied last week in tandem with U.S. Treasury yields, spiking on Friday to 109.65 and closing the week up 0.6%. At the time of writing, the DXY is up to 110.02, the highest it’s been since October 2022 when it topped out at 113.31.
• Jobs came in stronger than expected in December: The labor market ended 2024 on a high note. There were 256,000 jobs added in December, nearly 100,000 more than expected. The month also saw a 0.3% increase to wages and a drop in unemployment from 4.2% to 4.1%, and the labor force participation rate remained unchanged at 62.5%.

• Market now expects only one rate cut in 2025: If you’re scratching your head asking why markets performed so poorly last week despite a positive jobs report, this might help solve the conundrum: the market now expects the Fed to cut rates only once this year. Following the Fed’s forward guidance after December’s rate reduction, many were anticipating two cuts in 2025, but now expectations are converging on a single cut to ~4.25% in the middle of the year. 

The week ahead in data:

• U.S. Treasury Federal budget release (Monday)
• U.S. Bureau of Labor Statistics December PPI (Tuesday)
• National Association of Home Builders Housing Market Index (Wednesday)
• U.S. Census Bureau business inventories (Wednesday)
• U.S. Bureau of Labor Statistics December CPI (Wednesday)
• U.S. Federal Reserve Consumer Credit report (Wednesday) 
• U.S. Census Bureau December retail sales (Thursday)
• U.S. Bureau of Labor Statistics December export and import prices (Thursday)
• U.S. Department of Labor weekly unemployment report (Thursday)
• U.S. Census Bureau housing starts (Friday)
• Federal Reserve industrial production and capacity utilization (Friday)

Notable corporate earnings this week:

• KB Home (Monday)
• Applied Digital (Tuesday)
• JPMorgan Chase (Wednesday)
• Wells Fargo (Wednesday)
• Goldman Sachs (Wednesday)
• Citigroup (Wednesday)
• Bank of New York Mellon (Wednesday)
• TSMC (Thursday)
• UnitedHealth Group (Thursday)
• Bank of America (Thursday)
• Morgan Stanley (Thursday)
• PNC Financial Services Group (Thursday)
• U.S. Bancorp (Thursday)
• Truist Financial (Friday)
• Schlumberger (Friday)
• State Street (Friday)
• Huntington Bancshares (Friday)
• Regions Financial (Friday)
• Citizen Financial Group (Friday)

Thank you for reading, and please feel free to reach out with any questions.

Christian Lopez