🐂 BlackRock on Bitcoin & Gold: The Unstoppable Duo for 2025?

Good Morning!

The final piece of 2024's economic puzzle arrives today: the U.S. Core PCE inflation report. While central banks have made their last moves, this crucial metric could reshape 2025's market landscape. Currently, futures predict just two Fed rate cuts next year, while Bitcoin (+130%) and the U.S. dollar (+7%) emerge as this year's clear winners.

In today’s email:

• BlackRock: Loves Bitcoin and Gold for 2025 

• Bitcoin: Is back down around $96K!

• Polkadot: ETF soon? 

• Gold: Holding steady around $2600

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THE BIG IDEA

BlackRock forecasts gold and Bitcoin as essential portfolio diversifiers for 2025's fragmented global economy

Get ready for a spicier global cocktail in 2025. BlackRock, the world's largest money manager, just dropped their crystal ball predictions – and they're betting on gold and Bitcoin as your best friends in what's shaping up to be a wild year ahead.

Picture this: geopolitical blocks playing economic tug-of-war, China and the U.S. wrestling over tech supremacy (especially in AI), and a Trump comeback potentially stirring the pot. Meanwhile, countries are quietly sliding away from the dollar, turning to gold and other assets like that shy friend at a party who suddenly becomes popular.

What's particularly juicy is BlackRock's take on Bitcoin

They're not just throwing it in the same ring as gold – they're seeing it as a legitimate diversification play. Why? Its price drivers are as unique as a fingerprint, with Trump's crypto-friendly stance already sending it to the moon. Plus, its correlation with stocks is about as consistent as a teenager's mood swings.

Speaking of gold, it's having its moment in the sun too. Central banks are scooping it up like it's the last slice of pizza, especially as countries look for alternatives to stuffing their mattresses with dollars. And with China flexing its green tech muscles (think EVs and solar), we're watching a whole new kind of resource race unfold.

BlackRock's bottom line? The old-school stock-bond tango isn't cutting it anymore. Their investment chief for ETFs, Samara Cohen, suggests we need both the classic (gold) and the new kid on the block (Bitcoin) to weather what's coming. Just remember to keep your portfolio as nimble as a cat on a hot tin roof.

MARKETS AT A GLANCE

TOP NEWS

Fed's hawkish stance ripples through global monetary policy

The Fed just crashed everyone's rate-cut party, sending shockwaves through global markets. With Powell hinting at just two cuts in 2025 (down from four), emerging markets are feeling the squeeze as their currencies tumble against a muscular dollar. While Europe plays it cool, Asia's central banks are dancing a delicate balance between supporting growth and defending their currencies.

Pop Mart rides global collectibles wave to become China's hottest stock

China's Pop Mart is having a moment, turning blind box toys into global gold. Their shares have rocketed 370% this year, outpacing giants like Disney. With fans like Blackpink's Lisa dropping serious cash and overseas sales surging 500%, their mystery-box collectibles are sparking shopping frenzies from Paris to New York. Not bad for $9.50 toys that resell for multiples.

Europe braces for potential Russian gas disruption amid expiring Ukraine transit deal

Europe's gas traders are skipping New Year's champagne to monitor screens as the Russia-Ukraine gas transit deal expires December 31. With Russia providing 15% of Europe's gas imports and negotiations at a standstill, markets are jittery. While most banks expect flows to stop, some hope for a last-minute deal – especially after Trump takes office January 20.

CRYPTO

Crypto market tumbles further as Fed dampens rate-cut hopes

Bitcoin slipped below $96K while broader crypto markets took a nosedive, with the CoinDesk 20 Index plunging 10% after Powell's hawkish comments. Major altcoins got hammered even harder, with SOL nearly erasing its post-election gains. The selloff triggered $1.2B in liquidations, though some analysts view this as a "healthy pullback" after the recent record run.

Nexus testnet attracts 1.5M nodes for decentralized supercomputer development

Nexus' testnet, running from Dec. 9–13, garnered over 1.5 million nodes globally, showcasing demand for a decentralized supercomputer leveraging worldwide computing power. The system saw high engagement, with 37% of traffic from mobile devices and strong participation in Ethiopia and Poland. Nexus aims to refine the platform further, focusing on controlled program selection while exploring blockchain and AI applications.

Craig Wright sentenced to one year for contempt of court following Bitcoin IP case

Craig Wright, who claims to be Bitcoin's creator Satoshi Nakamoto, received a 12-month prison sentence (suspended for two years) for contempt of court after a £900 billion IP-related legal claim. Earlier this year, a U.K. court ruled Wright is not Nakamoto in a case brought by the Crypto Open Patent Alliance to block his copyright claims on the Bitcoin whitepaper. Wright intends to appeal.

21Shares prepares Polkadot ETF with Delaware trust registration

21Shares has registered the 21Shares Polkadot Trust in Delaware, signaling potential plans for a Polkadot (DOT) exchange-traded product (ETP). This aligns with a predicted wave of new crypto ETFs in 2025, spurred by optimism surrounding pro-crypto regulatory leadership in the U.S. DOT, currently ranked #17 by market cap, stands at $7.04 with a $10.77 billion valuation as of Dec. 19.

GOLD

2025 market volatility to make gold a key hedge

Axel Merk, President of Merk Investments, predicts a turbulent 2025 with heightened market volatility driven by economic uncertainty and policy shifts under President-elect Trump. Merk suggests gold will remain a strong hedge against fiscal instability and elevated government spending, noting sustained institutional and retail interest in the metal. His firm’s gold-backed ETF, OUNZ, has seen robust inflows, reflecting growing long-term confidence in gold as an investment.

DAILY ECONOMIC CALENDAR (ET)

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