Spot Bitcoin exchange-traded funds experienced a sharp drop in inflows on Jan. 7 as Bitcoin fell 5%, driven by rising expectations of a more hawkish approach from the Federal Reserve.

Bitcoin, the world’s largest cryptocurrency, surged past $102,000 yesterday, sparking renewed optimism among investors anticipating a market rally ahead of President-elect Donald Trump’s upcoming inauguration.

However, the gains were short-lived as Bitcoin dropped by 5.7% within 24 hours, weighed down by rising U.S. bond yields and investor caution ahead of key economic updates, including the Federal Reserve’s meeting minutes and nonfarm payroll data.

The increase in bond yields has fueled expectations of a more hawkish stance from the Federal Reserve. Officials have already signaled plans for only two interest rate cuts in 2025, fewer than previously anticipated. Investors are now awaiting the Fed’s meeting minutes, set to be released on Wednesday, Jan. 8, for more clarity on policymakers’ deliberations.

Further pressure on Bitcoin came from a U.S. Labor Department report revealing job vacancies had climbed to a six-month high, driven by growing demand in the services sector.

It precedes the crucial nonfarm payroll report scheduled for Friday. A stronger-than-expected jobs report could solidify expectations of prolonged Fed tightening, as a resilient labor market may continue to fuel inflationary pressures.

Bitcoin ETF inflows plunge by 94%

The falling Bitcoin price resulted in inflows of just $52.9 million across the 12 Bitcoin ETFs on Jan. 7, as expectations of a hawkish stance from the Federal Reserve dampened risk-on sentiment among investors. Notably, this figure represents a 94% drop compared to the $987 million inflows recorded the previous day.

According to data from SoSoValue, BlackRock’s IBIT was the only BTC ETF to record an inflow on Tuesday. The asset manager’s spot Bitcoin ETF drew in $596.11 million of inflows managing to offset the collective outflows seen from the other BTC ETFs.

ARK and 21Shares’s ARKB logged the highest outflows of the day with $212.55 million exiting the fund. Grayscale’s two Bitcoin ETFs tickered GBTC and BTC also contributed to the negative momentum with $125.45 million and $113.85 million outflows respectively.

Fidelity’s FBTC reported an outflow of $86.29 million while Franklin Templeton’s EZBC saw a more modest outflow of $5.58 million. The remaining BTC ETF saw “0” flows on the day.

Meanwhile, the daily trading volume for these investment products stood at $4.62 billion on Jan. 7 a jump from the $3.96 billion witnessed a day before.

AT press time Bitcoin (BTC) was exchanging hands at $96,145 per coin.

From mobile wallets to transaction fees, a16z crypto breaks down the top indicators shaping the crypto landscape in 2025.

The year 2024 was transformative for the crypto space as activity reached all-time highs, transaction fees dropped, stablecoins found practical use cases, and spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds finally received approval. Meanwhile, regulatory clarity began to emerge, offering the sector a more defined path forward. As 2025 begins, here are five metrics a16z’s partner Daren Matsuoka believes worth monitoring.

Mobile crypto wallets

Crypto wallets on mobile are where the action is. In 2024, over 35 million people were using them monthly, Matsuoka notes, bringing up such big names as Coinbase Wallet, MetaMask, and Trust Wallet, who are leading the charge. At the same time, newer apps like Solana-focused Phantom and World App are gaining steam too.

Mobile crypto applications have grown so popular that they now serve as an informal indicator of retail investor interest, with observers identifying a correlation between their high rankings in Apple’s App Store and rising crypto prices.

While millions own crypto, many remain passive holders. For broader adoption, Matsuoka says blockchain developers need to find the “right balance between security, privacy, and usability,” admitting that the task is “not trivial.” Nonetheless, the a16z partner believes blockchain infrastructure can now handle “hundreds of millions — or billions — of people on-chain,” adding it’s a “better time than ever to build a next-generation mobile wallet” than ever before.

According to data from Statista, the countries with the highest mobile wallet adoption are in Asia, despite the presence of major U.S. brands like PayPal, Apple Pay, and Google Pay. This trend is not accidental given that in emerging markets, mobile wallets are being used as a tool to address the issue of unbanked populations. As a result, the next major innovation in mobile crypto wallets may well emerge from this region.

Stablecoins everywhere

Stablecoins had a big moment in 2024. Lower transaction fees made them even more useful for stuff like cross-border payments, remittances, and even just buying everyday stuff. They’re also helping people in countries with crazy inflation store value (e.g. Argentina and Turkey).

“Stablecoins are already the cheapest way to send a dollar, and we expect enterprises will increasingly accept stablecoins for payments.”

Daren Matsuoka

Yet, there’s still no dominant solution that brings stablecoin payments closer to traditional methods, leaving a significant gap in the market.

Matsuoka notes that stablecoin payments are quickly gaining traction and show no signs of slowing down as payment giant Visa has developed a dashboard to distinguish genuine stablecoin usage from bot-driven transactions.

“If stablecoin adoption — one of crypto’s most clear use cases — takes off in 2025, this metric will be one to watch,” says Matsuoka.

ETPs bring Bitcoin and Ethereum to masses

Last year, Bitcoin and Ethereum got their first proper exchange-traded funds approved in the U.S. This makes it way easier for regular people — and big institutions — to invest in crypto.

However, so far these ETFs have attracted only 515,000 BTC (around $110 billion) and 611,000 ETH (~$13 billion), Matsuoka notes, adding that “activating the distributors – the likes of Goldman Sachs, JP Morgan, and Merrill Lynch, who can get these products into retail investors’ portfolios – is going to take time.”

The a16z partner suggests tracking on-chain deposits and withdrawals of addresses “identified as custodians of the ETPs,” noting that more institutional investors are likely to seek exposure to crypto assets, which will lead to increased net flows for the ETPs.

DEXs vs CEXs

Decentralized exchanges are slowly eating into centralized exchanges’ market share. While their trading volume is still far from centralized rivals, they already handle about 11% of spot trading, Matsuoka pointed out, adding that the number’s climbing.

“Recently, DEX volume hit an all-time high — driven by a major uptick in transaction volume on high-throughput chains like Coinbase’s Base and Solana as new users entered the space.”

Daren Matsuoka

Although Matsuoka says DEXs are likely to keep gaining their share in 2025, it’s unclear whether retail investors will rush to switch from centralized platforms. So far, the pace has been slow, as it took decentralized trading platforms four years to capture more than 10% of spot trading volume compared to their centralized counterparts, per data from DefiLlama.

Transaction fees

In a bid to identify which blockchain network is gaining in popularity, transaction fees could show how much demand there is. But here’s the catch: while fees should show growth, they shouldn’t go so high they scare users away.

Last year, Solana passed Ethereum in total fees collected for the first time, even though Solana’s transactions are extremely cheap (less than 1 cent vs. $5+ on Ethereum). Matsuoka admits that that’s a big milestone, adding that many ecosystems and their associated fee markets are maturing, making it a “good time to start measuring the economic value facilitated by various blockchains.”

In the long run, demand for blockspace – measured as the total aggregate USD value of fees paid – could be the most important metric for tracking the crypto industry’s progress, as it reflects engagement in valuable economic activities and users’ willingness to pay for them, Matsuoka wrote.

A crypto trader with a keen eye for artificial intelligence (AI) projects has reportedly amassed profits of more than $17 million from several AI-focused tokens, and on-chain data now points to a pivot toward fresh memecoins. According to an analysis shared by Lookonchain on X, the trader’s largest gains stem from early positions taken in GOAT, ai16z, Fartcoin, and ARC.

Crypto Trader Turns AI Coins Into $17 Million

Lookonchain reports via X, “What a smart AI coin trader! Profits exceeded $5.14M on GOAT. Profits exceeded $4.5M on ai16z. Profits exceeded $4M on Fartcoin. Profits exceeded $4M on arc. Let’s take a look at which tokens he is buying.”

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The trader’s most significant win reportedly came from GOAT. He entered the token at a time when its overall market cap was below $2 million dollars, spending around $62,000 to purchase approximately 11.1 million GOAT tokens. After riding GOAT’s rapid ascent, he sold all GOAT with a total of about $5.2 million, netting an estimated $5.14 million.

His performance with ai16z – a decentralized AI-powered trading fund on the Solana blockchain – is similarly impressive, as he spent one $123,000 to acquire 6.17 million tokens at a market cap of $22 million. Lookonchain’s data indicates that he sold 4.67 million ai16z tokens at around $1.78 each and still retains 2.65 million tokens currently valued near $2.9 million. According to Lookonchain, this amounts to a total ai16z profit of more than $4.5 million.

The analysis also highlights significant gains from Fartcoin, which the trader bought at a market cap of under $7 million, paying $121,000 for around 9.46 million tokens. He sold 6.81 million of those tokens for $610,000 while keeping 2.65 million tokens that are collectively valued at $3.55 million, bringing his net profit on Fartcoin to roughly $4 million.

A similar pattern emerged in his ARC position, where he invested $212,000 to acquire 11.6 million ARC tokens when the project’s market cap was approximately $15 million. After selling 1.6 million tokens for $212,000, he currently holds 10 million arc tokens worth about $4 million, resulting in another $4 million profit.

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Lookonchain’s post also details the trader’s recent moves into several smaller-cap memecoins, including CREATE, PIPPIN, SANDY, MOLE, and FORGE. A screenshot provided by Lookonchain shows that he financed part of these purchases by selling Fartcoin in two batches of 25,000 units for $31,446.35 and $29,681.37, respectively.

Additional funding appears to have come from selling Wrapped SOL (WSOL) in multiple transactions, including 100 units for $21,611, 50 units for $10,805.50, and 153 units for $33,069.42.

The distribution of these WSOL sales suggests a methodical approach to securing liquidity before deploying funds into CREATE, PIPPIN, SANDY, MOLE, and FORGE. In total, he allocated $202,255 to acquire stakes in the memecoins. He spent $61,127 on CREATE, $21,611 on PIPPIN, $21,611 on SANDY, $65,486 on MOLE, and $32,420 on FORGE.

At press time, GOAT traded at $0.52.

Featured image from iStock, chart from TradingView.com