Bitcoin (BTC) kicked off the week in the red, following a strong U.S. jobs report that prompted major investment banks to revise their Fed rate cut expectations. With traditional markets also under strain, the crypto market reacted to shifting monetary policy sentiment.

BTC Dips Below $93,000 

Bitcoin, the largest cryptocurrency by market value, slipped below $93,000 during European trading hours, marking a 1.6% decline on the day, according to CoinDesk data. The drop brings BTC closer to the critical $92,000 support level, a key zone that has provided stability since November.

The CoinDesk 20 Index, a broader measure of market performance, fell over 3%. Major altcoins like XRP, ADA, and DOGE recorded steeper losses, highlighting broader weakness across the digital asset space.

Jobs Data Alters Market Dynamics

Friday’s U.S. nonfarm payroll report revealed an unexpected addition of 256,000 jobs in December, significantly surpassing estimates of 160,000. The unemployment rate fell to 4.1% from 4.2%, while average hourly earnings rose modestly by 0.3% month-on-month and 3.9% year-on-year.

The robust labour market data caused Goldman Sachs to delay its anticipated Fed rate cuts, now forecasting reductions in June and December 2025 instead of March, June, and December as previously expected.

“Our economists believe the Fed’s focus has shifted back towards inflation risks,” Goldman’s economic note stated, adding that the jobs data underscores diminished urgency to cut rates.

Bank of America Warns of a Potential Hike

While Goldman and JPMorgan still foresee rate cuts in 2025, Bank of America (BofA) struck a more hawkish tone. The bank suggested the Fed could pause its rate-cutting cycle indefinitely, with risks skewed towards a potential hike.

BofA noted that the 10-year Treasury yield, which reflects interest rate and inflation expectations, has surged by 100 basis points since the Fed initiated its cutting cycle in September.

“We think the cutting cycle is over. The Fed is likely to hold steady, but risks are tilted towards a hike,” BofA analysts commented.

Broader Markets Under Strain

Traditional markets mirrored the crypto downturn, with S&P 500 futures down 0.3% after Friday’s 1.5% decline. Meanwhile, the U.S. dollar index (DXY) neared 110, supported by rising Treasury yields.

The upcoming December Consumer Price Index (CPI) report, due on Jan. 15, could further shape the Fed’s outlook. ING analysts suggested that consistent monthly core inflation increases of 0.3% could reinforce the Fed’s hawkish stance.

BTC’s meteoric rise since the Fed began its rate-cutting cycle in September—surging over 50% to a record high above $108,000—faces its toughest test yet. With market sentiment turning cautious and macroeconomic conditions evolving, Bitcoin traders are keeping a close eye on critical support levels and upcoming inflation data.

James Howells loses bid to recover Bitcoin fortune lost in landfill

James Howells, an IT engineer from Newport, Wales, has lost his 12-year legal battle to recover a hard drive containing 8,000 Bitcoin, currently valued at over $770 million. A judge dismissed the case, stating there was “no realistic prospect” of success at trial.

Howells Bitcoin address. Source: James Howells

The hard drive, which Howells accidentally discarded in 2013, ended up in a Newport landfill. Since then, he has repeatedly sought permission from Newport City Council to excavate the site, offering a share of the recovered Bitcoin as an incentive. However, the council has consistently denied access, citing environmental concerns and restrictions under its landfill permit.

Court Rules Against Hard Drive Recovery

In the latest development, Circuit Commercial Judge Keyser rejected Howells’ legal claim to search the landfill, according to a report by the BBC on 9 January. Judge Keyser concluded the case was unlikely to succeed, effectively ending Howells’ hopes of recovering the hard drive through the courts.

Howells expressed disappointment with the ruling, accusing the UK legal system of failing to provide him with a fair opportunity for justice. He argued that the value of the asset deserved greater consideration and claimed the court had not fully understood the significance of the case.

BTC/USD, 1-year chart.

Despite the legal setback, the ownership of the Bitcoin hard drive was not contested during the hearing. Howells said this acknowledgment could open alternative avenues, such as monetising the digital assets via tokenisation.

Council Denies Excavation Amid Environmental Concerns

The Newport City Council has consistently refused Howells’ requests to search the landfill, citing significant environmental risks. In October 2024, the council reiterated that excavation was “not possible” under its environmental permit, emphasising the potential “huge negative environmental impact” on the surrounding area.

Howells, however, has accused the council of breaching its own environmental regulations. He claimed to have “100 independently verified pieces of evidence” supporting allegations that the landfill was leeching harmful substances, including arsenic, asbestos, and methane gases, into the local environment.

Despite these allegations, the council has remained firm in its stance and has refused to meet Howells in person to discuss the matter further.

From Forgotten Hard Drive to $770 Million Loss

Howells, an early adopter of Bitcoin, mined 8,000 BTC in 2009 when the cryptocurrency was virtually worthless. He mistakenly threw away the hard drive containing the Bitcoin in 2013, at which point the cryptocurrency was valued at just $13 per coin.

BTC/USD, monthly chart. Source: TradingView

Since then, Bitcoin’s price has skyrocketed, reaching a record $100,000 in 2024. The dramatic rise has intensified interest in Howells’ case, as the value of the lost Bitcoin has increased over 700,000-fold since 2013.

While his legal options now appear exhausted, Howells remains determined to find a way to reclaim his lost Bitcoin fortune. His legal team continues to negotiate with the Newport City Council and the court over the final wording of the order.

For now, the saga of the $770 million Bitcoin hard drive remains an unresolved chapter in cryptocurrency history.

Stablecoin issuer Circle has made headlines by donating $1 million USDC to President-elect Donald Trump’s Inauguration Committee. Circle CEO Jeremy Allaire announced the contribution on 9 January, emphasising that the acceptance of the donation reflects the growing maturity of digital assets as a mainstream financial instrument.

USDC, a dollar-backed stablecoin with a market capitalisation of $44 billion, forms a key part of the $203 billion global stablecoin market. Overcollateralised stablecoins, such as USDC and Tether, have also emerged as major players in the US government debt market, collectively ranking as the 18th-largest buyers of US securities.

Source: Jeremy Allaire

The donation has sparked optimism within the cryptocurrency industry, with many expecting a second Trump administration to usher in pro-crypto legislation and regulatory reforms. Trump is set to assume office on 20 January.

Stablecoins: A Key Focus of US Crypto Policy

The rise of stablecoins has turned them into a cornerstone issue in US crypto policy discussions. In April 2024, US Senators Kirsten Gillibrand and Cynthia Lummis introduced the Lummis-Gillibrand Payment Stablecoin Act to the Senate. Senator Gillibrand called for the passage of stablecoin regulations, stating that such measures are essential for maintaining the US dollar’s global dominance.

Former Speaker of the House Paul Ryan also voiced support for stablecoins in an op-ed published in June. He argued that overcollateralised stablecoins, which collectively hold over $120 billion in short-term US government securities, could help reduce the national debt crisis while preserving the dollar’s status as the world’s reserve currency.

In October, Senator Bill Hagerty introduced the Clarity for Payment Stablecoins Act, which proposed a regulatory framework for stablecoin issuers. One notable provision within the bill suggested that smaller stablecoin issuers, with a market capitalisation of under $10 billion, should be regulated at the state level rather than federally.

Crypto VCs Eye Stablecoins for 2025

The stablecoin sector is poised for significant growth in the coming years, with venture capitalists turning their attention to this burgeoning asset class. Guy Young, founder of stablecoin-focused platform Ethena, has predicted that the market capitalisation of stablecoins will reach $300 billion by 2025.

Current stablecoin market overview. Source: RWA.XYZ

This growth is expected to be driven by major players like Circle and Tether, as well as the increasing adoption of stablecoins in emerging market economies. Deng Chao, CEO of institutional asset manager HashKey Capital, highlighted the use of stablecoins in providing banking solutions to the global unbanked population as a key driver of their appeal.

Chao noted that stablecoins are among the primary digital assets that venture capitalists are targeting for investments in 2025, underlining the sector’s potential for transformative impact on global financial systems.

As the cryptocurrency industry continues to expand and gain recognition, stablecoins remain at the forefront of innovation, bridging the gap between traditional finance and decentralised technologies.