Choppy Waters – February 2025

Choppy Waters

As we settle into this new year, it’s the perfect time to reflect on the lessons learned and the opportunities ahead—especially in the world of crypto. It’s often said that in investing, “Corrections are unpredictable. By selling to avoid pain, you might miss the next big gain.” – Peter Lynch.

This is an essential reminder, particularly for crypto investors. While markets can be turbulent and the volatility can be extreme, it’s important to remember that long-term wealth creation, whether in traditional markets or crypto, rarely follows a straight line.

We’ve seen how easy it is to be swept up in the excitement during bull runs and to fearfully retreat when the inevitable corrections occur. However, the key to success lies in managing the emotions tied to these market fluctuations.

Crypto is unique. While its cycles may seem chaotic, those who have the emotional resilience to differentiate between short-term market corrections and the larger, structural growth in the ecosystem will come out ahead.

As the crypto space matures and technology continues to evolve, those who can focus on the structural factors—such as the adoption of blockchain technology, the rise of decentralized finance (DeFi), and global regulatory shifts—will likely be positioned for success. It’s about maintaining a long-term vision while navigating the volatility with a steady hand.

Here’s to another year of navigating the ups and downs together—staying informed, disciplined, and focused on the bigger picture.

Market Highlights

With the recent transfer of power in the United States, it was anticipated that many policy decisions would be influential to the market of digital assets. Of those, the development of the Crypto Task Force invokes optimism around the growing scale of digital assets in public eye. The Task Force is set to develop regulations by which participants will engage, which in turn will negate much of the apprehension that many institutions still observe crypto with. With this framework, the participation in the market of digital assets is expected to increase dramatically, which will further the legitimacy of it as a mainstay in the economic world.

The proposition of tariffs from the United States on Mexico and Canada caused a dip in the market for crypto. Two of the flagbearers, Bitcoin and Ethereum, experienced noticeable drops in price, however, upon the freeze on trade policy for both nations, the two assets increased 10% to return to values around their new normal. This will be an area of focus over the coming weeks as discussions surrounding trade policy are had between nations. With the positive changes in crypto policy and sentiment that are associated with the current administration, we expect the growth in the market to continue in the long run, regardless of the outcome regarding trade policy between neighboring countries.