The Blockchain Bulletin, Jan 31: Fed Holds Interest Rates at 4.25%-4.50%

MercyJanuary 31, 2025Last Updated: January 31, 2025

3 minutes read

The Blockchain Bulletin, Jan 31 Fed Holds Interest Rates at 4.25%-4.50%

Hey folks! Welcome to the latest edition of The Blockchain Bulletin. The cryptocurrency market continues to evolve at a breakneck pace, with Bitcoin soaring, regulatory discussions intensifying, and memecoins facing a downturn. The developments that took place in the crypto space over the last 24 hours paint a picture of both opportunity and uncertainty for investors.

The Federal Reserve has maintained interest rates at 4.25%-4.50%, a move that has driven strong market reactions and investor confidence. However, Fed Chair Jerome Powell cautioned about the broader financial implications, while President Donald Trump criticized the central bank’s leadership, intertwining politics with economic policy.

Tesla’s massive $600 million profit from Bitcoin holdings underscores growing corporate adoption of digital assets. Norway’s Central Bank has also made a major move, investing $500 million in MicroStrategy, gaining indirect Bitcoin exposure through its massive 471,100 BTC holdings. Meanwhile, Bitcoin spot ETFs saw a net inflow of $92.0895 million, while Ethereum spot ETFs faced a net outflow of $4.8176 million, signaling shifting investor sentiment.

The crypto ETF landscape continues to evolve as Grayscale launched its Bitcoin Miners ETF, and the Canary Litecoin ETF took key steps toward SEC approval. Similarly, Indiana proposed a bill allowing public funds to be invested in Bitcoin ETFs, signaling growing regulatory acceptance. Despite these advancements, ECB President Christine Lagarde reaffirmed that Bitcoin would not be included in the eurozone’s central bank reserves, citing liquidity, security, and regulatory concerns.

The broader market remains volatile. Memecoins faced a significant downturn, with the index plummeting by 75%, raising concerns among traders. In contrast, Shiba Inu managed to resist major volatility, while ShibaSwap introduced cross-chain support and UI upgrades for seamless multi-network trading. Market uncertainty was further fueled by massive whale transactions, with millions in crypto moved to exchanges in the last 24 hours, hinting at potential sell-offs or strategic repositioning.

Gemini CEO Tyler Winklevoss added to the regulatory tensions by declaring that the exchange would no longer hire MIT graduates unless the university removes former SEC Chair Gary Gensler from his teaching role. Meanwhile, Kraken announced plans to reopen its on-chain staking service to users in 39 U.S. states, supporting 17 assets, including ETH, SOL, DOT, and ADA. This follows Kraken’s 2023 settlement with the SEC, where it agreed to pay a $30 million fine and terminate its staking service.

On the policy front, El Salvador’s Congress quickly amended its Bitcoin laws in response to IMF requirements, reducing government involvement and making Bitcoin optional for private sector merchants. The European Central Bank also cut the deposit facility rate by 25 basis points to 2.75%, marking its fourth consecutive rate cut and reinforcing its goal to return to a 2% inflation target.

Elsewhere, the Sei Foundation launched a $65 million venture fund, Sapien Capital — Open Science Fund I, to support decentralized science (DeSci) startups on the Sei blockchain. Circle announced the official launch of USDC on the Move-based L1 blockchain Aptos, providing direct access to users and developers without cross-chain bridging. Coinbase is expected to support USDC on Aptos soon, further expanding stablecoin adoption.

In a dramatic turn, Ross Ulbricht, the founder of Silk Road, suffered a major financial setback due to a liquidity addition error in the Pump.fun token transaction on Solana. His donation address initially received 50% of the ROSS token supply but lost $10.5 million (35% of the supply) due to operational mistakes. Ulbricht now retains 10% of the supply, having correctly added liquidity to the Raydium centralized liquidity pool.