Encryption Morning Post: Powell Says Fed Not Allowed to Hold BTC, Kelp DAO Unveils Token Economics

Author: Deep Tide TechFlow

Market Dynamics Yesterday

Framework Ventures released its 2025 predictions, stating that gaming and artificial intelligence will become the biggest verticals.

On December 19th, the co-founder of Framework Ventures released a forecast for 2025, including:

The inflow of Ethereum and Bitcoin ETFs has reached parity with the launch of the merged ETF, averaging $1 billion per day in the second half of the year.

Continued season of altcoins

According to MAUs/DAUs, gaming x artificial intelligence has become the largest vertical field.

Energy DePIN, led by Glow and Daylight, is on par with blue-chip DeFi in fees

Meme coins have evolved into different categories (transient, AI-driven, factory-produced, high market value), causing more diversification.

Total DeFi fees will reach $10 billion annually

Large banks are beginning to tokenize, paving the way to eliminate a lot of waste in the US financial system.

The listing of other cryptocurrency ETFs except BTC/ETH has been postponed to 2026

MicroStrategy may turn to fixed income securities in the future to raise funds to purchase Bitcoin

According to Bloomberg, MicroStrategy co-founder and chairman Michael Saylor said that once the current fundraising plan is exhausted, the company will focus more on fixed-income securities to raise funds to buy cryptocurrencies.

When asked about the future sources of funding for purchasing cryptocurrencies, Saylor stated that so far, MicroStrategy has been using a combination of new stock issuance and the sale of convertible bonds to provide funds for purchases. As the company's stock price has rebounded towards the price of convertible bonds, holders of convertible bonds have also gained returns.

Kelp DAO announced the KERNEL token economics, with a total supply of 20% allocated for airdrops.

The Ethereum liquidity re-staking platform Kelp DAO announces the KERNEL token economics. Among them, 55% will be allocated to community rewards and airdrops (20% for airdrops, 35% for future community rewards), 5% will be allocated to the ecosystem and partners, 20% will be used for private sales, and 20% will be allocated to the team and advisors.

In addition, 20% of the tokens will be distributed in three airdrop seasons. The snapshot date for the first airdrop season (10% of the total supply) is December 31, 2024; the second airdrop season (5% of the total supply) will run from January 1, 2025 to April 30, 2025, with an additional 15% loyalty reward for re-staking before January 15, 2025; the remaining 5% of the airdrop plan is to be determined.

The Federal Reserve cuts interest rates by 25 basis points, and Powell says the Federal Reserve is not allowed to hold Bitcoin.

On December 19th, the Federal Reserve announced its latest interest rate decision and, as expected, reduced rates by 25 basis points, with the federal funds rate target range lowered to 4.25%-4.5%. The Fed announced a rate decision (upper limit) of 4.50%, with an expected value of 4.50% and a previous value of 4.75%. According to the Fed's statement, recent data shows steady growth in economic activity, some easing in the labor market, an increase in the unemployment rate but still at low levels, and inflation close to the target but slightly higher. The committee will continue to reduce its balance sheet, and the decision was supported by a majority of members with Beth Hammock dissenting, advocating maintaining rates at 4.5%-4.75%.

Powell stated at the press conference that we are not allowed to hold Bitcoin and we do not wish to change the law.

US stocks close: Nasdaq plunges 3.5%, Dow hits longest single-day decline in 50 years

On December 19, the U.S. stock market closed on Wednesday, and the Dow initially closed down 2.58%, setting the longest single-day losing streak since 1974 (falling for the 10th consecutive trading day); The S&P 500 closed down 2.95% and the Nasdaq closed down 3.6%. Tesla (TSLA. O) fell 8.28%, and Nvidia (NVDA. O) fell 1.14%. The fear index VIX rose as much as 78.0% during the day and temporarily traded at 28.32 after the U.S. stock market closed.

The Trump family's encrypted project WLFI announced a strategic partnership with Ethena Labs to integrate sUSDe into its protocol.

The DeFi platform World Liberty Financial (WLFI), supported by the Trump family, announced a long-term strategic partnership with Ethena Labs. As the first project of the collaboration, WLFI plans to integrate Ethena's yield-bearing token sUSDe into its protocol, and the related proposal will be submitted for governance voting this week.

WLFI co-founder Zak Folkman said that the cooperation with Ethena Labs will help the platform further achieve its goal of inclusive finance. It is reported that WLFI has purchased $600,000 worth of ENA tokens, demonstrating its long-term confidence in the Ethena network. Both parties plan to use sUSDe as WLFI's first collateral asset in the Aave protocol. Even if governance voting does not pass, the two companies will continue to explore other opportunities for cooperation.

Bitwise: Tokenizing RWA will be the main driving force for Ethereum's recovery in 2025.

Bitwise's senior investment strategist, Juan Leon, released the latest weekly report, pointing out that Ethereum will experience a strong rebound in 2025, with the biggest driving force coming from the tokenization of real-world assets (RWA). Data shows that Ethereum currently dominates 81% of the tokenized asset market.

The report emphasizes that the global physical asset market is approximately $100 trillion. With institutions such as BlackRock and UBS actively deploying, the assets of tokenized funds are expected to double by 2025. Currently, Ethereum's annual total transaction fee revenue is $2.4 billion, and future expenses related to physical assets may exceed $100 billion. Although Ethereum's performance this year has increased by 66%, lower than Bitcoin's 130% and Solana's 106%, in the past 10 days, spot ETFs have attracted a net inflow of $2 billion.

Sonic Labs announced the official launch of the mainnet.

Layer1 blockchain project Sonic Labs (formerly Fantom) announced the official launch of the mainnet. The network supports EVM compatibility, can achieve a processing capacity of 10,000 transactions per second and sub-second confirmations, and provides a native decentralized gateway to Ethereum. FTM holders can now upgrade their tokens to Sonic network tokens S at a 1:1 ratio through the upgrade portal. The upgrade channel will open for bi-directional exchange within 90 days after the mainnet launch, and then only support FTM to S one-way upgrade.

Grayscale update DeFi fund holdings data: UNI accounts for 55.84%, AAVE accounts for 24.54%

According to the latest data disclosed by Grayscale, as of December 17th, the specific allocation of the 5 tokens managed by its DeFi Fund (DEFG) is:

DEX leader Uniswap (UNI) holds 55.84% of the market share;

Lending agreement Aave (AAVE) accounts for 24.54% of the holding ratio;

Lido DAO (LDO) holds a position ratio of 8.43% in the liquidity staking protocol;

Decentralized stablecoin protocol Maker (MKR) accounts for 7.17% of the total holdings;

Synthetix (SNX) holds 4.02% of the shares.

As one of the first pure DeFi investment securities, the fund avoids the challenges of users directly purchasing, storing, and safeguarding encrypted assets through securitization. The value of fund shares is calculated based on the digital asset reference exchange rate and weight of DFX index component assets, minus fund expenses and liabilities. Investors can trade on the over-the-counter market through traditional brokerage accounts.

Market Dynamics

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