Registered stablecoins, AI traders, and the Trump bump ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ Q4 REPORT Crypto Danish Ajmeri — Head of Crypto December 16, 2024 Q4 IN NUMBERS (Oct. 1 - Dec. 13) BTC: +59% ETH: +49% SOL: +47% Total crypto market cap: $3.66T USD (+75%) Three big things that happened in crypto Hi there, I ended the last one of these updates by saying the biggest factor governing the crypto market this fall would be the U.S. presidential election. With those results in, President-elect Donald Trump’s victory seems to have already kickstarted a crypto bull market (more on that below). BTC hit US$103,000 earlier this month — its highest price ever. SOL reached its own ATH (all-time high), and ETH went deep into NTS (not-too-shabby) territory. A majority of other coins and tokens were also caught up in the momentum. Here are three important things to know: The incoming U.S. administration has already dramatically changed the crypto landscape While there’s a little more than a month until Trump’s second administration is in place, his crypto-friendly appointees and pro-crypto prospective policies (including a potential bitcoin reserve, which I’ll explain in a bit) have already had an enormous impact. A wave of market euphoria — and profit — has swept up crypto investors of all varieties, from retail to corporate to institutional. In terms of appointees, Paul Atkins, a former SEC commissioner and vocal crypto supporter, was named as the new SEC chair. He’ll replace Gary Gensler, who was widely considered to be hostile to crypto. Trump also tapped former PayPal executive David Sacks to be the first ever “AI and crypto czar” — a grandiosely titled role that the president-elect says will “guide policy for the administration in artificial intelligence and crypto currency, two areas critical to the future of American competitiveness.” Other signs of the crypto momentum include Federal Reserve Chairman Jerome Powell comparing bitcoin to gold, software-company-turned-bitcoin-fund MicroStrategy buying another US$2.1 billion in BTC (bringing their total holdings to US$41B), and both BTC and ETH ETFs seeing billions of dollars in new investment. The future of stablecoins in Canada got a little murkier For the past year, the Canadian Securities Administrators (CSA) has been demanding that stablecoins register with it or get banned from being traded on regulated platforms. Earlier this month, Circle, the issuer of USDC (the second-biggest stablecoin by market cap), became the first to agree to be regulated. It was a controversial move. Some have argued that stablecoins are more like payment instruments than securities. One big question that’s come up is whether or not, under the purview of the CSA, every USDC transaction would need to be treated like a securities transaction and handled by a licensed securities trader or brokerage. That would be a huge change for the industry. Also, Fintechs Canada, the Canada Web3 Council, and the law firm McCarthy Tétrault have all noted that there already is a federal act, the RPAA, that is designed to deal with electronic payments. AI came to crypto It was inevitable, but two of the biggest technological drivers of the 21st century have come together: artificial intelligence and crypto. In October, AI16Z, a centralized autonomous organization controlled by AI — and whose name is a riff on famous venture capital firm Andreessen Horowitz — launched as a sort of robo advisor: you deposit funds and the AI (called “Marc AIndreessen”) invests in crypto on your behalf. It hasn’t actually performed any real-world trades yet and has only about $10 million USD in assets under management, but there’s a lot of interest so far. In less than two months, AI16Z’s market cap went from $0 to $445 million USD. What’s next? Just like any investment asset, crypto prices follow cycles of boom and bust. The last couple of years have been choppy for investors, with revelations of fraud by FTX and Celsius, the 2022 crypto winter, and 2024’s bear market keeping crypto prices flat or down. That’s changed quite dramatically, but it’s still early days. And there are plenty of potential headwinds to keep in mind. Unemployment is rising, inflation could return, and the Trump effect is still based only on expectations. We’ll have to wait for all of those things to play out to see how long this bull can keep bucking. CRYPTO 201 Bitcoin reserve The term has been in the news a lot recently, so it’s worth unpacking. At the Bitcoin 2024 conference in July, Trump announced that he would create a strategic bitcoin reserve by holding on to all of the bitcoin the U.S. government has seized, which is currently worth about US$18 billion. Senator Cynthia Lummis took it one step further, proposing that the government buy another 1 million BTC over the next five years, which would bring the nation’s total holdings to US$108 billion. That would make the U.S. one of the biggest countries actively buying bitcoin today, which may inspire others to follow suit. In theory, a bitcoin reserve would give America an additional safety net — an equivalent to a gold reserve, which many countries use to back up the national currency in case of a crisis. But not everyone thinks it’s a great idea. The biggest argument against it is that bitcoin is known for instability, which is the opposite of what you want in an emergency fund. If nothing else, it’s a sign that the asset class is maturing, and that’s definitely a positive for investors. All the best, Danish Ajmeri Head of Crypto What did you think? Choosing one of the following ratings will shape the content you see from us in the future. You'll also get the chance to share more detailed feedback after clicking. Interested Not interested We’re giving away 1 BTC! Just to one of you, though. (Sorry! It's a lot of money.) Enter by December 20. There are four easy ways to do it. T&Cs apply. Enter now Even more coins to trade Wealthsimple now lets you trade and transfer Fetch AI (FET), Blur (BLUR), and Worldcoin (WLD), bringing our total count to more than 70 tradeable coins and tokens. Make a trade Wealthsimple, 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Refer a Friend Privacy Policy Unsubscribe Replies to this email address are not monitored. Have questions? Visit our Help Centre or submit a request to our Client Support team. All information and commentary provided is for illustration purposes only and is not investment advice or recommendations. All investments involve risk. To get more info on our products, investment decisions, fee schedules, user testimonials, promos, and more, visit wsim.co/disclaimers. Indicated performance data are historical for the period indicated. Past performance may not be repeated. Crypto Giveaway: No purchase required. Contest begins on November 22, 2024 at 12:01am Eastern Time (ET) and ends on December 20, 2024 at 11:59pm ET (“Contest Period”). One (1) prize available to be won in Canada, consisting of one (1) Bitcoin. To enter for one (1) entry into the contest, during the Contest Period, either (i) open a new Wealthsimple Crypto account and fund at least CAD$1 into the account, (ii) fund at least CAD$1 into the Wealthsimple Crypto account if entrant had an account but never funded their account in the past, (iii) retweet the Contest Post on our X (formerly Twitter) account (@wealthsimple), including the hashtags #wealthsimplecrypto and #contest, or (iv) tag at least one friend in the “Comment” section of the Contest Post on Wealthsimple’s Instagram account (@wealthsimple) and reshare the Contest Post, including the hashtags #wealthsimplecrypto and #contest in the reshared post. For three (3) entries into the contest, refer a friend to open a new Wealthsimple Crypto (“Crypto”) account and fund at least CAD$1 into the account during the Contest Period. Limit of one (1) entry per account funding method and each social media method per entrant during the Contest Period. There is no limit of entries for the referral method so long as each referral is a different individual that satisfies the account opening and funding conditions. The entrant must meet the Crypto account opening requirements to enter via the funding method. Odds of winning depend on the total number of eligible entries received during the Contest Period. Skill-testing question required. Open only to legal residents of Canada who are the age of majority in the province or territory of residence at the time of entry. The Contest is not a recommendation to trade any security or cryptocurrency. Full rules and entry details available at https://wsim.co/1btcgiveaway. Crypto is offered by Wealthsimple Investments Inc. (WSII), a member of the Canadian Investment Regulatory Organization (CIRO). Crypto assets purchased and held in an account with Wealthsimple Crypto are not protected by the Canadian Investor Protection Fund, the Canadian Deposit Insurance Corporation or any other investor protection insurance scheme. You can learn more about the risks of crypto assets in our Crypto Product Risk Disclosure. You can find more information about WSII in our Relationship Disclosure. Any coins showcased are for illustration purposes only and are not recommendations or investment advice. © 2024 Wealthsimple Technologies Inc.