The Next Catalysts for Bitcoin
What you'll read in this issue:
TOP STORY
Bitcoin Adoption is Surging
Bitcoin has gradually boosted its lead against Ethereum, as well as other altcoins.
Background: Bitcoin's adoption is surging, helped by market participants’ growing interest in holding the world's top digital currency, be it as a store of value, strategic investment or dollar hedge. It accounts for around 54% of the global cryptocurrency market, up from 38% in late 2022.
Potential Tailwinds: The Fed's interest rate cuts could provide a long-term boost for the coin as lower funding costs typically support more “risk-on” assets, according to Jim Iuorio, Managing Director of TJM Institutional Services. America's growing debt problem is also seen lifting bitcoin's growing status as a dollar hedge. "Expectations of a [crypto friendly] regime shift, not just in the U.S. but globally, given America's influence on global financial markets" could prop up bitcoin, said Michael Lie, Global Head of Digital Assets at Flow Traders. "This shift could lead to increased institutional capital flows and allocations into bitcoin, and potentially other cryptocurrencies."
Why It Matters: As investors assess what's next for bitcoin, CME Group Bitcoin Friday futures (BFF) are providing clients with more granular exposure to the price of bitcoin. Since their launch in September, the weekly derivative expiring every Friday has seen more than 500,000 contracts traded.
FEATURED TOPIC
Behind Gold’s Enduring Appeal
Gold is poised to maintain its importance in the financial world.
Background: "In the dynamic world of finance, gold stands as one of the oldest and most reliable assets," said Jin Hennig, Global Head of Metals at CME Group in a video highlighting how gold became one of the world’s favorite assets. "For the past 50 years, Gold futures have been at the forefront of price discovery, serving as the global benchmark for gold pricing. Gold's quality and universal appeal have made it a mainstay in investment portfolios worldwide."
Expert Perspectives: Various factors contribute to the precious metal's continued popularity:
"Gold has a special place in the world... People in the 60s, 70s and 80s would use [it] as a substitute for anything – inflation, deflation – it was the way to hedge anything that you had; it was a stable commodity, it was a store of value, [and] you could convert it to dollars anytime you wanted to very easily.” - Dennis Suskind, a member of the CME Group Board of Directors
"We are in a period of shorter and more volatile macro changes... Gold is really good at acting as a defense when the timing of macro cycles is uncertain. That's why it's a critical asset across portfolios, including ours." - Elise Backman, a commodity investor at Wellington Management
Rising Retail Participation: Retail traders are increasingly shifting into gold, lured by the asset's versatility, high liquidity and the accessibility of smaller futures contracts, such as Micro Gold futures (MGC). The recent launch of 1-Ounce Gold futures (representing just 1/10 the size of a MGC futures contract) aims to make the market even more accessible for gold traders.
➜ Read more on gold’s continued importance and why retail traders are shifting into the asset.
INSIGHTS
Energy Market Trends to Watch in 2025
Amid the uncertainty around upcoming policy changes, continued geopolitical conflicts and slowing growth in major economies, the energy markets are susceptible to significant price movements in both directions.
Natural Gas: The market started this winter season with warmer-than-normal temperatures, but forecasts for colder weather reversed the upward price trend while pushing up forecasts for natural gas consumption from the residential and commercial sectors. Meanwhile, feedgas demand from U.S. LNG export terminals is set to remain strong. Tighter balances and rising natural gas prices may encourage producers to roll back gas curtailments that were put in place in early 2024.
Oil: With oil prices near multi-year lows and expectations for surplus oil supply, 2025 could be a challenging year for the Organization of Petroleum Exporting Countries (OPEC). OPEC+, which includes allies like Russia, has been trying to return 2.5 million barrels of curtailed oil production to the market since June 2024, a decision it delayed for a third time in December.
Biofuels: The non-traditional feedstocks such as waste oils look set to become a bigger feature of the market as governments make adjustments in an attempt to achieve net zero carbon emissions by 2050. The trading of the waste feedstocks – such as waste oils and animal fats – are expected to grow as a proportion of the overall biofuel supply.
Oil Crops: A Global Story of Food and Fuel
Oil crops serve both dietary and industrial needs, shaping and reflecting global economies.
Background: Oil crops have been historically used for human and animal consumption, with seed oils foundational to diets across the globe. What olive oil is to Italian cuisine, sunflower oil is to the Russian kitchen and palm oil to the Ghanaian. In recent decades, however, seed oils have taken on a new life as the primary input to biofuels, where they again display regional differences in prevalence:
Soybeans Are King: Each year for the last three (plus) decades, soybeans have comprised the plurality of global oilseed production. Soybean oil shares importance with another byproduct of the soybean crushing process: soybean meal. When a bushel of soybeans weighing 60 pounds is crushed, the conventional result is 11 pounds (18%) of soybean oil and 44 pounds of soybean meal, which is used as a high-protein animal feed, buoying pork and poultry production around the world.
Why It Matters: Whether as a staple in national diets or as a primary feedstock to biofuel production, plant-based oils remain integral to both local economies and the broader global agricultural framework. Moving forward, sustainable practices, technological advancement, and environmental and energy policy will be key in shaping the future landscape of oil crops.
The Importance of Mentorship
Mentorship plays a crucial role in guiding high school students through the college preparation process, which is where CME Group Foundation grantee iMentor Chicago comes in. Two CME Group employees currently volunteering with iMentor recently sat down to discuss their experience with mentorship.
Background: Corporate support of nonprofit organizations, through a combination of grants and formal volunteering, is critical to help these groups reach communities to not only produce positive outcomes, but to build lasting relationships between businesses, volunteers and the organization.
Quotable: “Mentorship offers a pathway for students from diverse backgrounds to form meaningful relationships with those working in the industry and, perhaps most importantly, those who may have similar backgrounds as them,” said Eva Giglio, Executive Director of CME Group Foundation, noting that during the last school year its partner organizations engaged over 1,500 mentors to support students in postsecondary success.
Stats: Since iMentor was established in 1999, it’s helped nearly 42,000 students nationally. Seventy-two percent of iMentor students enroll in college, versus 55% of their peers, and 47% of them finish their education, versus 27% of their peers.
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