News Roundup — Tether's Market Cap Sheds $3 Billion as Europe’s MiCA Regulations Take Effect

Major news stories this week;

1. Tether's Market Cap Sheds $3 Billion as Europe’s MiCA Regulations Take Effect
2. Can MiCA Spark a Euro Stablecoin Renaissance?
3. Ethereum ETFs Recorded Inflows of $2.1 Billion in December
4. Trudeau's Departure in Canada Opens Possibilities for Crypto
5. Mining Company MARA Lent Out 7,377 BTC to Third Parties in 2024

Story Summaries;

1. Tether's (USDT) market cap dropped by $3 billion, or 1.4%, following the implementation of the EU's MiCA regulations on Dec. 30. This marks its sharpest decline since the FTX crash in November 2022. The drop coincided with European exchanges delisting USDT due to MiCA's strict licensing and transparency requirements. Experts cite regulatory pressure and market uncertainty, amplified by social media FUD, as key factors behind the drop. MiCA's stricter rules could limit USDT’s future in Europe and challenge its dominance in the stablecoin market.
2. MiCA’s regulatory clarity could revive euro stablecoins, which currently make up less than 0.5% of global stablecoin supply. By offering a clear framework, MiCA is attracting institutional interest and driving growth in euro-denominated stablecoins like Circle’s EURC. Key adoption drivers include regulated crypto markets and corporate demand. However, challenges like the EU's Travel Rule and the need for ongoing regulatory adaptation remain.
3. Ethereum (ETH) spot ETFs saw record inflows of $2.1 billion in December, an 83% increase from November. Since launching in July 2024, ETH ETFs have raised $2.6 billion, with net assets totaling $12.1 billion. BlackRock's ETHA fund led with $1.4 billion in inflows, while Fidelity's FETH fund added $752 million. In contrast, Grayscale’s ETHE experienced $274 million in outflows. The surge is attributed to factors like Bitcoin's highs, a favorable regulatory environment, and growing interest in ETH. Despite some outflows, ETH ETFs have seen steady inflows since November.
4. Canadian Prime Minister Justin Trudeau announced his resignation, potentially opening the door for a more crypto-friendly government. While crypto policies are largely shaped by provincial regulators, upcoming elections could shift federal sentiment. Conservative leader Pierre Poilievre, once vocal about digital assets, leads in polls, while former central banker Mark Carney, a potential contender, holds cautious views on crypto.
5. In 2024, Marathon Digital (MARA) lent 7,377 BTC to third parties to generate income and offset mining costs. The company also surpassed 50 exahashes per second in computing power, acquiring 22,065 BTC at an average price of $87,205, bringing its total holdings to 44,893 BTC. MARA raised $1.9 billion through convertible notes to further expand its Bitcoin reserves, earning praise from figures like Michael Saylor for its strategy.
   
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And that’s all for last week’s news! Wishing you a great week ahead!