Crypto Rebounds After Inflation Cools More Than Expected, Blackrock Launches Canadian Spot Bitcoin ETF, and SEC Ramps Up Legal Actions

Takeaways

• Core CPI increases less than expected, sparking crypto markets: The closely watched inflation measure increased 3.2% year-over-year in December, less than the consensus 3.3% forecast. Crypto rallied Wednesday after the announcement, with bitcoin, ether, and a number of altcoins all pushing higher.
• XRP continues hot streak: The price of Ripple's XRP surged more than 45% over the past seven days an investors anticipate a new US regulatory regime, an XRP ETF approval later this year and continued momentum following the launch of Ripple's stablecoin.
• BlackRock has launched iShares Spot Bitcoin ETF in Canada via Cboe following the success of its US offering: This move only further solidifies BlackRock's dominance in the crypto ETF market.
• A US appeals court has mandated that the SEC provide explanation for its denial of Coinbase's request for crypto-specific regulations: SEC Chair Gary Gensler is expected to step down next week, but the regulator has continued to proceed with its legal cases against multiple crypto companies.
• SEC files appeal after court rules with Ripple: In a last-ditch effort before Gensler leaves office, the SEC asked a lower court to reverse a decision that ruled Ripple's sale of XRP was not a securities sale.

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CPI Cools in December Ahead of Second Trump Term, Sparking Crypto Markets

The core Consumer Price Index, a closely watched inflation measure, rose 0.2% from the previous month in December and 3.2% year-over-year, according to the US Bureau of Labor Statistics. The crypto markets received the latest inflation data as a positive sign, one that raises the chances of the Federal Reserve setting a more aggressive course for cutting interest rates in 2025. The news comes after last week’s blowout US jobs report put a damper on market sentiment headed into the weekend.

The price of bitcoin surged back above $100,000 on Wednesday following the latest news, a stark reversal after the price dipped below $90,000 earlier in the week. Ethereum also ticked up more than 5%, pushing close to $3,400.

Prior to Wednesday's announcement, crypto markets had remained muted in 2025 while awaiting president-elect Donald Trump to assume office and install a series of pro-crypto initiatives. A Reuters report this week indicated the overhaul could begin as soon as next week. The agenda will reportedly include the SEC clarifying whether they believe cryptocurrencies are a security and reviewing a slough of pending crypto enforcement cases. SEC chair Gary Gensler is expected to formally step down next week, with pro-crypto Paul Atkins succeeding him.

XRP Pushes Higher as Open Interest Increases

Ripple's XRP has continued its ascent in January, with the payments-specific cryptocurrency jumping some 46% over the past week to a price of around $3.29. With the recent surge, XRP has become the third most valuable cryptocurrency by market capitalization, at $176.75 billion.

A more friendly regulatory environment, the launch of Ripple's stablecoin, and the anticipated XRP ETF approval in 2025 have all contributed to driving the price higher. The cryptocurrency's perpetual futures interest market has jumped to $2.34 billion, an all-time high, with leveraged bets around 13%--down from 100% in December. That signals the coin's perps markets is no longer overheated and could be poised for more near-term price gains if traders continue to increase their bets.

The latest price movements come after Ripple has battled regulators for the past few years over a range of issues relating to whether their XRP coin qualified as a security. The anticipated regime change in the US could conceivably allow the company to become more engrained with its institutional client base. Ripple's network is designed to speed up cross-border payments and help the global banking system transfer funds more efficiently.

BlackRock Expands Bitcoin ETF Reach With Canadian Launch

Building on the success of its US launch, BlackRock has introduced iShares Spot Bitcoin ETF to the Canadian market. The newly listed ETF will trade on Cboe Canada under the symbol IBIT, mirroring its US counterpart. This ETF is available in two currency options: Canadian dollars (IBIT) and US dollars (IBIT.U). It can be purchased through a wide range of brokerage platforms, from discount brokers to full-service investment firms. Cboe Canada also facilitates approximately 15% of all trading activity in Canadian-listed securities.

The launch follows a record-breaking debut spot bitcoin ETFs in the US last January. Over the past year, BlackRock’s spot bitcoin ETF has led a wave of popular investment products. The success of spot bitcoin ETFs has been pivotal in bitcoin’s surge to a six-figure price over the last few months, alongside record-high valuations for other cryptos. BlackRock’s expansion into Canada signals further growth for the crypto ETF market as the industry anticipates a promising 2025.

Court Orders SEC to Clarify Coinbase Rulemaking Denial

A US Court of Appeals for the Third Circuit has ordered the SEC to explain its rejection of Coinbase's petition for crypto-specific regulations. This ruling criticizes the SEC’s response as “arbitrary” but falls short of urging the agency to create new rules.

Coinbase originally filed the petition in 2022, seeking clearer regulatory guidance for the crypto industry, but the SEC denied it, arguing that existing securities laws suffice. When the SEC sued Coinbase in 2023 for alleged securities violations, the exchange challenged the SEC’s lack of clear rules.

The court acknowledged the SEC’s right to allocate resources as it sees fit, but insisted on a well-reasoned explanation for its inaction. It also highlighted constitutional concerns, stating that the SEC's vague approach raises due process issues. While the SEC has revised rules like custody requirements for crypto assets, many exchanges have argued these measures are demonstrably unsuitable for digital assets. The SEC is now reviewing the court’s decision to determine its next steps.

SEC Seeks To Overturn Ruling in Ripple Case

The SEC has submitted an appeal to a July lower court ruling which said that Ripple had not violated securities laws through the sale of its XRP token.

Ripple CEO Brad Garlinghouse quickly shot down the move in a post on X.

"One definition of insanity... Doing the same thing over and over and expecting different results. Gensler's SEC really took this to heart."

The SEC has argued that Ripple's sale of XRP had met the criteria for an investment contract under The Howey Test in part because buyers anticipated making a profit. The lower court judge subsequently ruled that it only qualified as a securities sale when XRP sales went to institutional buyers. Ripple eventually had to pay a $125 million fine.

With new SEC chair Paul Atkins expected to take the reins next week, it's unclear how this case will proceed. Atkins has vowed to overhaul the agency's crypto policies, which have taken a regulation by enforcement approach under the Gensler regime.

Ripple chief legal officier Stuart Alderoty said the company would respond to the appeal.

"The SEC's lawsuit is just noise," he said. "A new era of pro-crypto regulation is coming, and Ripple is thriving."

-The Gemini Team