2025 Year in Recap

Happy Holidays to all those who celebrate!

This Week (and Year) in Crypto

Bitcoin’s been stuck in this same range for basically the entire month, currently sitting around $86-$88K depending on when you check. 

• And the vibe this week is thin. Holiday liquidity is thin, and ETFs saw nearly $500M in outflows last week as traders de-risked ahead of the holidays.

• Today, however, there was a record-breaking $23.8B in BTC options expiring. 

Ethereum, meanwhile, is doing its best impression of a treadmill - lots of movement, no progress.

• ETH is currently hovering around $3K, and ETH saw $95.5M in ETF outflows just on Tuesday. 

2025 wasn’t quite the year Bitcoin holders were hoping for, but there have still been many exciting developments.

• After touching all-time highs above $109K in January, BTC spent most of the year grinding lower.

• But the most significant development wasn’t captured in daily price charts. It was happening in the ownership structure itself.

  • ETFs, corporate treasuries, and institutional money absorbed more Bitcoin than miners produced in 2025. 

  • Bitcoin’s annual issuance dropped below 1% - less than gold’s inflation rate - meaning each future halving will carry diminishing impact.

  • And multiple analysts agree that the famous four-year halving cycle is effectively dead. While that may sound bearish, what we think that means is it actually signals Bitcoin’s maturation from a speculative retail asset into institutional-grade infrastructure.

  • BlackRock’s Bitcoin ETF became one of the firm’s most successful launches ever, pulling in tens of billions of dollars.

• The Trump administration’s crypto-friendly stance created a more favorable regulatory environment than many had anticipated.

  • Similarly, corporate adaptation has continued. More companies are adding Bitcoin to their balance sheets, and the infrastructure supporting institutional custody, trading, and compliance matured significantly.

This Week (and Year) in TradFi

Traditional markets ended the holiday-shortened week riding a “Santa rally” (cute, right?) to fresh record highs, though the moves came in characteristically thin trading volumes. 

• The S&P 500 closed Christmas Eve at a record 6,932.05, up 0.32%, while the Dow hit a new closing high of 48,731.16, up 0.6%. 

• Markets were closed yesterday and reopened today for a single session with little change. 

For 2025 YTD, the S&P 500 is up over 17%, the Nasdaq has jumped 22%, and the Dow has gained roughly 13%. 

• These solid gains come despite a turbulent year marked by Trump’s sweeping tariff announcements in April, an unprecedented 43-day government shutdown, and increasing uncertainty about the Fed’s next moves. 

• The AI trade remained a dominant force through year-end. While the "Magnificent Seven” saw bifurcation in 2025 - with Alphabet and Nvidia leading gains while Amazon and Apple underperformed - the broader AI infrastructure buildout story drove big gains. 

• The four largest tech companies are projecting collective capital expenditures of $380B on data center infrastructure this year, with expectations for continued growth ahead.

• Another interesting trend has been precious metals growth. Gold futures rose above $4,550 to hover near record highs (up nearly 70% in 2025), while silver jumped over $75/oz, extending YTD gains to 150%. 

  • The precious metals rally has been driven by geopolitical tensions, continued dollar weakness, and robust industrial demand concerns.

The setup for 2026 remains mixed.

• The markets are entering their final days of 2025 with solid gains but increasing questions.

• The Fed’s deep divisions suggest monetary policy will remain contentious, particularly if inflation stays elevated while the labor market softens further. 

• Economic fundamentals are also mixed - GDP growth is solid but slowing, the labor market shows resilience but with signs of cooling, and inflation has “moved up since earlier in the year and remains somewhat elevated” - per the Fed’s December statement. 

This Week (and Year) in Tech

Despite the holiday-shortened week, we still saw some significant tech news:

• Nvidia made an approximately $20B licensing agreement with AI chip startup Groq, structured as a technology license rather than outright acquisition. As part of the deal, Nvidia will hire Groq founder Jonathan Ross, president Sunny Madra, and other employees.

• Google parent Alphabet agreed to acquire Intersect Power for $4.75B, a company that develops renewable-powered data center projects and generation capacity. 

2025 will be remembered as the year AI stopped being a product and became a permanent layer of the global economy. 

• What started as speculation around large language models turned into one of the largest infrastructure buildouts since the internet itself. 

• This year’s defining tech event came from Hangzhou China, when a relatively unknown Chinese startup founded by a hedge fund released its R1 reasoning model, claiming to achieve ChatGPT-like performance while spending only $5.6M on training. 

  • The AI race was no longer just about who could build the best models, but who could build them the most efficiently. DeepSeek became what Morgan Stanley called "a watershed moment" and Bank of America dubbed "AI's Sputnik moment."

• Despite the efficiency scare, hyperscalers doubled down. Microsoft, Meta, Google, and Amazon collectively committed to spending $380B on AI infrastructure in 2025, with expectations for increases in 2026.

• AI deals scaled at a rate that would have seemed absurd just 2 years ago. 

  • The big headline was OpenAI, SoftBank, and Oracle’s Stargate initiative - a $500B commitment to U.S.-based AI infrastructure. 

  • And the mega-deals kept coming - Anthropic committed $50B to AI infrastructure buildout, Amazon pledged another $50B for AWS compute, and OpenAI signed a $38B multi-year partnership with AWS to diversify beyond Microsoft. 

It’s been quite a year! We appreciate you spending it with us - we’ll see you in the next one.

Arch is building a next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto.

Disclaimer: None of the above is financial advice, seriously.