This is a segment from the Forward Guidance newsletter. To read full editions, subscribe . Happy New Year from the Forward Guidance team! We launched this newsletter in 2024 and are excited to continue delivering our readers macro and crypto insights in 2025. As we head into Q1, let’s take a look at where markets could be headed next. After getting snubbed of a Santa rally at the end of December, Wall Street may be due for a bump in January. The so-called “January effect” is not a sure thing, but it has happened. The S&P 500 in January 2023 had a 5.8% return for the month. The index gained 2.12% during the first month of 2024. The tech-heavy Nasdaq Composite index has also been in the green for the last two Januaries, returning 1.95% in 2024 and 9.68% in 2023. But 2025 brings a new — well, old — administration to the White House, a Republican-majority Congress and a slower rate-cutting pace from the Fed. It’s a situation ripe for volatility, both in equities and crypto markets. In January 2017 (when Trump was inaugurated the first time), the S&P 500 had a 1.21% monthly return and the Nasdaq Composite gained 3.49%. Republican wins are generally followed by a boost in stocks (remember what we saw last November?), so keep that in mind. Coming up: The next US employment report coming out on Jan. 10, which should give us more clarity on where central bankers may send interest rates. As of yesterday, the odds of the FOMC holding interest rates steady later this month sat at 89%, according to CME Group data . On the crypto front, uncertainty is just as high. The euphoria from November has eased , and it seems like investors are in a holding pattern waiting to see if Trump comes through on his big industry promises . Leadership changes at the SEC, plus three new commissioners, could be a major catalyst. Any movement in Congress on a revised FIT21 bill (or a newly introduced bitcoin strategic reserve bill ) would likely have a similar effect. But — as I’m telling my friends and family who’ve asked me countless times over the holidays — no one really knows what’s going to happen, with bitcoin or otherwise. Buckle up, because I’m certain we’re in for an eventful 2025. Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter . Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter . Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more. The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
