Introduction

This report summarizes the key highlights from last week’s research report by Gate Research: “MiCA to Take Effect, Gate Quant Fund Hits 38% Record Annual Return.” The Markets in Crypto-Assets (MiCA) Regulation is set to effect on December 30 across all 27 EU member states, marking the beginning of a new era of digital asset regulation in the EU. In addition, starting from December 30, cryptocurrency exchanges operating within the EU will be subject to Regulation (EU) 2023/1113 (the Travel Rule Guidelines), which mandates reporting information on the transfer of funds and crypto-assets. On January 2, 2025, the United States will release its Manufacturing Purchasing Managers’ Index (PMI) and the number of initial unemployment claims for the week ending December 28.

Summary

• December 30 – The EU Markets in Crypto-Assets (MiCA) regulation and Regulation (EU) 2023/1113 (Travel Rule Guidelines) come into effect.
• January 2 – The United States releases the latest Manufacturing Purchasing Managers’ Index (PMI) at 48.4.
• January 2 – The United States releases the initial unemployment claims for December 28, totaling 211K.

Key Focus Events

December 30 – The EU Markets in Crypto-Assets (MiCA) Regulation and Regulation (EU) 2023/1113 (Travel Rule Guidelines) Come into Effect
The EU Markets in Crypto-Assets (MiCA) regulation officially comes into force, covering all 27 member states and providing a unified regulatory framework for the crypto-asset market. The implementation of MiCA will have a profound impact on both the cryptocurrency market and the broader fintech industry.

MiCA provides clear regulatory requirements for crypto asset service providers (CASPs), including capital requirements, risk management, and transparency standards. This helps reduce market uncertainty and boosts consumer and investor confidence in the crypto asset market. MiCA mandates crypto asset service providers comply with AML/CFT regulations, including customer identity verification and suspicious transaction reporting. This helps prevent crypto assets from being used for illicit activities and enhances the industry’s overall compliance.

MiCA strengthens investor protection by setting disclosure requirements and restricting certain high-risk products. This may attract more institutional investors to the market, promoting the maturation and growth of the industry. MiCA could also drive market consolidation, as smaller or non-compliant players may be pushed out. This could reduce competition but, at the same time, increase market stability and efficiency. While MiCA provides room for innovation, it also brings compliance costs. For some startups and smaller businesses, these costs could pose a challenge. MiCA allows CASPs licensed in one country to offer services across the entire EU single market through “cross-border licensing,” which helps reduce the complexity and cost of cross-border operations.

Alongside MiCA, Regulation (EU) 2023/1113 (the Travel Rule Guidelines) also comes into effect, requiring cryptocurrency exchanges to report information about the transfer of funds and crypto assets. This helps increase transparency in transactions and prevent the flow of illicit funds. MiCA imposes strict regulatory requirements on stablecoin issuers, including transparency and compliance with reserve requirements. This could significantly impact the stablecoin market, particularly for issuers who fail to meet regulatory requirements. [1]

January 2 – The United States Releases Manufacturing Purchasing Managers’ Index (PMI)
The Manufacturing Purchasing Managers’ Index (PMI) for the United States, released on January 2, 2025, increased slightly from 46.5 last month to 48.4. Although manufacturing activity is still contracting, price levels continue to rise, and the overall economy is expected to improve gradually. The final value of the S&P Global Manufacturing PMI for December was 49.4, above the expected 48.3, and the previous value was 48.3. While this value remains below the neutral 50 threshold, indicating that the manufacturing sector is still in contraction, the improvement compared to the previous month shows a slight recovery in manufacturing activity.

President Trump’s tariff and tax policies have objectively contributed to upward inflationary pressure. These policies could affect manufacturing costs, thereby influencing the PMI. At the same time, federal finances are under pressure, with interest payments on the national debt beginning to push the federal deficit rate significantly. This could have an indirect impact on economic policies and the PMI. [2]

January 2 – The United States Releases Manufacturing Purchasing Managers’ Index (PMI)
The Manufacturing Purchasing Managers’ Index (PMI) for the United States, released on January 2, 2025, rose slightly from 46.5 in the previous month to 48.4. Although manufacturing activity has contracted, price levels continue to rise, and the overall economy is expected to improve gradually. The final value for the S&P Global Manufacturing PMI for December was 49.4, higher than the expected 48.3 and the previous month’s 48.3. While this value is still below the neutral 50 mark, indicating that the manufacturing sector is still in contraction, the improvement from the previous month suggests a slight rebound in manufacturing activity.

President Trump’s tariff and tax policies have objectively contributed to the upward pressure on inflation. These policies may affect manufacturing costs, thus influencing the PMI values. At the same time, federal finances are under pressure, with debt interest payments starting to significantly push the federal deficit rate, which could indirectly impact economic policies and the PMI.[3]

Conclusion

This report comprehensively analyzes key dynamics in the cryptocurrency market and macroeconomy. The enforcement of the EU Markets in Crypto-Assets (MiCA) regulation offers a unified regulatory framework for the digital asset space, positively impacting market stability and investor protection. At the same time, the slight increase in the U.S. manufacturing PMI and the decline in initial unemployment claims indicate the resilience of the U.S. economy and improvements in the labor market.


References:

1. Regular United Europe, https://rue.ee/cn/blog/virtual-currency-licence-in-europe/
2. Trading Economics, https://tradingeconomics.com/united-states/manufacturing-pmi
3. Trading Economics, https://tradingeconomics.com/united-states/jobless-claims

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