Tech 5: Trump to Prioritize Crypto, Biden Blocks AI Chip Exports

1. Bitcoin breaks US$100,000, XRP rockets

The crypto market was initially down on Monday (January 13), but trended upward over the week.

Bitcoin experienced several bumps, coinciding with a steady release of economic data suggesting that inflation is continuing to cool. Open interest for Bitcoin on Binance surged to approximately US$500 million just two hours after Wednesday’s CPI results, and Bitcoin went on to briefly surpass US$100,000 on Wednesday evening. On Friday afternoon it surpassed US$105,000 before experiencing a pullback, closing the week around US$104,400.

Despite some volatility, the overall trajectory for Bitcoin was positive, with crypto analyst Rekt Capital suggesting that its movement is indicative of the final stages of a price discovery phase. Cointelegraph analyst Nancy Lubale also holds this view, citing a long-legged Doji candle pattern as a sign that dip buyers are overpowering sellers. For his part, Andre Dragosch, Bitwise's head of Research in Europe, noted that Bitcoin’s supply/demand dynamics are still bullish.

However, trading resource Stockmoney Lizards warned of weeks of rangebound trading to come for Bitcoin, with US$102,000 acting as the new key resistance level for the crypto coin.

Mid-week, reports surfaced indicating that Trump intends to make cryptocurrencies a national priority. People familiar with his plans said that once in office he will issue a strategically worded executive order to do so.

Meanwhile, a report by JPMorgan (NYSE:JPM) analysts that was shared with Cointelegraph projects that SOL and XRP exchange-traded products may eclipse the performance of spot Ether exchange-traded funds (ETFs) in their first six months of trading. Indeed, outsized gains from XRP led to a market cap surge of the broader digital asset market on Thursday (January 16), likely fueled by whale accumulation and anticipation of ETF approval.

Analysts are bullish on XRP, with chart patterns and growing open interest suggesting a potential 50 percent price rally to US$4.16 by February. This surge has propelled XRP to become the third most valuable cryptocurrency with a market cap exceeding US$159 billion. Cardano also appears to be headed for a bull rally, according to Peter Brandt and Altcoin Sherpa, who note that Cardano formed a double-bottom pattern over a year, demonstrating a long period of price stability and accumulation, which points to strong underlying support from buyers.

This pattern was confirmed when Cardano rose above US$0.81, a key resistance that is now functioning as a support. Further strengthening the bullish case, Cardano has rebounded from the 0.5-0.618 Fibonacci retracement levels.

2. iPhone sales decline amid delayed AI rollout in China

Apple’s (NASDAQ:AAPL) delay in rolling out artificial intelligence (AI) in China appears to be impacting the tech giant’s global iPhone sales, according to data from two research firms this week.

Counterpoint Research released a report on Monday (January 13) indicating a rebound in the global smartphone market after a two year decline. Global smartphone sell-through increased by 4 percent year-on-year in 2024.

This growth was fueled by Chinese brands like OPPO, Motorola (NYSE:MSI), Huawei and HONOR, which are competing with industry leaders, Samsung (KRX:207940) and Apple. Xiaomi (HKEX:1810) grew at the fastest pace among the top five brands ranked in the study, while Samsung and Apple each ceded 1 percent market share to competitors.

“Apple’s iPhone 16 series was met with a mixed response, partly due to a lack of availability of Apple Intelligence at launch. However, Apple continued to grow strongly in its non-core markets like Latin America, Africa and Asia-Pacific-Others,” the report reads, referencing Asian sales outside of China, where Apple Intelligence is not available.

Following the report's release, Apple's share price price experienced an intraday decline of 2.11 percent.

Later, on Thursday (January 16), analysis by Canalys revealed that Apple's 2024 iPhone shipments totaled 42.9 million units, a 17 percent year-on-year decrease, resulting in a 15 percent market share.

In Q4, historically one of Apple’s strongest quarters, iPhone sales fell by 25 percent in China to 13.1 million units, capturing 17 percent market share. Meanwhile, Chinese firm Huawei also managed to capture a 17 percent market share in Q4 with 12.9 million units sold; however, this figure represents a 24 percent increase compared to Q3.

Apple's delayed and staggered rollout of AI features, particularly in China, might have given its Chinese competitors an advantage, as many Chinese brands have been integrating AI capabilities into their newer models. Apple’s share price was down 3.83 percent from its opening price after Thursday’s closing bell and is down 1.5 percent for the week.

As a measure to keep the most advanced AI chips out of China, President Joe Biden’s Export Control Framework for AI Diffusion went into effect on Monday, despite protests from NVIDIA and Oracle (NYSE:ORCL) who say the rules will undermine competitiveness and hinder innovation. The US government revealed another set of new regulations on Wednesday, calling for chipmakers like Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE:TSM) and Samsung to perform more thorough due diligence on their customers; it also introduced sanctions on 16 Chinese companies that are “acting at the behest of Beijing” to build their country’s chip industry.

3. Microsoft and Google make AI strategy shifts

Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL) made significant moves this week, seemingly aimed at improving efficiency while also capitalizing on the growing AI market and potentially reducing costs. F

irst, Microsoft announced that it was reorganizing its cloud and AI teams to form a core AI unit that will “build the end-to-end Copilot and AI stack for both our first-party and third-party customers to build and run AI apps and agents,” Microsoft CEO Satya Nadella said in a memo posted on the company’s blog.

On Tuesday (January 14), the Information reported that Google would be slashing 60 jobs while creating a new AI sales team for its cloud-server rental unit. According to the report, the move is anticipated to attract more spending from Google’s private AI customers like Anthropic and Cohere.

Later, on Thursday, both companies expanded access to their AI-powered assistants while also adjusting pricing for certain tiers. Google made its Gemini AI freely available in Gmail and Docs while simultaneously increasing the price of Google Workspace, which includes those apps, by 20 percent for most users.

Meanwhile, Microsoft integrated Copilot and Designer into Microsoft 365 plans, for which the company increased the price to US$10 per month for personal plans and US$13 per month for family plans.

Beyond the technological advancements, these developments highlight the growing business opportunities within the AI landscape, as companies seek to monetize their AI investments and establish sustainable revenue streams.

4. TSMC's strong Q4 and AI-driven outlook

TSMC surged by nearly 6 percent on Thursday morning after the company reported a record net profit of T$374.68 billion (US$11.38 billion) in Q4 2024, up 57 percent from T$238.7 billion a year earlier.

The numbers were also in line with an LSEG SmartEstimate of T$377.95 billion.

The chipmaker says it anticipates demand for AI chips to drive strong revenue growth in the first quarter of 2025, predicting revenue between US$25 billion and US$25.8 billion in the March quarter, 6 percent above projections.

TSMC is ramping up production to meet the growing demand for advanced chips. With strong growth projections, TSMC estimates spending on AI would fall somewhere between US$38 billion and US$42 billion on technology and capacity throughout the year to keep up with demand. That is 19 percent more than analysts anticipate; however, investors don’t seem concerned, as its stock price is up by over 4 percent for the week.

This increased capacity is crucial for major tech companies like Apple, which rely on TSMC's advanced chips for their devices. According to a Nikkei Asia report, Apple is nearly complete with the verification process of its Arm-based (NASDAQ:ARM) A16 Bionic chip, produced at TSMC's Arizona plant. These chips are expected to be ready for production this quarter and will likely be incorporated into upcoming iPhones later this year.

5. Modern-day space race heats up

It was a momentous week in space exploration as both SpaceX and Blue Origin conducted high-profile rocket launches.

On Wednesday (January 15), SpaceX launched its Starship Super Heavy rocket on its seventh test flight from Boca Chica, Texas. The Starship Super Heavy, a fully reusable two-stage launch vehicle, is designed for both crew and cargo transport. SpaceX plans to use it for launches to Earth orbit, the Moon and Mars.

The following day, Blue Origin achieved a substantial milestone with the maiden flight of its New Glenn rocket from Cape Canaveral Space Force Station, marking the company's entry into the heavy-lift launch market after multiple reported delays and posing a potential challenge to SpaceX's dominance. Although the rocket reached orbit, the first-stage booster did not land back on Earth as planned, impacting Blue Origin's goal of reusable rockets.

SpaceX’s rocket also encountered issues. While the launch was successful, the rocket experienced “a rapid unscheduled disassembly during its ascent burn” — a phase in rocket launches where the engines fire to propel the rocket away from Earth and towards its intended destination – and was ultimately destroyed on Thursday evening. Despite the setback, SpaceX emphasized the valuable data collected, which will inform future Starship development.

These launches highlight the increasing competition and rapid innovation in the commercial space sector.

While both companies faced challenges, their continued efforts are pushing the boundaries of space technology and paving the way for future exploration.