As the year 2024 draws to a close, Bitcoin’s once unstoppable rally has begun to waver, signaling a momentary pause in what has been a record-breaking year for the world’s largest cryptocurrency. Investors are digesting various market catalysts, from President-elect Donald Trump’s crypto-friendly policies to the expiry of significant Bitcoin and Ether options contracts.
Market Snapshot: Bitcoin Hits $96,250
On Friday, Bitcoin was trading at $96,250 in Singapore, recovering slightly from a near 3% dip a day earlier. Despite this, the cryptocurrency has remained in a volatile range, with smaller tokens like Ether and Dogecoin reflecting similar trading patterns.
The retreat follows Bitcoin’s unprecedented high of $108,316 on December 17. Analysts note that the year-end profit-taking by investors and cautious market sentiment are contributing to the slowdown.
Trump’s Crypto Push and the National Bitcoin Reserve
A major driver of Bitcoin’s 2024 rally has been President-elect Donald Trump’s pro-crypto stance. His commitment to fostering a cryptocurrency-friendly regulatory environment and his proposal to establish a national Bitcoin reserve have excited investors.
While these developments have sparked optimism, market participants remain skeptical about the feasibility and timeline of such a reserve. Traders appear to be in a wait-and-see mode, locking in profits while assessing the potential impact of Trump’s policies on the broader cryptocurrency landscape.
Options Expiry and Market Volatility
Adding to the uncertainty is the looming expiry of a massive volume of Bitcoin and Ether options contracts. On Friday, Bitcoin contracts worth $14 billion were set to expire on Deribit, one of the largest digital-asset derivatives exchanges.
The simultaneous expiry of Ether options, valued at approximately $3.8 billion, further compounds the market’s volatility. According to Sean McNulty, director of trading at Arbelos Markets, such expiries can lead to “choppy” trading conditions as investors adjust their positions.
MicroStrategy’s Bold Bitcoin Strategy
MicroStrategy Inc., a leading Bitcoin proponent, continues to shape market sentiment. The company, which has transitioned from a software firm to a Bitcoin-centric entity, announced plans to expand its already substantial Bitcoin holdings. With over $40 billion in Bitcoin under its belt, MicroStrategy remains a cornerstone of institutional interest in the asset.
However, even this bullish development hasn’t been enough to sustain Bitcoin’s December momentum. Data from Bloomberg shows that Bitcoin is on track for its first monthly decline in four months.
Heavy ETF Outflows Highlight Investor Caution
Investor sentiment also appears to be cooling, as evidenced by significant outflows from US spot-Bitcoin exchange-traded funds (ETFs). In the four trading days leading up to December 24, these funds saw a net withdrawal of $1.5 billion—the largest outflow since Trump’s election victory on November 5.
The withdrawals reflect a cautious market as investors weigh Bitcoin’s next potential moves against broader macroeconomic trends and the evolving regulatory landscape.
What Lies Ahead for Bitcoin in 2025?
As Bitcoin ends 2024 with unprecedented highs and subsequent cooling, the question remains: What will 2025 bring for the cryptocurrency market?
Key factors to watch include:
- The implementation of Trump’s proposed crypto policies.
- The ongoing role of institutional players like MicroStrategy.
- Market dynamics driven by derivatives and ETF flows.
Despite the current slowdown, Bitcoin’s long-term trajectory remains promising, with many experts pointing to its growing acceptance as a mainstream asset.
Disclaimer: The content provided is for informational purposes only and should not be considered financial advice. Readers are encouraged to conduct their own research before making any investment decisions.
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