Last week, the cryptocurrency market sentiment continued to heat up, with Bitcoin's price rising by 9.02% to $97,985, and Ethereum's price rising by 9.4% to $3,365.16. Other cryptocurrencies also saw price increases. Additionally, according to relevant statistics, the total market capitalization of the global cryptocurrency market, including Bitcoin, Ethereum, and Solana, has surpassed $3 trillion, with a weekly increase of over 10.76%, indicating a strong bullish trend. What are the positive factors driving the optimistic sentiment in the crypto market recently?
Last week, the cryptocurrency market continued to experience strong upward momentum. Bitcoin's price rose by 9% to $97,985, showing a strong bullish trend. Meanwhile, with continued inflows of ETF funds, the market sentiment for Bitcoin remains optimistic. Ethereum's price also rose by 9.4% to $3,365.16. According to TradingView data, as of November 24, 2024, the global cryptocurrency market capitalization reached $3.27 trillion, with a weekly increase of 10.76%.
In terms of market sentiment, according to relevant data, the Crypto Fear and Greed Index, which measures cryptocurrency market sentiment, recorded a value of 80 on November 24, remaining in the 'Greed' zone for a consecutive month. This change in the index reflects that market sentiment is becoming more positive, and the mindset of cryptocurrency investors has become more optimistic since Trump's election.
Driven by the positive sentiment in the cryptocurrency market, stocks and ETFs related to it have collectively risen, with popular stocks such as MicroStrategy (MSTR.O), MARA Holdings (MARA.O), and TERAWULF (WULF.O) all showing gains. MicroStrategy (MSTR.O) surged by as much as 23.85% last week, MARA Holdings (MARA.O) rose nearly 23.54%, and TERAWULF (WULF.O) increased by 3.76% last week.
The recent multiple positive factors in the cryptocurrency market are driving this increase. These positive factors include Trump's team planning to add cryptocurrency-related positions in the White House, while Pennsylvania is pushing legislation aimed at incorporating Bitcoin into its reserve assets. In addition, the listing and trading of Bitcoin spot ETF options has also positively impacted the market. These factors together have driven the recent optimism in the cryptocurrency market.
Trump's team plans to establish cryptocurrency-related positions in the White House
Trump's team is negotiating with the cryptocurrency industry to consider creating a new position in the White House dedicated to regulating digital currency policy. Meanwhile, they are evaluating candidates suitable for this role. It is reported that the head of this position will lead a small team and be responsible for coordinating relationships between Trump, Congress, and federal agencies, including the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Supporters of the cryptocurrency industry hope that this position will report directly to Trump. If a cryptocurrency trading commission is established, this will be the first time the White House has set up a position specifically for the cryptocurrency industry, highlighting the industry's significance in the Trump administration, and will have a significant impact on boosting confidence and optimism in the cryptocurrency market.
Additionally, Trump stated last Tuesday that he would nominate veteran Wall Street financier Howard Lutnick as the next U.S. Secretary of Commerce, which is also good news for the cryptocurrency industry. As the CEO of financial services company Cantor Fitzgerald, Lutnick has become a close partner of Trump in recent months and has been a strong contender for the position of Treasury Secretary. Once approved by the Senate, Lutnick will take on the heavy responsibility of promoting U.S. economic growth and domestic industry development, while potentially playing a role in maintaining and strengthening the ties between the government and the business community.
Lutnick is a supporter of cryptocurrency, and his company has been managing Tether's U.S. Treasury bond investment portfolio since 2021. He has publicly expressed his support for the cryptocurrency Tether and has emphasized his management of Tether's financial assets in interviews. He compares Bitcoin to gold and advocates for its free trade globally.
Pennsylvania has proposed legislation to make BTC a reserve asset
Recently, Pennsylvania passed a groundbreaking bill, becoming the first state in the U.S. to incorporate Bitcoin into its strategic reserves. According to the bill, the Pennsylvania Treasury is authorized to invest up to 10% of its reserves (approximately $7 billion) in Bitcoin as a measure against inflation and for asset diversification. This is the second piece of legislation involving cryptocurrency that Pennsylvania has passed this year. The previously passed 'Bitcoin Rights Bill' has ensured residents' rights to self-custody of digital assets and allowed the legal use of Bitcoin as a means of payment. According to the state's 2023 annual investment report released by the Treasury Department, these funds manage approximately $51 billion in assets, which means that at a 10% allocation, about $5.1 billion will be used for Bitcoin investment. This initiative from Pennsylvania has quickly attracted widespread attention from the market and other states. The Bitcoin advocacy group Satoshi Action Fund has stated that ten states are currently considering adopting similar legislation, which could trigger a nationwide wave of cryptocurrency legislation.
It is believed that Pennsylvania has approved the Bitcoin Strategic Reserve Bill, which not only paves the way for digital assets to become state-level reserve assets but also greatly boosts the significant rise in Bitcoin prices, having a profound impact on financial markets in the U.S. and even globally. Pennsylvania's legislation sets a precedent for other states, helping to drive the widespread adoption and practical application of cryptocurrency in the U.S. Moreover, as Bitcoin prices break through the $95,000 mark and continue to rise, it is expected that more states and institutions will be attracted to participate in this investment transformation, further strengthening Bitcoin's status as a reserve asset and making it a key component of economic strategy, thus further increasing demand for Bitcoin.
Listing and trading of Bitcoin spot ETF options
The Nasdaq exchange began offering options for the iShares Bitcoin ETF for the first time last Tuesday. Data from SoSoValue shows that BlackRock's Bitcoin spot ETF (IBIT) options traded a total of 354,000 contracts on its first day of listing, with a nominal trading volume of nearly $1.9 billion, reflecting the market's high enthusiasm for it. This trading volume also drove IBIT's trading volume to increase by 32% week-on-week. Among all traded contracts, call options accounted for 82%, or 289,000 contracts, while put options accounted for 18%, or 65,000 contracts, with a call-to-put ratio of 4.4:1, indicating a generally optimistic market sentiment.
The launch of Bitcoin spot ETF options has bolstered the bullish sentiment in the cryptocurrency market. Many investment institutions believe that the entry of Bitcoin spot ETF options into the U.S. stock market is expected to significantly reduce Bitcoin price volatility, as the use of options strategies will allow hedge funds and other financial institutions to manage the risks associated with Bitcoin's high volatility more effectively, while also enhancing the liquidity of Bitcoin and its related ETFs. In the medium to long term, the listing of options products will gradually shift Bitcoin toward the low volatility trading characteristics of traditional major asset classes such as stocks, gold, bonds, and commodities, which may attract more investors to join the ranks of Bitcoin and other cryptocurrencies.
