The last months of 2024 are witnessing a volatile development of the global cryptocurrency market. Bitcoin, the leading cryptocurrency, continues to maintain its position despite facing numerous challenges from global economic indicators.
The Recovery of Bitcoin Amid Many Challenges
The Bitcoin market is showing signs of stagnation due to weaker demand in the US and the depreciation of the Australian dollar against the Japanese yen (AUD/JPY). This is a warning sign as the Australian dollar is a barometer for global economic health, while the Japanese yen is a safe-haven currency. The decline of AUD/JPY signals caution from investors, especially when reflecting on July-August of this year, when the strengthening yen led to a significant drop in BTC.
Currently, AUD/JPY has fallen below the trend line, indicating that the Japanese yen is strengthening amid speculation that the Bank of Japan (BOJ) will raise interest rates. The market is shifting expectations towards a rate hike from the BOJ in December, while the likelihood of a rate cut from the Federal Reserve (Fed) remains unclear. This situation could mark the beginning of a new risk-averse wave, impacting Bitcoin prices below $90,000.
Strategic Moves from Financial Companies
Shares of SOS Ltd, a financial services group in China, have surged over 40% after the company announced plans to purchase $50 million in Bitcoin. This decision, announced on November 27, reflects SOS's commitment to Bitcoin as a valuable asset and a strategic investment. The company intends to employ various trading strategies to maximize profits amid a volatile market.
Following the announcement, SOS's shares rose to $9.93 and continued to increase in after-hours trading. However, the shares have decreased by 86.5% over the year, leading to a non-compliance notice from the NYSE. Interest in Bitcoin has also surged as several other companies, such as Rumble and Genius Group, have begun investing in Bitcoin to benefit from the recent price surge of this cryptocurrency.
Conclusion
The year 2024 is truly a turbulent year for the cryptocurrency market. To survive and thrive in this context, investors need to carefully assess economic factors and strategies from major companies to make informed decisions. The market is witnessing a transformation with active participation from various sides, opening up many opportunities but also considerable risks to consider.
