Recently, cryptocurrency volatility has increased!
Last week, Bitcoin briefly broke through $108,000, followed by a sharp decline in the following days. On Monday, Bitcoin's price dropped to a low of $92,500, rebounding above $98,000 on Tuesday, and reaching $99,900 during trading on Thursday. However, as of the time of this report, Bitcoin has fallen back below $97,000, down nearly 2% in 24 hours.
Under the intense price volatility, many people have faced liquidation. Coinglass data shows that in the past 24 hours, the number of liquidated accounts in the entire cryptocurrency network exceeded 100,000, with a total liquidation amount exceeding $240 million.
Notably, this Friday, the largest Bitcoin options contracts in history are set to expire, with a total value of $14 billion, which may trigger significant volatility in the cryptocurrency market.
Meanwhile, several major news stories have emerged in the crypto space. Russian Finance Minister Anton Siluanov stated on the 25th that Russian companies have begun using Bitcoin and other digital currencies for international payments. In the United States, three states have proposed establishing strategic Bitcoin reserves.
The U.S. is the country with the most Bitcoins held at the government level. As of December 11, the U.S. government held approximately 200,000 Bitcoins (about $20 billion).
Over 100,000 liquidations.
The highly speculative cryptocurrency market has seen many liquidations. Coinglass data shows that in the past 24 hours, the number of liquidated accounts across the entire cryptocurrency network reached 103,600, with total liquidation amounts reaching $247 million, including $178 million in long positions and over $69 million in short positions.
Since entering December, the volatility of cryptocurrencies, led by Bitcoin, has significantly increased. On December 18, Bitcoin first broke through $108,000, setting a new historical high; on December 19, Bitcoin began its downward plunge, dropping below $100,000 during the day; on December 20, Bitcoin continued to drop, falling below $93,000. As of around 9 PM on the 20th, in the past 24 hours, the number of liquidated accounts in the entire cryptocurrency network exceeded 420,000, with a total liquidation amount reaching $1.4 billion. In the following days, Bitcoin's price continued to oscillate widely between $92,500 and $99,900, during which many people faced liquidation.
This Friday, the largest Bitcoin options contracts in history are set to expire, with a total value of $14 billion, which may trigger significant market volatility. According to data released by Deribit CEO Luuk Strijers, the ratio of put options to call options for these expiring contracts is 0.69, meaning that for every 10 call options, there are 7 put options. At the same time, the number of expiring contracts is twice that of the contracts set to expire in March 2025.
Strijers further explained that the expiring contracts account for 44% of all current open Bitcoin option contracts (with a total value of $32 billion). Deribit exchange expects that over $4 billion of contracts will expire and be executed, which will inevitably trigger a large amount of trading activity. Deribit's volatility index (DVOL) has fluctuated sharply recently, and Strijers noted that this indicates that traders still have significant disagreements about the future direction of the market.
David Lawant, head of research at crypto brokerage FalconX, wrote in a report that price volatility is the most likely scenario in the short term before a 'bullish trajectory' appears in the first quarter of 2025. Sean McNulty, trading director at liquidity provider Arbelos Markets, believes: 'Bulls should maintain Bitcoin's price at the $90,000 level by the end of the year, but if it falls below that level, it may trigger further liquidations.'
Cryptocurrencies have always been viewed as high-risk assets, subject to strict scrutiny by regulators, but this situation has changed recently in the U.S. As Wall Street institutions increasingly focus on cryptocurrencies, U.S. regulators have approved cryptocurrency funds, enhancing their mainstream appeal. Since the launch of the Bitcoin ETF on January 11 this year, it has been highly sought after by investors, with net inflows exceeding $35 billion to date, and the value of the Bitcoins it holds exceeding $110 billion, accounting for 5.71% of the total circulating supply of Bitcoins.
However, this Tuesday, the most popular Bitcoin ETF among investors — BlackRock's IBIT — recorded its largest single-day outflow ever, reaching $188.7 million, surpassing its previous record high of $72.2 million set on December 20. Meanwhile, the Bitcoin ETF has recorded net outflows for the fourth consecutive trading day. Since December 19, the cumulative net outflow of the 12 U.S.-listed Bitcoin ETFs has reached $1.52 billion.
Russian Finance Minister: Bitcoin has been used in trade.
According to Reuters, on December 25 local time, Russian Finance Minister Anton Siluanov stated that Russian companies have begun using Bitcoin and other digital currencies for international payments.
This year, Russia has allowed the use of cryptocurrencies in foreign trade and taken steps to legalize the mining of cryptocurrencies like Bitcoin. Russia previously proposed a complete ban on cryptocurrencies in 2022, believing that such assets could undermine the stability of financial markets. One of the main reasons for this significant shift is to respond to Western sanctions.
Siluanov stated, 'As part of an experimental system, we can use Bitcoins mined in Russia (for foreign trade transactions). Such transactions are already happening. We believe they should be further expanded and developed. I believe this will be realized next year.' He added that international payments in digital currencies represent the future.
Earlier this month, Russian President Putin stated that the current U.S. government uses the dollar for political purposes, weakening the dollar's status as a reserve currency and forcing many countries to turn to alternative assets. He pointed out that Bitcoin is an example of such assets and stated that no one in the world can regulate Bitcoin. Putin's remarks indicate that this Russian leader supports the widespread use of cryptocurrencies.
The U.S. government holds 200,000 Bitcoins.
Data from Bitcoin Treasuries shows that the total amount of Bitcoins held by governments worldwide is approximately 510,000, accounting for 3% of the total Bitcoins issued (approximately 19.79 million), while corporate holdings account for 5% and Bitcoin exchange-traded funds (ETFs) account for 6%.
Most of the Bitcoins held by governments come from seizures during crime fighting. The United States is the country with the most Bitcoins held at the government level. As of December 11, the U.S. government held approximately 200,000 Bitcoins (about $20 billion). These Bitcoins mainly come from cases involving the crackdown on illegal transactions.
U.S. President-elect Trump stated in July: 'The approximately 210,000 Bitcoins held by the U.S. Department of Justice will not be sold and will be used for the national strategic reserve.' Republican Senator Cynthia Lummis proposed a bill aimed at establishing such a reserve, which would require the U.S. Treasury to purchase 200,000 Bitcoins annually until the reserve reaches 1 million Bitcoins, with funding coming from Federal Reserve bank deposits and gold reserves.
According to a recent analysis report released by Barclays, funding for a strategic Bitcoin reserve may require congressional approval and the issuance of new government bonds. Barclays analysts expressed skepticism about the plan, stating, 'We suspect that the plan will face strong resistance from the Federal Reserve.'
During his campaign, Trump stated that if he were to return to the White House, he would classify Bitcoin as a U.S. strategic reserve asset. Although Federal Reserve Chairman Jerome Powell recently stated that the Fed does not intend to hold digital currencies, it still does not prevent people from having endless fantasies about Bitcoin becoming a national reserve.
As the inauguration date of Trump approaches, some states in the U.S. have begun to consider testing the waters early. So far, three states have proposed establishing strategic Bitcoin reserves.
On December 17, Ohio state representative Derek Merrin proposed a bill to establish a strategic Bitcoin reserve in the state. This bill, named the Ohio Bitcoin Reserve Act, requires the establishment of a Bitcoin fund within the state's treasury and grants the Ohio Secretary of the Treasury the discretion to purchase the asset.
On December 12, the official website of the Texas House of Representatives showed that Republican state legislator Giovanni Capriglione submitted a legislative proposal to establish a Bitcoin strategic reserve in the state. Capriglione stated in an audio chat room on social media platform X that the proposed bill would allow Texas to begin establishing a Bitcoin strategic reserve by accepting Bitcoin in the form of taxes, fees, and donations, which would be held for at least five years.
In November, a Pennsylvania state representative proposed a bill calling for the establishment of a strategic Bitcoin reserve. According to the bill, the Pennsylvania Secretary of the Treasury would be able to purchase Bitcoin with 'up to 10%' of the state's General Fund, emergency reserves, and state investment funds. If 10% of the state General Fund is utilized, the Pennsylvania Treasury could purchase Bitcoin worth nearly $1 billion.