Recently, cryptocurrency volatility has increased!
Last week, Bitcoin briefly broke through $108,000 before plummeting dramatically in the following days. On Monday, Bitcoin's price dipped to a low of $92,500, before recovering above $98,000 on Tuesday. On Thursday, it rose to $99,900 during intraday trading, but as of the time of the reporter's publication, Bitcoin fell below $97,000, down nearly 2% within 24 hours.
Amidst the volatile prices, many have also faced liquidation. Coinglass data indicates that over the past 24 hours, the total number of liquidated positions across the cryptocurrency network exceeded 100,000, with total liquidation amounts surpassing $240 million.
It is noteworthy that this Friday, the largest Bitcoin options contracts in history are set to expire, with a total value of $14 billion, potentially triggering significant volatility in the cryptocurrency market.
Meanwhile, several major news stories have emerged in the cryptocurrency space. Russian Finance Minister 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 already proposed establishing strategic Bitcoin reserves.
The United States holds the most Bitcoin at the governmental level. As of December 11, the U.S. government holds approximately 200,000 Bitcoins (around $20 billion).
Over 100,000 liquidations
In the highly speculative cryptocurrency market, many people have faced liquidation. Coinglass data shows that over the past 24 hours, the total number of liquidated positions across the cryptocurrency network reached 103,600, with a total liquidation amount of $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 a high-position plunge, dipping below $100,000 during intraday trading; on December 20, Bitcoin continued to plunge, falling below $93,000 during intraday trading. As of around 21:00 on the 20th, over 420,000 liquidations occurred across the cryptocurrency network within 24 hours, with total liquidation amounts reaching $1.4 billion. In the following days, Bitcoin's price continued to fluctuate widely between $92,500 and $99,900, during which many faced liquidation.
This Friday, the largest Bitcoin options contracts in history are set to expire, with a total value of $14 billion, potentially triggering significant market volatility. According to data released by Deribit exchange CEO Luuk Strijers, the ratio of put options to call options for the expiring contracts is 0.69, meaning for every 10 call options, there are 7 put options. Additionally, the number of expiring contracts is double that of contracts expiring in March 2025.
Strijers further explained that the expiring contracts account for 44% of the total outstanding Bitcoin options contracts (totaling $32 billion). Deribit expects that more than $4 billion of these contracts will expire and execute, which will undoubtedly trigger significant trading activity. Deribit's volatility index (DVOL) has fluctuated sharply recently, and Strijers pointed out that this indicates a significant divergence among traders regarding future market trends.
David Lawant, head of research at crypto broker FalconX, wrote in a report that before the emergence of a 'bullish trajectory' in the first quarter of 2025, price fluctuations in the short term remain the most likely scenario. Sean McNulty, trading director at liquidity provider Arbelos Markets, believes that 'bulls should aim to keep Bitcoin's price at the $90,000 level by the end of the year, but if it falls below that level, it could trigger further liquidations.'
Cryptocurrencies have long been regarded as high-risk assets, subject to strict scrutiny from regulators, but this situation has recently changed in the U.S. As Wall Street institutions increasingly focus on cryptocurrencies, U.S. regulators have approved cryptocurrency funds, enhancing their mainstream appeal. Since its listing on January 11, the Bitcoin ETF has been in high demand from investors, with its net inflow exceeding $35 billion, while the value of the Bitcoin it holds exceeds $110 billion, accounting for 5.71% of the total circulating supply of Bitcoin.
However, this Tuesday, the most popular Bitcoin ETF—BlackRock's IBIT—recorded the largest single-day outflow in history at $188.7 million, exceeding its previous record 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 from 12 Bitcoin ETFs listed in the United States 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 had proposed a total 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 the experimental system, we can use Bitcoin mined in Russia (for foreign trade transactions). Such transactions are already occurring. We believe they should be further expanded and developed. I believe this will be achieved 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, undermining 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
Bitcoin Treasuries data shows that the total amount of Bitcoin held by governments is approximately 510,000 coins, which is about 3% of the total Bitcoin issued (approximately 19.79 million coins), with corporate holdings at 5% and Bitcoin exchange-traded funds (ETFs) holding 6%.
Most of the Bitcoin held by governments comes from seizures made during crime investigations. The United States holds the most Bitcoin at the governmental level. As of December 11, the U.S. government holds approximately 200,000 Bitcoins (around $20 billion). These Bitcoins primarily come from cases involving the crackdown on illegal transactions.
U.S. President-elect Trump stated in July that he 'will not sell the approximately 210,000 Bitcoins held by the U.S. Department of Justice, which will be used for national strategic reserves.' U.S. Republican Senator Cynthia Lummis proposed a bill aimed at establishing such a reserve, under which the U.S. Treasury would purchase 200,000 Bitcoins annually until the reserve reaches 1 million coins, with funding coming from Federal Reserve bank deposits and gold reserves.
According to a recent analysis report published by Barclays, funding a strategic Bitcoin reserve may require congressional approval and the issuance of new government bonds. Barclays analysts expressed skepticism regarding the potential methods for establishing such a reserve, stating, 'We suspect that the plan will face strong resistance from the Federal Reserve.'
During the campaign, Trump stated that if he could return to the White House, he would designate Bitcoin as a U.S. strategic reserve asset. Although Federal Reserve Chairman Powell recently stated that the Fed does not plan to hold digital currencies, it does not deter people's infinite imagination of Bitcoin becoming a national reserve.
As the date of Trump's inauguration approaches, some states in the U.S. have begun to consider testing the waters in advance. So far, three states in the U.S. have proposed establishing strategic Bitcoin reserves.
On December 17, Ohio State Representative Derek Merrin introduced a bill to establish a strategic Bitcoin reserve in the state. The bill, known as the Ohio Bitcoin Reserve Act, mandates the establishment of a Bitcoin fund within the state treasury and grants the Ohio State Treasurer discretionary authority to purchase the asset.
On December 12, the official website of the Texas State House displayed that Republican State Representative Giovanni Capriglione submitted a legislative draft to establish a Bitcoin strategic reserve in the state. Capriglione stated in an audio chat room on social media X that the proposed bill would allow Texas to begin building a Bitcoin strategic reserve by accepting Bitcoin in the form of taxes, fees, and donations, with the reserve to be held for at least five years.
Earlier in November, Pennsylvania State Representative introduced a bill calling for the establishment of a strategic Bitcoin reserve. According to the bill, the Pennsylvania State Treasurer would be able to purchase Bitcoin using '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 nearly $1 billion worth of Bitcoin.
