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Anticipation for pro-crypto Trump entering office
The bullish sentiment surrounding US President-elect Donald Trump's upcoming administration could also be a catalyst to ensure Bitcoin completes its cycle by reaching new highs in 2025. Much of the positive sentiment is driven by anticipated regulatory changes favoring digital assets coupled with Securities & Exchange Commission (SEC) Chair Gary Gensler's resignation on January 20.
The bullish sentiment surrounding US President-elect Donald Trump's upcoming administration could also be a catalyst to ensure Bitcoin completes its cycle by reaching new highs in 2025. Much of the positive sentiment is driven by anticipated regulatory changes favoring digital assets coupled with Securities & Exchange Commission (SEC) Chair Gary Gensler's resignation on January 20.
AVIV Ratio still below peak points
Despite fears of a market top, Glassnode's AVIV metric shows that Bitcoin still has room to grow. The AVIV Ratio measures the average unrealized profit, or paper gains, held by active investors in the market.
According to Glassnode analysts, bull markets end when most investors are highly profitable, creating excess supply and a shortage of buyers. The metric has yet to reach the peak of previous cycles, suggesting that investors have yet to begin taking extreme profits as prices rise.
BTC AVIV Glassnode. Source: Glassnode
A similar sentiment was expressed by Michael Nadeau in The DeFi Report, suggesting that the dip in Bitcoin's price is a necessary pullback. He expects a short-term consolidation before the market resumes its upward trajectory.
Likewise, Santiment data reveals that the buy-the-dip trend among market participants has risen to its highest level in 8 months, signaling increased enthusiasm toward a market recovery.
With Bitcoin falling as low as $95.5K today, the ratio of crypto discussions that are about buying crypto's dip has reached its highest level in over 8 months. The last time we saw the crowd nearly this enthusiastic about dip buying was the major crash on August 4th. Since…
Despite fears of a market top, Glassnode's AVIV metric shows that Bitcoin still has room to grow. The AVIV Ratio measures the average unrealized profit, or paper gains, held by active investors in the market.
According to Glassnode analysts, bull markets end when most investors are highly profitable, creating excess supply and a shortage of buyers. The metric has yet to reach the peak of previous cycles, suggesting that investors have yet to begin taking extreme profits as prices rise.
BTC AVIV Glassnode. Source: Glassnode
A similar sentiment was expressed by Michael Nadeau in The DeFi Report, suggesting that the dip in Bitcoin's price is a necessary pullback. He expects a short-term consolidation before the market resumes its upward trajectory.
Likewise, Santiment data reveals that the buy-the-dip trend among market participants has risen to its highest level in 8 months, signaling increased enthusiasm toward a market recovery.
With Bitcoin falling as low as $95.5K today, the ratio of crypto discussions that are about buying crypto's dip has reached its highest level in over 8 months. The last time we saw the crowd nearly this enthusiastic about dip buying was the major crash on August 4th. Since…
Bitcoin ETFs may have tweaked crypto market structure
The spot Bitcoin ETFs have been instrumental in Bitcoin's price performance since their approval in January, drawing in massive institutional adoption.
These new ETF investors could also alter the dynamic of Bitcoin's market cycle, as evidenced by how they pushed Bitcoin to an all-time high before its latest halving.
Unlike traditional crypto investors who operate in high-volatility environments, institutional investors using ETFs benefit from operational efficiency and reduced custody risks. This is a key factor to watch as bulls and bears struggle to determine the next price direction.
$BTC $BTC
$ETH
The spot Bitcoin ETFs have been instrumental in Bitcoin's price performance since their approval in January, drawing in massive institutional adoption.
These new ETF investors could also alter the dynamic of Bitcoin's market cycle, as evidenced by how they pushed Bitcoin to an all-time high before its latest halving.
Unlike traditional crypto investors who operate in high-volatility environments, institutional investors using ETFs benefit from operational efficiency and reduced custody risks. This is a key factor to watch as bulls and bears struggle to determine the next price direction.
$BTC $BTC
$ETH
Changing Dynamics in Historic Cycles
Conversely, while Bitcoin has shown some synergy with previous cycles, there are certain traits of changing dynamics in the current cycle. Bitcoin has historically reached new highs, on average, one year after its halving event.
This pattern was repeated in the 2015-2018 cycle, when Bitcoin's price spiked to a new peak in August 2017 after its halving in 2016.
Similarly, in the 2019-2022 cycle, its price surged to new highs in November 2021, one year after its halving event in 2020. However, this trend has been altered in the current cycle after BTC hit a new ATH in March before its halving in April.
This places two options before investors: Either the halving event is no longer a yardstick for Bitcoin's price trajectory, or BTC has yet to experience the post-halving growth from previous cycles.
BTC/USD weekly chart (Coinbase)
Conversely, while Bitcoin has shown some synergy with previous cycles, there are certain traits of changing dynamics in the current cycle. Bitcoin has historically reached new highs, on average, one year after its halving event.
This pattern was repeated in the 2015-2018 cycle, when Bitcoin's price spiked to a new peak in August 2017 after its halving in 2016.
Similarly, in the 2019-2022 cycle, its price surged to new highs in November 2021, one year after its halving event in 2020. However, this trend has been altered in the current cycle after BTC hit a new ATH in March before its halving in April.
This places two options before investors: Either the halving event is no longer a yardstick for Bitcoin's price trajectory, or BTC has yet to experience the post-halving growth from previous cycles.
BTC/USD weekly chart (Coinbase)
Bitcoin Market Cycle Pattern
Historically, Bitcoin operates on a four-year market cycle pattern that begins with accumulation, bull market, distribution and bear market. Bitcoin could extend its rally into 2025 before establishing a price ceiling if the current market cycle follows this pattern. Additionally, market participants' expectation of the cycle repeating this trend could lead to a self-fulfilling prophecy.$BTC
Historically, Bitcoin operates on a four-year market cycle pattern that begins with accumulation, bull market, distribution and bear market. Bitcoin could extend its rally into 2025 before establishing a price ceiling if the current market cycle follows this pattern. Additionally, market participants' expectation of the cycle repeating this trend could lead to a self-fulfilling prophecy.$BTC
Bitcoin's retracement below $100K leaves investors wondering if the bull cycle is over
After reaching a high of $108,300 earlier in the week, Bitcoin experienced a decline on Wednesday following the FOMC's hawkish rate cut outlook for 2025. The Fed's decision to have only two rate cuts next year marred expectations of four rate cuts by market participants, leading to heavy selling pressure across the crypto market.
Particularly, US investors were among the top sellers, as revealed in the Bitcoin Coinbase premium plunging negative. This metric measures the difference between Coinbase's BTC/USD pair and Binance's. A decline shows higher selling pressure in the US than in the general market.
Bitcoin Coinbase Premium Index. Source: CryptoQuant
With the recent drawdown from its all-time high, most investors are contemplating if Bitcoin's bull season has run its course. The following factors reveal mixed signals:
After reaching a high of $108,300 earlier in the week, Bitcoin experienced a decline on Wednesday following the FOMC's hawkish rate cut outlook for 2025. The Fed's decision to have only two rate cuts next year marred expectations of four rate cuts by market participants, leading to heavy selling pressure across the crypto market.
Particularly, US investors were among the top sellers, as revealed in the Bitcoin Coinbase premium plunging negative. This metric measures the difference between Coinbase's BTC/USD pair and Binance's. A decline shows higher selling pressure in the US than in the general market.
Bitcoin Coinbase Premium Index. Source: CryptoQuant
With the recent drawdown from its all-time high, most investors are contemplating if Bitcoin's bull season has run its course. The following factors reveal mixed signals:
Bitcoin dives 3% from its recent all-time high, is this the cycle top?
Cryptos | 12/21/2024 01:09:30 GMT
Bitcoin investors panicked after the Fed's hawkish rate cut decision, hitting the market with high selling pressure.
Bitcoin's four-year market cycle pattern indicates that the recent correction could be temporary.
Bitcoin ETFs may have altered the historical crypto market cycle pattern.
Bitcoin (BTC) traded near $97,000 on Friday after its recent correction saw cryptocurrencies shedding over 5% of their total market capitalization. Despite the bearish sentiment currently dominating the market, several key factors suggest that BTC may not have topped in the current market cycle.
Cryptos | 12/21/2024 01:09:30 GMT
Bitcoin investors panicked after the Fed's hawkish rate cut decision, hitting the market with high selling pressure.
Bitcoin's four-year market cycle pattern indicates that the recent correction could be temporary.
Bitcoin ETFs may have altered the historical crypto market cycle pattern.
Bitcoin (BTC) traded near $97,000 on Friday after its recent correction saw cryptocurrencies shedding over 5% of their total market capitalization. Despite the bearish sentiment currently dominating the market, several key factors suggest that BTC may not have topped in the current market cycle.
Trump-Backed World Liberty Financial Adopts sUSDe Stablecoin for DeFi Expansion
Donald Trump-backed crypto platform World Liberty Financial (WLFI) is integrating Ethena’s sUSDe stablecoin as a core collateral asset within its DeFi ecosystem.
The move, pending governance approval, would enable sUSDe deposits with dual rewards in sUSDe and WLFI’s native WLF tokens.
These incentives aim to boost liquidity and attract new users to WLFI’s upcoming Aave v3 instance.
Should governance reject the proposal, WLFI and Ethena plan to pursue alternative collaboration opportunities for mutual integration.
WLFI has also expanded its digital asset portfolio as part of its growth strategy, investing $500,000 in Ethena and $250,000 in Ondo Finance.
The platform’s total holdings now stand at $83 million, with Ethereum (ETH) accounting for the largest share at $57 million, according to Arkham Intelligence. $ETH
Donald Trump-backed crypto platform World Liberty Financial (WLFI) is integrating Ethena’s sUSDe stablecoin as a core collateral asset within its DeFi ecosystem.
The move, pending governance approval, would enable sUSDe deposits with dual rewards in sUSDe and WLFI’s native WLF tokens.
These incentives aim to boost liquidity and attract new users to WLFI’s upcoming Aave v3 instance.
Should governance reject the proposal, WLFI and Ethena plan to pursue alternative collaboration opportunities for mutual integration.
WLFI has also expanded its digital asset portfolio as part of its growth strategy, investing $500,000 in Ethena and $250,000 in Ondo Finance.
The platform’s total holdings now stand at $83 million, with Ethereum (ETH) accounting for the largest share at $57 million, according to Arkham Intelligence. $ETH
Arthur Hayes Predicts Major Crypto Sell-Off During Trump’s Inauguration
Arthur Hayes, former BitMEX CEO and CIO of Maelstrom, warns of a significant crypto market sell-off around Donald Trump’s inauguration on January 20, 2025.
Hayes attributes this potential downturn to a growing disconnect between investor expectations for pro-crypto policies under Trump’s administration and the slow pace of political realities.
While Bitcoin surged following Trump’s electoral win, buoyed by optimism around favorable regulations, Hayes anticipates a sharp market correction as traders recalibrate their outlook.
Citing limited time for Trump to enact sweeping crypto reforms, Hayes believes the inauguration will serve as a tipping point for investor sentiment.
He revealed plans to reduce Maelstrom’s crypto holdings ahead of the event to mitigate risks.
Hayes’ forecast signals caution for bullish traders who have fueled Bitcoin’s post-election rally, underscoring the importance of balancing speculative enthusiasm with realistic policy timelines.$BTC
Arthur Hayes, former BitMEX CEO and CIO of Maelstrom, warns of a significant crypto market sell-off around Donald Trump’s inauguration on January 20, 2025.
Hayes attributes this potential downturn to a growing disconnect between investor expectations for pro-crypto policies under Trump’s administration and the slow pace of political realities.
While Bitcoin surged following Trump’s electoral win, buoyed by optimism around favorable regulations, Hayes anticipates a sharp market correction as traders recalibrate their outlook.
Citing limited time for Trump to enact sweeping crypto reforms, Hayes believes the inauguration will serve as a tipping point for investor sentiment.
He revealed plans to reduce Maelstrom’s crypto holdings ahead of the event to mitigate risks.
Hayes’ forecast signals caution for bullish traders who have fueled Bitcoin’s post-election rally, underscoring the importance of balancing speculative enthusiasm with realistic policy timelines.$BTC
Crypto news updates:
Ohio Lawmaker Proposes State-Backed Bitcoin Reserve to Safeguard Public Funds
Ohio State Representative Derek Merrin has introduced the Ohio Bitcoin Reserve Act, a bill aiming to establish a state-backed Bitcoin reserve.
The proposed legislation would allow Ohio to invest surplus funds in Bitcoin as a hedge against the devaluation of the US Dollar.
Merrin emphasized the importance of Bitcoin in preserving the value of public funds, stating it provides a robust supplement to traditional investment portfolios amid inflationary pressures.
The proposal mirrors growing state-level interest in Bitcoin, with Texas and Pennsylvania pursuing similar initiatives.
It also aligns with broader Republican strategies, including President-elect Donald Trump’s expected push for a national Bitcoin reserve and Senator Cynthia Lummis’ draft bill advocating for 1 million BTC purchases over five years.
Bitcoin’s impressive 155% growth this year — spurred by a 50% post-election surge — strengthens its appeal as a strategic asset.
Ohio Lawmaker Proposes State-Backed Bitcoin Reserve to Safeguard Public Funds
Ohio State Representative Derek Merrin has introduced the Ohio Bitcoin Reserve Act, a bill aiming to establish a state-backed Bitcoin reserve.
The proposed legislation would allow Ohio to invest surplus funds in Bitcoin as a hedge against the devaluation of the US Dollar.
Merrin emphasized the importance of Bitcoin in preserving the value of public funds, stating it provides a robust supplement to traditional investment portfolios amid inflationary pressures.
The proposal mirrors growing state-level interest in Bitcoin, with Texas and Pennsylvania pursuing similar initiatives.
It also aligns with broader Republican strategies, including President-elect Donald Trump’s expected push for a national Bitcoin reserve and Senator Cynthia Lummis’ draft bill advocating for 1 million BTC purchases over five years.
Bitcoin’s impressive 155% growth this year — spurred by a 50% post-election surge — strengthens its appeal as a strategic asset.
Chart of the day: Bitcoin traders maintain positive outlook despite Fed Jitters
As the US Fed meeting kicked off on Tuesday, the market had priced in a 25-basis-point rate cut, which has come to pass. Widespread anxiety around this major market event had already triggered a 4.2% outflow from the global crypto sector valuation over the last 24 hours. However, market data suggests the majority of speculative traders still maintain a positive outlook on Bitcoin’s short-term price prospects.
While Bitcoin price dipped below the $105,000 mark, the Coinglass chart below shows speculative traders continue to drive more capital inflows toward the BTC futures markets.
Bitcoin (BTC) Open Interest vs. Price | Source: Coinglass
As shown in the chart above, Bitcoin open interest rose to a new all-time high of $68.1 billion on Wednesday, reflecting $5 billion of inflows within the last 48 hours.
When Open Interest continues to increase amid a price pullback, it signals resilient bullish sentiment among short-term speculative traders. The move could set the stage for a rapid breakout in the coming trading sessions for two main reasons.
First, rising Open Interest amid a price correction suggests that traders are accumulating leveraged long positions, anticipating a rebound rather than exiting the market. This reinforces a "buy-the-dip" phenomenon that often precedes a sharp recovery.
If Bitcoin maintains its position above the $100,000 psychological support, a breakout toward the $110,000 resistance becomes increasingly likely.
As the US Fed meeting kicked off on Tuesday, the market had priced in a 25-basis-point rate cut, which has come to pass. Widespread anxiety around this major market event had already triggered a 4.2% outflow from the global crypto sector valuation over the last 24 hours. However, market data suggests the majority of speculative traders still maintain a positive outlook on Bitcoin’s short-term price prospects.
While Bitcoin price dipped below the $105,000 mark, the Coinglass chart below shows speculative traders continue to drive more capital inflows toward the BTC futures markets.
Bitcoin (BTC) Open Interest vs. Price | Source: Coinglass
As shown in the chart above, Bitcoin open interest rose to a new all-time high of $68.1 billion on Wednesday, reflecting $5 billion of inflows within the last 48 hours.
When Open Interest continues to increase amid a price pullback, it signals resilient bullish sentiment among short-term speculative traders. The move could set the stage for a rapid breakout in the coming trading sessions for two main reasons.
First, rising Open Interest amid a price correction suggests that traders are accumulating leveraged long positions, anticipating a rebound rather than exiting the market. This reinforces a "buy-the-dip" phenomenon that often precedes a sharp recovery.
If Bitcoin maintains its position above the $100,000 psychological support, a breakout toward the $110,000 resistance becomes increasingly likely.
Altcoin market updates: Solana, XRP AVAX among top losers, Fed triggers sell-the-news frenzy
As the US central bank’s governors on Wednesday projected fewer rate cuts in 2025, crypto traders opted to take profits off the table.
This effectively ended a week-long rally that has seen Bitcoin (BTC), Ripple (XRP) and Avalanche (AVAX) all score double-digit gains since December 10.
Crypto Market Performance | December 18, 2024 | Source: Coingecko
According to data aggregated by Coingecko, the global crypto market capitalization declined 4.2% on Wednesday, reflecting a sector wide sell-off after the US Fed cut its main policy rate by 25 basis points but projected fewer cuts next year.
XRP price dipped 5.2%, tumbling under the $2.50 mark as market euphoria peaked after the RLUSD stablecoin’s official launch on December 17.
Solana (SOL) price also declined by 5% before finding support around the $215 level.
Avalanche traders also booked profits on Wednesday, sparking a 5.6% price retracement before settling at the $47 level.
$XRP $SOL $BTC
As the US central bank’s governors on Wednesday projected fewer rate cuts in 2025, crypto traders opted to take profits off the table.
This effectively ended a week-long rally that has seen Bitcoin (BTC), Ripple (XRP) and Avalanche (AVAX) all score double-digit gains since December 10.
Crypto Market Performance | December 18, 2024 | Source: Coingecko
According to data aggregated by Coingecko, the global crypto market capitalization declined 4.2% on Wednesday, reflecting a sector wide sell-off after the US Fed cut its main policy rate by 25 basis points but projected fewer cuts next year.
XRP price dipped 5.2%, tumbling under the $2.50 mark as market euphoria peaked after the RLUSD stablecoin’s official launch on December 17.
Solana (SOL) price also declined by 5% before finding support around the $215 level.
Avalanche traders also booked profits on Wednesday, sparking a 5.6% price retracement before settling at the $47 level.
$XRP $SOL $BTC
Crypto Today: Bitcoin holds $104K as XRP, AVAX and Solana traders take profits
Cryptos | 12/18/2024 19:46:11 GMT
The cryptocurrency sector valuation declined 4% on Wednesday, dropping toward $3.8 trillion.
While Bitcoin price dipped 2% to consolidate around the $104,600 mark, top altcoins like XRP, AVAX and SOL suffered excess of 5% losses on the day.
The sell-the-news frenzy comes as the Fed projects fewer rate cuts in 2025.
Cryptos | 12/18/2024 19:46:11 GMT
The cryptocurrency sector valuation declined 4% on Wednesday, dropping toward $3.8 trillion.
While Bitcoin price dipped 2% to consolidate around the $104,600 mark, top altcoins like XRP, AVAX and SOL suffered excess of 5% losses on the day.
The sell-the-news frenzy comes as the Fed projects fewer rate cuts in 2025.
Bitcoin surged above the $100K milestone this year for the first time, a historic event for the overall crypto industry. Just a few years back, the entire industry was shaken by the collapse of foundational institutions, such as Genesis, FTX, BlockFi, Celsius, Three Arrows, and Voyager, as well as the LUNA/UST digital assets, casting doubts over the future of the crypto industry.
However, the launch of spot Bitcoin ETFs in the US in January 2024 gave an accessible avenue for institutional and retail investors to gain exposure to Bitcoin without the complexities of direct ownership. This was followed by corporate accumulation led by MicroStrategy, Marathon Digital, Galaxy Digital Holdings, Tesla, Riot Platforms and others, leading to the surge in demand for Bitcoin.
Bitcoin’s fourth halving event fueled the ongoing rally, leading to a 50% reduction in supply inflation and an inherent increase in issuance scarcity. Political developments further shaped the industry with the victory of a crypto-friendly candidate Donald Trump, the resignation by SEC chair Gary Gensler, expectations of favorable regulations and looser monetary policy in the US and other large economies pushed BTC to a new highs.
With many of these factors expected to extend into 2025, technical analysis and expert insights support a bullish outlook for BTC, with price targets exceeding $200K by the end of next year.
However, the launch of spot Bitcoin ETFs in the US in January 2024 gave an accessible avenue for institutional and retail investors to gain exposure to Bitcoin without the complexities of direct ownership. This was followed by corporate accumulation led by MicroStrategy, Marathon Digital, Galaxy Digital Holdings, Tesla, Riot Platforms and others, leading to the surge in demand for Bitcoin.
Bitcoin’s fourth halving event fueled the ongoing rally, leading to a 50% reduction in supply inflation and an inherent increase in issuance scarcity. Political developments further shaped the industry with the victory of a crypto-friendly candidate Donald Trump, the resignation by SEC chair Gary Gensler, expectations of favorable regulations and looser monetary policy in the US and other large economies pushed BTC to a new highs.
With many of these factors expected to extend into 2025, technical analysis and expert insights support a bullish outlook for BTC, with price targets exceeding $200K by the end of next year.
Technical analysis: Bitcoin could exceed $240K
Looking at Bitcoin’s monthly chart below, Bitcoin’s price peaked between 518 and 549 days after each previous halving cycle. This is seen after the 2016 and 2020 halving, respectively. Assuming that history repeats, the next Bitcoin peak would likely occur after 518 days (September 2025) or 549 days (October 2025).
Moreover, when considering the peak of the previous halving, it is 3.51 times the other one: the 2021 peak was 3.51 times the 2017 peak. Assuming this theory plays out, the peak in 2025 would be 3.51 times that of 2021, which would give a price target of $242,190.
BTC/USD monthly chart
Another price projection would be given by CryptoQuant Bitcoin realized price bands, which is the average price at which all the Bitcoin in circulation has been transferred for the last time.
Historically, the price of Bitcoin has marketed a cycle top at ~4 times the realized price; this level represents the upper band (red dashed line). As of now, Bitcoin’s top price target is at $156K.
Bitcoin: Realized Price Bands chart. Source: CryptoQuant
Bitcoin: Realized Price Bands chart. Source: CryptoQuant
Lastly, FXStreet interviewed several experts and renowned people in the crypto communities. Their views about Bitcoin price projection for the end of 2024 and 2025 are given below:
Looking at Bitcoin’s monthly chart below, Bitcoin’s price peaked between 518 and 549 days after each previous halving cycle. This is seen after the 2016 and 2020 halving, respectively. Assuming that history repeats, the next Bitcoin peak would likely occur after 518 days (September 2025) or 549 days (October 2025).
Moreover, when considering the peak of the previous halving, it is 3.51 times the other one: the 2021 peak was 3.51 times the 2017 peak. Assuming this theory plays out, the peak in 2025 would be 3.51 times that of 2021, which would give a price target of $242,190.
BTC/USD monthly chart
Another price projection would be given by CryptoQuant Bitcoin realized price bands, which is the average price at which all the Bitcoin in circulation has been transferred for the last time.
Historically, the price of Bitcoin has marketed a cycle top at ~4 times the realized price; this level represents the upper band (red dashed line). As of now, Bitcoin’s top price target is at $156K.
Bitcoin: Realized Price Bands chart. Source: CryptoQuant
Bitcoin: Realized Price Bands chart. Source: CryptoQuant
Lastly, FXStreet interviewed several experts and renowned people in the crypto communities. Their views about Bitcoin price projection for the end of 2024 and 2025 are given below:
Bitcoin outlook for 2025: What to expect with a crypto-friendly US president
Bitcoin outlook for 2025: What to expect with a crypto-friendly US president
The year-ahead report by Bitwise highlights Bitcoin predictions for 2025. The report explains that Bitcoin ETF demand will reach a new high.
“Combine that demand with the reduction in new supply thanks to the April 2024 halving, plus new buying from corporations and governments and … well, we’ve seen this play before. (Note: If the US government follows through on proposals to establish a 1 million Bitcoin strategic r
The year-ahead report by Bitwise highlights Bitcoin predictions for 2025. The report explains that Bitcoin ETF demand will reach a new high.
“Combine that demand with the reduction in new supply thanks to the April 2024 halving, plus new buying from corporations and governments and … well, we’ve seen this play before. (Note: If the US government follows through on proposals to establish a 1 million Bitcoin strategic r
Macroeconomics factors and use case for Bitcoin
US macroeconomics also supported risky assets like Bitcoin in 2024. The US Federal Reserve announced a 50 basis point (bps) cut in interest rates in September, lowering borrowing costs for the first time in over four years (COVID-19 times). This big rate cut is considered a bullish sign for cryptocurrencies, stocks, and global risk markets.
Lower borrowing costs generally provide more purchasing power for investors, who would invest their money in assets rather than keep it in the bank. Thus, since the September rate cut, Bitcoin has rallied from $55K to more than $100K.
“Rate cuts are generally pretty good for the risk assets.[...]Trump is coming. Elon Musk is joining Trump in forming the government, so 2025 could be the year of crypto and we are witnessing history,” Arjun Vijay, Chief Operating Officer and founder at Indian crypto exchange Giottus, told FXStreet.
Additionally, this year, the Bitcoin network discovered a new use case with the introduction of the RUNES protocol, enabling the minting of tokens directly on the Bitcoin blockchain. By leveraging the OP_RETURN opcode to inscribe RUNES, the protocol unlocked a wave of innovation, resulting in an unprecedented surge in the use of OP_RETURN, with 81 million recorded throughout the year.
Bitcoin: OP Return Code Use chart. Source: CryptoQuant
US macroeconomics also supported risky assets like Bitcoin in 2024. The US Federal Reserve announced a 50 basis point (bps) cut in interest rates in September, lowering borrowing costs for the first time in over four years (COVID-19 times). This big rate cut is considered a bullish sign for cryptocurrencies, stocks, and global risk markets.
Lower borrowing costs generally provide more purchasing power for investors, who would invest their money in assets rather than keep it in the bank. Thus, since the September rate cut, Bitcoin has rallied from $55K to more than $100K.
“Rate cuts are generally pretty good for the risk assets.[...]Trump is coming. Elon Musk is joining Trump in forming the government, so 2025 could be the year of crypto and we are witnessing history,” Arjun Vijay, Chief Operating Officer and founder at Indian crypto exchange Giottus, told FXStreet.
Additionally, this year, the Bitcoin network discovered a new use case with the introduction of the RUNES protocol, enabling the minting of tokens directly on the Bitcoin blockchain. By leveraging the OP_RETURN opcode to inscribe RUNES, the protocol unlocked a wave of innovation, resulting in an unprecedented surge in the use of OP_RETURN, with 81 million recorded throughout the year.
Bitcoin: OP Return Code Use chart. Source: CryptoQuant
Donald Trump’s victory in the US election
The US presidential election in 2024 was one of the most significant events in the world. The influence of the country’s political decisions, policies, and economic approaches can significantly impact crypto and global markets.
The victory of a crypto-friendly candidate, Donald Trump, was seen as more favorable for crypto markets due to his pro-crypto stances, which led Bitcoin prices to a new all-time high this year.
Trump’s stance regarding Bitcoin and other cryptocurrencies shifted dramatica
The victory of a crypto-friendly candidate, Donald Trump, was seen as more favorable for crypto markets due to his pro-crypto stances, which led Bitcoin prices to a new all-time high this year.
Trump’s stance regarding Bitcoin and other cryptocurrencies shifted dramatica
Bitcoin becomes the best-performing asset of 2024
Bitcoin has emerged as a standout performer in 2024, overshadowing traditional asset classes such as Gold, equities, real estate, and bonds. The world’s most renowned cryptocurrency has extended prior year gains, boasting a 139% surge in 2024, contributing a substantial $2.1 trillion to its market capitalization.
Assets Class Total Returns chart. Source: Macrobond
Bitcoin has emerged as a standout performer in 2024, overshadowing traditional asset classes such as Gold, equities, real estate, and bonds. The world’s most renowned cryptocurrency has extended prior year gains, boasting a 139% surge in 2024, contributing a substantial $2.1 trillion to its market capitalization.
Assets Class Total Returns chart. Source: Macrobond
Bitcoin’s fourth halving event
Bitcoin’s fourth halving event occurred in April 2024, leading to a 50% reduction in supply inflation and an inherent increase in issuance scarcity. The halving reduced block rewards from 6.25 BTC to 3.125 BTC, constraining new supply and fueling demand.
Bitcoin Halving Year and Reward chart
According to a Glassnode report, 19,687,500 BTC have been mined and issued in the Fourth Epoch, accounting for 93.75% of the terminal supply of 21 million BTC. Thus, there are only 1,312,500 BTC to be issued during the next 126 years, with 656,600 (3.125%) issued during our present Epoch. The report explains that each halving represents a point where:
The percent of supply remaining equals the new block subsidy (3.125 BTC/block vs 3.125% remaining).
50% of the remaining supply (1.3125M BTC) will be mined between the fourth and fifth halving.
Bitcoin: Percent of 21 Million Supply Mined chart. Source: Glassnode
Bitcoin: Percent of 21 Million Supply Mined chart. Source: Glassnode
Moreover, the block subsidy is halved every 210,000 blocks, and the inflation rate is also halved roughly every four years. This puts the new annualized inflation rate of the Bitcoin supply at a value of 0.85%, down from 1.7% in the prior Epoch.
The fourth halving also marks a significant milestone in comparing Bitcoin to Gold as, for the first time in history, Bitcoin’s steady-state issuance rate (0.83%) became lower than Gold (~2.3%), marking a historic handover in the title of the scarcest asset.
Bitcoin vs. Gold Inflation Rate chart. Source: Glassnode
Bitcoin vs. Gold Inflation Rate chart. Source: Glassnode
In an exclusive interview with FXStreet, market-making firm Auros Managing Director Le Shi said that, based on past trends, Bitcoin is “still relatively early on” in the bullish cycle compared to other years in which there has been a halving event.
“I can’t predict that timing, but there are plenty of reasons to be very bullish for the remainder of this year – the three weeks remaining – as well as going into 2025,” Le said.
Bitcoin’s fourth halving event occurred in April 2024, leading to a 50% reduction in supply inflation and an inherent increase in issuance scarcity. The halving reduced block rewards from 6.25 BTC to 3.125 BTC, constraining new supply and fueling demand.
Bitcoin Halving Year and Reward chart
According to a Glassnode report, 19,687,500 BTC have been mined and issued in the Fourth Epoch, accounting for 93.75% of the terminal supply of 21 million BTC. Thus, there are only 1,312,500 BTC to be issued during the next 126 years, with 656,600 (3.125%) issued during our present Epoch. The report explains that each halving represents a point where:
The percent of supply remaining equals the new block subsidy (3.125 BTC/block vs 3.125% remaining).
50% of the remaining supply (1.3125M BTC) will be mined between the fourth and fifth halving.
Bitcoin: Percent of 21 Million Supply Mined chart. Source: Glassnode
Bitcoin: Percent of 21 Million Supply Mined chart. Source: Glassnode
Moreover, the block subsidy is halved every 210,000 blocks, and the inflation rate is also halved roughly every four years. This puts the new annualized inflation rate of the Bitcoin supply at a value of 0.85%, down from 1.7% in the prior Epoch.
The fourth halving also marks a significant milestone in comparing Bitcoin to Gold as, for the first time in history, Bitcoin’s steady-state issuance rate (0.83%) became lower than Gold (~2.3%), marking a historic handover in the title of the scarcest asset.
Bitcoin vs. Gold Inflation Rate chart. Source: Glassnode
Bitcoin vs. Gold Inflation Rate chart. Source: Glassnode
In an exclusive interview with FXStreet, market-making firm Auros Managing Director Le Shi said that, based on past trends, Bitcoin is “still relatively early on” in the bullish cycle compared to other years in which there has been a halving event.
“I can’t predict that timing, but there are plenty of reasons to be very bullish for the remainder of this year – the three weeks remaining – as well as going into 2025,” Le said.