Last week was the Thanksgiving holiday in the United States, with low market trading volume, maintaining an overall consolidation pattern. The U.S. stock market is about to create history again, with 2024 expected to be one of the best-performing years on record, and 5 out of the past 6 years have achieved double-digit returns.
Market breadth remains supportive, with the difference in the number of new highs and new lows for stocks over the past 52 weeks looking healthy. The upward trend remains intact, the volatility index (VIX) is trending downwards, and after Trump announced Scott Bessent would serve as Secretary of the Treasury, the U.S. bond market has calmed down, with the 10-year yield down nearly 35 basis points from its October peak.
In addition to the so-called 'support for cryptocurrencies' stance, Bessent is also a supporter of fiscal hawks and an independent Federal Reserve. His proposed 3-3-3 plan (reducing the fiscal deficit to 3% of GDP, increasing real GDP growth to 3%, and increasing energy production by 3 million barrels per day) has brought relief to the U.S. fixed income market, and since his nomination, the yield curve premium has remained stable at current levels.
Despite doubts about his core views, reporters found that he has a 'long-term bullish' outlook on gold due to the central bank's continued accumulation when researching his early speeches. Will this have a spillover effect on Bitcoin, especially in light of recent discussions about strategic reserve portfolios? At the very least, the next 4 years will undoubtedly be very interesting.
Traders will return to a busy week, welcoming the final non-farm payroll data release of the year. Despite newly emerging worries about rising inflation, the market still expects about a 65% chance of interest rate cuts, but considering the strong economic conditions, the forward expectations for rate cuts in 2025-2027 have been significantly reduced. Regarding employment data, the market expects overall employment figures to rebound to around +160,000, while the unemployment rate is expected to remain around 4.3%. Given the recent weakness in PMI surveys and high-frequency employment data, the final data results may also fall below expectations, but unless there is an extremely surprising outcome, risk sentiment may remain positive.
The optimistic sentiment in the cryptocurrency market is still widespread, but this week's focus is on Ripple. In anticipation of the government withdrawing its long-standing lawsuit, XRP skyrocketed by an astonishing 73%. This significant surge helped XRP surpass USDT, becoming the third-largest cryptocurrency by market capitalization. Anticipating this development, whale addresses have been actively buying (and are now selling) XRP over the past month.
The current upward trend is primarily focused on mainstream coins (excluding ETH), with BTC leading the charge, while altcoins are still struggling to return to January's highs. Although the recent success of Layer 2 and protocol-transitioning blockchains (such as Hyperliquid) continues to dominate attention in the cryptocurrency market, we are seeing some signs of improvement in Ethereum through inflows into ETH ETFs, with over $330 million flowing in last Friday. Will we see more secondary mainstream coins rebound before the end of the year?
Regardless, the fundamental indicators of cryptocurrency remain optimistic, and the market capitalization of stablecoins has finally surpassed the peak during the Terra-Luna period. Stablecoins are usually the first stop for most fiat currency users entering the cryptocurrency market, and a higher market capitalization (price-fixed and thus fully driven by quantity) indicates greater mainstream participation.
As investors pour in more new funds, will we see faster growth in the new year? Hopefully!
