As Bitcoin breaks the 100,000 mark, discussions about future market trends are becoming increasingly heated, with predictions ranging from bullish to 200,000 or bearish to 70,000. Especially from late 2024 to early 2025, the cryptocurrency market will experience several key policy and regulatory changes. Whether you are preparing to liquidate or looking for entry opportunities, you should closely monitor these events and their potential impacts to grasp the underlying risks or opportunities in the market in advance.
Key trading timeline
The Federal Reserve's interest rate cut process
The policy direction of the Federal Reserve has always been a key factor affecting the overall financial market and the cryptocurrency market. Since the second half of 2024, the Federal Reserve has entered a cycle of interest rate cuts to avoid economic recession and stimulate economic growth.
As the market has already priced in expectations of multiple interest rate cuts, the focus of this meeting will be on the sustainability of future policies and whether we are nearing the end of the interest rate cut cycle. If the Federal Reserve continues to cut rates by the end of 2024 or the beginning of 2025, maintaining a loose monetary environment, hot money may flow from traditional assets into risk assets like cryptocurrencies.
December 19, 2024, FOMC meeting
The FOMC meeting at the end of the year may provide insights into future monetary policy trends, specifically whether to continue cutting interest rates. If further rate cut signals are provided during the meeting, it may not only weaken the dollar but also continue to drive funds into risk assets, including Bitcoin.
January 30, 2025, FOMC meeting
The policy meeting on January 30, 2025, will be an important moment to examine the effects of interest rate cuts. The market will closely monitor whether the Federal Reserve will hint that the interest rate cut cycle is nearing its end or continue to release signals of easing. The impact of rate cuts has been fully digested by the market, and the future focus will be on whether the policy can be sustained.
Changes in the political situation in the U.S. and Europe
From this U.S. election, it is evident that political events are often the core driving force behind fluctuations in market sentiment, especially during times of new leadership or significant policy adjustments; the market usually views these key moments as signals for future economic policy, regulatory environments, and capital flows.
Especially in the cryptocurrency sector, future policy changes will directly relate to the tightening or loosening of industry regulatory frameworks, adjustments in tax burdens, and ultimately determine the confidence of market participants. Thus, there are several important time points to watch for in the future.
January 20, 2025: U.S. presidential inauguration
According to the Twelfth Amendment to the U.S. Constitution and the 1887 Electoral Count Act, Congress will hold a joint session on January 6 following the presidential election to formally confirm the new president, and the inauguration on January 20, 2025, will become a highly anticipated time point for the market.
The U.S. presidential inauguration symbolizes not only the formal handover of political leadership but may also be accompanied by the announcement of new economic policies. While Trump's previous strong support for economic growth and regulatory relief has positively influenced market sentiment, the subsequent market reaction will depend on actual cabinet selections and whether any new favorable policies are announced around January 20, as well as the speed of policy implementation following the inauguration.
(Cabinet nominations require Senate confirmation, with the confirmation process to begin after Trump officially takes office on January 20, 2025. The Senate typically holds hearings and votes on cabinet nominations within weeks of the new President's inauguration. Therefore, the final confirmation of Trump's cabinet is expected to be completed between February and March 2025.)
March 1, 2025: New President of the EU takes office
The President of the European Commission is the leader of the EU's highest administrative body, responsible for proposing legislative initiatives, executing EU policies, and overseeing the implementation of policies by member states. The new President of the EU will officially take office in March 2025, and this personnel change will symbolize a new starting point for the EU's policy direction. The policy stance of the new President will also directly affect the regulatory environment and development direction of the EU in this area.
In the past, the EU has taken a relatively progressive stance on cryptocurrency regulation. After the new President takes office, these policies may be further advanced or adjusted according to individual positions. If the new President supports the development of cryptocurrencies and blockchain technology, the EU may welcome a more lenient regulatory environment; conversely, if there is a greater emphasis on risk control, it may put pressure on market activity levels in the short term.
Significant decisions in corporate and financial markets
December 15, 2024: Will MSTR meet the profitability requirements to be included in the S&P 500?
However, the widely circulated news that MicroStrategy's stock MSTR may be included in the S&P 500 cannot materialize in the short term. According to S&P's regulations, candidate companies must have positive cumulative net income over the last four quarters, and the net income for the most recent quarter must also be positive.
However, in MicroStrategy's third-quarter report for 2024, the net loss reached $340.2 million, or $1.72 per share, failing to meet profitability standards. Therefore, although MicroStrategy benefited from the surge in Bitcoin and its market value has exceeded the requirements of the S&P 500, it has not yet reached the financial threshold for inclusion in the S&P 500 index in the near term.
New regulatory policies in Europe and the U.S. are implemented
The newly implemented regulatory policies may become key 'signposts' for the cryptocurrency market from late 2024 to early 2025, especially as new rules in Europe and the U.S. may introduce a certain degree of market volatility.
January 1, 2025: The European MiCA regulation takes effect
The European cryptocurrency market regulations (MiCA) will be fully implemented starting January 1 next year, covering various regulatory aspects for stablecoins, exchanges, and wallet service providers. It is seen as the world's first unified regulatory framework for the cryptocurrency market, aimed at enhancing operational transparency, protecting investors, and promoting technological innovation.
If successfully advanced, MiCA will help enhance Europe's leading position in the global cryptocurrency industry. For institutional investors, the improvement of the compliance environment will boost investment confidence, attract more capital to the European market, and promote the healthy development of the market as a whole. However, regulations may also pose short-term challenges, such as increasing compliance costs for companies, particularly for small and medium-sized exchanges and emerging projects, which could impact liquidity and activity levels in the European cryptocurrency market.
January 1, 2025: New tax reporting rules for the U.S.
The new tax reporting regulations for cryptocurrency transactions in the U.S. will also officially take effect on January 1 next year. According to the new regulations, all trading platforms must record in detail and report users' cryptocurrency trading data to tax authorities, including trading volume, capital gains, and capital flow information. The goal is to reduce tax loopholes, ensure compliance in cryptocurrency trading, and provide more comprehensive data support for U.S. tax authorities.
For individual and institutional investors, while this increases reporting requirements, it also provides clearer tax guidance, helping to reduce potential future tax risks. If implemented smoothly, it could also attract more institutional investors into the market due to clearer regulatory standards, reinforcing the U.S.'s position as a global cryptocurrency hub.
Fluctuations in trading activity during major holidays
During the holiday season at the end and beginning of the year, market liquidity usually decreases, but unexpected price fluctuations may occur.
December 24, 2024, to January 1, 2025: Christmas holidays
During the Christmas period, trading activity is significantly reduced as most traders in Western countries are on holiday, leading to a drastic decline in overall market liquidity. This period coincides with the retail consumption peak, and coupled with investors' expectations for the coming year, there may be additional capital inflows into the cryptocurrency market.
If consumption data or macroeconomic indicators during the holiday period perform strongly, it may further boost market sentiment and drive up cryptocurrency prices toward the end of the year. However, investors still need to be cautious due to insufficient liquidity, as short-term volatility may be exacerbated, leading to the risk of a 'holiday effect'.
January 29 to February 12, 2025: Lunar New Year
The Lunar New Year is one of the most important traditional holidays in Asia. Similar to the Christmas holidays, trading activity in the Asian market usually declines during the Lunar New Year due to many traders being on holiday. However, after the long holiday, trading volumes often rebound, depending on macroeconomic dynamics during the holiday and the overall performance of international markets.
This period is also an important time to observe market sentiment, as many families and individuals may use the holiday for financial planning, which could affect the flow of funds in the following year.
