1. The prospect of the Federal Reserve maintaining interest rates
According to CME's 'FedWatch' data, the market expectation for the Federal Reserve to maintain interest rates in January 2024 is as high as 91.4%. This data reflects the market's general belief that the Federal Reserve will not continue to raise interest rates in the short term but will maintain its current policy stance based on economic data observation. Only 8.6% of market participants expect the Federal Reserve to cut rates by 25 basis points, indicating that the expectation for rate cuts is not strong.
From an overall economic perspective, the Federal Reserve's interest rate policy will continue to have a profound impact on global financial markets. In 2023, the U.S. economy showed strong growth, but inflation has not been fully controlled. Although the Federal Reserve has suppressed some demand through interest rate hikes, the market's tolerance for further rate increases seems to be approaching its limit. At the beginning of 2024, the Federal Reserve is likely to adopt a wait-and-see attitude, waiting for more data to determine whether there is room for further rate cuts.
If the Federal Reserve actually maintains interest rates in January and gradually cuts rates in the second half of 2024, it will undoubtedly provide better support for the cryptocurrency market. A low interest rate environment typically helps players seek returns on high-risk assets, and Bitcoin and other digital currencies, as emerging asset classes, may thus welcome opportunities for capital inflow.
2. Bitcoin ETF and institutional capital inflow
In 2024, the launch of Bitcoin ETFs is undoubtedly one of the significant events in the cryptocurrency market. According to monitoring by HODL15 Capital, since the beginning of this year, institutions, including 9 new Bitcoin spot ETFs and MicroStrategy, have cumulatively increased their holdings by more than 1.1 million Bitcoins, indicating that the institutionalization of the Bitcoin market is deepening. Particularly, the launch of Bitcoin ETFs provides players with a more convenient investment channel and gradually tightens the connection between the cryptocurrency market and traditional financial markets.
Currently, the inflow of institutional capital is one of the important factors driving the rise in Bitcoin prices. The successful issuance of Bitcoin ETFs not only allows traditional players to participate in Bitcoin investments more easily but also lays the foundation for the mainstreaming of Bitcoin. In the future, as more institutional players get involved, the liquidity and market depth of Bitcoin will further enhance, which will be very beneficial for its long-term price performance.
In addition, BlackRock is also actively promoting the launch of Bitcoin and Ethereum ETFs. BlackRock's ETF director Jay Jacobs stated that currently, compared to altcoin ETFs, the market demand for Bitcoin and Ethereum ETFs is still in its early stages. As players deepen their understanding of digital currency assets, traditional financial institutions' layout in the digital currency field is expected to expand further in the coming years, which may bring more capital support for Bitcoin and Ethereum.
3. The application of digital currency in Russia and trends in international payments
In the international market, Russia's digital currency policy is also worth paying attention to. Russian Finance Minister Anton Siluanov recently stated that Russian companies have begun using Bitcoin and other digital currencies in international payments. This trend indicates that the application of digital currency as an international payment tool is gradually expanding, especially against the backdrop of a complex and changeable global political and economic situation, where digital currency provides a new payment method for international trade.
Russia has taken measures to legalize cryptocurrency in foreign trade. This initiative not only promotes the use of digital currency but also further consolidates Russia's leading position in the global Bitcoin mining industry. As more countries accept digital currency payments, the role of digital currency in the international payment system will become increasingly significant.
4. Industry trends in 2025: The rise of AI, DeSci, and quantum-resistant technology
Looking ahead to 2025, the statements made by DWF Labs co-founder Andrei Grachev on the X platform provide us with insights into the future development direction of cryptocurrencies and blockchain technology. He pointed out that AI (artificial intelligence), DeSci (decentralized science), quantum-resistant technology, and meme coins will become key narratives in 2025. The future of the cryptocurrency industry will not be limited to traditional financial applications but will gradually expand into the fields of AI and quantum technology.
The combination of AI and DeSci may bring broader prospects for the application of blockchain technology. Decentralized scientific research not only improves research efficiency but may also bring new application scenarios for blockchain technology. The rise of quantum-resistant technology aims to develop more secure encryption protocols in response to the encryption challenges that future quantum computing may pose, ensuring the long-term security of blockchain.
BTC: Yesterday, Bitcoin closed with a 'small bullish line' and the trend remains within a volatile range. Currently, from a daily chart perspective, the significant strong resistance level is $100,000 above, while support is around $92,000 below. This range has become the main scope of recent volatility, and the market has yet to break through the key interval; directional choice still needs further confirmation.
ETH: Yesterday, Ethereum closed with a 'doji' candle and is currently at the 5-day moving average position, in a state of fluctuation. Patience is needed to wait for signals of capital inflow or outflow for ETH tonight, as there is still an expectation of a rebound in the future.
In summary, tonight's U.S. market opening will have an important impact on Bitcoin's trend. If the U.S. market shows positive movement and Bitcoin trading volume significantly increases, it may push the price towards the strong resistance level of $100,000. However, if market sentiment is weak, there is a possibility that the price may retest the $92,000 support area.
Altcoins: Recently, the overall performance of the altcoin market has been relatively sluggish. The funding situation is not ideal, and the enthusiasm for speculation is noticeably lacking. In the short term, the market lacks clear profit opportunities, and sentiment is relatively cold. However, from a medium to long-term perspective, if you already hold positions, you can still hold on and wait for further changes in the market.
Today's Fear and Greed Index: 79 (Extreme Greed)