The price of Bitcoin reached a historic high under the dual influence of Trump's election and the Federal Reserve's policy outlook. Behind this wave of increase is both the impetus of policy expectations and the exposure of the market's speculative characteristics, with volatility significantly increasing after a sharp rise. Optimistic market participants remain closely focused on this wave of increase, especially on whether it can push Bitcoin's price to break the $100,000 barrier. It is unstoppable.
The recent surge in Bitcoin began on November 5, 2024, during the U.S. elections, and on November 13, it briefly surpassed the historic high of $93,400, rising about 35% compared to before the election.
The factors driving this surge mainly come from two aspects: first, the U.S. inflation data met analysts' expectations, prompting traders to increase bets on a 25 basis point rate cut by the Federal Reserve in December; second, Trump's campaign promises to introduce a series of policies favorable to the development of cryptocurrencies greatly boosted market sentiment. The active participation of institutional investors injected new momentum into the market.
Data shows that the number of open contracts for Bitcoin futures at the Chicago Mercantile Exchange hit a historic high of 35,973 contracts in November, with a nominal value of $13.9 billion.
Since the election date on November 5, the U.S. spot Bitcoin ETF has seen a net inflow of $4.7 billion, with the total assets of Bitcoin ETFs issued by 12 institutions reaching approximately $94 billion.
However, the sustainability of this wave of increase is impacted by short-term shocks.
On November 15, after Federal Reserve Chairman Powell stated that there was no need to rush to cut interest rates, the price of Bitcoin fell below $87,000, a decrease of about $6,500 from the historic high of November 13.
$100,000 in sight? Optimistic traders remain actively bullish. The policy commitments from Trump's camp have become an important driving force behind this market trend.
It is noteworthy that the enthusiasm of individual investors is also on the rise. Google search data shows that the search volume related to Bitcoin has risen to levels seen before the 2022 industry crisis.
As the market expands, Bitcoin price volatility may become more intense, and investors need to closely monitor various risk factors. Institutions believe that multiple factors will affect the sustainability of this Bitcoin surge.
First, the direction of the Federal Reserve's monetary policy is crucial; if inflation rises again leading to tighter monetary policy, it may pose resistance to Bitcoin. Second, the implementation of specific policies by the Trump administration, including the establishment of regulatory frameworks and strategic reserves, will also be significant. Moreover, the sustained participation of institutional investors will be a key factor, as their capital flow often influences market trends.
It is noteworthy that changes in the supply of stablecoins have become an important indicator for the market. The growth in stablecoin supply not only reflects market confidence in cryptocurrencies but also provides potential support for subsequent price increases.
Data shows that since August 5, 2024, Tether has minted over 7 billion USDT on the Ethereum blockchain.
It is important to note that speculative sentiment in the market may lead to significant price fluctuations. However, this concentration of holdings may also bring about price volatility risks.
