Last week was Thanksgiving holiday in the United States, with light market trading volume, and the overall trend remains in consolidation. The US 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 lows in stocks over the past 52 weeks appearing healthy, the upward trend remains intact, and the Volatility Index (VIX) is trending downward. Meanwhile, after Trump announced that Scott Bessent would be appointed as Treasury Secretary, the US bond market has calmed down, with the 10-year yield dropping nearly 35 basis points from its October peak.
In addition to his so-called 'support for cryptocurrency' 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 boosting daily energy production by 3 million barrels) has brought relief to the US fixed income market, and since his nomination, the yield curve premium has remained stable at current levels.
Despite doubts about his core viewpoint, reporters found that he has been 'long-term bullish' on gold due to central banks' continued accumulation, which raises the question of whether this will 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, anticipating this year's final non-farm employment data release. Although concerns about a rebound in inflation have just emerged, the market still expects a roughly 65% chance of interest rate cuts. However, given the strong economic situation, forward rate cut expectations for 2025-2027 have significantly decreased. In terms of employment data, the market expects overall employment figures to rebound to around +160,000, while the unemployment rate remains around 4.3%. Considering the recent weakness in PMI surveys and high-frequency employment data, the final data results may also have a chance of coming in below expectations; however, unless an extremely surprising outcome occurs, sentiment risk is likely to remain positive.
Optimism in the cryptocurrency market remains widespread; however, this week's focus is on Ripple, where XRP surged an astonishing 73% in anticipation of the government withdrawing its long-standing lawsuit, helping XRP surpass USDT to become the third-largest cryptocurrency by market capitalization. In anticipation of this development, whale addresses have been actively buying (and are now selling) XRP over the past month.
The current rally is mainly 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 L2 and protocol-transitioning blockchains (such as Hyperliquid) continues to dominate attention in the cryptocurrency market, we've seen some 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, with the market capitalization of stablecoins finally exceeding the peak during the Terra-Luna era. Stablecoins are often the first stop for most fiat currency users entering the cryptocurrency market, and a higher market capitalization (fixed price, thus entirely driven by quantity) indicates greater mainstream participation.
As investors inject more new funds, will we see faster growth in the new year? Let's hope so!
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