Wall Street stocks ushered in a new round of gains this week with the strong momentum of the holiday rebound. The S&P 500 rose 0.73%, the Dow Jones Industrial Average rose slightly by 0.16% after early volatility, and the Nasdaq Composite Index climbed 0.98% thanks to the outstanding performance of technology giants such as Nvidia, Tesla and Meta Platforms.
However, compared with the jubilation of Wall Street, the cryptocurrency market is playing a different tune - a slightly heavy bass. The price of Bitcoin continues to linger, still $14,000 away from its all-time high set on December 17.
MicroStrategy: The two sides of the Bitcoin “trend chaser”
As the ultimate supporter of Bitcoin, MicroStrategy's fate is closely tied to the crypto market. On Monday, the company's stock price plummeted 8.8%, becoming the "bottom player" in the Nasdaq 100 Index. This performance is not surprising, because MicroStrategy's business model is almost completely tied to Bitcoin's price fluctuations.
Despite this, the company delivered an amazing report card in 2024. Its stock price soared 426% throughout the year, becoming a tech stock star with a market value of more than $5 billion. The driving force behind this is undoubtedly Bitcoin. Since it began strategically purchasing cryptocurrencies in 2020, MicroStrategy's Bitcoin holdings have swelled to $43 billion.
But the risks of this strategy are also obvious. When the heat of the Bitcoin market subsides, MicroStrategy's vulnerability is exposed. On Monday, Bitcoin fell below its 50-day moving average, which is a very important level in technical analysis, and MicroStrategy's stock price also "fell in response."
The drivers behind the volatility include the Federal Reserve's potential slowdown in rate cuts and investors' waning appetite for riskier assets. Even President-elect Donald Trump's attempts to promote pro-cryptocurrency policies have been met with hesitant market reactions.
Trump and Bitcoin, policy enthusiasm and market calm
Trump's victory once ignited the enthusiasm for Bitcoin's rise. Since Election Day, the price of Bitcoin has risen by 40%. The market has high expectations for his pro-cryptocurrency policies - from appointing pro-cryptocurrency regulators to setting up a special cryptocurrency committee, Trump's every step is trying to inject confidence into the crypto market.
At the same time, Bitcoin ETFs have also seen a large influx of funds. So far this year, these funds have attracted more than $12 billion in capital. However, as the end of the year approaches, investors' attitudes seem to be becoming more cautious. On December 19, Bitcoin ETFs recorded the largest single-day outflow of funds in months, indicating a cooling of market enthusiasm.
Even so, MicroStrategy is still "buying, buying, buying." The company just announced that it has purchased another $561 million worth of Bitcoin, expanding its digital asset reserves for the seventh consecutive week.
The broader picture of the crypto market
The broader crypto market continues to rise and fall with the volatility of Bitcoin. This year, major crypto assets such as Ethereum and Dogecoin have also doubled, but they have not yet escaped from Bitcoin's "shadow market." Among them, Dogecoin has performed particularly well, rising 125% since the beginning of the year.
However, the thin holiday trading volume may further increase market volatility this week. With the US market closed early for Christmas, the number of "market stabilizers" in the crypto space is limited, and price movements may be more volatile.
During the holiday season, whether it is the ups and downs of Wall Street or the volatility of the crypto market, they are reminding investors that strategy and risk management are always the key to moving forward. Want to get more professional analysis and in-depth insights? Don't forget to follow Mr. Qiu's channel. He will lead you through the financial storm and use wisdom to clear the fog, so that investment is no longer just a "bet"!
