Rising bull market boosts crypto wallets to 500 million: Chainalysis
Over 400 million bitcoin wallets have positive balances, indicating rising usage throughout the bull market.
According to Chainalysis' Dec. 5 study, institutional and individual investors are investing more in dollar-pegged stablecoins due to the surge.
TradFi and Digital Economy Converge
The research noted a “seismic shift” in crypto use and perception.
It identified a “convergence” between the digital economy and conventional finance due to financial institutions entering via ETFs and comparable products.
Crypto ETFs give a regulated, mainstream investing instrument to obtain exposure to cryptocurrencies, likely driving market rises.
Since 2024, they have accounted for 50% to 75% of on-chain transactions
Stablecoins are becoming repositories of wealth, especially in developing nations, after being utilized as on-ramps and off-ramps.
In Venezuela and Latin America, U.S. dollar-backed stablecoins are becoming popular for remittances and liquidity, particularly in countries with restricted dollar access or strong capital restrictions.
Policymakers are interested in stablecoins' wider use.
In an Oct. 18 address, Federal Reserve Governor Christopher Waller recognized their potential to lower cross-border settlement costs.
Crypto and Stocks May Be Overvalued
Hartnett told Bloomberg that the S&P 500 might “overshoot” to 6,666 points, 10% higher than its present level, indicating a hazardous bubble in early 2025.
Bloomberg data reveals that the S&P 500's price-to-book ratio reached 5.3 times in 2024, reaching the tech bubble's March 2000 milestone of 5.5.
According to BofA's bull-and-bear indicator, investors are not yet exuberant despite the stock market's gain.
The S&P 500 is up 27% this year, its highest performance since 2019.
AI excitement and President-elect Donald Trump's “America First” promises are driving the increase.
Hartnett also noted that Trump's crypto attitude helped Bitcoin briefly reach $100,000 this week.
