Recently, the volatility of cryptocurrencies has increased!
Last week, Bitcoin briefly broke through $108,000, followed by a sharp drop in the following days. On Monday, the Bitcoin price fell to a low of $92,500, then rose above $98,000 on Tuesday, and on Thursday, it briefly rose to $99,900. However, as of the time of the reporter's writing, Bitcoin fell below $97,000 again, dropping nearly 2% within 24 hours.
Under the pressure of volatile prices, many people have also faced liquidation. According to Coinglass data, over 100,000 people were liquidated across the entire cryptocurrency network in the past 24 hours, with the total liquidation amount exceeding $240 million.
It is worth noting that this Friday, the largest Bitcoin options contracts in history are set to expire, with a total value of $14 billion, which may lead to significant volatility in the cryptocurrency market.
Meanwhile, several major news stories have emerged in the cryptocurrency circle. On the 25th, Russian Finance Minister Anton Siluanov stated that Russian companies have begun using Bitcoin and other digital currencies for international payments. In the U.S., three states have proposed establishing strategic Bitcoin reserves.
The United States is the country with the most Bitcoins held at the government level. As of December 11, the U.S. government holds approximately 200,000 Bitcoins (about $20 billion).
Over 100,000 people liquidated
In the highly speculative cryptocurrency market, many people have also faced liquidation. According to Coinglass data, over the past 24 hours, the number of liquidations across the cryptocurrency network has reached 103,600, with a total liquidation amount of $247 million, including $178 million in long positions and over $69 million in short positions.
Since entering December, the volatility of cryptocurrencies led by Bitcoin has significantly increased. On December 18, Bitcoin first broke through $108,000, setting a new historical high; on December 19, Bitcoin began a high-position plunge, falling below $100,000 during the day; on December 20, Bitcoin continued to plunge, briefly falling below $93,000. As of around 21:00 on the 20th, within 24 hours, the number of liquidations across the cryptocurrency network exceeded 420,000, with a total liquidation amount reaching $1.4 billion. In the following days, Bitcoin's price continued to fluctuate widely between $92,500 and $99,900, during which many people faced liquidation.
This Friday, the largest Bitcoin options contracts in history are set to expire, with a total value of $14 billion, which may trigger significant market volatility. According to data released by Deribit Exchange CEO Luuk Strijers, the ratio of put options to call options for these expiring contracts is 0.69, meaning that for every 10 call options, there are 7 put options. Meanwhile, the number of expiring contracts is twice that of the contracts expiring in March 2025.
Strijers further explained that the expiring contracts account for 44% of all outstanding Bitcoin options contracts (totaling $32 billion). Deribit Exchange expects that over $4 billion of these contracts will be executed upon expiration, which is sure to trigger a large amount of trading activity. Deribit's volatility index (DVOL) has fluctuated sharply recently, and Strijers pointed out that this indicates that traders still have significant differences in their views on the future direction of the market.
David Lawant, head of research at crypto broker FalconX, wrote in a report that before the appearance of a 'bullish trajectory' in the first quarter of 2025, short-term price fluctuations are still the most likely scenario. Arbelos Markets trading head Sean McNulty believes: 'Bulls should keep Bitcoin's price at the level of $90,000 until the end of the year, but if it falls below that level, it may trigger further liquidations.'
Cryptocurrencies have long been viewed as high-risk assets, subject to strict scrutiny by regulators, but this situation has changed recently in the United States. As Wall Street institutions increasingly value cryptocurrencies, U.S. regulators have approved cryptocurrency funds, enhancing their mainstream appeal. Since the Bitcoin ETF was listed on January 11 this year, it has been in high demand from investors, with net inflows exceeding $35 billion, and the value of the Bitcoins it holds has surpassed $110 billion, accounting for 5.71% of the total circulating Bitcoin supply.
However, on Tuesday, the most popular Bitcoin ETF among investors—the BlackRock IBIT—set a record for the largest single-day outflow in history, reaching $188.7 million, surpassing its previous high of $72.2 million set on December 20. Meanwhile, the Bitcoin ETF has recorded net outflows for the fourth consecutive trading day. Since December 19, the total net outflow of funds from 12 U.S.-listed Bitcoin ETFs has reached $1.52 billion.
Russian Finance Minister: Bitcoin has been used in trade
According to Reuters, on December 25 local time, Russian Finance Minister Anton Siluanov stated that Russian companies have begun using Bitcoin and other digital currencies for international payments.
This year, Russia allowed the use of cryptocurrencies in foreign trade and took measures to legalize the mining of cryptocurrencies such as Bitcoin. Russia previously proposed a complete ban on cryptocurrencies in 2022, believing that such assets could undermine the stability of financial markets. One of the main reasons for this significant turnaround is to respond to Western sanctions.
Siluanov stated, “As part of an experimental system, we can use Bitcoin mined in Russia (for foreign trade transactions). Such transactions are already occurring. We believe they should be further expanded and developed. I believe this will be realized next year.” He added that international payments in digital currencies represent the future.
Earlier this month, Russian President Putin stated that the current U.S. government uses the dollar for political purposes, undermining the dollar's status as a reserve currency and forcing many countries to turn to alternative assets. He pointed out that Bitcoin is an example of such an asset and stated that no one in the world can regulate Bitcoin. Putin's remarks indicate that this Russian leader supports the widespread use of cryptocurrencies.
The U.S. government holds 200,000 Bitcoins
Bitcoin Treasuries data shows that the total amount of Bitcoin held by governments is approximately 510,000, accounting for 3% of the total issued Bitcoin (approximately 19.79 million), while corporate holdings account for 5%, and Bitcoin exchange-traded funds (ETFs) hold 6%.
Most of the Bitcoins held by governments come from seizures during crime-fighting efforts. The United States is the country with the most Bitcoins held at the government level. As of December 11, the U.S. government holds approximately 200,000 Bitcoins (about $20 billion). These Bitcoins mainly come from cases involving the crackdown on illegal transactions.
President-elect Trump stated in July: “We will not sell the approximately 210,000 Bitcoins held by the U.S. Department of Justice, which will be used for national strategic reserves.” U.S. Republican Senator Cynthia Lummis proposed a bill aimed at establishing such a reserve. According to the bill, the U.S. Treasury would purchase 200,000 Bitcoins annually until the reserve reaches 1 million Bitcoins, with the purchase funds coming from Federal Reserve bank deposits and gold reserves.
According to a recent analysis report released by Barclays, funding for a strategic Bitcoin reserve may require congressional approval and the issuance of new national debt. Barclays analysts stated that considering the possible ways to establish such a reserve, “we suspect the plan will face strong resistance from the Federal Reserve.”
During the campaign, Trump stated that if he could return to the White House, he would designate Bitcoin as a U.S. strategic reserve asset. Although Federal Reserve Chairman Powell recently stated that the Fed does not intend to hold digital currency, it still cannot stop the infinite imagination of Bitcoin becoming a national reserve.
As the date of Trump's inauguration approaches, some states in the U.S. have already begun to consider testing the waters in advance. So far, three states have proposed establishing strategic Bitcoin reserves.
On December 17, Ohio House Representative Derek Merrin proposed a bill to establish a strategic Bitcoin reserve in the state. This bill is named the 'Ohio Bitcoin Reserve Act' and requires the establishment of a Bitcoin fund within the state treasury, granting the Ohio Treasurer the discretion to purchase the asset.
On December 12, the official website of the Texas House of Representatives showed that Republican State Representative Giovanni Capriglione submitted a legislative proposal to establish a strategic Bitcoin reserve in the state. Capriglione stated in an audio chat room on social media platform X that the proposed bill would allow Texas to start building a Bitcoin strategic reserve by accepting tax payments, fees, and donations in Bitcoin, which would be held for at least five years.
In November, a Pennsylvania House representative proposed a bill calling for the establishment of a strategic Bitcoin reserve. According to the bill, the Pennsylvania Treasurer would be able to use 'up to 10%' of the state general fund, emergency reserves, and state investment fund to purchase Bitcoin. If 10% of the state general fund is utilized, the Pennsylvania Treasury could purchase nearly $1 billion worth of Bitcoin.