At 3:00 AM on Friday, the Federal Reserve announced its latest interest rate decision, with the market expecting a 25 basis point cut. Bank of America stated that the weakness in October's non-farm data is sufficient for the Fed to cut rates by 25 basis points in both November and December. (October non-farm employment was 12,000, expected value was 113,000, previous value was 223,000.) Following the new highs of the three major U.S. stock indices on November 6, the indices continued to hit new highs during trading on the 7th.
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U.S. stocks achieved their best post-election performance in history, with the S&P 500 hovering around 5930 points, marking the 48th historical high this year; the Nasdaq 100 index rose 2.7%, marking its first record since July; the Dow Jones Industrial Average climbed 3.6%. Bernstein, a financial services company, stated that it expects increased clarity in crypto asset regulation following a Trump win, with the SEC and the Senate Banking Committee likely to become more friendly towards cryptocurrencies. New cryptocurrency rule-making systems are expected to emerge, and the impact of this shift has not yet been reflected in prices. Currently, it is anticipated that stablecoin and market structure legislation will progress more rapidly, which is positive. On November 6, BTC's market capitalization surpassed Meta to become the ninth-largest asset in the world by market cap. JPMorgan has renamed its blockchain and tokenization department Onyx to Kinexys, intensifying efforts in the tokenization of real-world assets (RWA). ETH/BTC rose to 0.038, an increase of 8.5%. VanEck executive Matthew Sigel stated that ETH is oversold, and U.S. speculative activity will return to the market, asserting that ETH will not be overlooked. Justin Sun expressed optimism about market prospects (including ETH) as U.S. macro crypto policies improve. IntoTheBlock reported an increase in the number of short-term investors holding BTC, a phenomenon typically seen in bull markets as new participants enter with rising prices. On November 7, Tether injected $1.845 billion in stablecoins into CEX on the ETH chain.
In the past year, Tether issued $370 million in stablecoins on ETH and Tron. Thelnformation reported that investment bankers from top Wall Street firms like JPMorgan, Goldman Sachs, and Morgan Stanley have been meeting with executives from cryptocurrency companies, hoping to secure opportunities for initial public offerings (IPOs) after the election. This enthusiasm reflects optimism about improved market and regulatory conditions following a Trump victory, potentially paving the way for companies like Krake, Fireblock, and Chainalysis to go public. Bitfinex analysts expect a new wave in the crypto market following a Trump win, as the industry anticipates a less hostile attitude from U.S. federal agencies towards cryptocurrencies, which is expected to encourage more capital inflow into the Web3 sector. A significant amount of capital is expected to be released for the crypto space in the short term. Additionally, this may influence the approach taken by the U.S. Securities and Exchange Commission (SEC), which is widely viewed as having a negative stance towards the crypto industry. On November 6, the trading volume of BTC spot ETFs reached $6.07 billion, a new high since March 15 of this year. Among these, the BlackRock ETF IBIT had a single-day trading volume of $4.14 billion, surpassing giants like Berkshire, Netflix, or Visa, setting a new historical record. On the 6th, the net inflow of BTC spot ETFs in the U.S. reached $622 million, including: Fidelity FBTC inflow of $308.77 million, Grayscale GBTC inflow of $30.91 million, Grayscale mini BTC inflow of $108 million, and BlackRock IBIT outflow of $68.31 million. The net inflow of ETH spot ETFs was $52.3 million, with Grayscale ETH net inflow of $25.4 million and Fidelity FETH net inflow of $26.9 million.
On the 6th, all three major U.S. stock indices hit historical highs, with the S&P 500 index rising 2.5%; the Dow rose 3.57%, marking its largest increase in two years; the Nasdaq rose 2.95%. The price of BTC hit a historical high of $76,400, up over 8%; ETH rose to $2,880, up over 14%. Spot On Chain summarized 11 commitments made by Trump regarding BTC and cryptocurrencies, including: establishing a U.S. national BTC reserve, making the U.S. the world capital of BTC and cryptocurrencies, retaining the U.S. government's current holding of 203,650 BTC ($14.95 billion), eliminating capital gains tax on BTC, supporting U.S. BTC mining, establishing a presidential advisory committee on BTC and cryptocurrencies, and protecting individual rights to self-custody digital assets. Analysts like Gautam Chhugani indicated that in the medium term, the definitions of crypto assets and securities are expected to become clearer, and a gradual framework for registering crypto asset securities with the SEC is anticipated. It is expected that proactive measures will be taken to establish a U.S. national BTC reserve based on Trump’s pre-election commitments, with increased focus on U.S. mining growth. JPMorgan anticipates that as Trump wins the election, both gold and BTC will perform well, emphasizing the "dollar depreciation trade". Investment strategies benefiting from dollar depreciation or weakness typically occur due to inflation or expansionary fiscal policies, leading to a decline in the purchasing power of the dollar while gold and BTC can maintain their value. After Trump's election and expansionary fiscal policies, the "dollar depreciation trade" may be strengthened, with an optimistic outlook for BTC in 2025. At 3:00 AM on Friday, the Federal Reserve announced its latest interest rate decision, with the market expecting a 25 basis point cut.
Bank of America stated that the weakness in October's non-farm data is sufficient for the Fed to cut rates by 25 basis points in both November and December; Morgan Stanley indicated that the Fed will cut rates by 25 basis points in both November and December, with statements raising assessments of economic growth while continuing to acknowledge progress on inflation; JPMorgan expects the Fed to possibly cut rates by 25 basis points this month and to continue cutting quarterly until rates reach 3.5% after the December meeting; Goldman Sachs stated that the Fed will cut rates by 25 basis points, with no significant modifications to the statement and little guidance on future plans, and expects the Fed to continue cutting rates until at least December, with four consecutive cuts in the first half of 2025 down to 3.25%-3.5% (currently 4.75%-5.0%). Goldman Sachs maintains a 12-month target of 6,300 points for the S&P 500 (currently at 5,966 points). BTC's market share fell 2% to 57.13%. BTC hit a historical high, and altcoins generally rebounded. Many believe this cycle is the hardest in history, but some feel it is not the hardest. In December 2020, BTC's market share soared to 70%, with altcoins only accounting for 30%; by May 2021, BTC's market share dropped to 39%, and altcoins rose to 61%. From a capital greed perspective, after BTC broke a new high, the rate of return decreases, leading to a stagnation period. New U.S. institutional investors may choose other currencies, as capital is greedy. No one can be certain whether other currencies will see a rebound; the bull market is still long, and from past cycles' capital greed perspective, there are opportunities for other currencies. (Note the risks) Early Friday morning, the market paid close attention to the Fed's interest rate meeting and Powell's speech. A rate cut in November seems almost certain, and attention is on Powell's stance regarding cuts in December and early next year. Trump's election has shifted market sentiment, and whether the Fed can maintain rate cuts is another important factor for the bull market; hopes are that Powell aligns with market expectations for rate cuts.
