Cryptocurrency Market Hits a Speed Bump
As the clock ticks down to the end of 2024, the Bitcoin rally that began with Donald Trump’s presidential election victory in November is losing steam. The digital asset’s value has stagnated, hovering around $93,670 as of Monday morning in New York, a significant drop from its mid-December record high of over $108,000.
Regulatory Uncertainty Weighs on Market
Trump’s crypto-friendly stance and support for a national Bitcoin reserve had initially boosted digital assets. However, the Federal Reserve’s scaled-back expectations for interest-rate cuts have cooled the speculative fervor. The market is now eagerly awaiting more clarity on the US crypto regime, which is expected to emerge after Trump takes office on January 20.
A Shift in Sentiment
Chris Weston, head of research at Pepperstone Group, notes that the momentum has dissipated from the post-election surge in Bitcoin, partly due to outflows from exchange-traded funds for the token. This shift in sentiment is a significant departure from the crypto market’s performance earlier in the year.
MicroStrategy’s Buying Spree
Meanwhile, software maker turned Bitcoin accumulator MicroStrategy Inc. has been on a buying spree in recent weeks. Traders are now waiting with bated breath to see if the company, which owns over $40 billion of the digital asset, will continue its pattern of announcing Bitcoin purchases on Mondays.
Bitcoin’s Impressive Performance
Despite the current slowdown, Bitcoin has had an impressive run this year, climbing roughly 120% and outperforming traditional investments such as global stocks and gold. In fact, the original cryptocurrency more than doubled in value in 2023, marking a significant comeback from a deep bear market.
What’s Next for Crypto?
As the market navigates this period of uncertainty, one thing is clear: the future of cryptocurrency is closely tied to regulatory developments in the US. With Trump’s inauguration just around the corner, all eyes are on the new administration’s stance on crypto and its potential impact on the market.
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