Bitcoin’s rally has hit a pause in the final days of a historic year as investors evaluate the long-term implications of President-elect Donald Trump’s crypto-friendly stance. The digital asset traded at $96,200 as of 6 a.m. Friday in London, marking a 3% decline from the previous day. Meanwhile, alternative cryptocurrencies like Ether and Dogecoin displayed limited price movements, reflecting market caution.
Trump’s Crypto Agenda Sparks Debate
Donald Trump has vowed to establish the United States as a hub for cryptocurrency innovation, including exploring the creation of a national Bitcoin reserve. While his advocacy has boosted market sentiment, traders are now capitalizing on earlier gains and adopting a wait-and-see approach regarding the feasibility of such policies.
Market participants are also closely watching a critical event this week: the expiration of substantial Bitcoin and Ether options contracts. FalconX, a prominent prime broker, described this as one of the largest expiries in digital asset history.
Bitcoin and Ether Options Expiry Looms
The notional value of expiring Bitcoin contracts on the Deribit exchange exceeds $14 billion, while Ether contracts total approximately $3.8 billion. These expirations introduce heightened volatility, with liquidity provider Arbelos Markets’ director Sean McNulty warning of a “choppy market.”
Amid these fluctuations, Bitcoin faces its first monthly decline in four months, despite reaching an all-time high of $108,316 on December 17. Investor sentiment remains fragile, as reflected by the $1.5 billion net outflow from U.S. spot Bitcoin exchange-traded funds over four trading days through December 24.
MicroStrategy Inc., known for its aggressive Bitcoin accumulation, is mulling an expansion of its holdings, which currently exceed $40 billion. This shift has transformed the company from a software enterprise into a significant player in the cryptocurrency market. However, the broader crypto community is questioning whether this accumulation strategy is sustainable in light of recent market headwinds.
The coming days will be crucial as traders navigate market turbulence driven by Trump’s policy proposals, expiring derivatives contracts, and year-end profit-taking. While Bitcoin’s remarkable ascent has defined 2024, its latest challenges highlight the unpredictable nature of this burgeoning market.
Investors will need to weigh the potential of regulatory clarity under Trump’s administration against immediate market risks. For now, the cryptocurrency space remains on edge, awaiting the next chapter in its volatile journey.
