As the year draws to a close, the largest cryptocurrency by market capitalization has begun to lose steam, with Bitcoin’s price waning in the final days of what has been a record-breaking year.
Trump’s Embrace of Cryptocurrency Sector Boosts Prices
U.S. President-elect Donald Trump’s enthusiastic endorsement of the cryptocurrency sector had sent prices soaring earlier this month. However, it appears that investors are now taking a step back to assess the remaining impetus from his pro-crypto stance.
As of Friday morning in New York, Bitcoin was trading at $96,445, down almost three percent from Thursday’s close and partly paring the retreat. Smaller rivals such as Ether and Dogecoin, a favorite among meme enthusiasts, were oscillating within tight ranges.
Options Expiry to Watch
The crypto market is also bracing for one of its biggest events yet: the expiry of a substantial quantity of Bitcoin and Ether options contracts on Friday. According to prime broker FalconX, the notional value of these contracts exceeds $14 billion for Bitcoin and $3.8 billion for Ether.
Sean McNulty, director of trading at liquidity provider Arbelos Markets, warned that this could lead to a "choppy market" amid the expiry of derivatives positions.
MicroStrategy’s Plan to Expand Bitcoin Holdings
Despite the waning price, MicroStrategy Inc., which has transformed itself from a software maker into a Bitcoin accumulator, has signaled its intention to expand its holdings. The company owns more than $40 billion worth of digital assets and may be looking to increase this amount.
Investors Take a Step Back
The original cryptocurrency is flirting with a drop for December, its first monthly decline in four, according to data compiled by Bloomberg. Bitcoin reached a record high of $108,316 on Dec. 17 before pulling back.
Investors withdrew a net $1.5 billion from a group of one dozen US spot-Bitcoin exchange-traded funds in the four trading days through Dec. 24, the heaviest such outflow since Trump’s victory in the U.S. election on Nov. 5. However, this trend reversed on Thursday with investors pouring $475 million into the group.
Trump’s Economic Force: How Far Can He Go?
Meanwhile, U.S. President-elect Donald Trump has been pushing ahead with his promise to create a crypto-friendly environment in the country. He has backed the idea of establishing a national Bitcoin reserve and is banking on the support of investors who have profited from his pro-crypto stance.
Options expiry and investors’ reactions to Trump’s plans will be crucial in determining the direction of the market in the coming days. As the year draws to a close, it remains to be seen whether Bitcoin will continue its record-breaking performance or succumb to the pressures of market forces.
Why Invest in Cryptocurrency?
Cryptocurrencies have been gaining traction globally due to their potential for high returns and decentralized nature. They offer a secure way to conduct transactions without the need for intermediaries such as banks.
Investors are drawn to cryptocurrencies because they have the potential to disrupt traditional financial systems. With the increasing adoption of blockchain technology, it is likely that more companies will start using cryptocurrencies for transactions in the future.
Conclusion
The crypto market has been on a rollercoaster ride this year, with prices soaring and plummeting in a matter of days. As we approach the end of the year, investors are taking a step back to assess their positions and plan for the future.
While Trump’s pro-crypto stance has sent prices higher, it remains to be seen whether this momentum will continue or if market forces will take over. One thing is certain: the crypto market will continue to evolve and adapt to changing circumstances.
What’s Next?
As we move into the new year, investors will be watching closely for signs of a recovery in prices. With the introduction of new technologies and innovations, it’s likely that cryptocurrencies will continue to grow in popularity.
However, the path ahead is not without challenges. Market volatility and regulatory uncertainty are just two of the many factors that could impact the price of cryptocurrencies.
Will Bitcoin Continue its Record-Breaking Performance?
Only time will tell if Bitcoin will continue its record-breaking performance or succumb to market forces. One thing is certain: the crypto market will continue to evolve and adapt to changing circumstances.
As we move into a new year, investors are taking a step back to reassess their positions and plan for the future. With Trump’s pro-crypto stance and increasing adoption of blockchain technology, it’s likely that cryptocurrencies will continue to grow in popularity.
However, the path ahead is not without challenges. Market volatility and regulatory uncertainty are just two of the many factors that could impact the price of cryptocurrencies.
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Invest Wisely
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