The Bitcoin surge ignited by Donald Trump’s November election win is losing steam as 2024 concludes. The cryptocurrency hovered around $94,000 on Tuesday, significantly below its December peak of $108,000. Altcoins like Ether and Dogecoin also experienced stagnation.
Table Content:
Trump’s Pro-Crypto Stance vs. Cooling Speculation
Trump’s support for crypto-friendly regulations and a national Bitcoin reserve initially propelled the digital asset market. However, tempered expectations for Federal Reserve interest rate cuts have dampened the speculative fervor.
Bitcoin price chart showing a recent decline.
The upcoming Trump administration, starting January 20th, is anticipated to provide clearer direction on US crypto regulations. His position sharply contrasts with the Biden administration’s stricter approach to the often-controversial sector. This regulatory uncertainty contributes to the current market slowdown.
ETF Outflows and MicroStrategy’s Bitcoin Accumulation
Chris Weston, head of research at Pepperstone Group, attributes the waning Bitcoin momentum partly to outflows from exchange-traded funds (ETFs). Data reveals a net outflow of nearly $1.8 billion from US Bitcoin ETFs since December 19th.
Bitcoin price chart showing a recent decline.
Conversely, MicroStrategy Inc., a prominent Bitcoin acquirer, has been actively purchasing the cryptocurrency in recent weeks. Market observers are watching for potential announcements of further Bitcoin acquisitions by the company, which holds over $40 billion in the digital asset. These large-scale purchases could impact Bitcoin’s price trajectory.
Bitcoin’s 2024 Performance and Future Outlook
Despite the recent slowdown, Bitcoin has delivered remarkable returns in 2024, surging roughly 120%. This performance surpasses traditional investments like global stocks and gold. The cryptocurrency also more than doubled in value in 2023, rebounding from a significant bear market. The interplay between regulatory developments under the Trump administration and institutional investment strategies will likely shape Bitcoin’s future performance.
While the initial post-election euphoria has subsided, the long-term implications of a Trump presidency for the crypto market remain to be seen. His pro-crypto stance suggests a potentially favorable regulatory environment, which could reignite investor interest and drive further growth in the digital asset space.
