Bitcoin's price is up more than 4% today, raising the capitalization of the largest cryptocurrency to $2.1 trillion. The trend was supported by recent comments from Donald Trump, who announced that the United States intends to make 'something big' with crypto, and the BlackRock fund, which in a recent note to investors via the Investment Institute conveyed that a 2% equity allocation to Bitcoin for portfolios seeking cryptocurrency exposure seems reasonable. At the same time, this was the first time a major issuer of the IBIT ETF has indicated a precise number and created a special report dedicated to Bitcoin.
- December flash services and manufacturing PMIs supported sentiment on Wall Street; dollar slightly weakens, but 10-year treasury yields maintain recent gains now at 4.4%
- Optimism on the Nasdaq with renewed euphoria amid AI and quantum computing stocks also supports Bitcoin reflecting high risk appetite ahead of the Fed decision on Wednesday, December 18 (8pm) - expectations for another 25bp cut are rising
- Shares of companies holding BTC including Microstrategy (MSTR.US) and Semler Scientific (SMLR.US) are rising. Altcoins outside of Ethereum and Chainlink are 'subdued' today and the markets' attention is once again focused on Bitcoin.
- The total market capitalization of cryptocurrencies is now $3.8 trillion; of the major altcoins, Ripple (XRP) has the biggest growth behind it. Bitcoin is behind nearly 200% growth this year, and a 50% rebound from November 5, when Donald Trump won the election.
- Asked directly about a strategic Bitcoin reserve in the U.S., Trump said he thought one would be established. Currently, national governments hold about 2.2% of all BTC; of these, the United States holds the most, with more than 200,000.
ETF funds continue to accumulate both BTC and ETH
Net inflows into ETH ETFs weakened slightly on Friday; for Bitcoin, they remain steadily high. ETFs currently hold about 5.6% of the total supply of BTC; they began buying it about 11 months ago. Analysts at Pepperstone suggest that a strategic reserve of BTC in the US, even if adopted, will not happen in the near future and requires a considerable amount of time. In the meantime, the market may also put up further question marks and wonder whether a final one will be possible.
Source: XTB Research, Bloomberg Finance L.P.
Source: XTB Research, Bloomberg Finance L.P.
Bitcoin and Ethereum chart (D1 interval)
Looking at the long-term chart of Bitcoin (since the bottom of the 2022 bull market), the recent upward impulse since the August panic (the drop below $50,000) is 1:1 similar to the impulse that took place between the fall of 2022 and the local peak in the spring of 2024 (the local 'peak of activity' of ETFs after their admission by the SEC, on January 10 this year). This time, however, the rise is more 'vertically inclined' illustrating tighter supply conditions, with charging market demand for both spot and ETFs.
Source: xStation5
Ethereum is up less than 20% from July, when ETFs were allowed in the US. Bitcoin has had a decidedly better month so far while ETH is facing significant resistance in the $4,000 zone. Significant short-term support is currently levels between $3650 and $3700.
Source: xStation5
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