In Markets
Crypto publications are busy prepping their ‘Bitcoin breaks US$100K’ articles (A$154K), and MicroStrategy’s Michael Saylor is already organising a party. With Bitcoin trading in a 7% range this week and nudging A$143K/US$93K on November 13, the milestone doesn’t seem far off. Retail appears to be coming back with a big increase in BTC transactions with values under A$154K/US$100K, and new money is flowing in with the total stablecoin index hitting a new all-time high. Bitcoin reserves on exchanges are at lows last seen in 2018, and Bitcoin futures open interest is at an all-time high. That said, while the future for crypto looks bright, the Buffett Indicator (which takes the market cap of total US stocks and divides it by the US GDP) also sits at a record 208% — and topping 100% is considered an early warning of a potential crash. Bitcoin’s ATH comes at the expense of the ETH/BTC chart, which has fallen to 0.03367. Bitcoin finishes the week up 2% to trade around A$139,288 (US$90,147), while Ethereum fell 4% to A$4,925 (US$3,187). Solana gained another 10% as trading volume hit a new record. But SOL was outshone by XRP, which is up 86% this week. Cardano was up 24%, Dogecoin was up 3% (and 163% for the month), while Shiba Inu fell 18%. The Crypto Fear and Greed Index is at 90, or Extreme Greed.
From the IR OTC Desk
Over the past week, several significant developments have emerged in the global macroeconomic and political arenas, with notable implications for financial markets and the cryptocurrency sector.
Global Macroeconomic and Political Developments
The re-election of Donald Trump as the 47th President of the United States has introduced a wave of economic uncertainty. Analysts anticipate potential trade conflicts stemming from Trump’s proposed tariffs, particularly targeting Chinese imports. Such measures could disrupt global trade dynamics and exacerbate inflationary pressures. Additionally, Trump’s plans for substantial tax cuts have raised concerns about increasing the federal deficit, adding to the complexity of the economic outlook.
The Federal Reserve, under Chairman Jerome Powell, has maintained a cautious stance regarding further policy easing. Despite recent inflation data and uncertainties surrounding fiscal policies under the incoming administration, Powell emphasised the economy’s resilience and indicated no immediate plans for additional interest rate cuts. This position has led markets to adjust their expectations for significant Fed easing in the near term.
Cryptocurrency Market Trends
The cryptocurrency market has experienced remarkable growth, with Bitcoin reaching an all-time high of US$93,445 on November 13, 2024, following the U.S. election. This surge is attributed to investor optimism regarding President-elect Trump’s favourable stance on digital assets and his vision to position the U.S. as the “crypto capital of the planet.” Analysts project that Bitcoin could reach US$100,000 by year-end, with some forecasts suggesting a potential rise to US$200,000 by the end of 2025.
Getting technical, Solana continues to show Ethereum who’s boss. Last week we discussed the dynamics around what Trump’s election may mean for Ethereum – are the floodgates to ETH open now that the litigious government entities will (hopefully) be put on a leash? Or has Ethereum’s ETF moat been removed? It appears the market thought the former initially, with ETHBTC jumping up and crossing 0.04 (and finally appearing to reverse the trend that’s been in place since July), but it only took a few days to erase all gains and we’re now sitting at lowest ETH/BTC price since April 2021. SOL-ETH didn’t even flinch, however, with the ratio going on a tear over the last 6 days, and currently is sitting at all time highs.
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In Headlines
XRP is breaking out
The XRP faithful have finally been rewarded with a massive surge to A$1.74 (US$1.13) this week after consolidating around the US$0.60 (A$0.92) mark for some time. XRP’s price has been depressed for years due to the SEC’s enforcement actions, meaning the change of guard at the SEC has buoyed the price, helped along by Robinhood relisting XRP this week. News also emerged that the trial of a class action against Ripple has been expedited and will now begin on January 21, 2025 (helping clear up legal uncertainties). According to Fox Business, Ripple CEO Brad Garlinghouse met with President-elect Donald Trump.
Ethereum ETFs flip positive
After billions in outflows from Grayscale since the Ether ETFs debuted in July, they have finally flipped positive with a cumulative net inflow since the launch of A$275M (US$179M), according to Farside. “The launch of the spot Ethereum ETFs came at an awkward time,” said Matt Mena, a research analyst at 21Shares. “But now the optimism has come back in full force.” When the Bitcoin ETFs flipped positive, BTC was about 38% off its all-time high, and Ethereum’s price s in a similar position. Meanwhile, the Bitcoin ETFs hauled in US$1.8B (A$2.76B) last week, and Van Eck’s Matthew Sigel predicts more ETFs will be approved and that “the odds are overwhelmingly high that there will be a Solana ETF trading by the end of the year.” Microstrategy, which is like an ETF at this point, bought up another 51,780 Bitcoin worth US$4.6B (A$7.07B), bringing the firm’s holdings to almost US$30 billion (A$46.1B).
Bitcoin ETF options trading imminent
Options trading for BlackRock’s IBIT Bitcoin ETF shares is set to launch this week. The Commodity Futures Trading Commission has approved it, and the Options Clearing Corporation indicated overnight that it will sign off. Nasdaq said that on November 18, it was prepping to launch trading as early as today.
SEC crypto cases will be quietly retired
Consensy boss and Ethereum co-founder Joe Lubin predicts the SEC’s court cases against crypto companies will be “dismissed or settled” in fairly short order. The SEC is currently suing Consensys, Uniswap, Coinbase and other crypto companies and projects. “My guess is, in a way that is not embarrassing, they figure out ways to get the cases dismissed or settled, or something like that,” he told Cointelegraph. Lubin believes Ethereum stands to benefit the most from the changes at the SEC. “America has had its boot on the neck of Ethereum for a pretty long time, specifically Ethereum, and that’s caused a bunch of FUD,” he said.
Gary Gensler’s swan song
SEC boss Gary Gensler delivered a speech this week that sounded like a resignation letter as he defended his approach to crypto at the 56th Annual Institute on Securities Regulation. “I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance,” he said. Incredibly, he also took credit for establishing the Bitcoin ETFs despite the SEC losing a court case to Grayscale, which forced its hand. In tribute to his leadership, 18 US states have joined forces to sue the SEC “for overstepping its authority” through its “unlawful” regulations targeting the cryptocurrency industry.
Trump appointments and crypto
Coinbase CEO Brian Armstrong is set to meet Trump to discuss key administration appointments. Armstrong has indicated he supports SEC commissioner Hester Peirce as the “best choice” to chair the SEC. Other contenders in the mix include former Binance.us CEO Brian Brooks (also being considered for other roles) and former CFTC chair J Christopher Giancarlo. Meanwhile, Bitcoin investor and the owner of Tether’s custodian Cantor Fitzgerald, Howard Lutnick, is vying for Treasury Secretary against another crypto-positive candidate, Scott Bessent, who has expressed openness to a Bitcoin Strategic Reserve. However, after intense lobbying, the New York Times reports that Trump might go with a crypto-agnostic pick, like former Federal Reserve governor Kevin Warsh and Wall Street investor Marc Rowan. RFK Jr has been nominated to head up the Department of Health, and he revealed that most of his wealth is in Bitcoin this week. The Financial Times also reported today that Trump Media (which owns Truth Social) is in advanced talks to buy Bakkt, a crypto trading venue owned by Intercontinental Exchange. Bakkt shares surged 162% on the news.
Until next week, happy trading!