In Markets
It’s been another historic week, with Bitcoin crossing the US$100K (A$155.3K) mark for the first time and hitting a new all-time high of US$103,900 (A$161.3K). MicroStrategy is doing its best to keep us at these levels, with another US$2.1B (A$3.26B) buy, but long-term holders have been taking profits selling 828K Bitcoin in the past month. Amazon, the US state of Florida and even the Russian State Duma Deputy have all floated the idea of establishing a Bitcoin reserve. ETH crossed US$4,000 (A$6,209), Solana’s market cap looks vulnerable to being flipped by BNB, and the altcoin market cap and the stablecoin market cap are both at or near all-time highs. CoinShares reports digital asset investment took a record $3.85B in a week. However, a pullback in the past 24 hours has moderated some of the excitement. Bitcoin finishes the week up 2% to trade around US$98,121 (A$151,587). Ethereum is up 6% to trade around US$3,739 (A$5,777). XRP fell 17%, alongside Solana (falling 3%), Cardano (down 16%), and Shiba Inu (down 6.1%). Dogecoin is flat this week. The Crypto Fear and Greed Index is at 78, or Extreme Greed.
From the IR OTC Desk
Over the course of the week, the CME bond futures implied probability for a rate cut has increased significantly, rising from 61.6% to its current level of 85.8%. This shift is likely attributable to the underperformance of the ISM Services PMI (52.1% actual vs. 55.5% consensus) as well as Chairman Jerome Powell’s speech. During the speech, Chairman Powell mentioned that Bitcoin could be a competitor to gold, which boosted positive sentiment and led to BTC/USD breaking above $100,000 the following day. BTC/USD reached a high of $104,028 on Independent Reserve. The S&P also hit new highs of 6098 before retreating slightly yesterday, further fueling positive risk sentiment.
During the RBA meeting this afternoon, the Board decided to keep the cash rate target unchanged at 4.35% and the interest rate on Exchange Settlement balances at 4.25%. The Board also issued a statement noting that “underlying inflation remains too high,” which the market interpreted as slightly more hawkish. As a result, the AUDUSD dropped sharply, falling from 0.6410 before the statement was released to a low of 0.638.
On the OTC desk, we observed a sharp increase in trading volumes and requests compared to the previous week. There was strong interest in altcoin flows, with a good mix of profit-taking and new buying interest. Market participants believe there may be a shift of capital from BTC to altcoins.
Correspondingly, the BTC Dominance chart has been an interesting indicator throughout this cycle. BTC dominance, defined as Bitcoin’s market capitalisation divided by the total capitalisation of the top 125 coins, was trading at 39% during the bear market in September 2022. However, it has steadily climbed to 61.5% by late November. Over the past two weeks, altcoins have significantly outperformed, particularly some of the top 10 coins, such as XRP and Dogecoin, which have made impressive gains. BTC dominance is currently sitting at 57.2%.
The markets have also become increasingly choppy. After BTC/USD broke above $100,000, it traded down to $92,088 on Independent Reserve the same day, before quickly recovering past $100,000 the following day.
Key economic calendar events for the coming week (in AEST) are as follows:
- Thursday, 12 December, 12:30 a.m.: US Core Inflation Rate MoM, Consensus: 0.3%
- Friday, 13 December, 12:30 a.m.: US PPI MoM, Consensus: 0.3%
- Monday, 16 December, 1:00 p.m.: Chinese Industrial Production YoY
- Monday, 16 December, 1:00 p.m.: Chinese Retail Sales YoY
For any further information, please feel free to reach out.
In Headlines
New SEC boss is one of us
Bitcoin broke through the US$100K (A$155K) barrier just a few hours after Paul Atkins was nominated as the new chair of the Securities and Exchange Commission. He’s not just ‘pro-crypto’ — he actually fought for the industry against the SEC as co-chair of the Digital Chamber’s Token Alliance and as a board member of the Digital Chamber of Commerce. A former SEC commissioner from the Bush era, he’s already worked with current commissioners Mark Uyeda and Hester ‘crypto mom’ Peirce. FOX Business reports Atkins wants Peirce to lead the SEC’s crypto policy turnaround. That would likely mean a resurrection of her Safe Harbor idea to enable crypto businesses to legally raise money via tokens. Meanwhile, the industry has launched an ad campaign and furious lobbying effort to prevent the reelection of anti-crypto commissioner Caroline Crenshaw, with the vote due on Wednesday..
Crypto Czar
David Sacks has been announced as the Trump administration’s new AI and Crypto Czar. He will help develop a legal framework for the crypto industry and set the direction of AI and crypto policy. A vocal supporter of Bitcoin since 2013, he’s a major investor in the Solana-focused MultiCoin Capital and his VC firm Craft Ventures has tipped money into a range of crypto exchanges. He’s also a ‘PayPal Mafia’ member and good friends with Elon Musk.
ASIC lays out new crypto rules
The Australian Securities and Investments Commission (ASIC) is expanding its oversight of crypto with some proposed changes. Exchanges and firms promoting crypto investments will need to be licensed, and ASIC wants to expand the definition of financial services to include stablecoins and staking services. Bitcoin, Ethereum and other digital asset commodities (including memecoins) would not fall under the new rules. The draft updates to ‘Information Paper 225’ are available for comment now and are expected to be implemented within six months. AUSTRAC has also announced it will crack down on the use of crypto ATMs for money laundering. Meanwhile, a KPMG study of fintechs in Australia found the blockchain and cryptocurrencies space decreased in size by 14% YoY, with 74 active firms as of 2024.
Amazon and Microsoft to consider adding Bitcoin
The same think tank lobbying Microsoft to add Bitcoin to its treasury has raised a similar shareholder proposal over at Amazon, suggesting it hold 5% of its assets in Bitcoin. Microsoft is scheduled to vote today on whether it will add BTC to its balance sheet
Celsius founder pleads guilty
Celsius founder and CEO Alex Mashinsky has pleaded guilty to multi-billion dollar fraud and market manipulation schemes, according to the Department of Justice. It said he misled customers about core aspects of the company, its investments and its lack of profitability. The DOJ also says he manipulated the price of CEL while secretly selling his own stack at the inflated prices. Mashinsky has agreed to forfeit US$48M (A$74.5M) in proceeds from the schemes and faces up to 30 years in prison.
Record-breaking ETF inflows
The Ethereum ETFs are on a hot streak with two weeks of inflows in a row, and they notched up a record US$428.5M (A$665M) inflow in a single day on December 5. The ETFs hauled in US$836.7 million (A$1.3B) last week, the highest weekly inflow to date. “The ETH ETFs are just getting started – we will soon see single days with billion-dollar inflows,” predicted Ethereum podcaster Anthony Sassano. The Bitcoin ETFs are also on a trading streak, with seven positive inflow days. The week’s total was US$2.729 billion (A$4.24B). Between them, the ETFs now hold 1.104m million Bitcoin, surpassing even Satoshi’s long-dormant stash. However, the prospect of a Solana ETF in the near future has receded with Fox Business reporting that two of the prospective issuers were told by the SEC their applications had been denied.
Ethereum sentiment
ETH sentiment is at a yearly high, and the ratio of ETH to BTC rose from around 0.0325 on Nov. 21 to above 0.04 on Dec. 6, according to TradingView. Technical analysis suggests ETH is finally breaking out of a three-year long triangle, a similar setup to XRP before it went on to skyrocket. The MVRV-Z score (which compares the current price to what the coins were actually bought for) is barely out of the bear market accumulation range at 1.62 and “very similar to March 2017 and Dec 2020, where soon after both ETH price and Z-score exploded” according to influencer VentureFounder. Bybit also released a report suggesting growing demand for ETH options indicate ETH is poised to outperform.
US Treasury calls Bitcoin ‘digital gold’
The US Treasury has released a new report that calls Bitcoin “digital gold” and suggests the “Digital asset market cap remains low relative to other financial and real assets.” It also says that “tokenization has the potential to unlock the benefits of programmable, interoperable ledgers to a wider array of legacy financial assets.”
Where to next for the Bitcoin price?
Analyst Miles Deutscher says we’ve just entered the most explosive phase of the cycle and that the Bitcoin Power Law suggests we’re headed to US$150K Bitcoin (A$233K) in the short term. Standard Chartered has doubled down on its prediction that Bitcoin will hit US$200K (A$310K) in 2025. Meanwhile, Blockworks analysed past Bitcoin cycles to predict there’s about 10 months left to go in this cycle. It also noted that altcoins are currently up around 3.7x, whereas last time, they surged 49x!
Until next week, happy trading!
