Bitcoin’s record-breaking streak stalled towards the end of 2024, marking its first monthly decline since August.
The digital asset rallied in the wake of President-elect Donald Trump’s victory, as U.S. investors cashed in their profits after Bitcoin rose to an all-time high of $108,315 in mid-December. It fell 3.2% last month. Frenzied speculation in the cryptocurrency market has subsided as expectations for the US Federal Reserve’s interest rate cuts recede and appetite for risk assets wanes.
More than a dozen U.S. Bitcoin exchange-traded fund groups have seen net outflows of about $1.8 billion since Dec. 19, according to data compiled by Bloomberg. Open interest (outstanding contracts) in Chicago-based CME Group’s Bitcoin futures, which is seen as a gauge of interest among U.S. institutional investors, has also fallen by nearly 20% from its peak in December.
Still, Bitcoin recorded a 120% rally in 2024, outperforming gold and global stocks.
“While there is widespread optimism about crypto-friendly regulations after President Trump takes office, the main catalyst may come in January when financial institutions recalibrate their asset allocations,” QCP Capital wrote for clients. I mentioned it in my notes. “Bitcoin is now widely adopted by a wide range of institutions, with university endowments also added to the list this year, increasing allocations and reinforcing Bitcoin’s dominance, stabilizing spot movements. , volatility dynamics may approach stocks.”
Bitcoin fell 0.24% and was trading at $93,487 as of 8:10 a.m. Wednesday in New York. Smaller coins such as Ether and Dogecoin also struggled to gain ground.
Shukla writes for Bloomberg.