Bitcoin and crypto stocks surge

Weekly crypto wrap: 21st November 2024

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TLDR

• Bitcoin and crypto stocks surge as ETF options drive record-breaking growth.
• Ethereum ETFs saw a record US$515 million in net inflows last week, highest since launch.
• Solana bulls’ eye new all-time highs as price soars.
• Speculation mounts over Trump’s SEC Chair pick amid Ripple case developments.
• Australia’s economy shows signs of growth, Westpac signals steady cash rate.
• Powell signals patience on rate cuts as US growth steadies and inflation cools.

BTC Markets announcements

Livewire Markets: What a Trump presidency could mean for crypto.

In Caroline’s latest Livewire Markets article, she explores how crypto investors are gearing up for a potential shift in U.S. policy and regulatory landscape.

"The return of President Trump to the White House has already caused significant ripples on global markets, with Bitcoin emerging as a standout asset in the broader market rally.

Investors are sending a clear message: optimism for the future of crypto under Trump, especially given his public support for Bitcoin and digital assets.

President Trump’s administration is widely expected to create a more favourable environment for crypto’s growth, boosting market confidence and attracting new investment."

Read the full article here.

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State of crypto

• Bitcoin and crypto stocks surge as ETF options drive record-breaking growth.
• Ethereum ETFs saw a record US$515 million in net inflows last week, highest since launch.
• Solana bulls’ eye new all-time highs as price soars.
• BlackRock is bullish, calling Bitcoin’s future under Trump “bright.”
• Speculation grows over Trump’s SEC Chair pick, fuelling market interest amid ongoing Ripple case.
• Tether Treasury mints another 1 billion $USDT on Ethereum.
• VanEck CEO predicts Bitcoin could hit US$300K as it takes on gold’s market share.
• Chainlink, Microsoft, Banco Inter partner on Brazil's CBDC pilot to improve trade finance

Weekly crypto market close as of Thursday, 21st November.

Bitcoin sustained its upward trend this week, rising 4.52% on the BTC Markets exchange to close at AU$145,254.80.

XRP led the charge with a remarkable 60.99% gain, finishing at AU$1.7036 and solidifying its position as the week’s top performer.

Litecoin also delivered solid returns, climbing 12.58% to close at AU$129.82.

Other standout gainers included Hedera (HBAR) with an extraordinary 119.46% increase, Stellar (XLM) up 94.38%, and Algorand (ALGO) rising 44.72%, as bullish sentiment dominated the market.

On TradingView, the total cryptocurrency market capitalisation hit a new all-time high of US$3.11 trillion on Wednesday, reflecting a 4% weekly increase.

Check prices.

Bitcoin and crypto stocks surge amid positive developments.

Bitcoin's future looks bright, with VanEck CEO predicting a potential rise to US$300K in the next five to ten years as it takes market share from gold. This optimistic view is supported by growing institutional adoption and the success of Bitcoin ETFs like BlackRock’s $IBIT. Meanwhile, Nasdaq has listed options on BlackRock’s Bitcoin ETF, expected to drive further growth.

In crypto-related stocks, Bakkt saw its shares skyrocket nearly 250% amid reports of a takeover by Trump Media, fuelling optimism for a more crypto-friendly regulatory environment under a potential Trump administration.

Bitcoin ETF options drive record-breaking growth and market sentiment.

The launch of options for BlackRock’s iShares Bitcoin Trust ($IBIT) ETF on November 19 saw a staggering US$1.9 billion in trading volume on its debut day, pushing Bitcoin to a new all-time high of US$94,105. This record-breaking trading volume highlights strong demand for Bitcoin’s future price appreciation, with most options being call options, reflecting bullish market sentiment.

Galaxy Digital’s Alex Thorn predicts that these new options will help reduce Bitcoin’s volatility over time, attracting institutional investors and promoting Bitcoin as a more stable asset. Goldman Sachs also increased its Bitcoin ETF exposure to US$710 million, reflecting a broader trend of institutional adoption. The $IBIT ETF has now surpassed US$40 billion in assets, setting a record as the fastest ETF to reach this milestone.

This surge in Bitcoin ETF options trading offers new hedging opportunities for investors and is expected to foster greater market sophistication, reducing volatility and broadening Bitcoin’s appeal as a mainstream financial asset.

Check BTC/AUD price

Source: Eric Balchunas

Source: The Block

Ethereum ETFs saw a record US$515 million in net inflows last week, marking the highest since launch.

Ethereum’s (ETH) price stabilised above US$3,000 after historic ETF inflows, with US$550 million added, led by BlackRock. Institutional interest surged, totalling US$789 million in November, alongside heightened activity from large wallet holders. If ETH breaches US$3,248 resistance, it could extend its rally, but a drop below US$3,001 risks declines to US$2,828.

Check ETH/AUD price

Solana bulls’ eye new all-time highs as price soars.

Solana (SOL) has been on a major rally, up 45% in just two weeks, with its price hitting around US$242.80. Strong on-chain data shows a surge in trading volume, fees, and open interest, suggesting more gains are ahead.

The technical charts also back up this optimism, with SOL breaking key resistance levels and eyeing a new all-time high of US$276. If momentum continues, Solana could soon hit new price records, with plenty of room for growth before hitting overbought conditions.

Check SOL/AUD price

Speculation mounts over Trump’s SEC Chair pick amid Ripple case developments.

Speculation surrounding President Trump’s potential pick for SEC Chair has intensified, with crypto lawyer Teresa Goody Guillen emerging as a strong contender. Guillen, known for her work with blockchain firms and her past role as an SEC attorney, is now one of several names in the running, alongside Brad Bondi and Brian Brooks.

Crypto attorney John Deaton weighed in, expressing support for Bondi and Brooks due to their stances on investor protection and self-custody in DeFi. The choice of SEC Chair could have major implications for the Ripple case, with experts predicting that Bondi’s leadership might halt crypto-related investigations and influence the outcome of ongoing litigation. Meanwhile, XRP's price action remains volatile, with investors closely monitoring the situation for any signs of regulatory shifts.

Check XRP/AUD price

Chainlink, Microsoft, Banco Inter partner on Brazil's CBDC pilot to improve trade finance.

Brazil’s central bank has launched phase two of its Drex CBDC pilot, aimed at improving cross-border trade finance and supply chain processes. The initiative brings together Chainlink, Microsoft, Banco Inter, and 7Comm to explore the use of blockchain technology for automated trade settlements.

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) will facilitate secure, cross-platform transactions, while Microsoft provides the cloud infrastructure. The project aims to integrate CBDCs and blockchain into Brazil’s economy, addressing trade finance inefficiencies and enhancing financial innovation. The pilot will also test technologies like tokenized bills of lading and delivery-versus-payment mechanisms, extending into 2025.

Check LINK/AUD price

Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

Moneymag.com.au: Why crypto prices are surging.

What could the Trump regime mean for cryptocurrency?

Caroline Bowler, chief executive of crypto exchange BTC Markets, says that the incoming administration is generally expected to create a more favourable environment for cryptocurrency.

"One of the key policy shifts under a Trump presidency is likely to be deregulation. Trump has publicly stated his intention to replace SEC Chair Gary Gensler, a figure criticised by the crypto community for his enforcement-heavy regulatory approach.

InvestorDaily.com.au: Expert warns regulators: ‘Crypto is not a dirty word’

“Policymakers must remain adaptable and open to the opportunities that cryptocurrencies present. While these assets may not align with traditional concepts of ‘money’, they are undeniably reshaping the financial landscape.”

Bowler called for “a more open-minded approach,” emphasising that dismissing cryptocurrencies as a passing trend overlooks profound global changes already underway.

Read the full article here.

The week ahead: economic events

Friday, November 22nd

• 8:00am Australia Judo Bank Manufacturing, Services and Composite PMI
• 9:30am Japan Inflation Rate
• 5:00pm United Kingdom Retail Sales MoM
• 6:30pm Germany Manufacturing PMI

Monday, November 25th

• 7:00pm Germany Ifo Business Climate Index

Wednesday, November 27th

• 5:00am USA FOMC Minutes
• 10:30am Australia Monthly CPI Indicator
• 5:00pm Germany GfK Consumer Climate
• 11:30pm United States Core PCE Price Index MoM, Durable Goods Orders, GDP Growth Rate, Personal Income and Personal Spending

Source: trading economics

Market reflections

Overview

Australia's economy shows growth with steady rates, as employment slows, and inflation expectations drop. In the US, retail sales and factory prices rise, while building permits dip. China's retail sales rebound, though industrial growth slows due to energy issues, while manufacturing remains robust. Japan's economy grows but faces rate hike risks. The UK sees a slowdown in GDP growth for Q3, although consumer and business spending remain strong. Canada's inflation rises to 2%, staying within target range.

Australia

• Australia’s economy shows signs of growth, Westpac signals steady cash rate.
• Employment growth slows in October while unemployment stabilises.
• Inflation expectations drop to 3-year low as RBA maintains rates.

Australian shows signs of growth amid steady policy

Australia’s economy is showing encouraging signs of recovery, with the Westpac-Melbourne Institute Leading Economic Index rising 0.2% in October after six months of stagnation. Westpac predicts GDP growth will lift from 1.0% mid-year to 1.5% by the end of 2024, reaching 2.4% in 2025. Despite this momentum, the Reserve Bank of Australia (RBA) is expected to hold its cash rate steady in December as it monitors inflation's trajectory.

Job market moderates

Employment growth slowed in October, adding 15.9k jobs compared to September’s robust 61.3k. While the unemployment rate remained steady at 4.1%, the participation rate dipped slightly to 67.1%. Underemployment improved, and hours worked saw a minor increase, indicating stable labour demand despite moderated gains.

Inflation expectations fall to three-year low

Inflation expectations dropped to 3.8% in November, their lowest since October 2021. Annual inflation for Q3 stood at 2.8%, firmly within the RBA’s target range. The cash rate remains steady at 4.35% for the eighth consecutive meeting as the RBA continues its focus on reducing underlying inflation.

These developments highlight steady progress in Australia’s economic recovery, with signs of growth balanced by measured monetary policy.

Global

• Powell signals patience on rate cuts as US growth steadies and inflation cools.
• US retail sales and factory prices rise, while building permits dip with regional variation.
• China’s retail sales rebound, industrial growth slows due to energy, manufacturing remains strong.
• Japan's economy grows, trade deficit narrows, but rate hike risks and pressures loom.
• UK inflation hits 6-month high as growth slows amid energy pressures.
• Canada's inflation climbs to 2% in October, still within target range.

United States

Fed signals caution on rate cuts amid steady U.S. growth

Federal Reserve Chair Jerome Powell underscored the central bank's careful approach to rate cuts, citing strong economic growth and resilient labour market conditions. Inflation is progressing towards the 2% target, but the path remains uneven.

Retail sales climb in October with strength in electronics and autos

U.S. retail sales rose 0.4% in October, beating expectations. Electronics and auto dealers led the gains, but sectors like furniture and miscellaneous retail saw declines, highlighting mixed consumer spending patterns.

Factory prices rise as services and raw materials drive inflation

Producer prices increased 0.2% in October, propelled by service costs and higher raw material prices such as carbon steel and diesel. Annual PPI rose 2.4%, with core PPI at 3.1%, both slightly above forecasts.

Building permits dip as multi-unit approvals decline

U.S. building permits fell 0.6% in October, led by a 3% drop-in multi-unit projects. Single-family permits rose 0.5%, while the Northeast region saw a standout 13.4% increase.

China

Retail sales rebound as Chinese consumers return to spending

China’s retail sales grew 4.8% year-on-year in October 2024, marking the fastest pace since February. Holiday-driven demand, a shopping festival, and government measures boosted multiple categories.

Industrial growth slows as energy drags, but manufacturing holds firm

China’s industrial production rose 5.3% year-on-year in October, slightly underperforming expectations due to a sharp slowdown in energy output. Manufacturing remained robust, with standout growth in computers and communication (+10.5%) and chemicals (+6.9%). Over the year, industrial output posted a solid 5.8% increase, showcasing manufacturing resilience against energy sector headwinds.

Japan

Japan’s economy grows, but external pressures and rate hike risks loom

Japan’s economy grew by 0.2% in Q3 2024, slowing from 0.5% in Q2. Wages helped fuel stronger-than-expected consumer spending, but businesses pulled back on investments, and trade imbalances weighed on growth. Imports surged faster than exports, highlighting global headwinds. Meanwhile, government spending continued to rise, cushioning the impact of recent natural disasters.

Looking ahead, potential interest rate hikes by the Bank of Japan could trigger another yen carry trade unwind, like what we saw in early August. With the recovery still on fragile ground, the BOJ’s moves will be closely watched by markets.

Japan's trade deficit narrows in October, exports outperform imports

Japan's trade deficit shrank to JPY 461.25 billion in October 2024, down from JPY 702.86 billion a year earlier, as exports surged faster than imports. Exports rose 3.1% to JPY 9.43 trillion, exceeding forecasts, while imports increased by 0.4%, also above expectations. However, the result missed market expectations for a smaller deficit of JPY 360.4 billion.

United Kingdom

UK inflation hits 6-month high as growth slows amid energy pressures

UK inflation climbed to 2.3% in October, marking a six-month high as energy costs surged following Ofgem’s adjusted price cap. Core inflation edged up to 3.3%, adding pressure on the Bank of England to address stubbornly high prices. Housing and household services saw the sharpest increases, particularly in electricity and gas, while restaurants and hotels also became more expensive. In contrast, food inflation remained steady at 1.9%, and costs in recreation and culture showed signs of slowing.

Simultaneously, UK GDP growth slowed to 0.1% in Q3, the weakest in three quarters, driven by declines in energy supply and manufacturing. Construction rose by 0.8%, while household spending (+1.2%) and business investment (+4.5%) supported year-on-year growth of 1%. However, September's unexpected 0.1% contraction underscores challenges, as rising imports and falling exports weigh on trade. While pockets of resilience remain, global uncertainties continue to overshadow the UK’s economic outlook.

Canada

Canada's inflation climbs to 2% in October, still within target range

Canada’s annual inflation rate rose to 2% in October, up from 1.6% in September, slightly surpassing expectations. The increase was mainly due to gasoline price changes, with transportation costs moving from deflation to inflation. However, inflation for shelter and food eased, staying within the Bank of Canada’s target range.

Regulation round-up

18 states sue SEC over crypto regulation, Gensler hints at resignation

In a significant legal development, 18 states, along with the DeFi Education Fund, have filed a lawsuit against the SEC, accusing the agency of unconstitutional overreach in its regulation of the cryptocurrency industry. The lawsuit criticizes the SEC's regulatory stance and enforcement actions, seeking to block the SEC from requiring digital asset platforms to register as securities exchanges. SEC Chair Gary Gensler, facing intense scrutiny over the lawsuit and recent pressure from political circles, hinted at a possible resignation, which may be influenced by a shift in the political landscape following Trump's victory in the presidential election.

Scam awareness

Cyber scams are getting smarter – here’s how to stay safe.

Cybercriminals are stepping up their game, using tricks like fake QR codes, AI-generated deepfakes, and clever phishing scams to target Australians. The Australian Signals Directorate (ASD) says scams like “quishing” (QR code phishing) and “vishing” (video phishing) are becoming more common, with hackers even mimicking entire video meetings using deepfake technology. Critical infrastructure like water, electricity, and transport systems are also being targeted, raising the stakes for businesses and governments alike.

The good news? Staying vigilant and using tools like multi-factor authentication can go a long way in keeping you safe. Remember, cybersecurity is everyone’s responsibility!

ASICs provides a checklist of common scams and ways to avoid them. To learn more, visit ASIC’s website.

Discover more on our ‘Compliance conversation’ blog page, where we share the latest updates on safeguarding against scams and protecting your assets. Stay informed and stay protected!

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