Bitcoin smashes $100k milestone

Weekly crypto wrap: 5th December 2024

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TLDR

• Bitcoin smashes $100k milestone: A historic moment for the industry.
• XRP sees massive surge, whale activity drives price spike and market cap leap.
• Crypto market sees 4th week of growth, rising 3.46% to US$3.39 trillion.
• Chainlink surges 29%, community calls LINK the true ‘bank coin’.
• HBAR soars with historic 700% rally as technical indicators point to continued momentum.
• President-elect Donald Trump nominates pro-crypto SEC Chair.
• ASIC proposes expanded regulatory framework for crypto and digital assets.

Regulation round-up

Fostering an innovative, safe, and secure digital asset industry.

This week, both the Albanese Government and the Australian Securities and Investments Commission (ASIC) reaffirmed their commitment to developing a comprehensive digital asset regulatory framework aimed at enhancing safety, transparency, and innovation.

Recognising the transformative potential of blockchain and digital assets for Australia's economy, the Government plans to introduce legislation in 2025. This will include licencing regimes for digital asset platforms and clear regulatory guidance for stablecoins. ASIC has outlined its intention to consult widely to ensure the regulatory framework aligns with the needs of modern finance, prioritises investor protection, and encourages industry growth.

Industry and government collaboration
ASIC Commissioner Alan Kirkland described these initiatives as a critical step in safeguarding consumers while enabling industry expansion. Treasurer Jim Chalmers highlighted the measures as foundational for innovation in blockchain and digital assets, balancing economic opportunity with robust protections.

Implications for businesses
Proposed changes will expand ASIC's oversight, introducing licensing obligations and clearer compliance guidelines for businesses handling stablecoins, staking, or tokenised investments. These adjustments aim to resolve long-standing legal ambiguities while leaving traditional cryptocurrencies largely unaffected.

Next steps
ASIC intends to finalise its updated regulations within six months, marking a significant evolution in the sector’s regulatory landscape. This initiative underscores its commitment to bridging emerging technologies with traditional financial oversight to ensure responsible growth.

BTC Markets’ perspective
Caroline Bowler, CEO of BTC Markets, stated:

"We are encouraged by the Government's proactive approach to establishing a fit-for-purpose regulatory framework. A balanced approach to digital asset regulation will strengthen consumer confidence, foster innovation, and ensure Australia remains competitive globally. As ASIC engages collaboratively with industry stakeholders, we are optimistic about the opportunities this clarity will create for businesses and consumers alike."

With Australia’s economy facing challenges in innovation, it is vital to leverage the potential of blockchain and digital assets to drive growth and competitiveness. BTC Markets fully supports these forward-thinking initiatives and remains committed to fostering a secure and dynamic digital asset environment.

Read ASICs announcement here

State of crypto

• Bitcoin smashes $100k milestone: A historic moment for the industry.
• XRP sees massive surge, whale activity drives price spike and market cap leap.
• Grayscale files with SEC for spot Solana ETF.
• Chainlink surges 29%, community calls LINK the true ‘bank coin’.
• HBAR soars with historic 700% rally as technical indicators point to continued momentum.
• President-elect Donald Trump nominates pro-crypto SEC Chair.
• How MicroStrategy’s Bitcoin flywheel leverages Wall Street strategies.
• Virtuals Protocol tokens soar as AI agent demand grows.

Bitcoin (BTC)

Bitcoin smashes US$100k milestone: A historic moment for the industry.
Bitcoin has broken through the US$100k mark, marking a major milestone for the digital asset. Capital rotation from altcoins like XRP and TRX, both experiencing double-digit declines, has bolstered Bitcoin’s dominance, resulting in a 3% rise in its value and overall market cap. This reflects renewed investor confidence, spurred by profit-taking and new capital inflows.

Regulatory developments also play a crucial role. ASIC’s ongoing consultation on digital asset regulations highlights potential impacts on stablecoins, wrapped tokens, and DeFi tools. A balanced framework is essential to ensure Australian platforms remain competitive while fostering innovation.

Adding to the momentum, optimism is growing globally with the appointment of Paul Atkins as SEC Chair. Known for his pro-market stance, Atkins is expected to introduce clearer and more crypto-aligned policies, creating a supportive environment for the sector.

Together, these domestic and international factors are shaping a promising future for Bitcoin and the broader digital asset industry.

How MicroStrategy’s Bitcoin flywheel leverages Wall Street strategies.

MicroStrategy's approach of using Bitcoin as its primary treasury asset has resulted in impressive growth for the company, with shares rising 467% year-to-date. The firm has raised billions through equity offerings and bonds, specifically to purchase bitcoin. With its current holdings of over 402,000 BTC, MicroStrategy has created a flywheel effect that drives both Bitcoin and its shares higher.

What sets MicroStrategy apart from ETFs is its ability to issue long-dated bonds with terms that ETFs can't replicate. By raising debt to buy Bitcoin, the company offers investors more options for exposure, including shares, bonds, and derivatives. The firm's strategy has attracted both institutional investors and speculators seeking leveraged plays on Bitcoin. However, the flywheel effect comes with risks; a drop in Bitcoin’s price could negatively impact MicroStrategy’s shares and force the company to sell Bitcoin to cover its debt.

The approach has worked thus far, and others are beginning to adopt similar strategies, making MicroStrategy a key case study in corporate Bitcoin investment.

View Bitcoin

BlackRock’s Bitcoin ETF hits 500k BTC milestone.

BlackRock's spot Bitcoin ETF, IBIT, has surpassed 500,000 BTC in assets under management (AUM), less than a year after launching in January 2024. This milestone, equating to nearly US$48 billion, highlights IBIT's role as a key driver of Bitcoin’s price surge and broader adoption. On Monday alone, the fund saw inflows of US$338.3 million, pushing total U.S. Bitcoin ETFs closer to holding 1.1 million BTC, approximately Satoshi Nakamoto’s estimated holdings.

This rapid growth reflects increasing institutional interest in Bitcoin ETFs, with market participants positioning Bitcoin as a portfolio diversifier. Coupled with strong inflows, the ETF's trajectory signals potential for holding 1 million BTC in the future, aligning with broader trends of regulatory acceptance. Locally, ASIC’s evolving crypto regulations are further shaping opportunities for institutional engagement in Australia.

Source: TheBlock.co

XRP

XRP sees massive surge, whale activity drives price spike and market cap leap.

XRP has surged nearly 100% in a week, reaching levels not seen since 2018, with a 470% price increase since November. Whale activity has been a key factor, as large holders move significant amounts of XRP, hinting at potential profit-taking. This rally follows a boost in investor confidence tied to the U.S. Republican election win and speculation around Ripple Labs' future, including a potential ETF and stablecoin.

XRP has now overtaken Tether (USDT) to become the third-largest cryptocurrency by market cap, valued at US$139 billion. Additionally, WisdomTree has filed for a spot XRP ETF, joining four other firms in seeking approval to offer investors direct exposure to XRP.

View XRP

Solana (SOL)

Grayscale files with SEC for spot Solana ETF.

Grayscale Investments has filed with the SEC to launch a spot Solana ETF under the ticker GSOL, aiming to convert its existing Solana Trust into an ETF. If approved, the ETF would trade on the New York Stock Exchange. As of the filing, the Grayscale Solana Trust holds US$134.2 million in assets, representing about 0.1% of all SOL in circulation.

Grayscale joins several other firms, including 21Shares, Canary Capital, VanEck, and Bitwise, in competing for SEC approval. Solana’s price has surged by 277% in the last year, driving increased competition for Solana-based investment products.

View SOL

Chainlink (LINK)

Chainlink surges 29%, community calls LINK the true ‘bank coin’.

Chainlink’s LINK token jumps 29% after the community brands it the true “bank coin” contrasting it with XRP. Proponents highlight Chainlink's partnerships with major financial institutions, claiming its role in connecting banks to blockchains. This follows a rally in XRP, with some suggesting LINK could gain attention due to similar goals in traditional finance.

View LINK

Hedera (HBAR)

Hedera (HBAR) soars with historic 700% rally as technical indicators point to continued momentum.

Hedera (HBAR) has seen a remarkable surge in its price, increasing by 721% over the past 30 days and reaching its highest levels since 2021. With a market cap of US$13.44 billion, HBAR has overtaken prominent cryptocurrencies like SUI, Uniswap, and Litecoin. This rise is supported by strong bullish momentum, as indicated by the Directional Movement Index (DMI) with an ADX reading of 72, signalling powerful trend strength.

While the uptrend remains strong, the Ichimoku Cloud analysis suggests the price may be overextended in the short term, potentially leading to a consolidation phase. The continued momentum, however, remains a bullish signal for HBAR's longer-term outlook.

View HBAR

President-elect Donald Trump nominates Paul Atkins as SEC Chair.

Trump's decision to nominate Paul Atkins as Chair of the Securities and Exchange Commission (SEC) could mark a significant shift toward more crypto-friendly financial regulation in Washington. Industry insiders have expressed optimism, suggesting Atkins may prioritise creating a clearer, more accommodating regulatory environment for digital assets. They anticipate a move away from using enforcement actions to push companies into frameworks that many argue are ill-suited for cryptocurrencies.

In his announcement, Trump highlighted Atkins's support for the crypto industry, stating that he "recognises that digital assets & other innovations are crucial" in driving American success. A SEC under Atkins is expected to foster innovation, enabling new securities products and platforms while taking a hands-off approach to non-security crypto assets like Bitcoin and Ethereum.

Virtuals Protocol tokens soar as AI agent demand grows.

Virtuals Protocol, a platform for tokenised AI agents, has seen a massive surge, with its VIRTUAL token skyrocketing into the top 100 cryptocurrencies. In just 24 hours, the token jumped nearly 29%, and it has increased by 161% over a week, setting an all-time high.

The driving force behind this rise is growing demand for AI agents, autonomous programs designed to perform tasks and make decisions on their own. Virtuals, launched on Base (Coinbase's Ethereum layer-2 network), offers a marketplace for AI agents in gaming, entertainment, and beyond. With functionalities like Telegram chatting, meme generation, and livestreaming, these agents can operate autonomously and even facilitate transactions in the crypto space.

The surge in Virtuals' tokens, along with other ecosystem tokens, highlights the increasing interest in AI-driven technology. As the AI agent market expands rapidly, Virtuals is positioning itself as a key player in the intersection of blockchain, AI, and the metaverse.

Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

AFR: Bitcoin’s wild ride towards $US100,000 – and why it matters

“These pullbacks are part of a cyclical pattern,” says Charlie Sherry, head of finance at Australian crypto exchange BTC Markets. “The drop to $US91,600 fits this trend, suggesting it could be the last flush before bitcoin crosses the $US100,000 mark.”

“For many, the potential for life-changing gains and the thrill of the market is a significant draw,” says BTC Markets chief executive Caroline Bowler.

Read the full article here

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The week ahead: economic events

Thursday, December 5th

• 1:00am United States ISM Services PMI
• 10:30am Australia Balance of Trade, Export & Imports
• 11:30pm Canada Balance of Trade

Friday, December 6th

• 1:00am Canada Ivey Purchasing Managers Index
• 11:30pm Canada Unemployment Rate
• 11:30am United States Non-Farm Payrolls & Unemployment Rate

Saturday, December 7th

• 1:00am United States Michigan Consumer Sentiment
• 1:00pm China Balance of Trade

Monday, December 9th

• 11:30am China Inflation Rate

Tuesday, December 10th

• 10:30am Australia Business Confidence
• 1:30pm Australia Interest Rate

Market reflections

Overview

Australia's economy grew at its weakest pace since 2020 in Q3 2024, with fixed investment supported by public sector spending while household spending remained flat. Exports showed slight improvement, and imports decreased. The housing market faced challenges, with falling private house approvals. Manufacturing showed modest recovery, but inventories declined. Inflation eased to 2.8%, although services inflation remained high, and job ads dropped, indicating weaker labour demand. Globally, US job openings surged, China’s manufacturing grew despite challenges, and inflation rose in Germany, while Japan, India, and Canada also faced economic pressures.

Australia

• Australia’s economy grew 0.3% in Q3 2024, the weakest growth since 2020.
• Exports rose slightly, while the housing market faces declines in approvals and values.
• Manufacturing recovery signs emerge, but declining inventories indicate cautiousness.
• Inflation dropped to 2.8%, with a cooling labour market and higher services inflation.

Australia's economy slows with weakest growth since 2020.

Australia’s economy showed signs of slowing down in Q3 2024, expanding by just 0.3% quarter-on-quarter, marking the weakest growth since Q4 2020. While the economy continued to grow for the 12th consecutive quarter, it fell short of the 0.4% forecasted by economists. This slowdown is a sign that the economy is facing challenges, despite positive movements in certain sectors. Annual GDP growth stood at only 0.8%, which is the lowest rate since late 2020, reflecting ongoing pressures from external and domestic factors.

Fixed investment and household spending trends.

Fixed investment saw a 1.5% rise in Q3, led by a significant surge in public investment. This increase was driven by a record-high rise in public sector spending, which has been a key source of support for economic activity amid a cooling economy. However, household spending remained flat, driven by a decrease in electricity spending, though other areas of consumer spending showed some growth. Retail sales, for example, rose by 0.6% in October, surpassing expectations and showing resilience in consumer activity despite broader economic slowdowns.

Exports and imports show mixed performance.

On the external side, exports grew slightly by 0.2%, while imports declined by 0.3%, which had a positive impact on GDP. Despite this, Australia’s goods and services surplus shrank to its smallest level since 2018, largely due to weaker global demand for key exports like iron ore and coal. The Reserve Bank of Australia’s Index of Commodity Prices continued its downward trend, falling by 11.8% year-on-year in November, marking the 21st consecutive month of negative growth, driven by lower commodity prices.

Housing market and construction sector challenges.

The housing market has been showing signs of cooling, with private house approvals dropping by 5.2% month-on-month in October. However, the broader construction sector has remained more resilient, with approvals for total dwellings rising by 4.2%, thanks to a surge in private sector approvals for non-house dwellings. This trend, especially in New South Wales and Victoria, has been positive, but the construction sector continues to face challenges, particularly due to slow permit processing and tight profit margins in the industry.

Manufacturing sees some recovery, but inventory declines persist.

Australia's manufacturing sector showed signs of improvement in November 2024. The Ai Group Australian Industry Index rose by 17.9 points to -10.8, indicating a reduction in contractionary conditions. The S&P Global Flash Australia PMI Composite Output Index remained steady at 50.2, signalling a marginal rise in private sector output, driven entirely by services. However, business inventories continued to fall, with a 0.9% drop in Q3 2024, showing contraction across several sectors, including retail, mining, and accommodation.

Mixed signals for inflation and labour market trends.

On the inflation front, Australia saw a decrease in annual inflation to 2.8% in Q3, the lowest since Q1 2021. However, while goods inflation slowed, services inflation remained elevated. The labour market is also showing mixed signals: while job ads declined by 1.3% month-on-month in November, they remain significantly above pre-pandemic levels. Corporate profits, on the other hand, contracted by 4.6% in Q3 2024, with sectors such as mining, wholesale trade, and accommodation facing particularly weak performance.

A challenging economic landscape ahead.

While some sectors in Australia’s economy are showing signs of resilience, including retail and some areas of construction, broader economic challenges persist. Weak global demand, especially for commodities, slower corporate profits, and cooling in the housing market suggest that Australia’s economy will continue facing pressures in the coming quarters. Mixed signals from the manufacturing sector and ongoing inflation pressures highlight the complex landscape the economy is navigating in the latter half of 2024.

Global

• US job openings soar, driven by growth in key sectors as manufacturing contracts.
• China’s manufacturing sector shows growth despite challenges.
• Germany’s inflation hits 4-month high at 2.2%, but monthly prices dip.
• Japan’s consumer confidence edges up amid brighter income outlook.
• India’s GDP growth slows in September quarter, weakest since late 2022.
• Eurozone and key European economies face inflationary pressure.
• Canada's economy slows in Q3 2024 amid weaker exports.

United States

Job openings soar by in October, driven by growth in key sectors.

Job openings jumped by 372,000 in October, reaching 7.744 million, exceeding expectations. The biggest increases were seen in professional services, food services, and information sectors. The South and West saw the biggest regional gains, while the Northeast and Midwest experienced declines. Despite this, hires and separations remained steady, with quits holding at 3.3 million and layoffs at 1.6 million.

US manufacturing activity contracts at slower pace in November.

The US ISM Manufacturing PMI rose to 48.4 in November, up from 46.5 in October, surpassing expectations of 47.5. While still signalling contraction, the reading points to a milder slowdown in the sector. Price pressures moderated, and supplier delivery times improved, reflecting better capacity, though some product shortages reemerged. Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted, "Demand remains weak as companies focus on 2025 planning following the election cycle. Production eased in line with soft demand and limited backlogs."

China

China’s manufacturing sector shows growth despite challenges.

China’s manufacturing sector showed promising signs of recovery in November, with the Caixin Manufacturing PMI rising to 51.5, the highest in five months. This growth was driven by strong foreign demand and a boost in output, with export orders growing at their fastest pace since February 2023.

However, employment continued to decline, and input prices surged due to rising raw material costs, leading to higher selling prices. Despite these challenges, business confidence reached an eight-month high, buoyed by optimism about government support and economic improvements.

Meanwhile, China’s NBS Manufacturing PMI increased slightly to 50.3, marking its highest level since April. This improvement was underpinned by stronger output and new orders, although foreign orders and employment remained weak. Business confidence also saw a rise, reflecting cautious optimism as recovery efforts continue.

Germany

Germany’s inflation hits 4-month high at 2.2%, but monthly prices dip.

Germany’s annual inflation climbed to 2.2% in November, up from 2% in October, though it fell short of the 2.3% forecast. While services inflation held steady at 4%, the cost of goods eased slightly, and energy prices fell but at a slower pace.

On a brighter note, for consumers, monthly prices dropped 0.2%, reversing October’s rise. Core inflation, excluding food and energy, reached a six-month high of 3%. Meanwhile, the EU-harmonised inflation rate stayed at 2.4%, though monthly harmonised prices saw a sharper-than-expected 0.7% decline.

Japan

Japan’s consumer confidence edges up amid brighter income outlook.

Japan's consumer confidence index rose slightly to 36.4 in November, recovering from October's five-month low of 36.2, matching market expectations. The improvement was driven by better household sentiment in areas like income growth and willingness to buy durable goods. Sentiment around overall livelihood also ticked up slightly, though views on employment dipped.

India

India’s GDP growth slows in September quarter, weakest since late 2022.

India's economy grew 5.4% year-on-year in Q3 2024, slower than the 6.7% in Q2 and below the 6.5% forecast. The slowdown was mainly due to weaker manufacturing and a sharp decline in utilities growth. However, the tertiary sector remained stable at 7.1%, and agricultural output helped offset construction losses.

Euro Area

Eurozone and key European economies face inflationary pressure.

Inflation in the Eurozone increased to 2.3% in November, up from 2% in October, driven by base effects as last year’s energy price declines no longer impacted annual comparisons. Energy prices fell 1.9%, easing from the previous month’s drop of 4.6%. Price growth in non-energy industrial goods accelerated to 0.7%, but inflation in services and food categories slowed. Core inflation, excluding volatile categories, remained steady at 2.7%, in line with expectations. On a monthly basis, the CPI decreased by 0.3%, reversing October’s 0.3% increase.

In France, annual inflation rose to 1.3% in November, marking a three-month high but missing the forecast of 1.5%. This slight increase was driven by slower food price growth, stronger gains in services, and a smaller drop in energy costs. On a monthly basis, the CPI dipped 0.1%, reversing the previous month’s 0.3% increase.

Italy’s inflation rate surged to a one-year high of 1.4% in November, up from 0.9% in October. This increase was largely due to the fading impact of the 2022 energy crisis. Energy prices rose and declines in unregulated energy moderated. Core inflation edged up to 1.9%.

Canada

Canada's economy slows in Q3 2024 amid weaker exports and investment.

Canada's economy grew at 1% in Q3 2024, down from 2.2% in Q2. Household consumption rose 0.9%, driven by vehicle and financial service spending, while government spending increased by 1.1%. However, weaker inventory accumulation and a decline in business investment, along with falling exports, weighed on growth.

Scam awareness

New tool to block scam texts aims to protect Aussies from fraud.

The Australian government is rolling out a new tool to tackle the growing issue of SMS scams. Telcos will now be required to verify messages from trusted brands, such as CommBank and MyGov, through a national SMS sender ID register.

This initiative will help block or flag scam messages, reducing fraud and restoring consumer trust in legitimate communications. Communications Minister Michelle Rowland emphasised that this tool is vital in protecting Australians from sophisticated scammers who steal millions each year.

In fact, Scamwatch reported losses exceeding $11 million from SMS fraud in 2024. The register, which will be open for registration of sender IDs by late 2025, is part of the government's $10 million investment in the 2023-24 Federal Budget. This move is expected to make Australia a less attractive target for scammers, ultimately improving the security of digital communications for all Australians.

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.

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