Crypto markets rebound

Weekly crypto wrap: 12th December 2024

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Farewell 2024

That’s a wrap.

As the year comes to a close, we're pausing our weekly crypto updates for a well-deserved break. Before signing off, we want to take a moment to express our heartfelt gratitude for your continued support throughout 2024.

This year has been nothing short of transformative for the digital asset industry, and you've been right there with us, navigating market fluctuations, embracing technological advancements, and staying engaged with regulatory shifts. Our mission is to keep you informed and inspired, so you are ready to navigate the digital asset space.

So, from all of us at BTC Markets, thank you for being a part of our community.

But don’t worry, we’ll return on January 13, 2025, with fresh insights, market trends, and all the latest crypto updates you’ve come to rely on. Until then, we wish you a joyous holiday season filled with laughter, love, and maybe even a little blockchain banter around the table.

Here’s to a prosperous and crypto-filled New Year!

The BTC Markets Team

TLDR

• Crypto markets rebound with US$163 billion surge as US inflation meets expectations
• Bitcoin ETF shatters records, as crypto market surges past US$1.4 trillion
• MicroStrategy's likely addition to Nasdaq 100
• Ethereum ETFs see US$1.3 billion inflows as ETH hits US$4,000
• Solana captures US$2 billion of Ethereum's market share in 2024
• RBA holds rates steady as Australia's trade surplus rises
• US job growth rebounds, as unemployment rises; inflation concerns increase
• China's inflation hits five-month low; trade surplus rises on strong exports.

Check prices on the BTC Markets exchange

Regulation round-up

US could become a crypto leader with clear rules, says Eric Trump

Eric Trump, speaking in Abu Dhabi, shared his enthusiasm for cryptocurrency and a vision of America as a global leader in the crypto industry. He called for clear and sensible regulations, saying the crypto world isn’t against rules, they just want transparency and guidance.

This comes as Bitcoin recently hit $100,000 for the first time, showcasing the growing confidence in digital assets. Eric highlighted his father’s plan to make the U.S. the “crypto capital of the world” with a supportive regulatory environment.

He also noted that Elon Musk would play a significant role in shaping future government policies, describing the tech mogul as “a modern-day Albert Einstein.” With a focus on innovation, efficiency, and cutting back red tape, the aim is to let businesses and new technologies thrive.

State of crypto

• Crypto markets rebound with US$163 billion surge as US inflation meets expectations
• Bitcoin ETF shatters records, as crypto market surges past US$1.4 trillion
• MicroStrategy's likely addition to Nasdaq 100
• Microsoft shareholders reject Bitcoin proposal, citing volatility concerns
• Ethereum ETFs see US$1.3 billion inflows as ETH hits US$4,000
• Ripple's RLUSD stablecoin approved by NYDFS, set to launch on exchanges
• Solana captures US$2 billion of Ethereum's market share in 2024

Crypto markets rebound with US$163 billion surge as US inflation meets expectations

The crypto markets have rebounded strongly today as US inflation data for November 2024 came in line with expectations, providing a sense of stability for investors. The total market capitalisation of cryptocurrencies surged by US$163 billion, marking a 5% increase. This positive momentum was driven by gains in major assets, with both Bitcoin and Ethereum climbing by 5%. The inflation figures, which showed core consumer prices holding steady, helped alleviate concerns about further tightening in monetary policy, prompting renewed confidence in risk assets, including digital currencies. As a result, investor focus has shifted back towards the crypto space.

Crypto markets cooled on Monday: What caused the retracement?

The crypto market took a significant hit earlier this week, with billions wiped off its total value. Bitcoin dropped slightly, holding steady around $95,800, but altcoins like Ethereum, XRP, and Solana saw steeper losses. Meme coins and gaming tokens were hit hardest, with some losing over 20%. The crash was triggered by a mix of high leverage, liquidity issues, and aggressive selling, leading to a cascade of liquidations. Over US$1.6 billion in futures contracts were liquidated in just 24 hours, mostly from overleveraged traders betting on price increases.

Despite the turbulence, the long-term outlook for crypto remains promising. Institutional adoption is strong, with Bitcoin ETFs gaining traction, and macroeconomic factors like a weaker US dollar and potential interest rate cuts could boost market sentiment. While Bitcoin shows resilience, the path forward could include short-term corrections or further rallies. For altcoins, analysts predict a breakout, likening the current setup to the pre-rally phase of 2020. In short, the bull run may have stumbled, but it’s far from over.

Bitcoin ETF shatters records, as crypto market surges past US$1.4 trillion

History is being made as the Bitcoin ETF, $IBIT, surpasses US$50 billion in assets under management (AUM), an unprecedented milestone reached in just 228 days. This is more than five times faster than any other ETF in history, including the gold ETF ($GLD), which took approximately 5.5 years to achieve the same feat. Driving this momentum, Bitcoin has surged 32% over the past month, surpassing the historic US$100,000. The broader crypto market has added an astounding US$1.4 trillion in value during this period.

Source: TheBlock.co

MicroStrategy's likely addition to Nasdaq 100

MicroStrategy (MSTR) is expected to be added to the Nasdaq 100 Index ($QQQ) on December 23, with an announcement anticipated on December 13, according to Bloomberg ETF analysts Eric Balchunas and James Seyffart. This inclusion would solidify MicroStrategy's standing in the tech-heavy index and boost its exposure among ETFs tracking the Nasdaq 100, which collectively represent approximately US$550 billion in assets.

The company is projected to receive a 0.47% weight in the index, making it the 40th largest holding. Analysts estimate net buying of US$2.1 billion in MSTR shares by ETFs as a result, representing roughly 20% of the stock's daily trading volume. This development would mark another milestone for MicroStrategy, which has seen its stock soar almost 500% year-to-date, outperforming both major equities and Bitcoin.

Source: Eric Balchunas

The stock's meteoric rise aligns with its aggressive Bitcoin acquisition strategy, with over 170,000 BTC now on its balance sheet. However, a future inclusion in the S&P 500 may hinge on changes to accounting rules surrounding Bitcoin valuation, potentially making MSTR eligible in 2025. This announcement signals both recognition of MicroStrategy's unique position in the cryptocurrency space and its growing influence in traditional financial markets. Investors and analysts will closely watch the impact of the inclusion on the stock and the broader market.

Microsoft shareholders reject Bitcoin proposal, citing volatility concerns

During its annual meeting, Microsoft shareholders voted against a proposal to allocate a portion of the company's profits toward Bitcoin investments. The resolution, presented by the National Centre for Public Policy Research, argued that Bitcoin could be a strategic move to diversify profits and capitalise on emerging technology trends. Despite promises of potential value creation, Microsoft's board dismissed the idea, citing Bitcoin's volatility and reaffirming the company's current treasury management practices. The shareholders ultimately sided with the board, marking a cautious stance on integrating cryptocurrency into its financial strategy.

Ethereum ETFs see US$1.3 billion inflows as ETH hits US$4,000

Ethereum ETFs have been on fire, seeing over US$1.3 billion in inflows in just two weeks. A big part of this surge is tied to Ethereum’s price jumping above US$4,000, marking its highest point since March. Over the past week, the funds saw US$836.7 million in inflows, with Fidelity’s Ethereum Fund leading the way. Other big players like BlackRock’s iShares Ethereum Trust and Grayscale’s Ethereum Mini Trust also contributed. This rally in Ethereum’s price has been accompanied by a bounce in the NFT market, adding to the hype. As the ETH/BTC ratio climbs, analysts expect Ethereum to keep gaining ground against Bitcoin in the months ahead.

View ETH

Source: TheBlock.co

XRP falls below US$2 after a surge, still up 237% this month

XRP has taken a sharp downturn this week, dropping to US$1.90 after reaching a seven-year high of US$2.82 just last week. The sudden dip comes as Bitcoin and other cryptocurrencies experience a healthy cooling-off period. Despite this drop, XRP remains up an impressive 237% over the past month, driven by growing optimism around potential regulatory clarity for Ripple. Investors were particularly buoyed by the election of pro-crypto candidate Donald Trump, sparking hopes of clearer regulations and the possible launch of XRP ETFs. While the recent market correction has impacted XRP's price, the coin's dramatic monthly gains highlight its growth potential.

Ripple's RLUSD stablecoin approved by NYDFS, set to launch on exchanges

In another positive development for Ripple, CEO Brad Garlinghouse announced that the New York Department of Financial Services (NYDFS) has approved Ripple’s RLUSD stablecoin. Pegged 1:1 to the US dollar, RLUSD is backed by USD deposits, short-term US Treasury bonds, and other cash equivalents. Primarily targeting institutional users, Ripple plans to list RLUSD on exchanges soon, with potential partnerships already in the works, positioning it as a competitor to stablecoins like Tether and USD Coin. This milestone marks a significant step for Ripple in expanding its influence in the stablecoin market.

Check XRP

Solana captures US$2 billion of Ethereum's market share in 2024

Solana (SOL) has been consolidating since its November high of US$264.39, dipping 15% to trade at US$225.54. Despite this pullback, derivatives traders remain optimistic, with open interest and funding rates supporting potential recovery. Technical indicators suggest that Solana could aim for a retest of its all-time high and possibly reach the US$300 level, a psychologically significant price point.

Although Solana's trade volume has decreased, it has captured a substantial share of Ethereum's market in 2024, with over US$2 billion moved from ETH to SOL. However, it’s still US$30 billion behind XRP in market capitalisation. Analysts believe Solana could eventually surpass XRP, positioning itself as the second-largest altcoin after Ethereum. This "flippening" might take longer, but if SOL breaks out of its consolidation phase and continues its upward momentum, it could challenge XRP’s spot.

Check SOL

Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

AFR

Bitcoin smashes through $US100,000 as traders eye ‘huge re-rating’

“A well-structured regulatory framework is essential to ensure local platforms remain competitive while safeguarding innovation,” said Caroline Bowler, chief executive of Australian crypto exchange BTC Markets.

“Bitcoin’s rally toward the $US100,000 milestone today highlights a possible shift in market dynamics, with capital rotating from assets like XRP and TRX – both seeing double-digit declines – back into bitcoin,” Ms Bowler said.

Read the full article here

News.com.au

Bitcoin hits US$100,000 for first time

Caroline Bowler, CEO of Australia’s local crypto trading exchange BTC Markets, said the surge suggests a renewed confidence.

“Bitcoin’s rally toward the $100k milestone today highlights a possible shift in market dynamics, with capital rotating from assets like XRP and TRX — both seeing double-digit declines — back into Bitcoin,” she said in a statement provided to news.com.au.

“The 3 per cent rise in Bitcoin and the overall market cap reflects renewed confidence, potentially driven by profit-taking and fresh investment.

Read the full article here

Livewire Markets

Bitcoin has just broken through US$100,000

Bitcoin’s rally toward the $100k milestone today highlights a possible shift in market dynamics, with capital rotating from assets like XRP and TRX—both seeing double-digit declines—back into Bitcoin.

The 3% rise in Bitcoin and the overall market cap reflects renewed confidence, potentially driven by profit-taking and fresh investment.

Read the full article here

Investordaily.com.au

Bitcoin cracks US$100k amid ‘perfect storm’ of market forces

BTC Markets chief executive Caroline Bowler said that the news highlights a possible shift in market dynamics, with capital rotating out of cryptocurrencies like XRP and TRX - both seeing double-digit declines - back into bitcoin.

“Industry stakeholders are evaluating ASIC’s proposals, particularly regarding stablecoins, wrapped tokens, and DeFi tools, which could impact Australians’ access to certain crypto products.

Read the full article here

The week ahead: economic events

Thursday, December 12th

• 12:45am Canada Interest Rate
• 10:30am Australian jobs data
• 11:15pm Euro Area Interest Rate
• 11:30pm United States Producer Price Inflation

Friday, December 13th

• 9:50am Japan Business Confidence
• 5:00pm Germany Balance of Trade
• 5:00pm United Kingdom Monthly GDP

Monday, December 16th

• 8:00am Australia Judo Bank Manufacturing PMI, Services PMI & Composite PMI
• 12:00pm China Industrial Production & Retail Sales
• 6:30pm Germany Manufacturing PMI

Tuesday, December 17th

• 5:00pm United Kingdom Unemployment Rate
• 7:00pm Germany Ifo Business Climate Index
• 8:00pm Germany ZEW Economic Sentiment Index
• 11:30pm Canada Inflation Rate
• 11:30pm U.S. Retail Sales

Wednesday, December 18th

• 9:30am Australia Consumer Confidence MoM
• 9:50am Japan Balance of Trade
• 5:00pm United Kingdom Inflation Rate
• 11:30pm United States Building Permits

Source: trading economics

Market reflections

Overview

The Reserve Bank of Australia (RBA) kept interest rates steady, while Australia’s trade surplus rose, exceeding expectations. Business confidence dropped, with most sectors struggling, except construction. Housing approvals showed mixed trends. In the US, core inflation holds steady, job growth rebounded in November, but unemployment rose, and inflation concerns persisted. China's inflation hit a five-month low, and its trade surplus grew. Canada's trade deficit narrowed, but growth slowed, and unemployment rose to its highest since September 2021, indicating labour market challenges.

Australia

• RBA holds rates steady at 4.35% for last meeting of the year.
• Business confidence dips, with most sectors struggling except for construction.
• Housing approvals show mixed trends, with gains in some areas and declines in others.
• Australia’s trade surplus surges due to increased exports of fuels, metals, and machinery.

RBA holds rates steady, Australia's trade surplus rises as business confidence dips

The Reserve Bank of Australia (RBA) kept its cash rate unchanged at 4.35% during its final meeting of 2024, marking the ninth consecutive pause. While headline inflation has eased, underlying inflation remains above target, with expectations to reach the 2-3% range by 2026.

The RBA expressed cautious optimism about inflation’s path but noted that economic recovery is slower than expected, with weaker household consumption and subdued output growth. The central bank also highlighted evolving risks, including geopolitical uncertainties, influencing its data-driven decision-making approach.

Business confidence dips, with most sectors struggling except for construction

Australia’s NAB business confidence index dropped to -3 in November, from +5 in October, the lowest level since late 2020. Most industries saw a decline, with retail and manufacturing facing tough conditions, though construction held steady. Despite softer economic growth, capital expenditure showed a slight uptick, and capacity utilisation remained stable.

Housing approvals show mixed trends, with gains in some areas and declines in others

On the housing front, October saw a 4.2% rise in total dwelling approvals, driven by a 24.8% boost in private sector dwelling permits (excluding houses). However, private house approvals fell 5.2%. Regional performance varied, with New South Wales, Victoria, and Tasmania posting strong growth, while Queensland and Western Australia experienced declines.

Australia’s trade surplus surges due to increased exports of fuels, metals, and machinery

Australia’s trade surplus surged to AU$5.95 billion in October, bolstered by a 3.6% rise in exports, particularly in mineral fuels and metals. Imports increased modestly by 0.1%, but strong export growth led to a significant improvement in the overall trade balance.

Global

• US core inflation holds steady at 3.3% in November, matching expectations
• Job growth rebounds in the US as services sector slows
• China's inflation hits five-month low; trade surplus rises on strong exports
• Canada’s trade deficit narrows as growth slows and inflationary pressures build
• Unemployment rises to highest level since September 2021 in Canada

United States

US core inflation holds steady at 3.3%, matching expectations

Core inflation in the US, which excludes volatile food and energy prices, stayed consistent at 3.3% annually in November 2024, marking a three-month high. Monthly core prices rose by 0.3%, continuing the same pace as the last three months and meeting market expectations. Key drivers included a modest rise in shelter costs and steady prices for commodities.

Overall inflation ticked up to 2.7% annually, driven by smaller declines in energy costs and slightly higher food prices. Shelter costs made up a significant portion of the monthly increase, but softer trends in transportation services and other areas helped keep inflation manageable. The data aligns with expectations, offering a steady outlook for price stability heading into the new year.

US job growth rebounds despite rising unemployment

The US economy added 227,000 jobs in November, bouncing back strongly from October's revised 36,000 gain, which had been impacted by strikes and hurricanes. The November numbers exceeded expectations, with significant job gains in healthcare, leisure and hospitality, and government. Transportation equipment manufacturing also added jobs as workers returned after strikes.

However, the retail trade sector lost jobs, and other industries showed little change. Unemployment rose slightly to 4.2%, as the number of unemployed individuals increased. Despite the uptick in unemployment, the overall trend for 2024 remains positive, with an average monthly payroll increase of 186,000 jobs.

Consumer sentiment improves as inflation concerns rise

US consumer sentiment improved in December, with the University of Michigan’s index rising to 74, marking its fifth consecutive monthly increase. This is the highest level since April and reflects growing optimism about current economic conditions, especially around durable goods purchases.

However, the expectations subindex dropped, indicating some caution about the future. Consumers' inflation expectations have also increased, with the year-ahead inflation estimate rising to 2.9%. Despite this, the long-term outlook remains more stable, with five-year inflation expectations dipping slightly to 3.1%. While current sentiment is strong, inflation worries could impact future spending.

Services sector growth slows to a three-month low

US services sector growth slowed in November, with the ISM Services PMI falling to 52.1, its lowest level in three months. The decline was across several areas, including business activity, new orders, and employment. Price pressures increased slightly, and inventories and backlogs contracted. Industry sentiment remained mixed, influenced by seasonal factors, election concerns, and tariffs, leading to a more cautious outlook for the sector.

China

China’s inflation drops to five-month low, raising deflation concerns

China’s inflation rate eased to 0.2% in November, the lowest since June and below expectations. Despite government stimulus efforts, deflationary risks persist, with food prices rising at a slower pace. Non-food prices were flat overall, but healthcare and education saw slight increases. Core inflation rose by 0.3%, the highest in three months. On a monthly basis, consumer prices fell sharply by 0.6%, signalling further economic challenges.

Trade surplus jumps on strong exports

China’s trade surplus surged to US$97.44 billion in November, driven by a 6.7% rise in exports. The surplus exceeded expectations and marked the highest level since June. However, imports fell 3.9%, reflecting sluggish domestic demand. The surplus with the US rose to US$34.9 billion, contributing to a year-to-date total of US$884.7 billion.

Canada

Canada's trade deficit narrows in October but shows ongoing strain

Canada's trade deficit narrowed to CA$0.92 billion in October, an improvement from September’s CA$1.26 billion gap. Imports rose 0.5%, driven by metal ores and energy products, while exports grew 1.1%, with notable gains in metal products and pharmaceuticals. However, exports to the US fell, reducing the trade surplus with its largest partner. Exports to other countries surged, reducing the non-US trade deficit.

Economic expansion slows as inflationary pressures build

Canada’s Ivey PMI increased slightly to 52.3 in November, indicating steady but subdued economic growth. Employment growth surged, but inflationary pressures grew, reflected in a sharp rise in the price index to 62.9, signalling rising input costs for businesses.

Unemployment rate rises to highest level since September 2021

Canada’s unemployment rate rose to 6.8% in November, the highest since September 2021. Despite the increase, employment grew by 50,500, and more people are actively seeking work, indicated by a rise in the labour force participation rate to 65.1%.

Scam awareness

Cybercriminals target Australians with new scams: quishing, vishing, and ai exploits

Cybercriminals in Australia are increasingly using sophisticated scams like quishing (QR code phishing), vishing (video phishing), and AI-driven fraud, according to the Australian Signals Directorate (ASD). Quishing involves fake QR codes in emails, leading victims to fraudulent websites to steal personal data, while vishing uses AI-generated deepfakes in video calls to deceive employees into transferring money.

AI tools also help scammers create convincing phishing emails and deepfake videos. The ASD’s report highlights a rise in cybercrime incidents, with small businesses facing losses averaging $50,000 per attack. Additionally, state-sponsored hackers are targeting critical infrastructure, employing “living off the land” tactics to avoid detection.

These evolving threats emphasise the importance of cybersecurity awareness, with the ASD urging individuals and businesses to remain vigilant as cybercrime continues to grow in scale and sophistication. The report stresses that cybersecurity is everyone's responsibility in today’s digital world.

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’ page, where we share the latest updates on safeguarding against scams and protecting your assets. Stay informed and stay protected!

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