The weekly crypto close: Monday, 2nd December

The cryptocurrency market wrapped up its fourth consecutive week of growth, with total market capitalisation rising by 3.46% to reach US$3.39 trillion. This continued upward momentum reflects increased investor confidence, greater liquidity, and sustained capital inflows, fuelling optimism in the market.

The weekly trading stats as of 2/12/2024 at 11:00am AEDT from Tradingview in USD.

XRP steals the spotlight.

XRP led the charge this week, skyrocketing 60.05% to close at US$2.2937. The asset’s meteoric rise was driven by several factors, including news of SEC Chair Gary Gensler’s upcoming resignation in January, following Donald Trump’s presidential election victory. The announcement has sparked hopes of a more crypto-friendly regulatory environment.

XRP’s rally broke through its 2021 all-time high of US$1.996, with no signs of slowing down. Adding to the excitement, reports suggest the New York Department of Financial Services (NYDFS) may approve Ripple's proposed stablecoin, RLUSD, as early as December 4. If greenlit, Ripple could launch RLUSD, bolstering its position in New York’s regulated digital finance market and cementing its place in the stablecoin ecosystem.

Further fuelling the rally was speculation that the SEC might abandon its case against Ripple, now in the appeals process. Former CFTC Chairman Chris Giancarlo stated in a recent Fox Business interview, “I would bet they would [drop the case].”

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Litecoin gains on whale accumulation.

Litecoin (LTC) also enjoyed a stellar week, gaining 23.25% to close at US$119.55. This surge comes amid a 73-day buying spree by whales, who reportedly poured US$950 million into LTC. Speculation around the potential approval of a Litecoin ETF has added fuel to the rally.

LTC’s gains echo a broader trend among assets tied to litigation or ETF developments, including Solana (SOL) and XRP, which have similarly recorded significant upward momentum.

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Cardano’s momentum driven by regulatory advocacy.

Cardano (ADA) continued its upward climb, gaining 12.42% to close the week at US$1.1496. Although its rally was more subdued than some, ADA’s momentum stems from founder Charles Hoskinson’s proactive involvement in shaping U.S. cryptocurrency policy.

Hoskinson announced plans to work closely with lawmakers and the incoming Trump administration to develop long-term crypto-friendly policies, including executive orders, rulemaking, and legislation. His vision aligns with President-elect Trump’s campaign rhetoric, positioning the U.S. as a global leader in cryptocurrency innovation.

Trump’s declaration of being the “First Bitcoin President” and the potential creation of a crypto advisory role within the White House have bolstered market optimism for projects like Cardano, which prioritise regulatory collaboration.

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Ethereum joins the rally.

Ethereum (ETH) emerged as another major gainer, rising 10.31% to close at US$3,707.61. The week’s highlight was a historic inflow of US$332.9 million into Ethereum ETFs on November 29, exceeding Bitcoin ETFs’ inflow of US$320 million for the same period.

This milestone marks the first time Ethereum has surpassed Bitcoin in ETF inflows, highlighting growing institutional interest in the asset. The performance underscores Ethereum’s increasing appeal as an investment vehicle, particularly as its ecosystem continues to expand.

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Bitcoin consolidates below US$100k.

Bitcoin, meanwhile, took a breather, with its dominance slipping for the second consecutive week to 56.80%. It closed down 0.73% at US$97,185.18 after retesting support at US$90,791. The psychological resistance of US$100k proved difficult to overcome, leading to modest profit-taking.

Despite the pullback, the broader narrative around Bitcoin remains positive. Historical patterns suggest that consolidations like this often precede significant breakouts. Seasonal trends also favour a potential rally, as December has historically delivered robust performance for Bitcoin during bull markets.

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Strategic Bitcoin Reserve Proposal.

Adding to this momentum is Senator Cynthia Lummis’ introduction of the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act, which aims to establish a strategic Bitcoin reserve for the United States.

Key highlights of the BITCOIN Act include:

• Secure Bitcoin vaults: The establishment of a decentralised network of vaults operated by the U.S. Department of Treasury, ensuring robust physical and cybersecurity measures.
• Acquisition strategy: A program to purchase 1 million Bitcoin units over a defined timeframe, representing approximately 5% of Bitcoin’s total supply, comparable to the U.S. gold reserves.
• Funding mechanism: Diversification of existing Federal Reserve and Treasury funds to finance the acquisition.
• Self-custody protections: Assurance that private Bitcoin holders retain self-custody rights, preserving individual financial freedoms.

Senator Lummis has positioned this initiative as a pivotal step towards financial innovation, describing it as the U.S.’s "Louisiana Purchase moment." The act seeks to leverage Bitcoin as a transformative savings technology to enhance America’s economic competitiveness and address national debt concerns.

Market outlook.

The cryptocurrency market continues to signal renewed interest across both established and emerging assets, buoyed by shifting regulatory dynamics and growing institutional involvement. The anticipated departure of SEC Chair Gary Gensler has injected a wave of optimism into the sector, with expectations that his successor may adopt a more constructive approach towards digital assets.

Prediction markets, including Kalshi, now assign a 70% probability to former SEC Commissioner Paul Atkins stepping into the role, a development that could provide a regulatory tailwind for the industry. Additionally, market sentiment reflects growing confidence in Bitcoin's upward trajectory, with Kalshi estimating a 78% likelihood of Bitcoin reaching the coveted US$100k mark by the end of the year.

Year-end market focus.

As the year-end approaches, the crypto market’s focus remains on Bitcoin’s ability to surpass the critical US$100k threshold. At the same time, assets such as XRP, Cardano, and Ethereum are attracting increased attention due to their respective regulatory developments, ETF inflows, and policy shifts.

While short-term volatility is likely, the broader outlook remains constructive. The combination of evolving regulatory landscapes, institutional adoption, and innovative legislative proposals like the BITCOIN Act supports a long-term growth trajectory for the crypto market as it continues to mature and adapt to a dynamic macro environment.

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