The price of Bitcoin surpassed $93,200 on November 13 (Wednesday), setting a new record high. After the likely election of Donald Trump, the Republican candidate, in the US presidential election on November 5, the price has risen by about 30%. Since the 13th, it has been fluctuating within a range of about 10% above the new high, taking a breather.
The influx and trading volume of the surging Bitcoin spot exchange-traded funds (ETFs) well demonstrate the source of the price increase. Last week, records were broken one after another, and especially on the 11th and 12th, just before the new high was recorded, there was a strong net inflow of $2 billion over the two days. $1.98 billion flowed into Bitcoin-related products the week before last, a significantly increased figure.
There were a few momentum factors during the steep rise. First, the notable one is MicroStrategy's additional Bitcoin purchase. MicroStrategy, the US company known to hold the most Bitcoin, announced that it had purchased 27,200 Bitcoins for about $2.03 billion on the 11th (local time).
It was also a boon for Bitcoin that not only the President but also the US Senate and House of Representatives were all taken over by the Republican Party. In fact, the US is well decentralized, so the President alone cannot freely implement the policies he wants. However, a president who has taken control of both the Senate and the House of Representatives can exercise virtually unchallenged authority.
In this regard, the Bitcoin-friendly Republican Senator Cynthia Lummis' Bitcoin reserve bill, which has become a topic of discussion again, is noteworthy. This bill not only prohibits the US government from selling its Bitcoin holdings, but also requires the government to purchase an additional 1 million Bitcoins.
She said on the 11th (local time) through her X that "this can be achieved with bipartisan support within the first 100 days of the Trump administration." When she first introduced the bill, few saw it as realistic. But the mood has changed a bit now. The Pennsylvania state government also introduced a bill this week to allocate 10% of state funds to Bitcoin.
It was not all good news. In particular, Federal Reserve (Fed) Chairman Jerome Powell's speech on the 14th (local time) poured cold water not only on Bitcoin prices but also on US stock prices. He hinted at the possibility of keeping interest rates unchanged at the December Open Market Committee (FOMC) meeting.
He said, "It's hard to see a reason to rush to raise interest rates right now in any part of the US economy," and "inflation hasn't been brought under control yet." This is a 180-degree change from when he emphasized in the September FOMC that they had solved the inflation problem by lowering rates by 50bp. The market, which had been reflecting a 25bp rate cut in the December FOMC, was dampened by the new variable.
Memecoins, regulated coins, and old coins all rose
While Bitcoin was hesitating due to Powell's remarks, altcoins that had failed to keep up with the pace of the rise began to rise. The most famous meme coin, Doge, continued its upward trend this week, following last week's rise. As expected, Elon Musk, known as the 'father of Doge', was appointed as the co-leader of the government efficiency department (D.O.G.E) of the Trump administration. Doge rose 65.55% compared to a week ago and 179.48% compared to a month ago.
Could it be that the changed atmosphere due to Trump's election was reflected? Cryptocurrencies also saw a big surge as Robinhood, a familiar asset trading platform for Americans, relisted cryptocurrencies. Solana (SOL) rose 16.85% in just one week after being relisted on Robinhood. The meme coin Pepe listed on Coinbase surged 89.90% last week. The new meme coins Act and Peanut rose 3,210% and 1,340% respectively in just one week after being listed on Binance.
Crypto-friendly asset management companies that have been releasing related products one after another have also affected altcoin prices. These products are mostly structured so that when an order is placed, the corresponding altcoins are purchased for the fund in a predetermined ratio.
This week, Aptos and Sui were among the coins that saw a significant price increase due to this mechanism. In particular, Sui set a new record high by being named the blockchain with BlackRock's BUIDL.
The most shocking news regarding altcoin regulation was SEC Chairman Gary Gensler's mention of the possibility of resigning in a public speech. If he resigns, many of the SEC's lawsuits against altcoins are likely to lose momentum.
In this atmosphere, applications for spot ETFs related to altcoins continued this week as well. Canary Capital applied for a Hedera (HBAR) spot ETF on the 13th, and the HBAR price rose 69.62% in just one week.
On the weekend, a rumor spread online that the Trump administration could exempt cryptocurrencies issued in the US from capital gains tax, causing the prices of related coins like Ripple (XRP) and Cardano (ADA) to surge. Of course, it has not yet been officially confirmed whether the Trump administration can actually take such a measure.
The total market capitalization of cryptocurrencies was around $3.1 trillion as of the 13th. This is on par with France's GDP. Now that the full-fledged rise in altcoin prices has begun, it is difficult to easily predict how far the market capitalization will grow.
Bitcoin's rise, will it lose steam due to the mood of the US interest rate freeze in December?
In the short-term trend, this week is expected to be a major turning point for Bitcoin prices. If the current price level is maintained, altcoin prices will surge, and if it jumps over the previous high of $93,000 once again, reaching $100,000 by the end of the year could become a reality.
However, if Bitcoin prices fall due to the mood of the Federal Reserve's interest rate freeze, a general adjustment in altcoins will be inevitable. As of 1 AM on the 18th, Bitcoin prices are fluctuating around $90,350.
The most important schedule in this regard is the Nvidia earnings announcement scheduled for the 20th (Wednesday). Nvidia has reigned as the AI leader during the Biden administration, but has not seen much excitement since Trump's election.
If Nvidia's earnings announcement falls short of market expectations, it is likely to have a negative impact on the US stock market as well as the global asset market. Of course, there is also a possibility that assets that have been concentrated in US stocks will shift to the cryptocurrency market, which has recently recorded relatively high returns.
Regarding the Fed's choice in December, the speech by Austin Goolsbee, President of the Federal Reserve Bank of Chicago, scheduled for 0:00 on the 19th (Tuesday) is expected to be an important clue. Goolsbee, considered one of the Fed's representative 'dovish' figures, recently made remarks in an interview with CNBC suggesting that the pace of rate cuts should be adjusted, which drew attention as it was in line with the message of Chair Powell's speech on the 14th.
In addition, it is necessary to check whether the heads of state participating in the G20 summit to be held between the 18th and 19th will make any remarks related to the regulation of cryptocurrencies or stablecoins. These days, not only Trump, the president-elect of the United States, but also President Putin of Russia and the BRICS, an international cooperation organization centered on Russia and China, are also paying attention to cryptocurrencies and Bitcoin. I hope all of you will have a successful investment this week.
