Bitwise: Expectations of US Bitcoin Strategic Reserves Drive Crypto Market Rise

According to Mars Finance news, this week, cryptocurrencies have become the focus, outperforming traditional assets. Bitwise Europe's report attributed this rise to the growing optimism about policy measures in the US and the continued Bitcoin supply tightening. The core of the report is about the discussion of the US potentially establishing a strategic Bitcoin reserve. Pennsylvania has already enacted legislation supporting such reserves, sparking speculation that other states may soon follow suit. Betting activity on Polymarket has amplified this expectation, with the probability of a national Bitcoin reserve being established surging to over 50% last week. The report also delves deeper into Bitcoin's supply constraints, while demand from ETFs and corporations is growing. The inflow into US spot Bitcoin ETFs has surged, exceeding the overall growth in Bitcoin supply, leading to an imbalance in supply and demand. This scarcity is reflected in Bitcoin's liquidity and high-liquidity supply indices, both of which have fallen to historic lows. Corporations are increasingly adopting Bitcoin as a reserve asset, with companies like Microstrategy making large Bitcoin purchases, reinforcing this trend. The researchers further explain that Bitcoin is not the only cryptocurrency benefiting from a more transparent regulatory environment in the US. Altcoins, including XRP, and meme coins like Doge have also made progress. The Efficiency Department has taken a crypto-friendly stance, providing momentum for these assets (especially for Doge). However, Ethereum has not kept pace. This lag may be related to capital flows favoring other cryptocurrencies. On the broader economic front, the US CPI data for October was in line with forecasts. Combined with other indicators, this strengthens the expectation of a potential rate cut by the Federal Reserve in December, introducing another variable to the evolving cryptocurrency narrative. (Bitcoin.com)