The price of Bit reached the threshold of $100,000 for the first time in history, but unfortunately it did not cross it. Last week, Bit rose 13.04% from the previous week, leading the bullish crypto market. The weekly high was $95,188 (based on the Binance exchange) recorded on the 23rd.
The reason for the rise is relatively clear. As of the 19th, the beginning of the week, the price of Bit was stagnant at $90,600. However, the expectation of the Blackrock Bit physical exchange-traded fund (ETF) option caused the price to start rising, and it reached $94,800 on the actual listing day of the 20th.
The Bit physical ETF option is a type of derivative financial product that grants the right to buy and sell the underlying asset, the ETF, according to the pre-determined contract conditions. If the price is expected to rise, you can buy a call option, and if the price is expected to fall, you can buy a put option to hedge against the physical price loss. This derivative product, which saw a net inflow of $2.8 billion into the Bit physical ETF over the past 5 business days, has driven the price rise.
The Bit physical ETF has grown to account for 5% of the total Bit supply as of last week. With the launch of leveraged investment-enabled option products, more institutional investor funds have poured in. On the first day, the option trading volume was $425 million, indicating that there were many more investors betting on Bit's further rise. Perhaps they were inspired by Blackrock's success. On the 21st, Grayscale's Bit physical ETF also launched an option product.
Who is buying Bit like this? The 13F report submitted to the U.S. Securities and Exchange Commission (SEC) for the third quarter has been released. The 13F report is a document that can be used to check the investment in Bit physical ETFs by institutional investors, and it is noteworthy that the famous investor Paul Tudor Jones has quickly increased his Bit investment ratio. Until the second quarter, he held 869,565 shares of Blackrock's IBIT, but by the end of the third quarter, he had increased his holdings to 4.4 million shares.
MicroStrategy (MSTR), one of the companies that is said to be making the most money on Wall Street these days, announced on the 19th that it had purchased an additional 51,780 Bit. MSTR's current Bit holdings are 331,200 Bit.
Announcement of Voluntary Resignation of SEC Chairman Gary Gensler
The rise in the latter part of last week was led by the news of the resignation of SEC Chairman Gary Gensler on the 21st (local time). He announced that he will step down as SEC Chairman on January 20, which is the inauguration day of President Donald Trump.
The price of Bit, which had soared to $98,000 the previous day, showed signs of correction until the news of his resignation was announced, falling to around $95,000, but after the news was released, it started to rebound sharply. Not only Bit, but also altcoins such as Ethereum (ETF), Solana (SOL), etc. showed a rise of nearly 10% across the board.
The reason why the cryptocurrency price rebounded on the news of his resignation is that he has played a role in tormenting the cryptocurrency industry in the United States so far. He has sued numerous altcoins for violating securities laws, and has wielded unfair regulatory power not only over cryptocurrency exchanges such as Coinbase and Kraken, but also over traditional financial exchanges such as Robinhood for dealing in cryptocurrencies.
With the resignation of Chairman Gary Gensler and the report that President-elect Trump is considering creating a cryptocurrency advisor position in the White House, investor sentiment has been ignited again. The cryptocurrency advisor position is also included in Trump's cryptocurrency-related campaign promises. So far, all the content that President-elect Trump has promised has been kept. Chris Giancarlo, the former chairman of the U.S. Commodity Futures Trading Commission, is being strongly considered for the position of this 'crypto czar'.
Additional Positive Factors Needed to Exceed $100,000
Last week must have been a very happy week for cryptocurrency investors. However, we have a huge task left until the end of the year. That is the schedule of the Federal Open Market Committee (FOMC) of the Federal Reserve, where the U.S. interest rate for December will be determined.
Two weeks ago, Federal Reserve Chairman Jerome Powell hinted at the possibility of a rate freeze at the December FOMC. Last week, Federal Reserve governors such as Lisa Cook and Michelle Bowman also made similar statements. Since the market is currently expecting an additional rate cut by the end of the year, if the interest rate is frozen at the December FOMC, there is a high possibility of a correction in the Bit price.
The important indicators this week are the U.S. initial jobless claims to be announced on the 27th (Wed) and the U.S. personal consumption expenditures price index (PCE) to be announced on the 28th (Thu). The minutes of the last November FOMC will be released in the early morning of the 29th. It will be necessary to watch how these three factors will affect the expectations for the December interest rate trend.
The nomination of Trump's cabinet members should also not be overlooked. Over the weekend, Trump nominated Scott Baesent, a pro-cryptocurrency figure, as the next U.S. Treasury Secretary. Now the SEC Chairman is the remaining position, and the person currently expected to be the next Chairman is Brian Brooks, the former CEO of Binance.US. If he is actually appointed as the SEC Chairman, the prices of XRP and Hedera Hashgraph (HBAR) may fluctuate greatly.
Do you think the current Bit price is at its peak? In this regard, the on-chain data analysis platform Cryptoquant has warned on the 21st that the Bit price is close to its all-time high. They cited the fact that the market value to realized value (MVRV) ratio has risen to a considerably high level.
This figure has the meaning of 'risky' if it exceeds 3.7 and 'safe' if it falls below 1 in terms of investment appropriateness. In March of this year, when the Bit price broke through its previous high, the MVRV rose to 2.74. As of November 23, the Bit MVRV is 2.68. So I hope you all have a successful investment this week as well.
