Author: 1912212.eth, Foresight News
Recently, the price of Bitcoin has broken through $93,000, setting a new historical high, and is just a stone's throw away from $100,000. Google Trends shows that the popularity of Bitcoin has reached a new high since 2021.
In addition, CryptoQuant CEO Ki Young Ju released data showing that the trading volume of Bitcoin at the retail level (below $100,000) has reached a new high in 3 years, also indicating that retail investors have entered the market.
After the Bitcoin price rally stagnated and began to fluctuate and consolidate, some funds flowed into meme coins, while some altcoins still performed poorly.
In the future, what other catalysts will drive the bullish price rise?
MicroStrategy May Be Included in the S&P 500 Index
The S&P 500 Index, full name the Standard & Poor's 500 Index, is a stock index compiled by Standard & Poor's, designed to reflect the performance of 500 listed companies in the United States. The constituent stocks of the S&P 500 Index are selected through a series of strict screening standards, including market capitalization, liquidity, and profitability standards. The S&P 500 Index is one of the important indicators for global investors to measure the performance of the U.S. stock market and the health of the U.S. economy.
According to CCN reports, its new accounting standards may allow MSTR to be included in the S&P 500 Index.
If this becomes a reality, not only will the company's importance in the U.S. stock market be enhanced, but its leading position in the industry and its sustained profitability will also be widely recognized.
According to the latest MicroStrategy holdings report, it currently holds 331,200 BTC at a price of about $165 billion, with an average holding price of $49,874. Calculated at a Bitcoin price of $90,000, MicroStrategy's Bitcoin holdings have a floating profit of over $13 billion.
MicroStrategy founder Michael Saylor is a staunch Bitcoin bull. According to crypto KOL Remo Uherek's analysis, MicroStrategy's recent purchase of 51,780 Bitcoins was funded by the $21 billion it had previously raised through stock financing, and after this purchase, it still has $15.3 billion available for Bitcoin purchases. At this rate, the funds can be used until the end of this year.
Based on this, MicroStrategy plans to privately raise $1.75 billion in 0% convertible senior notes due 2029. These notes are unsecured and non-interest-bearing, and can be converted into cash or stock. The proceeds will be used to purchase Bitcoin and for general corporate purposes.
Data shows that MSTR's U.S. stock performance has been impressive, with a return of over 450% so far this year.
If MicroStrategy is able to enter the S&P 500 Index, more companies that meet the criteria may subsequently be included in the index, thereby gaining greater attention and influence from traditional capital. This is undoubtedly a major positive for the crypto market.
Microsoft Reviewing Bitcoin Investment Proposal
In a Form A filed with the U.S. Securities and Exchange Commission (SEC) on October 24, Microsoft listed the issues to be discussed at the next shareholders' meeting. One of the proposals suggests that the tech company should research Bitcoin to hedge against inflation and other macroeconomic impacts. And on October 30, Microsoft shareholders have already begun preliminary voting on whether the company should invest in Bitcoin.
The document also shows that Microsoft will vote on the "assessment of investment in Bitcoin" at its shareholders' meeting on December 10. Although the board has proposed to oppose this proposal, shareholders have different thoughts. Vanguard and BlackRock are Microsoft's current largest institutional shareholders, holding 8.95% and 7.30% respectively.
BlackRock is no stranger to the crypto circle, with a considerable amount of assets in its Bitcoin spot ETF, and its chairman Larry Fink is also a Bitcoin supporter. Another major shareholder, the Vanguard Group, holds a dissenting view and focuses only on stocks, bonds, and cash assets.
The current voting result is difficult to predict, and the final answer may be revealed on December 10.
In the past two months, Japanese listed company Metaplanet, German listed company Samara Asset Group plc, U.S. stock company Solidion Technolog (battery material supplier), Unitronix, Semler Scientific, Genius Group Limited, Cosmos Health (healthcare group) and others have successively included Bitcoin and other assets in their reserve assets.
If the vote is successful, as a listed company with huge influence, it may affect and drive more listed companies to purchase Bitcoin.
The Fed May Cut Rates by 25 Basis Points in December
Crypto assets represented by Bitcoin are increasingly affected by macroeconomic factors, and the Fed's interest rate cut policy still has a significant impact on the inflow of funds into crypto assets.
On November 15, Fed Chairman Powell said that due to the strength of the U.S. economy, the Fed does not need to "hurry" to lower interest rates, and the Fed will "carefully observe" to ensure that certain inflation indicators remain within an acceptable range. Powell reiterated that the Fed's policy rate path will depend on the data to be released and the evolution of the economic outlook. He said that the inflation rate is approaching the Fed's 2% target, but has not yet reached it. The Fed will closely monitor the core indicators of commodity and service inflation excluding housing, which have been declining for the past two years. "We expect these indicators to continue to fluctuate in the near-term range, and the path to the Fed's 2% target may be bumpy at times. But we still believe we are on the right track with inflation."
That night, the U.S. October retail sales monthly rate recorded 0.4%, higher than the expected 0.3%, and the previous value was revised up from 0.4% to 0.8%. Due to the continued willingness of U.S. consumers to consume, retail sales grew steadily in October. After the data was released, spot gold initially fell and then rebounded, with a short-term fluctuation of $6; the U.S. dollar index expanded its short-term gains to over 30 points. The better-than-expected retail sales data led traders to reduce their bets on the Fed's rate cut in 2025.
According to the CME "Fed Watch": the probability of the Fed cutting 25 basis points in December is 61.9%, and the probability of keeping the current interest rate unchanged is 38.1%.
BlackRock Chief Investment Officer (CIO) Rick Rieder said he still expects the FOMC to cut rates by 25 basis points in December. Rieder said the current federal funds rate target range of 4.5% to 4.75% is restrictive. After the rate cut in December, the Fed is expected to pause the rate cut, and the FOMC will evaluate the number and pace of rate cuts. By 2025, the Fed is expected to cut rates at least twice.
In addition, Goldman Sachs chief economist Hazus still expects "the Fed to cut rates consecutively in December, January and March, and then once a quarter in June and September, but he believes the FOMC may slow the pace of rate cuts sooner, possibly as early as the December or January meeting." However, unless the November employment or inflation report is surprisingly strong, the FOMC is unlikely to skip the rate cut in December.
The Fed's next meeting will be held from December 17 to 18.
Summary
In addition to the above three catalysts, Gary, the chairman of the U.S. SEC, who has been criticized by the crypto industry as too harsh, may announce his resignation after Thanksgiving, and Trump will take office as the new U.S. president in January next year, and the future crypto regulatory policy may be more relaxed and friendly. Bitwise Chief Investment Officer Matt Hougan once said, "Every year, we survey hundreds of financial advisors and ask them what is holding them back from investing in cryptocurrencies? Every year, they tell us that 'regulatory issues' are the number one reason. This is one of the reasons why this election could change the rules of the crypto currency game. We will see a wave of institutional capital in the coming months."
The future market performance is worth looking forward to.
