Bitcoin has soared to an all-time high, fuelled by US election optimism and increased institutional investment, but at the same time declining Bitcoin dominance has led to significant gains in altcoins, particularly in DeFi projects and memecoins.
Thanks to our friends at CKC.Fund in the US for their insights on crypto markets.
Spot Bitcoin ETFs have experienced record-breaking inflows, solidifying crypto’s place in traditional portfolios. Key developments like Tornado Cash’s sanction reversal and SEC Chair Gensler’s pending resignation boosted market confidence. The US elections spurred market growth through crypto-friendly policies and talks of state-level Bitcoin reserves.
Bitcoin’s dominance is declining
Surpassing its previous all-time highs, BTC’s recent surge was driven by optimism surrounding pro-crypto policies from the newly elected administration and increasing allocations by institutional investors. ETH traded in a fairly flat range, reflecting steady but slower growth relative to BTC, as network upgrades and capital rotation into Bitcoin dominated the month. DeFi tokens and memecoins benefited from declining Bitcoin dominance (now below 60%), signalling an “altcoin season” as investors sought high-beta opportunities in emerging protocols.
With $116bn in total AUM, spot Bitcoin ETFs have set new records in November, showcasing strong institutional interest in regulated crypto exposure. Europe’s crypto framework has also progressed, with new licensing requirements and stablecoin regulations setting the stage for a more unified market in 2025.
- Finland sees its first crypto exchange-traded products
- Trump and Crypto: could we see a US national Bitcoin reserve?
- Saba Capital furore highlights investment trust governance issues
The reversal of the ruling on Tornado Cash has spurred significant gains across privacy coins like TORN and XMR, highlighting renewed confidence in decentralized protocols. Markets naturally reacted positively to the expected regulatory shift after the Gensler resignation news, with XRP, ADA, and other major altcoins seeing double-digit gains in response.
Funds buy into Bitcoin big time
Hedge funds like Millennium and Capula have increased allocations to Bitcoin ETFs, capitalizing on arbitrage opportunities between spot and derivatives markets. MicroStrategy announced plans to acquire $42bn in BTC over the next three years, further validating long-term bullish sentiment among corporates.
Bitcoin miners leveraged improved post-halving margins and record-high hash rates to expand operations, with smaller players consolidating amid rising competition.
Pro-crypto policies and discussions around national Bitcoin reserves and decentralized finance have added fuel to market optimism. Post-election, the market cap of altcoins surged by 72%, with Bitcoin adding 46%. Talk of ceasefires in global conflicts, including Israel-Palestine and Russia-Ukraine, have tempered geopolitical risks, supporting investor sentiment.
The number of wallets holding over 1 BTC reached an all-time high in November, underscoring long-term holder confidence. Inflows into stablecoins like USDT and USDC rose sharply, signalling increased capital deployment for trading and DeFi activities. Bitcoin’s network hash rate also hit new highs, reflecting strong miner confidence and continued infrastructure expansion. The Fear and Greed Index (VIX) shifted from neutral to greed mid-month, tracking closely with Bitcoin’s price rally and market optimism.
December 2024 is poised to bring heightened volatility as markets await ETF updates and macroeconomic announcements. Developments in Layer-2 scaling solutions, DeFi protocols, and institutional participation are expected to remain central themes.
