Bitcoin Grapples with $100K as Rally on Trump’s Crypto-Positive Comment Fizzles

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What to know:

  • Bitcoin climbed to $102,500 early Thursday after President-elect Trump reiterated his ambition to embrace crypto assets, but a bond market rout dragged risk assets lower.
  • The European Central Bank cut interest rates by 25 basis points and in its dovish policy statement hinted that more rate cuts were likely to happen.
  • Most members of the CoinDesk 20 Index outperformed bitcoin, with Avalanche’s AVAX and Chainlink’s LINK up 9% and 13% over the past 24 hours, respectively.

As a seasoned crypto investor with over a decade of experience navigating market fluctuations and trends, I’ve learned to appreciate the unpredictable nature of the digital asset world. The recent events surrounding Bitcoin and other cryptocurrencies have been an interesting rollercoaster ride.

Initially poised to hit a fresh peak yesterday, Bitcoin (BTC), unexpectedly plunged during U.S. trading hours in the afternoon, as a downturn in the bond market negatively impacted riskier investments.

During President-elect Donald Trump’s speech at the New York Stock Exchange, where he rang the opening bell, he expressed his optimism about cryptocurrency, stating “we aim to achieve something extraordinary with crypto.” This positive sentiment towards digital assets aligns with his intention to integrate them into the U.S. economy and potentially establish a strategic bitcoin reserve. Simultaneously, the European Central Bank lowered its benchmark interest rates by 0.25% and released a statement suggesting that further rate reductions may be imminent, signaling a more accommodative monetary policy approach.

Bitcoin reached a peak of $102,500, which was its highest point since setting an all-time record of over $104,000 last week. However, this surge didn’t sustain and the $100,000 mark also failed to hold, causing the price to dip to $99,800 by the time press releases were being finalized around late Thursday afternoon.

In summary: Various high-risk assets experienced a decline, possibly due to the perceived cautiousness from the European Central Bank affecting Western bond markets. For instance, the German 10-year Bund yield climbed by 8 basis points to reach 2.21%, while the U.S. 10-year Treasury yield increased by 6.5 basis points to hit 4.34%. Consequently, U.S. stocks initially gained ground but ended up closing lower, with the Nasdaq falling by 0.7% and the S&P 500 dropping by 0.5%. Additionally, the price of gold dropped by approximately 1.8% to $2,706 per ounce during the afternoon trading session.

On average, alternative cryptocurrencies (altcoins) surpassed Bitcoin in their performance, as almost all coins from the extensive CoinDesk 20 Index recorded daily increases. The top performers in this group were the native tokens of Avalanche network (AVAX) and data provider Chainlink (LINK), which jumped by 9% and 13% respectively. The surge in AVAX might be linked to a $250 million investment in its token, led by Galaxy, Dragonfly, and ParaFi Capital. Meanwhile, the Trump-related decentralized finance project World Liberty Financial (WLFI) continued to buy LINK throughout the day, adding an additional $1 million worth of tokens, according to Arkham Intelligence’s on-chain data.

Ether (ETH), the second largest cryptocurrency, surpassed Bitcoin (BTC) yesterday, increasing by 1.5% daily. After briefly reaching a session peak of nearly $4,000, it pulled back slightly. CryptoQuant, a data analysis firm, believes that rising investments in Ethereum-focused exchange-traded funds and growing activity on the Ethereum blockchain could push ETH prices beyond their previous record highs, potentially reaching over $5,000.

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2024-12-13 01:20