It took only one week for Bitcoin to go from $70,000 to $90,000. Just this morning, Bitcoin hit a new high, breaking through the $90,000 mark and reaching a high of more than $93,000, just one step away from the $100,000 predicted by analysts.
The bull market is emerging, the crypto world is boiling, and the news is naturally burning. Can the rise continue? How far can the Trump effect go? The market is also divided.
Before the election, Bitcoin surged to $74,000. At that time, there were still doubts in the market, and bearish and conservative voices still existed, but it turned out that the Trump effect is more worth looking forward to than imagined.
In the early hours of this morning, Bitcoin rose nearly 6% during the day, officially reaching $90,000, and the highest reached $93,462. Although it subsequently fell back to $90,000, as of now, Bitcoin has risen by more than 33% since the US election. After breaking through $93,000, the market value of Bitcoin rose to $1.84 trillion in a short period of time, surpassing Saudi Aramco and once rising to the seventh place in the world's mainstream assets.
The crypto market also became excited, with USDT's market value exceeding 127.84 billion US dollars, setting a new record. Most mainstream sectors rose, and new coins such as PUNT in the MEME sector continued to rise. In the early morning, US cryptocurrency concept stocks rose collectively, with MicroStrategy up more than 4%, Coinbase up 3.7%, and Riot Blockchain up 2%. The Hong Kong stock crypto sector also continued to rise, with OKEx up more than 10%.
The same volatility brings the same liquidation formula. Coinglass data shows that as of early this morning, the 24-hour cryptocurrency market has a total liquidation of $659 million, of which $374 million is for long orders and $284 million is for short orders. The total liquidation amount of BTC is $161 million, and the total liquidation amount of ETH is $87.1368 million.
As for the reasons for the rise, Trump's agenda and the Fed's policy outlook are the main support for the positive factors, but on the other hand, the bullishness of large institutions and the popularization trend of national reserves are also important reasons.
From the perspective of the Federal Reserve, after the 25BP interest rate cut in November, which lowered the federal benchmark interest rate to 4.5%-4.75%, the market has been cautious about the extent of subsequent interest rate cuts, especially since Trump's policy philosophy has obvious hidden dangers of pushing up inflation. However, the CPI data released yesterday made the interest rate cut more feasible. Data released on Wednesday showed that the US CPI in October rose 2.6% year-on-year and 0.2% month-on-month; the core CPI in October (excluding volatile factors such as energy and food) rose 3.3% year-on-year and 0.3% month-on-month; showing that the non-agricultural data in October, which was disturbed by hurricanes and was lower than expected, was combined with inflation in line with expectations.
Against this backdrop, traders have increased their bets on the Fed continuing to cut interest rates next month. According to CME Fed Watch, the probability of the Fed maintaining the current interest rate unchanged by December is 17.5%, and the probability of a cumulative 25 basis point rate cut is 82.5%. The probability of maintaining the current interest rate unchanged by January next year is 11.9%, the probability of a cumulative 25 basis point rate cut is 61.7%, and the probability of a cumulative 50 basis point rate cut is 26.5%.
The loose environment seems to be able to continue, and the prices of risky assets have been pushed up accordingly. But what is more noteworthy is that the current rise in the crypto market is undoubtedly highly dependent on the favorable regulatory expectations brought by Trump. A new official takes office with three major actions. Just recently, Trump began to update his agenda and personnel changes after taking office.
As president, Trump needs to nominate cabinet members for 15 departments. Musk and Robert Kennedy Jr. are undoubtedly highly relevant to encryption. Although Robert has not yet taken office, the boots of the Department of Government Efficiency have already fallen. Trump announced that Musk and Vivek Ramaswamy will jointly lead the proposed "Department of Government Efficiency" and said that the agency will pave the way for dismantling government bureaucracy, cutting redundant regulations and wasteful spending, and reorganizing federal agencies.
Musk reposted the appointment on social media, saying that the Government Efficiency Department is not a threat to democracy, but a threat to bureaucracy. The efficiency of the Government Efficiency Department is also very fast. Today, the official X account of the Government Efficiency Department has been officially launched. Musk's support for encryption is no less. In addition to releasing a LOGO with the word DOGE, he also responded to @DOGE on the official account, which also added fuel to the DOGE community.
On the SEC side, which is the most concerned by the market, from a regulatory point of view, the president cannot remove Gensler from the committee without a legitimate reason, and Gensler himself does not seem to have the intention to resign on his own. However, regarding the Senate candidates, Trump still made some hints, saying that he would bypass the Senate's appointment confirmation process to appoint members of his government. If this statement is true, the probability of Gensler's position being lost will be greatly increased. On the other hand, the majority leader of the U.S. Senate will be Senator John Thune, who supports crypto legislation, next year, which also lays a solid foundation for the favorable policy direction.
Although judging from Trump’s currently announced agenda, the first day of work will start with the relatively easy-to-implement large-scale deportation of illegal immigrants living in the United States, and cryptocurrencies are not on the list, as pro-crypto members continue to join the ruling party, the long-term certainty of benefits is clearly visible. For example, the legal officer of Ripple, which has been severely affected by regulation, believes that the new government will withdraw digital asset cases, and market sentiment has been agitated.
Unexpectedly, large institutions are optimistic about it with real money. MicroStrategy was the first to bear the brunt. On the evening of November 11, MicroStrategy announced that it had purchased 27,200 bitcoins between October 31 and November 10, spending about $2.03 billion, with an average purchase price of about $74,463 per bitcoin. The funds for this purchase came from the company's ATM stock sales activities. Currently, MicroStrategy's total holdings have reached 279,420 bitcoins, with a total purchase cost of about $11.9 billion and an average purchase price of about $42,692 per bitcoin.
Wall Street is not to be outdone. Following the US election, net inflows of Bitcoin ETFs and Ethereum ETFs soared. The US Bitcoin spot ETF has achieved net inflows for 6 consecutive days, with a total inflow of US$4.705 billion, total assets under management of US$56.475 billion, and a total market value of US$95.688 billion. The Ethereum spot ETF is slightly inferior, but it has also achieved a net inflow of more than US$759 million in the past 6 days.
It is clear that institutions are bullish on Bitcoin, so much so that they are making large purchases at prices that can be considered high. It is worth mentioning that large purchases by institutions also provide price support for Bitcoin. Analysts also pointed out that the current cost basis for new or short-term investors is about $66,800.
In addition, the Bitcoin U.S. reserve asset that Trump once proposed has gradually been implemented in other countries. El Salvador and Bhutan, who dared to be the first in the world, have already reaped a lot of rewards. Take Bhutan as an example. The Royal Government of Bhutan, with a population of less than 800,000, holds 12,576 Bitcoins, worth more than $1.1 billion, making it the fourth largest government Bitcoin holder in the world. The total value of Bitcoin held has exceeded 25% of the country's total GDP. Members of the Venezuelan and German governments have proposed that Bitcoin be included in the national reserve issue. Recently, Bitcoin Magazine CEO David Bailey disclosed on social platforms that at least one sovereign country is actively acquiring Bitcoin and has become one of the top five holders. The sovereign country has not yet been revealed, but the market speculates that it is Qatar and Saudi Arabia, which have strong financial resources. After all, at the current price, relatively economically backward regions can hardly support such a large amount of funds.
With all these favorable factors, it is not surprising that Bitcoin is advancing rapidly. In a bull market, any favorable factors can push it to continue to rise, and the same is true for declines. But it is obvious that Trump is still the main driver of this round of bull market, so his subsequent policies will be highly watched, which also brings uncertainty to the market.
Although he has already taken control of Congress, Trump's primary concern after taking office must be national affairs such as economic and fiscal policies, and the priority of the crypto industry will continue to be postponed. Relatively direct is the dismissal of the SEC chairman. Trump once mentioned that he would dismiss Gensler after taking office and would also establish a presidential advisory committee on Bitcoin and cryptocurrency. This action may be a directly observable short-term indicator, which can be quickly revealed after January 20.
As for the US reserve assets that the market pays close attention to, it can only be an ideal but a reality. On the one hand, the high volatility of Bitcoin does not meet the principle of strategic reserve targets; on the other hand, at the implementation level, there are still obstacles to the inclusion of Bitcoin in the national reserve from laws, security and traditional institutions. At the legal level, the regulatory laws and regulations for Bitcoin have not yet been clarified. Whether it is classification, custody or taxation, it will cause major changes in existing laws and regulations, and even pose security risks; even if the regulations are improved, the erosion of the Fed's independent policy by decentralized currencies will also trigger opposition from the central bank, not to mention the adaptability issues of vested interests such as traditional financial institutions. Some people also pointed out that Trump is not targeting Bitcoin, but is conducting risk-free arbitrage through the cooperation between stablecoins and Bitcoin, but there is no evidence yet, and it is only a guess at present.
Of course, there are many obstacles, but if it is truly implemented, the benefits it will bring will be huge. Novogratzy, a well-known cryptocurrency investor, predicted that if it is established, Bitcoin will soar to $500,000, and Arthur Hayes even believes that it will reach $1 million in the future.
In any case, judging from the current growth trend of Bitcoin, the $100,000 that many analysis agencies believe is only one step away. JPMorgan Chase also stated that Bitcoin will continue to benefit from the Trump effect in the next 8 weeks, while CNBC and Copper both believe that Bitcoin can reach $100,000 before the presidential inauguration.
It is worth noting that for short-term investors, a correction after a sharp rise is also normal. Glassnode analysts believe that Bitcoin has entered the price discovery phase. Historically, such phases last about 22 days on average, followed by a major correction, when about 5% of the circulating supply may be pushed down below the original acquisition price. It has now remained in a high-profit position for 12 consecutive days.
But judging from the current situation, expectations are still supported, and the extent of the correction will be relatively limited before Trump officially takes office.
