Since Trump won the US election, the crypto market has experienced explosive growth. As the leader, Bitcoin rose by more than 37% in a single month in November, adding more than $26,000 in value, pushing the market value of the entire cryptocurrency market to surge by more than $1 trillion, an increase of about 45%. This wave of gains not only made Bitcoin once again the focus of investors' attention, but also gave altcoins a long-lost rise, and market sentiment was high.

Bitcoin went sideways, altcoins surged

After continuously setting price ATH, Bitcoin encountered resistance at the $100,000 mark and showed a volatile trend. Market funds began to turn their breakthrough points to altcoins. In the past week, the market share of altcoins increased from 8.91% to 11.0%, and the daily trading share also increased from 23% to 37%. New and old altcoins have begun sector rotation, with astonishing gains. In November, the total market value of altcoins rose by nearly 70% unilaterally.

Among them, the performance of the old altcoin XRP is particularly eye-catching. Driven by triple positive factors such as the resignation of the SEC chairman, a sharp reduction in litigation pressure, the XRP spot ETF application, and the South Korean giant whale, XRP rose by 400% in a single month, hitting a historical high. Its market value has surpassed USDT and Solana, ranking third in the cryptocurrency market value list. It has also surpassed Pinduoduo and risen to the 138th place in the global mainstream assets.

In the encryption market, the value of altcoins often cannot be quantified, and an approximate valuation can only be given by benchmarking the leading projects in the track. XRP's skyrocketing FDV exceeded US$260 billion, reshaping the value reference system of most altcoins on the market and unleashing the valuation potential of many altcoins, demonstrating a strong money-making effect. With the arrival of the copycat season, the market becomes lively.

Can Bitcoin reach another peak in December?

Bitcoin rose rapidly in November, causing a large number of profit-taking transactions in the market. The US$100,000 mark has never been exceeded. Data also shows that the net position changes of long-term Bitcoin holders are declining. , close to the level near March 2024, many investors have begun to worry about whether the current encryption market is overheated. However, from multiple perspectives, Bitcoin still has significant upside potential in December.

1. The Santa Claus quotation in the U.S. stock market boosts market optimism

As the holiday season approaches, the Santa Claus quotation in the U.S. stock market often occurs, that is, the stock price often rises around Christmas. . Such increases tend to be driven by holiday optimism, increased holiday spending and investors making year-end trades. Since 1950, the S&P 500 has gained an average of about 1.3% during the Santa Claus rally.

Since the U.S. stock market and the crypto market are highly correlated, the positive sentiment in the U.S. stock market is expected to provide a stable external environment for the crypto market.

2. Bitcoin has experienced significant increases in December in all previous halving years

Data shows that Bitcoin has experienced significant increases in December after the halvings in 2012, 2016 and 2020.The success rate reaches 100%. Among them, the return rate increased from US$12.57 to US$13.45 in December 2012, with a return rate of 7%, the return rate in December 2016 was 30.8%, and the return rate in December 2020 was 46.92%. This month’s return is still worth looking forward to. It is worth noting that Bitcoin closed up 7.35% in September this year, its best performance in history. Historically, every time Bitcoin closed up in September, it could rise until the end of the year. Taking history as a guide to identify the cycle, the historical rise follows the consensus very much, which also gives Bitcoin a considerable chance of having a larger upside this month.

3. There is a high probability that the Federal Reserve will continue to cut interest rates in December

Interest rate cuts have been a long-term focus of the market. The Federal Reserve announced an interest rate cut of 0.5% in September, and then further cut interest rates by 0.25% in November, accelerating the pace of global interest rate cuts and boosting global market sentiment. Recent U.S. economic data show that although inflation has shown stubbornness, the downward trend has not changed. Unless the employment or inflation report in November is unexpectedly strong, there is a high probability that the Federal Reserve will continue to cut interest rates in December, which will make the original wait-and-see state or Funds tied up in low-yield investments are seeking higher-yield investment channels, accelerating the transfer of global funds to risky assets. As a high-profile asset with great value-added potential, Bitcoin will take on part of the liquidity.

4. The period before Trump’s inauguration was a period of great speculation

Last week, the Trump cabinet was basically formed, and almost all members are fans of cryptocurrency, including Trump’s own cabinet, which collectively has a strong interest in cryptocurrency. One emerging asset has allocation exposure. This "all-hands speculation" attitude has greatly increased the market's expectations for future crypto-friendly implementation, and has also become an important support for the continuation of the market in December.

With reference to the aftermath of the 2016 election, many Trump deals peaked at the inauguration in January. Judging from historical experience, whether Trump was shot or his election was successful, the currency circle has shown extremely fierce market reactions. Although the inauguration ceremony on January 20 is regarded as a potential market peak, the accumulation of market sentiment is often reflected in advance. From the current point of view, December may become a key window period for investors to make arrangements.

5. The continued inflow of ETFs and on-chain funds

The continued inflow of ETFs and on-chain funds has also provided strong support for the popularity of the crypto market. Thanks to Trump's pledge to implement policies that will benefit the crypto industry, Bitcoin and Ethereum ETFs set new records for net inflows in November, reaching US$6.5 billion and US$1.1 billion respectively. This increase shows that the market is optimistic about the two stocks. There is strong demand for crypto assets.

Net inflows of ETF funds for Bitcoin and Ethereum in November

On the other hand, the additional issuance of USDT It is also accelerating, with more than $13 billion in additional issuance in November, which is the fastest pace of issuance since 2021. Currently, the total market capitalization of the stablecoin market has exceeded $193 billion, a record high, with increases over the past week2.3%.

Stablecoin market value

In addition, the sudden rise of Phantom wallet also provides an observation window for the market. On November 21st, in just half a month, Phantom Wallet’s ranking in the Apple App Store jumped from obscurity to No. 1 in the tool category, and the overall ranking reached the highest No. 6. According to similarweb's data analysis, Phantom's recent US user traffic accounted for 27.38%, and achieved a significant growth of 24.82% in the past month, showing that the encryption market is attracting more and more people.

Summary

Although Bitcoin encountered certain resistance after its rapid rise in November, many positive factors are working together on the cryptocurrency market, setting the stage for December for Bitcoin and even the entire altcoin sector. The market has set an optimistic tone, and Bitcoin may end 2024 with overwhelming positive momentum. As the official partner of the Argentinian team, 4E supports spot and contract transactions of more than 200 crypto assets such as Bitcoin, Ethereum, SOL, XRP, etc., covering various sectors, with high liquidity and low rates.

At the same time, 4E also integrates traditional financial assets into the platform, establishing a comprehensive one-stop service covering everything from deposits to crypto assets to US stocks, indices, foreign exchange, and bulk gold. A trading system with more than 600 assets of different risk levels. You can invest with one click at any time by holding USDT. In addition, the 4E platform has a risk protection fund of US$100 million to provide another layer of protection for users’ financial security. With the help of 4E, investors can keep up with market dynamics, flexibly adjust strategies and capital allocation, and seize every potential opportunity.