Author: Ben Strack, Blockworks; Compiled by: Five Baht, Golden Finance

As you know, November was an eventful month for cryptocurrencies – driven by Donald Trump’s election victory promote.

Bitcoin gained 37.3% last month, according to CoinGlass data. This was the asset’s best performance in November since 2020 (Bitcoin’s highest average return month, at 46%), when Bitcoin gained 43%.

Looking ahead, December was not historically the best month for BTC (average returns were +4.9%). In December 2020 (also after the presidential election), Bitcoin price increased by 47%; but from 2021 to 2023, the asset returned -18.9%, -3.6%, and +12.2% respectively.

Bitcoin has been unable to break above the $100,000 level, which some analysts attribute to profit-taking by investors and resistance triggered by put options as traders hedge against possible losses.

Jeff Embry, managing director of crypto hedge fund Globe 3 Capital, noted that he does not believe specific developments this month will impact the crypto market. Instead, he predicted a “full continuation” of U.S.-stimulated cryptocurrency demand starting in November, “letting innovators, risk takers, and investors off the hook and telling them, ‘We have your back now.’”

“Prior to November, the most recent peak for BTC and ETH was in mid-March,” he explained. "This is an eight-month consolidation period in a bull market, so the market is primed for a catalyst to new highs, and the November election provides that catalyst in a huge way."

Globe 3 Capital The year-end BTC price prediction (announced in early 2024) was $124,000 – a number that Embry said the company has been sticking to. Some others point to $80,000 as support in the event of a pullback.

“Of course, higher prices depend on higher demand, and we’re seeing demand across the board from retail investors, [high net worth individuals], institutions, sovereign wealth funds and themselves,” Embry added.

We certainly saw numerous examples in November of companies purchasing Bitcoin in exchange for Treasury bonds. This seems set to continue.

A document filed on Monday showed that from November 25 to December 1, MicroStrategy purchased 15,400 Bitcoins for approximately $1.5 billion in cash. Bitcoin miner Marathon Digital revealed (also today) that it intends to issue $700 million in convertible senior notes – with proceeds primarily used to purchase more Bitcoin.

MicroStrategy founder Michael Thaler shared a video explaining why Microsoft should hold Bitcoin on its balance sheet. Such a proposal was on the agenda at the December 10 shareholders' meeting; although the board recommended a vote against it (noting it had already considered the issue), it was something worth keeping an eye on.

Then there is the Federal Reserve’s interest rate decision on December 18. Multiple market odds suggest the market is pricing in a 25 basis point rate cut (67% probability). Rate cuts have historically been beneficial for risky assets such as Bitcoin.

Finally, the industry continues to await clarity on a possible strategic Bitcoin reserve in the United States. To the extent Embry's point about showing interest, U.S. support for this could lead to more doing the same.

But analysts at Compass Point Research & Trading believe that the “BITCOIN Act” proposed by Senator Cynthia Lummis (BITCOIN Act) has less than 10% chance of becoming law. .

“We do not expect the Republican-controlled Congress to appropriate funds for this purpose, and they will focus on expiring tax provisions and the federal budget,” Joe Flynn and Ed Ed Groshans writes. “The main challenge this action will encounter is deficit financing of Bitcoin purchases.”

They added that although Trump could issue an executive order (perhaps establishing one in the Treasury Department’s general fund sub-account), but this action may be reversed in the future.

What’s the bottom line? As the weather gets colder for many of us, the cryptocurrency story continues to heat up.