Market Insights: NOV 2024 | Week4
Wavebridge Research/
Bitcoin and Cryptocurrency Market Surge After Trump’s Election Win
Bitcoin and the cryptocurrency market have been on a bullish run since Trump's election win. This is also reflecting expectations that bitcoin could be adopted as a strategic asset in the US. Republican Senator Cynthia Lummis has proposed selling some of the Fed's gold reserves to stockpile 1 million bitcoins. She argues that the US should acquire 1 million bitcoins, which is about 5 per cent of the bitcoins currently in circulation. Large traditional financial institutions such as Goldman Sachs and BlackRock have also increased their investments in Bitcoin. Goldman Sachs increased its investment in a Bitcoin ETF to $718 million, while BlackRock bought more than $90 million of its Bitcoin spot ETF. One Fed member, Minneapolis Fed President Neil Cassicari, has been known to be anti-cryptocurrency, but has recently made comments that modify this claim: He has said he is ‘open to bitcoin,’ contradicting his past dismissal of cryptocurrencies like bitcoin as worthless, fraudulent, and nonsensical.
Cardano and Ripple Soar on Federal Use Rumors and Tax Incentive Expectations
Cardano surges more than 100% on rumours of a federal blockchain-based voting system. Rumours that the newly formed US Government Efficiency Office will use Cardano's blockchain to build a federal blockchain voting and identity verification system are unconfirmed. Ripple gained significantly on rumours of a US-made cryptocurrency tax exemption and expectations of a settlement of its lawsuit with the SEC. Stellar surged in tandem as the positive sentiment around Ripple created favourable sentiment towards the payments crypto sector. 89% of new tokens were launched on the Solana network, which proved its ability to handle high transaction volumes without significantly increasing fees. Stablecoin USDT issuer Tether launched its RWA tokenisation platform Hadron, and Coinbase announced the COIN50, an index that tracks the performance of the cryptocurrency market. Meanwhile, the first AI-inspired token, Gothseus Maximus, recently surpassed $1 billion in market capitalisation, establishing AI and meme-infused content as a new trend.
Progress in US Cryptocurrency Policies at State and Federal Levels
In the US, a Pennsylvania lawmaker introduced a bill in the state House of Representatives that would allow state treasuries to hold up to 10 per cent of their assets in Bitcoin, while the US Commodity Futures Trading Commission approved an important step towards listing Bitcoin ETF options. EDX Markets, a cryptocurrency exchange created by traditional US financial institutions, has seen a significant increase in trading activity since 2024, with more than $36 billion in trading volume from institutional traders this year. Meanwhile, US SEC Chairman Gary Gensler, who is expected to be replaced by President Trump, made comments hinting at his resignation. ‘The SEC is an extraordinary institution, and it has been a great honour to serve the public and protect the primacy of capital markets,’ Gensler said, hinting at his resignation. Standard Chartered analysed that the US government's policy changes have the potential to nearly quadruple the market capitalisation of the cryptocurrency market from the current $2.5 trillion to $10 trillion by the end of 2026.
Global Regulatory Trends and Market Changes
Israel has drafted legislation to tax cryptocurrency trading profits. Israel has hastily put together a tax policy targeting cryptocurrencies as the country faces increased spending due to the prolonged war. The Italian government is likely to withdraw its proposal to increase taxes on cryptocurrency trading. Italy has submitted an amendment to the proposed tax hike on cryptocurrency transactions, reducing it from 42% to 28%. The government of the Kingdom of Bhutan transferred its Bitcoin holdings to an exchange, raising the possibility of a sale. Bhutan is the fifth largest holder of bitcoin in the world, after the US, China, the UK, and Ukraine. Australian crypto investment firm Canary Capital filed for a spot ETF of the cryptocurrency Hedera with the US Securities and Exchange Commission, while Singapore-based AI education technology company Genius Group invested 90 per cent of its financial assets in bitcoin, sending its share price soaring. Nasdaq-listed battery company Solidion Technology also allocated a significant portion of its excess cash reserves to Bitcoin. Tokyo, Japan-based cryptocurrency exchange Coincheck received approval from the US SEC to list on Nasdaq.