Market Insights: NOV 2024 | Week2
Wavebridge Research/
The election of Trump as the next president of the United States has given the cryptocurrency market a strong upward momentum. The crypto market rallied across the board in a cyclical buying spree, with Ethereum and altcoins, which have been marginalised relative to Bitcoin, making strong gains. Bitcoin also showed a strong trend, albeit with a lesser degree of bullishness. Bitcoin has seen strong gains in the past, rising 22% after the 2012 election, 37% after the 2016 election, and 98% after the 2020 election, and is on track to do the same this time around. This strong demand has also been seen in spot ETFs, with IBIT's $34.3 billion in total assets surpassing the $33 billion of gold ETF iShares Gold Trust and chasing the $76 billion of SPDR GoldShares.
The Ethereum Foundation released a periodic report showing a total of $970 million in assets, 81% of which are cryptocurrencies and 19% non-cryptocurrencies, with 99.45% of those cryptocurrencies being Ethereum, demonstrating strong confidence in the platform. It has also been speculated that the upcoming Ethereum Pactra update in 2025 will be a two-stage hard fork that will increase the speed and scalability of Ethereum.
Solana and Sui, which compete with Ethereum at the layer 1 level, made significant strides, with Solana overtaking Bitcoin in monthly fee revenue and TVL in the DeFi ecosystem. Ripple has even been linked to the possibility of launching a stablecoin pegged to the dirham in the UAE. The market capitalisation of the ever-hot meme coin sector rose from 4% of the total altcoin market in 2022 to 11% in 2024. Tether completed its first crude oil trade, transporting 670,000 barrels of Middle Eastern crude via USDT, with the transaction valued at around $45 million.
President-elect Trump's main pro-crypto policy directions can be summarised as follows
1) crypto deregulation and support for the industry,
2) policies focused on decentralisation and private asset protection, and
3) anti-CBDC and privacy protections. President Trump has vowed to replace the SEC chairman, and while he cannot force the current chairman to resign, he could name a new acting SEC chairman at his inauguration on 20 January, which would force the current chairman to step down. The Republicans' new majority in the Senate should also provide strong support for this policy. The new SEC chairman is expected to be the current Chief Legal Officer Robin Hood and the former chairman of the Commodity Futures Trading Commission, both of whom are expected to be pro-crypto. Meanwhile, the push for Bitcoin's inclusion in reserves continues to move forward behind the scenes, led by Senator Cynthia Loomis.
The Monetary Authority of Singapore has released two frameworks for financial institutions to embrace and implement tokenised assets. It will provide recommendations on industry best practices for tokenised funds, and includes provisions for the development of tokenised investment vehicles comprising multiple assets, which is expected to facilitate the acceptance of cryptocurrencies by financial institutions. Qatar has announced a comprehensive regulatory framework to foster the cryptocurrency and digital asset market to compete with the UAE as a crypto innovation hub in the Middle East. The framework is expected to provide clear regulations on key elements such as cryptocurrency tokenisation, property rights, and smart contracts.