Bitcoin’s rally, which began after Donald Trump won the US presidential election in November, has stalled. As the year comes to a close, the cryptocurrency has fallen below $94,000. Bitcoin has fallen to $93,722, down 2% in the last 24 hours. It has also fallen by around $15,000 from its mid-December high.
Other cryptocurrencies, such as Ethereum and Dogecoin, have struggled to gain the momentum needed to increase their value. Smaller currencies have been unable to keep up with Bitcoin during this period.
Trump’s support for cryptocurrencies, especially in terms of legislation supporting these assets, has helped boost Bitcoin’s value significantly. Trump has also supported the idea of creating a national reserve using Bitcoin, which has helped boost demand for the currency. However, declining expectations of a rate cut by the Federal Reserve have helped calm the wave of speculation that has swept the market recently.
The picture of pro-cryptocurrency legislation is expected to become clearer after Trump takes office on January 20. The Republicans’ stance is characterized by their support for cryptocurrencies, which is different from the administration of President Joe Biden, which has taken a tougher stance towards the crypto sector. The current administration has relied on imposing strict restrictions and regulations after the scandal that hit some crypto companies.
Chris Weston, head of research at Pepperstone Group, stated that the changes in the price of Bitcoin after the election could be due in part to outflows from exchange-traded funds that invest in cryptocurrencies. This could have a significant impact on price movement in the coming period.
Amid these changes, some analysts note that there is a gradual shift in the general attitude towards cryptocurrencies. This shift could reignite momentum in the market, especially if supportive legislation is implemented after Trump enters the White House.
Future challenges and opportunities for cryptocurrencies
Despite the challenges faced by Bitcoin and other cryptocurrencies, there are still significant opportunities in the market. With the growing interest in the digital transformation of money, there is strong support for cryptocurrencies from many political and economic parties. If the legislation supporting cryptocurrencies succeeds after Trump takes office.
However, there is an urgent need to deal with market volatility and price action in the short term. The market is still vulnerable to sudden fluctuations, especially in light of the impact of economic decisions by the Federal Reserve, which plays a key role in stabilizing the market. Expectations about interest rates policies may lead to significant changes in price action.
On the other hand, interest in digital assets remains strong, as interest in blockchain technology and new financial applications that could support this sector is growing. Therefore, any improvement in the legislation and regulatory environment could provide long-term support to the cryptocurrency market.
While Bitcoin has seen a decline in its value recently, the general attitude towards cryptocurrencies remains strong. Trump’s potential support for cryptocurrencies could help push the market towards greater stability and increase demand for digital assets. However, investors should keep a close eye on changes in economic policies, as any change could have a significant impact on market movement.
The situation is shifting in favor of crypto
Recently, interest in cryptocurrencies has returned strongly, especially after the increase in investment in Bitcoin. Bitcoin has seen a significant increase in its value this year, which has led to a significant shift in the general attitude towards digital currencies. Despite previous criticism of cryptocurrencies by major financial institutions, things are gradually starting to change.
One of the most prominent examples of this change is the return of MicroStrategy, a software company, to heavy investment in Bitcoin.
The role of major banks in cryptocurrencies is increasing
As the volume of cryptocurrency-related transactions grows, major banks have begun to play an active role in this market. For example, banks such as Barclays and Citigroup have begun issuing convertible bonds for MicroStrategy, one of the largest investors in Bitcoin. Goldman Sachs has also helped Applied Digital raise funding to build Bitcoin mining data centers, while JPMorgan has managed bond issues for major mining companies such as Core Scientific, Mara, and Airn.
These moves indicate that major banks are beginning to recognize cryptocurrencies as an investment vehicle with significant potential. As interest in Bitcoin and other cryptocurrencies has grown, the cryptocurrency sector has seen banking fees rise to unprecedented levels in 2024. According to IFR data, convertible bond issuances in this sector have exceeded $13 billion, generating fees of more than $200 million. For example, banks received a 2% fee from a $21 billion equity issuance deal for MicroStrategy.
Bitcoin Outperforms Traditional Investments
Bitcoin has surged by around 120% this year, outperforming traditional investments such as global stocks and gold. This massive increase in value reflects the market’s major shift towards cryptocurrencies. In 2023, Bitcoin saw significant declines in its value, but it managed to recover its losses in an amazing way, pushing its value up significantly. This rise is evidence that cryptocurrencies are beginning to gain widespread acceptance among investors, and are even considered an attractive investment option compared to traditional markets.
Bitcoin’s strong performance this year opens up new opportunities for investors. With more financial institutions managing investments in this sector, the cryptocurrency is expected to continue to attract more funds. Experts suggest that Bitcoin could become one of the primary assets that individuals and institutions alike invest in.
Future Challenges for the Cryptocurrency Sector
Despite the significant gains that cryptocurrencies have made in recent times, the sector still faces significant challenges. The most prominent of these challenges are concerns about government regulations and high price volatility. Large fluctuations in the value of Bitcoin may lead to a decline in confidence among some investors, which may negatively affect market stability.
There is also ongoing concern about the laws and regulations that governments may impose on cryptocurrencies in the future. Despite recent positive developments, such as the US Securities and Exchange Commission’s decision, doubts about future policies may affect the investment decisions of many individuals and companies.
With the growing interest in cryptocurrencies, the situation has begun to change in favor of this sector. In the past, major banks avoided dealing with cryptocurrencies, but now they have begun to take active steps to support them. Despite the challenges facing the sector, such as sharp price volatility and regulatory concerns, recent developments indicate that the future may be bright for cryptocurrencies. The investment of major companies such as MicroStrategy in Bitcoin, along with the moves of major banks, enhances the credibility of these assets and encourages investors to approach them. Ultimately, cryptocurrencies are expected to continue to attract more investment and form a larger part of the global financial market. As more governments and financial institutions take steps to regulate the sector, the crypto world could become more stable and attractive to investors in the future.
