Bitcoin Explores Uncharted Territory!
Bitcoin has entered a highly bullish phase, driven by Trump’s recent election victory, which has significantly reduced market uncertainty and fostered a risk-on environment. Furthermore the recent rate cuts have only created a more encouraging environment for those looking to invest in the market. This past week, Bitcoin closed its largest weekly green candle in history, highlighting intense market strength and bullish sentiment. Buyers took full control, pushing Bitcoin to over $89,800, a 22.6% increase in the week.
Additionally MicroStrategy has acquired an additional 27,200 bitcoins for approximately $2.03 billion in cash, purchasing these coins between October 31 and November 10 at an average price of $74,463 per bitcoin, inclusive of fees and expenses.
Weekly Price Update
Crypto ETF Rally
BlackRock’s iShares Bitcoin Trust (IBIT) saw record-breaking net inflows of $1.12 billion in a single day on November 7, surpassing its previous peak of $872 million on October 30. The inflow surge followed a day when IBIT recorded over $4 billion in trade volume, reflecting heightened investor confidence, driven by BlackRock’s reputation, Bitcoin’s rally, and pro-crypto regulatory optimism linked to Donald Trump’s presidential election victory.
Trump’s win triggered rallies across both equities and crypto markets, with Bitcoin achieving a new all-time high when he was elected, and is now sitting at $89,000. The Federal Reserve's 25-basis-point rate cut also triggered institutional interest, as investors anticipate continued rate cuts and pro-crypto policies. The total daily net inflow across all U.S. spot Bitcoin ETFs reached $3.6 billion in the last 4 trading days, with yesterday being also the second biggest inflows for BTC ETF history with $1.114 billion, which helped BTC close its largest weekly candle in its history.
Additionally in the past 4 trading days, Fidelity’s FBTC and Grayscale’s mini trust recorded net inflows of $396.7 million and $65 million, respectively, while other funds like Ark & 21Shares, Bitwise, VanEck, and Valkyrie also saw positive inflows, bringing total net inflows for the 12 Bitcoin funds to $27 billion
Spot Ether ETFs likewise experienced a major increase, with $295.5 million in net inflows yesterday, 2.77x larger than its previous highest inflow on its debut on July 23. million in trade. The influx highlights the sustained interest in cryptocurrency ETFs, particularly as favorable market conditions and more regulatory clarity continue to drive institutional participation.
BlackRock Bitcoin ETF Beats Gold
BlackRock’s iShares Bitcoin Trust (IBIT), which reached a net asset value of $40 billion, surpassing BlackRock’s gold ETF which has $32 billion in assets. Bitcoin hit a new all-time high of over $89,000, marking an impressive rise from $43,000 at the start of the year - over 107%. This rapid growth highlights Bitcoin’s appeal compared to gold, which, despite a strong year with a 40% rise to an all-time high of $2,800, has been outpaced by Bitcoin’s performance. It is amazing that Blackrocks BTC ETF overtook BlackRock’s established gold ETF within just 10 months.
Bitcoin’s $1.75 billion market value now surpasses both Meta Platforms Silver’s market cap, with VanEck CEO Jan Van Eck projecting a long-term target of $300,000 per Bitcoin, which is half of gold’s market cap. This momentum has been bolstered by Donald Trump’s election victory, which is seen as favorable to pro-crypto policy. As institutional interest in Bitcoin grows, many see the cryptocurrency evolving as a key asset class alongside traditional stores of value like gold.
Ethereum Hits $3,250 - Surpasses Bank of America
Ethereum's price has surged to $3,250, pushing its market capitalisation above that of Bank of America. Ethereum is now ranked the 28th largest asset in market value. This achievement showcases Ethereum's growing prominence in the financial sector and its potential to disrupt traditional banking systems through its decentralised ecosystem.
Federal Reserve Rate Cuts
The Federal Reserve's recent interest rate reductions have significant implications for the cryptocurrency sector. In September 2024, the Fed lowered its benchmark rate by 0.5 percentage points, followed by an additional 0.25 percentage point cut in today, bringing the federal funds rate to a range of 4.5% to 4.75%. These actions aim to stimulate economic growth
Lower interest rates typically reduce the appeal of traditional savings and fixed-income investments, prompting investors to seek higher returns in alternative assets like cryptocurrencies. This shift can lead to increased capital inflows into the crypto market, potentially driving up valuations and market activity. Historically, Bitcoin and other digital assets have benefited from such "risk-on" environments.
Bitcoin Price and Rate Cuts
Currently, retail investors have largely been absent from the crypto market, as rising living costs have squeezed household budgets, leaving little room for riskier investments. With mortgage payments and basic expenses absorbing more income, many individuals simply don’t have the funds to allocate to crypto or other speculative assets. However, if the Fed continues to lower rates we could see a significant inflow of retail investment. This was a major driver during the last bull cycle, when near-zero interest rates freed up disposable income, enabling a wave of retail investors to pour into crypto markets in search of high returns. Lower rates would not only make risk-on assets more attractive but also provide households with the financial flexibility to participate, creating conditions similar to the 2020-2021 bull run where crypto saw unprecedented retail-driven growth.
Rates vs BTC
Trump Considering Pro-Crypto Officials for SEC Chair and Treasury Secretary
In line with his pro-crypto stance, Donald Trump is considering appointing pro-crypto officials to lead both the Securities and Exchange Commission (SEC) and the Treasury Department. Potential candidates for SEC Chair include Dan Gallagher, Chief Legal Officer at Robinhood and former SEC Commissioner, and current SEC Commissioner Hester Peirce, both known for their crypto-friendly views. These appointments could pave the way for a more supportive regulatory environment for cryptocurrencies in the U.S. Fox Business reporter Elanor Terrett asked a source close to the transition team about the names and the response was: "I promise you it will be someone pro-crypto."
For Treasury Secretary, Trump is reportedly considering Scott Bessent, a pro-crypto advocate and founder of Key Square Group, who has expressed support for Bitcoin and other digital assets. This aligns with Trump’s goal of establishing the U.S. as a global leader in cryptocurrency. Prediction platform Polymarket currently indicates an 88% probability of Bessent’s appointment, highlighting a potential shift toward a more crypto-friendly policy stance in the U.S. PolyMarket vastly outperformed traditional polling this election, with Polymarket not only calling the winner months ago but also getting every state right.
Doge Surge - Department of Government Efficiency
Dogecoin has surged 20% higher today, extending its 150% increase post-election rally after Donald Trump officially announced the creation of the Department of Government Efficiency, abbreviated as “DOGE”. Tesla CEO Elon Musk who’s company’s BTC holdings surpassed 1 billion this week and former Republican presidential candidate and Strive Asset Management co-founder Vivek Ramaswamy will lead the department. Trump stated that they will “pave the way for my Administration to dismantle government bureaucracy, slash excessive regulations, cut wasteful expenditures, and restructure federal agencies.”
Memecoins like Dogecoin are widely seen as a barometer for retail interest and risk appetite in crypto, increased memecoin activity typically signals growing retail participation and a willingness to venture further out on the risk curve.
Doge Price Action
Dogecoin’s impressive performance post-election has set a bullish tone for the broader meme coin sector, which has been attracting significant liquidity all year. With it’s market cap surpassing $60 billion and ranking #6, Doge is establishing a foundation for other meme coins to rise. As the current leader, Dogecoin’s upward trend could continue, with a goal to surpass its previous high of $80 billion market cap.
Typically, after a large cap like Doge in the meme sector consolidates at a new high, profits will likely start flowing into smaller to mid cap meme coins, a trend already underway with Bonk and Pepe up by 54% and 44% this week, respectively. This profit rotation which can occur from larger to smaller market cap opportunities is speculated to extends to newer meme coins.