The total crypto market capitalization has seen a significant increase over the last 24 hours, rising by 3.2% to reach $3.71 trillion on December 16th. This growth is accompanied by a substantial surge in trading volume, which has jumped by 27% to $162 billion on the same day.
Bitcoin and Ethereum Lead the Charge
Bitcoin (BTC), the largest cryptocurrency by market capitalization, has seen a notable increase of 3.5% over the last 24 hours, trading at around $81,587 as of the time of publication. Ethereum (ETH), the second-largest crypto, has also climbed by 3.25% to trade around $3,976.
Prospects of Bitcoin Becoming US Reserve Asset
One of the key factors driving the bullish sentiment in the crypto market today is the prospect of Bitcoin becoming a US reserve asset. US President-elect Donald Trump’s recent comments about his intentions to build a strategic Bitcoin reserve and do "something great" with crypto have sparked optimism among market participants.
According to Jack Mallers, founder and CEO of Strike, Trump could issue an executive order on "day one" of his second term to designate Bitcoin a reserve asset status. While the size of this potential reserve is unclear, it would be a significant development for the crypto market.
Dennis Porter, CEO of Satoshi Action Fund, expects at least 10 states to introduce a Bitcoin reserve bill in total, building on Texas and Pennsylvania’s lead. This could further solidify the case for Bitcoin becoming a US reserve asset.
US Federal Reserve Expected to Reduce Interest Rates
The US Federal Reserve is also expected to reduce the benchmark borrowing cost by 25 basis points to the 4.25% to 4.5% range, marking a total of 1% interest rate reduction since September 18th. This move could have a positive impact on the crypto market, as lower interest rates can increase demand for riskier assets like cryptocurrencies.
Market Participants Expect Core PCE Price Index Reading
The latest core Personal Consumption Expenditures (PCE) price index reading this week will be closely watched by market participants. This measure of inflation is the Fed’s preferred indicator, and a strong reading could signal a genuine inflation rebound.
Institutional Demand for Spot ETFs Remains High
The ongoing gains in the crypto market are also being driven by significant capital flows into spot exchange-traded (ETF) funds. Farside Investors reported that approximately $2.16 billion flowed into US-based spot Bitcoin ETFs over the December 9th to December 13th week.
Spot Ethereum ETFs have also seen two weeks of continuous inflows, with a total of $1.4 worth of capital entering these investment products over the last 14 days. This has taken the combined assets under management to a record high of $1.98 billion on December 13th.
MicroStrategy and Riot Platforms Continue to Buy Bitcoin
The steady capital inflow into Bitcoin and Ethereum ETFs signals heightened institutional and retail interest in these cryptocurrencies. MicroStrategy, which now holds over $44 billion worth of Bitcoin, has continued to buy the cryptocurrency, with CEO Michael Saylor hinting at further purchases on December 4th.
Riot Platforms, a leading Bitcoin mining giant, also announced last Friday that it had acquired 5,117 Bitcoin at an average price of around $99,669 per BTC.
Crypto Market Cap Nears $4 Trillion
Data from Cointelegraph Markets Pro and TradingView shows that the total market capitalization of all cryptocurrencies (TOTAL) has rallied more than 34% since November 11th. This price action has recorded a series of higher lows, indicating a strong bullish trend.
The current chart pattern suggests that the price must hold above the immediate support provided by the lower boundary of the channel at $3.57 trillion to sustain the uptrend. If this happens, TOTAL may move towards the middle boundary of the channel at $3.73 trillion and later to the upper boundary at $3.9 trillion.
A breakout above the upper boundary would signal a bullish breakout from the chart pattern, with the next logical move being toward the $4.0 trillion mark, representing a 10.8% uptick from the current price.
Investment Advice
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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