December 16, 2024

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Trading Desk Insights

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Bitcoin surged to a fresh all-time high on Sunday night as the "Santa Claus Rally" continued to gather momentum, fueled by anticipation of a Federal Reserve interest rate cut later this week. BTC's recent climb above $106,000 may also be tied to the FASB fair value accounting rule coming into effect today. This new rule, approved in 2023, allows companies to account for the fair value of crypto holdings and recognize unrealized gains and losses in net income each reporting period. This shift away from the cost-less-impairment model offers a clearer snapshot of crypto assets' market value and likely contributed to the recent price surge.

Adding to the bullish sentiment, reports that Trump is considering establishing a strategic Bitcoin reserve have stirred excitement, though no concrete plans have been outlined yet. Despite the positive momentum, attention remains on the 10-year Treasury yield, which could signal broader market dynamics.

Altcoins are currently under pressure as capital flows into BTC, but a rebound may be on the horizon. Arbitrum (ARB) is set to unlock $94 million worth of tokens on December 16, equating to 2.3% of its circulating supply. Meanwhile, MicroStrategy continues to stack sats, adding another 15,350 BTC to its holdings for $1.5 billion at an average purchase price of $100,386 per coin.

All eyes are on the Fed’s Wednesday meeting, where market expectations are leaning heavily toward a 25 basis point rate cut, with futures pricing in a 96% probability. Bitcoin is currently up about 8% for the month, 50% since the U.S. presidential election, and an impressive 145% year-to-date. The Fed’s projections and outlook for 2025 rate cuts will be key drivers for the market’s next move.

In the ETF space, year-to-date flows have surpassed 500,000 BTC, with U.S.-based crypto ETFs absorbing over 2.5% of the circulating supply since their January launch.

MicroStrategy shares rallied on Monday following news that the company will join the Nasdaq-100 index, a move that also includes it in the QQQ ETF, a widely tracked fund mirroring the Nasdaq-100. While the market saw a broad rally after Trump’s November election win, recent moves have narrowed to tech-driven gains.

Looking ahead on the economic calendar, the week is packed with key events. Wednesday features the Fed funds rate decision and the Bank of Japan’s policy rate announcement later in the day. On Thursday, the Bank of England will announce its policy rate, followed by the final U.S. GDP figure. The week wraps up with the U.S. Core PCE index, a critical inflation gauge.

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The News Room

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Riot Platforms Increases Bitcoin Holdings to 17,429 BTC with Latest Purchase

Riot Platforms has increased its bitcoin holdings to 17,429 BTC, valued at $1.8 billion, following the purchase of 667 BTC at an average price of $101,135 per coin using proceeds from a $594 million convertible bond offering. The miner previously acquired 5,117 BTC earlier this month. Riot shares have surged over 20% in the past five trading days, bolstered by a Wall Street Journal report that activist hedge fund Starboard Value plans to repurpose some of Riot’s mining facilities for hyperscalers. Year-to-date, Riot has achieved a 37.2% BTC yield per share, reflecting its strategic focus on bitcoin as a reserve asset amid growing institutional interest.

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Ripple to Launch RLUSD Stablecoin on Tuesday

Ripple has announced that its U.S. dollar-pegged stablecoin, RLUSD, will launch on Dec. 17, with availability on global exchanges. Each RLUSD token will be fully backed by U.S. dollar deposits, government bonds, and cash equivalents, with monthly reserve attestations by an independent auditing firm to ensure transparency. Ripple plans to integrate RLUSD into its Ripple Payments system for enterprise transactions and initially launch the stablecoin on the XRP Ledger and Ethereum, with expansions to other blockchains in the future. RLUSD will debut on platforms like Uphold and MoonPay, with additional listings expected soon.

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MicroStrategy Acquires 15,350 Bitcoin for $1.5 Billion, Boosting Holdings to 439,000 BTC

MicroStrategy has purchased an additional 15,350 BTC for $1.5 billion at an average price of $100,386 per coin, bringing its total bitcoin holdings to 439,000 BTC, worth over $45 billion. Funded by the sale of 3.88 million shares as part of its $42 billion equity and fixed-income raise for bitcoin acquisitions, the company has acquired $17.5 billion worth of bitcoin in the last six weeks alone. Its bitcoin buying strategy has significantly increased its market cap to $92 billion, with its stock up 490% year-to-date. MicroStrategy is set to join the Nasdaq 100 index on Dec. 23, further boosting its liquidity and potential for inclusion in the S&P 500 by 2025. Analysts remain optimistic about the firm's ability to continue its aggressive bitcoin accumulation.

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Crypto Charts

ETF Flow

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Disclaimer

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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.

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