Bitcoin Rally Cools as Record-Breaking Year Draws to a Close
A Bitcoin rally is losing steam in the final stretch of a record-breaking year for the digital asset. Investors are closely watching the impact of President-elect Donald Trump’s pro-crypto stance, which has shaped much of the year’s market enthusiasm.
The largest cryptocurrency traded at $94,673 as of 11:38 a.m. Friday in New York, trimming a near 3% drop from the previous day. Smaller tokens like Ether and Dogecoin, popular among meme-driven traders, showed little movement as they hovered within tight trading ranges.
Trump’s pledge to foster a crypto-friendly environment in the U.S., including a proposed national Bitcoin reserve, has been a significant market driver. However, traders are now cashing in on some of the year’s gains, awaiting further clarity on the feasibility of these initiatives.
Market Braces for Options Expiry
The crypto market faces heightened volatility with the impending expiration of a substantial volume of Bitcoin and Ether options contracts — one of the largest events of its kind in the history of digital assets.
On the Deribit exchange, a leading platform for crypto derivatives, the notional value of expiring Bitcoin contracts exceeds $14 billion, while Ether contracts account for roughly $3.8 billion.
Sean McNulty, director of trading at liquidity provider Arbelos Markets, warned of potential market turbulence, describing the situation as a “choppy market” scenario linked to the expiry of these derivatives.
MicroStrategy’s Moves and December Decline
Despite this week’s announcement by MicroStrategy Inc. that it may expand its Bitcoin acquisition program, the cryptocurrency has struggled to maintain its momentum. The company, which has pivoted from software to become a major Bitcoin holder, now holds over $40 billion worth of the digital asset.
Bitcoin is on track for its first monthly decline since August, following a record high of $108,316 on Dec. 17. Net outflows from U.S. Bitcoin exchange-traded funds (ETFs) totaled $1.5 billion in the four trading days leading up to Dec. 24 — the largest such withdrawal since Trump’s election win on Nov. 5. However, Thursday saw a reversal, with $475 million flowing back into these funds.
As the year winds down, Bitcoin’s remarkable ascent faces tests from profit-taking, regulatory developments, and market dynamics, leaving investors to gauge what lies ahead for the volatile asset.
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