Matrixport Market Observation: Global liquidity continues to tighten, what will be the future trend of BTC?

Last week, BTC showed an M-shaped top-down trend, and the price fluctuated greatly. Although there have been many sharp rises and falls, there is still some buying support at low levels. From December 25 to 26, BTC hit $100,000 twice and reached a significant high at $99,963.7. Then the BTC price fluctuated in the downward channel and stopped falling several times near $91,530.45, forming a long-term key support. The bulls tried to resist, but the overall trend was still accompanied by a large volume during the decline and a shrinking volume during the rebound, indicating that the market is still dominated by shorts. The current price of BTC is $94,540.02 (the above data comes from Binance spot, December 31, 16:30).

Since Trump was elected, the inflow of funds to the spot ETH ETF has increased significantly, and the growth trend during the same period has even exceeded that of the BTC spot ETF. Last week, the spot BTC ETF had a net outflow of $388 million, and the spot ETH ETF had a net inflow of $349 million. Trump is about to take office in January, which may further promote ETH to become the best performing mainstream token in the next quarter.

Рынок Interpretation

South Korea’s криптовалютаcurrency investors surge as weaker won drives premium trading

On December 28, CryptoQuant CEO Ki Young Ju pointed out that the Korean won exchange rate fell to a 15-year low, prompting Korean investors to exchange the won into BTC and USDT at a 3-5% premium through exchanges such as Upbit to avoid exchange rate risks.

As of November, the number of cryptocurrency investors in South Korea exceeded 15.59 million, accounting for more than 30% of the total population. This growth is closely related to US President-elect Trumps promise to support the crypto industry, and the rise in BTC prices has further promoted this trend. The total cryptocurrency holdings of Korean investors reached 102.6 trillion won (about $70.8 billion), a significant increase from October.

As Korean investors’ interest in cryptocurrencies increases and exchange rate risks rise, premium trading in the crypto market has become increasingly significant, and the market’s demand for safe-haven crypto assets such as BTC and USDT has increased.

US debt ceiling crisis may trigger BTC downside risk

On December 30, U.S. Treasury Secretary Yellen warned that the debt ceiling would be hit in mid-January 2025, and risk aversion in global markets is heating up. She said the Treasury would take extraordinary measures to cut borrowing after hitting the ceiling, but urged Congress to act quickly to maintain U.S. credit. The news triggered volatility in risky assets, with major U.S. stock indexes falling by about 1%, and BTC also falling 4% from its intraday high.

In addition, the debt problem in the macro context is also a core variable. Since the United States established a debt ceiling in 1939, its total national debt has exceeded $36.2 trillion. In the current environment of global macroeconomic turmoil and political uncertainty, the BTC market may face greater pressure.

Institutional BTC adoption accelerates in 2024, KULR Technology purchases 217.18 BTC for $21 million

From the approval of spot BTC ETFs in the United States to more companies incorporating BTC into asset reserve planning, BTC is becoming a mainstream asset. This year, BTC has risen by nearly 130%, approaching the psychological mark of $100,000. In January, the net inflow of ETFs reached $36 billion, and the holdings exceeded 1 million BTC.

This trend started with MicroStrategy in 2020 and has attracted more companies to participate. The latest to join is KULR Technology, which produces energy storage products for the aerospace industry. The company purchased 217.18 BTC for $21 million and plans to invest up to 90% of its surplus cash in BTC. At the same time, the BTC Standard Company ETF submitted by Bitwise will track the stocks of companies holding more than 1,000 BTC. The BTC Bond ETF submitted by Strive Asset Management provides exposure by holding corporate bonds targeting BTC, further promoting the diversification of BTC investments.

With the continued participation of institutions, the mainstreaming of crypto assets is developing rapidly, and BTC is seen as a long-term investment tool to hedge against inflation and geopolitical risks.

Trump will take office as president on January 20 and is expected to issue at least 25 executive orders

After Trump successfully ran for president in early November, the market has been rising continuously for a month. Trump has shown a friendly attitude towards cryptocurrencies, and the heads of various departments he nominated are mostly pro-crypto market people. The chairman of the SEC, who has always been criticized, is about to leave, which makes the market generally optimistic about the future of the crypto market.

According to Coinbase data, the proportion and number of members who support encryption in the new term of Congress who are about to take office are significantly higher than those in the previous term. Michael Rosen, chief investment officer of Angeles Investments, said: Trumps inauguration may also bring some surprises to the market. He is expected to issue at least 25 executive orders on his first day in office, covering a range of issues from immigration to energy and cryptocurrency policies.

Market Hotspots

FTX is about to start the first round of cash repayment of debts, and the compensation will flow into the market to indirectly reduce the selling pressure

On December 17, FTX and its affiliated debtors announced that the court-approved Chapter 11 reorganization plan will officially take effect on January 3, 2025. The first round of distribution will be launched within 60 days after the effective date and will only be open to approved creditor holders in the Convenience Classes. FTX has reached an agreement with cryptocurrency custodian BitGo and trading platform Kraken to provide asset allocation services to retail and institutional clients.

According to data disclosed by HOD L1 5 Capital, FTX included $16 billion in cash in the first round of repayment distribution that officially took effect on January 3. Some of the tokens previously held by FTX/Alameda, such as SOL/WLD, have been basically sold. The compensation received by creditors is not tokens but cash, which indirectly reduces the market selling pressure and increases the probability that some compensation funds will flow into cryptocurrencies again, thereby boosting the market.

Tether clarifies rumors that USDT is illegal in Europe

Recently, there have been rumors that USDT will be deemed illegal in Europe on December 30, 2024, causing market concerns. In response, on December 29, Tether CEO Paolo Ardoino spoke several times on the social media platform X to clarify the news and called it FUD information, making it clear that USDT will not lose its legitimacy on the above date or in the short term.

According to the EUs Crypto-Asset Market Regulation (MiCA), stablecoin issuers must comply with specific regulations, but the regulation provides a transition period of 6 to 18 months, which means that the legal status of USDT is not currently threatened. In addition, Tether plans to launch new stablecoins (such as EURQ and USDQ) that meet MiCA standards to ensure its compliance and continued operation in the European market.

It is worth mentioning that although MiCA requires stablecoin operators to deposit more than 30% of their liquidity in banks, Tether expressed reservations about this rule, believing that it may have an adverse impact on the liquidity management of stablecoins. However, as of now, Tether has not encountered any financial problems or illegal activities, and its market position remains stable.

Trumps inauguration as US President drives surge in crypto OTC trading volume

Recently, several crypto trading companies reported that the volume of cryptocurrency OTC has grown rapidly in recent months, with Trumps election as a key driving force. Tim Ogilvie of Kraken Обмен said that OTC trading volume increased by 220% year-on-year. Traders pointed out that market participants actively prepared and launched transactions when the election approached. The price of mainstream currencies such as BTC and ETH rose, pushing projects and investors to manage funds and risks in the new price range. BitGo also pointed out that the election results were the dominant factor in the recent surge in trading volume, and the trading volume of some companies has returned to the level of the market peak in 2021.

The United States, the United Kingdom, and the European Union strengthen cryptocurrency tax supervision. Investors need to pay attention to tax rates and compliance requirements

The United States, the United Kingdom, and the European Union are strengthening tax supervision on cryptocurrencies, affecting investor operations. In the United States, cryptocurrency transactions are subject to capital gains tax, with tax rates based on holding time and income; miners and staking income are subject to income tax, and exchanges are required to report data from 2025. The United Kingdom imposes a capital gains tax of up to 24% on crypto asset transactions, with a tax-free amount of £3,000; miners and salary income are subject to income tax and national insurance. The tax rates vary from country to country in the European Union, with Germany exempting from tax for holding for more than one year and Spain at 28%. The 2025 MiCA regulations will unify some rules and enhance tax transparency.

Отказ от ответственности: приведенный выше контент не является инвестиционным советом, предложением о продаже или приглашением на предложение о покупке резидентам Специального административного района Гонконг, США, Сингапура и других стран или регионов, где такие предложения или приглашения могут быть запрещены законом. Торговля цифровыми активами может быть чрезвычайно рискованной и нестабильной. Инвестиционные решения следует принимать после тщательного рассмотрения личных обстоятельств и консультаций с финансовыми специалистами. Matrixport не несет ответственности за какие-либо инвестиционные решения, основанные на информации, предоставленной в этом контенте.

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