Investor demand, already exceeding March 2023 levels by 4%, is fueling optimism for new milestones. Bitcoin’s market capitalization came close to $3 trillion during the last surge, according to CoinGecko. As the year-end approaches, all eyes are on the Federal Reserve and its upcoming policy decisions, which could influence Bitcoin’s trajectory. Bitcoin’s Record Demand Meets Market Shifts Bitcoin demand is currently outpacing levels last seen during its $70,000 rally in March 2023. Axel Adler Jr., a researcher and author at CryptoQuant, noted that prior bull cycles saw demand peaks of 205% and 133%, suggesting the current surge could be a prelude to further highs. Source|AxelAdlerJr X This robust appetite for Bitcoin comes as the cryptocurrency matures, with its volatility hitting record lows, according to CryptoBanter show host Kyledoops on X highlighting Glassnode’s data. Source|KyleDoops X He also noted that institutional adoption and market stability are transforming Bitcoin into a dependable financial asset. Adding to the bullish narrative is President-elect Donald Trump’s vocal support for cryptocurrencies . Trump has pledged to make the US a global leader in digital assets, proposing favorable regulations and even a strategic Bitcoin reserve. This policy stance has injected fresh energy into the market, attracting investors seeking exposure to Bitcoin’s long-term potential. Institutional Adoption and Derivatives Betting The institutional pivot toward Bitcoin is unmistakable. MicroStrategy Inc., a Bitcoin-focused firm, is set to join the Nasdaq 100 Index. The inclusion underscores Bitcoin’s growing mainstream acceptance and highlights how corporate entities continue to embrace it as a strategic asset. MicroStrategy, led by Bitcoin permabull Michael Saylor currently holds 439,002 BTC, valued at $46.9 billion at the current market price. This makes Microstrategy the largest corporate HODler of BTC. On the derivatives front, the Deribit options exchange is seeing a concentration of bullish bets at the $120,000 strike price. This reflects traders’ belief in Bitcoin’s ability to extend its gains, particularly as macroeconomic conditions evolve. Analysts at K33 Research note that Bitcoin’s momentum could strengthen during the quiet weeks following the Federal Reserve’s final meeting of 2024. Economic and Political Drivers The Federal Reserve is widely expected to announce a quarter-point rate cut this week, which could bolster Bitcoin’s appeal as a hedge against traditional financial risks. However, market uncertainty remains, given the robust US economic growth and inflation concerns tied to Trump’s broader policy agenda. Bitcoin has also benefited from renewed retail interest. Its price has risen over 55% since Trump’s election victory on November 5, with US-based exchange-traded funds seeing significant inflows. This starkly contrasts Bitcoin’s skepticism a year ago when it traded at $41,000. Bulls, Bears, and the Road Ahead Despite its recent highs, Bitcoin remains a polarizing asset. Axel Adler Jr. highlighted that the market is perpetually divided between doubters and believers. Bitcoin’s cycles of extreme optimism and caution are unlikely to change, even as it pushes toward new records. As Bitcoin consolidates below $100k, the question remains: Is this the calm before another explosive move? With record demand, institutional backing, and favorable macro conditions, Bitcoin appears poised for a decisive end to the year. Whether it can sustain this momentum will depend on a delicate interplay of market forces and policy decisions.
