November was an eventful month for crypto, as you know — jumpstarted by Donald Trump’s election win.
Bitcoin rose 37.3% last month, CoinGlass data shows. This was bitcoin’s highest performance since November 2020 (when it gained 43% in the month that saw the highest BTC average returns).
In the future, December has historically not been as profitable for BTC (average returns of 4.9%). Bitcoin’s price rose by 47% after the presidential election in December 2020. But from 2021-2023, returns on this asset were: -18.9%; -3.6%; and +12.2%.
Bitcoin has been unable to breach the $100,000 level — with some analysts attributing that to investor profit-taking, as well as put option-fueled resistance as traders hedge against possible dips.
BTC was trading around $95,650 at 2 pm ET — down 1.6% from 24 hours prior.
Jeff Embry is the managing director at crypto hedge fund Globe 3 Capital. He told me that he doesn’t necessarily anticipate specific events this month impacting crypto markets. He predicts rather than “an across-the-board continuation” From November, there was a surge in demand for cryptocurrency fueled by US “taking its boot off the throats of the innovators, risk takers and investors and telling them ‘we support you now.'”
“Before November, the most recent peaks for BTC and ETH were in mid-March,” He clarified. “That is an eight-month consolidation period in a bull market, so that market was ready for a catalyst to push to new highs, and the November election provided that catalyst in a gigantic way.”
Globe 3 Capital’s end-of-year BTC price prediction (proclaimed at the start of 2024) was $124,000 — a number Embry said the firm is sticking to. Other people have suggested that $80,000 is the support level for a possible drawdown.
“Of course, higher prices depend on higher demand and we are seeing demand across the board from retail, [high-net-worth individuals], institutions, sovereign wealth funds and governments themselves,” Embry has been added.
There were many instances in November where companies bought BTC as part of their corporate treasuries. It appears that this trend will continue.
MicroStrategy, a bitcoin miner revealed (also today) that it intends to offer $700 million of convertible senior notes — the proceeds from which will be used to buy more BTC. Bitcoin miner Marathon Digital revealed (also today) it intends to offer $700 million of convertible senior notes — the proceeds of which will primarily go toward buying more BTC.
MicroStrategy’s founder Michael Saylor posted a video explaining the reasons why Microsoft should keep BTC in its balance sheet. This proposal will be on Microsoft’s agenda at its shareholder meeting on Dec. 10. The board has recommended a no vote, but it is something worth watching.
There’s also the Federal Reserve rate announcement for Dec. 18th. Polymarket odds indicate that the market is expecting a decrease of 25 basis points (67% probability). History has shown that rate reductions have been beneficial for risky assets, such as Bitcoin.
The industry is still waiting for clarity on a potential US strategic Bitcoin reserve. In response to Embry’s comment about the governments that have shown interest in bitcoin, US support would probably lead more countries to do so.
But analysts at Compass Point Research & Trading believe the BITCOIN Act (floated by Sen. Cynthia Lummis) has a less than 10% chance of becoming law.
“We do not expect the Republican-controlled Congress, which will be focused on expiring tax provisions and the federal budget, to allocate funds for this purpose,” Joe Flynn & Ed Groshans both wrote. “The primary challenge this action would encounter is the deficit financing of BTC purchases.”
They said that while Trump may issue an executive action (perhaps to create a sub-account in the Treasury general fund), a subsequent administration could reverse the decision.
Bottom line: Crypto narratives will continue to heat up as the temperatures drop for most of us.
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