The post-election Bitcoin surge, fueled by US President-elect Donald Trump’s crypto-friendly policies, has started to lose steam as the year concludes. As of Tuesday afternoon in New York, Bitcoin hovered around $94,000, a significant drop from its mid-December peak of $108,000. Other cryptocurrencies, including Ethereum and Dogecoin, also faced challenges in sustaining upward momentum.
Trump’s support for cryptocurrency adoption and the concept of a national Bitcoin reserve initially propelled digital assets. However, tempered expectations for Federal Reserve interest-rate cuts have curbed speculative enthusiasm in the market.
The outlook for the US crypto regulatory landscape is expected to become clearer after Trump takes office on January 20. His stance marks a departure from President Joe Biden’s administration, which heavily scrutinized the volatile crypto sector.
Chris Weston, research head at Pepperstone Group, noted that Bitcoin’s rally has lost its post-election momentum, partly due to a $1.8 billion net outflow from US-based Bitcoin exchange-traded funds (ETFs) since December 19, according to Bloomberg data.
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Despite this slowdown, MicroStrategy Inc., a major corporate Bitcoin holder, has continued to bolster its holdings in recent weeks. The software company now owns over $40 billion worth of Bitcoin and has a history of making significant purchase announcements on Mondays, keeping traders on edge for further updates.
Bitcoin remains a standout performer this year, gaining approximately 120% and outperforming traditional investments like global equities and gold. This marks the second consecutive year of recovery for the cryptocurrency, which also more than doubled in 2023 after emerging from a prolonged bear market.
