Bitcoin's remarkable price surge in 2024 showed signs of cooling during the final trading week of the year. As markets prepare for year-end closures, investors are reassessing the potential impact of U.S. President-elect Trump's supportive stance on Bitcoin's future momentum.
Current Bitcoin Price Fluctuations
According to Bloomberg data, Bitcoin traded at $95,600 (approximately S$130,000) as of 8:45 AM on Friday, December 27, marking a nearly 3% decline from the previous day. The cryptocurrency briefly dipped to $94,776 before recovering to $97,000 by 6:00 PM Friday—still significantly below its all-time high of $106,533 recorded the previous week.
Key Market Observations:
- Bitcoin may record its first monthly decline in four months during December 2024
- Approximately $9.5 billion in Bitcoin and Ethereum options contracts expired on Friday
- Analysts warn of potential volatility during major derivatives expirations
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Political Influences on Cryptocurrency Markets
President-elect Trump's cryptocurrency-friendly policies contributed significantly to Bitcoin's 2024 rally, including his controversial proposal to establish a national Bitcoin reserve. However, Federal Reserve Chair Powell later clarified that the central bank:
- Has no plans to participate in government Bitcoin accumulation
- Won't seek legal changes to facilitate such reserves
- Maintains its traditional monetary policy approach
This policy divergence has left traders questioning the feasibility of Trump's reserve proposal while monitoring its potential market impact.
Derivatives Market Impact
FalconX, a major crypto prime broker, highlighted Friday's unprecedented options expiration event. Arbelos Markets' trading head Sean McNulty cautioned about increased volatility risks during such large-scale derivatives settlements.
FAQ Section
Q: Why did Bitcoin's price drop below $95,000?
A: The decline reflects year-end profit-taking, derivatives expirations, and uncertainty about political support for cryptocurrencies.
Q: What was Bitcoin's highest price in 2024?
A: Bitcoin reached its all-time high of $106,533 in mid-December before the current correction.
Q: How significant are Friday's options expirations?
A: With $9.5 billion in contracts expiring, this represents one of the largest single-day derivatives events in crypto history.
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Q: Could Bitcoin recover its recent losses?
A: Market analysts suggest the current pullback may be temporary, but caution that January typically sees lower trading volumes.
Q: How does Fed policy affect Bitcoin?
A: While the Fed doesn't directly regulate crypto, its monetary decisions influence investor risk appetite across all assets.
Market Outlook
While short-term volatility persists, Bitcoin maintains strong fundamentals with:
- Institutional adoption continuing to grow
- Technological improvements enhancing scalability
- Global macroeconomic conditions favoring alternative assets
The cryptocurrency market enters 2025 with cautious optimism as traders balance political uncertainties against Bitcoin's long-term value proposition.