Bitcoin Drops 3.2% in December After Historic 2024 Rally
Bitcoin fell 3.2% in December as investors took profits after its record-breaking $108,315 high.
After a record-breaking run for most of 2024, Bitcoin faced its first major setback in months, slipping 3.2% in December. The decline came as U.S. investors decided to cash in on gains following a rally driven by President-elect Donald Trump’s victory, which had propelled Bitcoin to a historic peak of $108,315 in mid-December.
The crypto market’s energy started to fade as hopes for aggressive interest-rate cuts by the Federal Reserve cooled off, making riskier assets like cryptocurrencies less appealing. Data showed that Bitcoin exchange-traded funds (ETFs) in the U.S. experienced a net outflow of $1.8 billion since December 19. At the same time, open interest in Bitcoin futures—a popular measure of institutional interest—fell by nearly 20% from its high point earlier in the month, according to the Chicago-based CME Group.
Still, 2024 was a banner year for Bitcoin, which surged by 120% and outpaced traditional investment options like gold and global stock markets. Its stellar performance highlighted the growing acceptance of cryptocurrencies among institutional investors, including university endowment funds, which began adding Bitcoin to their portfolios this year.
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Many market watchers believe the new year could bring fresh opportunities for Bitcoin. January is expected to be pivotal as institutions reconsider their investment strategies. "Crypto-friendly regulations anticipated under the incoming Trump administration have sparked optimism," said QCP Capital in a client update. "With Bitcoin now widely recognized across a variety of institutional portfolios, we foresee an increase in allocations. This could solidify Bitcoin’s market dominance, smooth out price swings, and bring its behavior closer to that of traditional equities."
By midweek, Bitcoin was trading at $93,518 as of 2:55 p.m. in Singapore, down slightly by 0.20%. Other cryptocurrencies, including Ether and Dogecoin, also struggled to make headway, reflecting a broader market slowdown.
Despite December’s pullback, experts remain optimistic about Bitcoin’s long-term prospects. They point to its resilience and widening adoption as proof of its staying power but caution that macroeconomic shifts—such as Federal Reserve policies and global economic trends—could still shape the market’s direction in the months to come.
Also Read: Stablecoin Market Surpasses $205 Billion and Gears Up for Mainstream Adoption
