Fed’s 25-Year Expectation of Fewer Rate Cuts Brings Down the Market｜Hotcoin Research Market Insight: December 16–20, 2024

Cryptocurrency Market Performance

Currently, the total market capitalization of cryptocurrencies is $3.35 trillion, with BTC accounting for 57.626% at $1.93 trillion. The market capitalization of stablecoins is $204.2 billion with a 7-day increment of 1.05%, of which USDT accounts for 68.87%.

The price of both BTC and ETH has shown range fluctuations this week, with BTC now at $97,738; ETH at $3,385.

Most of CoinMarketCap’s top 200 assets decreased while some increased (within a 7 day range), including HYPE (increased 42.74%), USUAL (increased 113.43%), and BGB (increased 32.04%).

For the week, U.S. Bitcoin Spot ETF net inflow: $586 million; U.S. Ether Spot ETF net inflow: $153.7 million.

The ‘Fear & Greed Index’ on December 20th was 74 lower than last week), and this week’s sentiments: 3 days of greed, 4 days of extreme greed.

Market Forecast: More issuance of stablecoins, ETFs are all net inflows, positive market sentiment has declined due to fewer expected Fed rate cuts in 2025. However, the bull market is ongoing, so you can buy on the low side, and focus on the RWA track.

Understanding Now

A look back at the week’s big events

1. On December 16, Bitcoin rose above $105,000 at dawn. However, according to Coinglass, current mainstream CEX and DEX funding rates are below 0.01%, suggesting that the market is not significantly bullish or FOMO;

2. According to Fortune on December 17, the U.S. Securities and Exchange Commission (SEC) issued a Wells Notice to crypto-investment company Unicoin, charging it with fraud, misconduct and unregistered securities offerings. Unicoin CEO Alex Konanykhin revealed that the company sold about $3.5 billion in tokens and has about 70,000 investors, with its tokens backed by physical assets such as 8,000 acres of land in the Bahamas. SEC Chairman Gensler is set to step down in January 2025, in what is seen as the last wave of regulatory action against the crypto industry during his tenure. Unicoin has until December 24 to respond, and had mentioned that it will opt for a legal confrontation rather than a settlement;

3. On December 17, 21Shares’ XRP Trust was registered in the US state of Delaware under the name “21Shares XRP Trust”. The entity was formed on June 3, 2024, as a statutory trust, and the registered agent is CSC Delaware Trust Company, located in Wilmington, Delaware; BlockBeats reported that 21Shares had filed with the U.S. Securities and Exchange Commission (SEC) for the 21Shares Core XRP Trust, with plans to launch a spot XRP ETF, designed to track the price of XRP and is scheduled to be listed on the Cboe BZX exchange. The registration of the trust may pave the way for the launch of this ETF;

4. On December 18, according to Cointelegraph, Ripple’s stablecoin RLUSD is now officially live.

5. On December 18, Hyperliquid’s open interest on December 16 reached $4.28 billion, setting a new record.

6. On December 19, on-chain data indicates that Trump’s crypto project, World Liberty, increased its holdings by over 230,000 ENA tokens.

7. On December 19, according to Bloomberg, MicroStrategy co-founder and executive chairman Michael Saylor stated that once the company’s current fundraising efforts are exhausted, it plans to shift from a leveraged Bitcoin strategy to focusing more on fixed-income securities to raise funds for cryptocurrency purchases.

8. On December 18, Usual partnered with Ethena Labs and BlackRock’s tokenization platform, Securitize. The stablecoin USDtb, soon to be launched by Ethena Labs and Securitize, will become the primary collateral asset for Usual’s stablecoin USD0. Usual will also launch the sUSDe Vault for USD0++ holders, allowing Usual users to earn sUSDe APY, Ethena rewards, and additional USUAL rewards.

9. On December 19, Data disclosed by IntoTheBlock reveals that a significant demand zone worth approximately $100,000 has formed. Over 1.45 million BTC have accumulated around the average price of $97,500, making it a critical potential support area.

10. On December 19, publicly traded company reAlpha Tech Corp (AIRE)’s board of directors approved a new investment policy designating Bitcoin, Ethereum, and Solana as the company’s primary reserve assets. The company plans to allocate up to 25% of its excess cash to cryptocurrency purchases after ensuring six months of operating expenses, with specific allocations determined by market conditions and operational needs.

11. On December 19, The Federal Reserve concluded its 2024 annual interest rate decision by lowering the benchmark rate by 25 basis points to a range of 4.25%-4.50%, marking the third consecutive rate cut, in line with expectations. Across eight decisions this year, the Fed cumulatively cut rates by 100 basis points, including one 50-basis-point cut, two 25-basis-point cuts, and five instances where rates were left unchanged.

12. On December 20, Coinbase announced the suspension of wBTC trading. Trading of wBTC on Coinbase Exchange and Coinbase Prime is suspended, but users can still withdraw funds at any time.

Macroeconomics

1. On December 18, Cryptocurrency asset management company Bitwise launched a Solana Staking ETP in Europe under the ticker symbol BSOL, with Solana staking provider Marinade serving as Bitwise’s staking provider.

2. On December 19, The Bank of Japan maintained its policy rate at 0.25%, marking the third consecutive decision to pause rate hikes.

3. On December 20, The U.S. Securities and Exchange Commission (SEC) approved the listing and trading of shares of the Hashdex Nasdaq Crypto Index US ETF and Franklin Crypto Index ETF on the Nasdaq and Cboe BZX exchanges, respectively.

4. On December 20, Japanese publicly traded company Metaplanet announced the issuance of its fifth series of zero-interest ordinary bonds, totaling 5 billion Yen. The funds raised will be used to accelerate Bitcoin purchases, with the bonds maturing on June 16, 2025. The company plans to secure bond repayment funds through the exercise proceeds of its 12th series of warrants.

ETFs

According to statistics during the period of Dec 16 — Dec 20, the U.S. Bitcoin Spot ETF net inflow: $586 million; GBTC (Grayscale) total outflow: $21.247 billion (as of Dec 20), currently holds $20.057 billion; IBIT (BlackRock) currently holds $53.339 billion. The total market capitalization of the U.S. Bitcoin Spot ETF: $112.922 billion.

U.S. Ether Spot ETF net inflow: $153.7 million.

Foreseeing the Future

Upcoming Events

1. CoinDesk will host Consensus Hong Kong on February 18–20, 2025, in Hong Kong.

Project Progress

1. Sui lending protocol Scallop launched a Christmas airdrop campaign, from December 14 to 26, users who meet the borrowing value of more than 1,000 U.S. dollars or hold more than 1,000 veSCA can participate in the sharing of 1 million SCA tokens.

2. Pump Science released a roadmap update on December 24 to announce new partners, protocol development, and preparing for mouse experiments.

Important Events

1. The European Banking Authority’s (EBA) new guidance on ‘travel rules’ for crypto assets will come into force on December 30, 2024;

2. The EU’s Markets in Crypto Assets Act MiCA guidance for cryptocurrency exchanges and other companies operating in the EU zone will come into force from December 31.

Token Unlocking

1. Altlayer (ALT) will unlock 195 million tokens valued at approximately $23.1 million, or 1.95% of the outstanding volume, on December 25;

2. Immutable (IMX) will unlock 24.52 million tokens on December 27, valued at about $33.04 million, or 1.23 percent of the outstanding volume;

3. Axelar (AXL) will unlock 13.51 million tokens on December 27, valued at approximately $9.48 million, or 1.14% of the outstanding volume;

4. Open Campus (EDU) will unlock 19.07 million tokens on December 28, valued at approximately $9.34 million, or 1.91% of the outstanding volume.

About Us

Hotcoin Research, as the core investment research department of Hotcoin, is dedicated to providing comprehensive and professional analysis of the crypto market. Our goal is to offer clear market insights and practical operational guidance for investors at all levels. Our professional content includes “Play to Earn Web3” tutorial series, in-depth analysis of crypto market trends, detailed analysis of potential projects, and real-time market observations. Whether you are a newcomer exploring the crypto world or a seasoned investor seeking deep insights, Hotcoin is your reliable partner for understanding and seizing market opportunities.

Risk Disclaimer

The crypto market is highly volatile, and investment involves risks. We strongly advise investors to fully understand these risks and operate within a strict risk management framework to ensure the safety of their funds.

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