Bitcoin slips in December as investors cash in on record rally
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Bitcoin racked up a 120 per cent gain in 2024, outperforming gold and global equities.
PHOTO: REUTERS
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Bitcoin’s record-breaking run faltered toward the end of 2024, leading to its first monthly drop since August.
The digital asset fell 3.2 per cent in December as US investors cashed profits after a rally triggered by US President-elect Donald Trump’s victory pushed Bitcoin to an all-time high of US$108,315 in mid-December.
Feverish speculation in the crypto market has cooled as expectations for interest rate cuts from the US Federal Reserve waned, eroding appetite for riskier assets.
The group of a dozen Bitcoin exchange-traded funds in the US saw a net outflow of about US$1.8 billion (S$2.58 billion) since Dec 19, according to data compiled by Bloomberg.
Open interest – or outstanding contracts – for Bitcoin futures hosted by Chicago-based CME Group, seen as a measure for US institutional interest, also fell nearly 20 per cent from its December peak.
Even so, Bitcoin racked up a 120 per cent gain in 2024, outperforming gold and global equities.
“While optimism surrounds crypto-friendly regulations post-Trump inauguration, we think the key catalyst may come in January as institutions readjust asset allocations,” QCP Capital said in a note to clients.
“With Bitcoin now broadly adopted by a broad spectrum of institutions – adding university endowment funds to the list this year – allocations are likely to increase, strengthening Bitcoin dominance, stabilising spot movements, and shifting volatility dynamics closer to equities.”
Bitcoin slipped 0.2 per cent, trading at US$93,518 as at 2.55 pm on Jan 1 in Singapore. Smaller coins like Ether and Dogecoin also struggled to gain ground. BLOOMBERG
