Bitcoin rally fizzles as crypto token’s record-breaking year winds down
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A Bitcoin rally is fizzling in the final days of a record-breaking year for the digital asset.
PHOTO: REUTERS
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SINGAPORE – A Bitcoin rally is fizzling in the final days of a record-breaking year for the digital asset, as investors assess the remaining impetus from US President-elect Donald Trump’s embrace of the cryptocurrency sector.
The largest token changed hands at US$96,200 as at 6am on Dec 26 in London, partly paring a retreat of almost 3 per cent from a day earlier. Smaller rivals, including Ether and Dogecoin, a favourite of the meme crowd, oscillated in tight ranges.
Trump is pushing ahead with a promise to create a crypto-friendly environment in the US and has backed the idea of establishing a national Bitcoin reserve. Traders are waiting to see if such a stockpile is feasible.
The crypto market is also braced for the expiry of a substantial quantity of Bitcoin and Ether options contracts on Dec 27 – one of the biggest such events in the history of digital assets, according to prime broker FalconX.
The notional value of the Bitcoin contracts on the Deribit exchange – one of the largest for digital-asset derivatives – exceeds US$14 billion (S$19 billion), while the equivalent figure for Ether is about US$3.8 billion.
Mr Sean McNulty, director of trading at liquidity provider Arbelos Markets, flagged the risk of a “choppy market” amid the expiry of the derivatives positions.
Bitcoin is wavering even after MicroStrategy this week signalled the possibility of expanding its programme of purchases of the token. The company has transformed itself from a software maker into a Bitcoin accumulator and now owns more than US$40 billion of the digital asset.
The original cryptocurrency is headed towards a drop for December, which would be its first monthly decline in four months, according to data compiled by Bloomberg. Bitcoin reached a record high of US$108,316 on Dec 17 before pulling back.
Investors withdrew a net US$1.5 billion from a group of one dozen US spot Bitcoin exchange-traded funds in the four trading days up to and including Dec 24, the heaviest such outflow since Trump’s victory in the US election on Nov 5.
BLOOMBERG
