The latest U.S. inflation data aligned with market forecasts, strengthening expectations for continued Federal Reserve rate cuts. This triggered a surge in cryptocurrency markets, with Bitcoin reclaiming the $100,000 threshold (approximately S$130,000).
Bitcoin’s Volatile Rally
- Price Action:
- Spike: +5% on Wednesday (Dec 11) — largest two-week gain
- Peak: $100,665 at 8:52 AM SGT Thursday (Dec 12)
- Current: Slightly retreated to ~$100,630
- Market Context: Smaller altcoins showed relative stability compared to Bitcoin’s volatility.
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Political Influence on Crypto Markets
President-elect Trump’s regulatory shift contrasts sharply with incumbent Biden’s restrictive stance. Key developments:
1. Policy Reversal: Trump’s pro-crypto stance contributed to Bitcoin’s all-time high of $103,800 on December 5.
2. Profit-Taking: Subsequent sell-offs briefly pushed prices below $100K.
Macroeconomic Drivers
November’s CPI data reinforced expectations of:
– 25-basis-point Fed rate cut next week
– Continued宽松 monetary policy
This optimism buoyed risk assets:
– Nasdaq Composite: +1.77% (first close above 20,000)
– Crypto Inflows:
| Asset | ETF Inflows Since Nov 5 | Price Increase |
|————-|————————-|—————-|
| Bitcoin | $11B | ~50% |
| Ethereum | $2.4B | – |
Industry Reactions
Henry Elder of UTXO Management noted:
“The market sees CPI as a green light. Traders are now debating whether $100K is a ceiling or a floor.”
Trump’s controversial proposals added fuel:
– National Bitcoin reserve concept
– Personal crypto project involvement
– Reversed skepticism after industry lobbying
👉 Explore crypto investment strategies in evolving markets
FAQs
Q: Why does Fed policy affect Bitcoin?
A: Lower interest rates typically weaken the dollar, making scarce assets like Bitcoin more attractive as inflation hedges.
Q: How significant are Trump’s crypto policies?
A: His regulatory relaxation and pro-industry stance mark a dramatic shift from current administration, creating market optimism.
Q: What risks remain for Bitcoin investors?
A: Volatility, potential over-regulation in other jurisdictions, and technological risks inherent in blockchain systems.
Q: Are institutional investors driving this rally?
A: Yes—the $11B Bitcoin ETF inflows indicate strong institutional participation alongside retail traders.
Q: How does Ethereum compare in this market cycle?
A: While trailing Bitcoin’s gains, Ethereum’s $2.4B ETF inflows show growing institutional interest in smart contract platforms.
Market Outlook
Analysts watch these key factors:
1. Fed’s 2025 rate path
2. Geopolitical stability
3. Regulatory clarity post-election
4. Technological advancements in layer-2 solutions
The $100K level now serves as a psychological benchmark, with trading volumes suggesting sustained institutional interest despite short-term profit-taking.