Crypto Weekly Digest | "Trump 2.0" Officially Launches! Bitcoin Soars "to the Moon", What Other Key Events Should We Watch After the Election?

Trump's victory has sparked a surge in crypto assets. BTC reached a new all-time high on the evening of November 5th (US time), consecutively breaking through the $74,000, $75,000, and $76,000 marks. It is currently fluctuating around the high of $76,000. Ethereum has also continued its upward trend, breaking $2,900 on the evening of November 7th (US time), and reaching its highest point in three months.

The most significant event of last week was undoubtedly Trump's victory in the election once again, becoming the 47th President of the United States and also the second president to serve non-consecutive terms. During his campaign, Trump frequently engaged with the crypto community. He promised to make the United States the first country to designate Bitcoin as a strategic reserve asset and to establish the nation as the "global capital of cryptocurrencies." Additionally, he pledged to dismiss the SEC chairman, who is perceived as hostile to the cryptocurrency industry, and encouraged power plants to enhance their electricity supplies for Bitcoin mining.

On November 7th (US time), according to the Federal Open Market Committee meeting, the Federal Reserve lowered the benchmark interest rate by 25 basis points to 4.50%-4.75%, marking the second consecutive rate cut, in line with market expectations. The Fed also announced that it would maintain the current scale of balance sheet reduction. (Monthly reduction of $25 billion in US Treasuries and $35 billion in MBS)

The total open interest in Bitcoin contracts across all networks has surpassed $46 billion, continuing to set new historical highs.

Last Thursday, the U.S. Bitcoin spot ETFs saw a net inflow of $1.374 billion, setting a new historical record for single-day inflows. IBIT alone accounted for over $1.1 billion in net inflows yesterday.

On November 8th, the Ethereum Foundation released its 2024 report: As of October 31, 2024, the EF (Ethereum Foundation) had asset reserves of approximately $970.2 million, of which $788.7 million were in crypto assets.

99.45% of crypto holdings were in the form of ETH. These ETH holdings represented 0.26% of the total ETH supply as of October 31, 2024.

The Foundation follows a conservative fiscal management policy to ensure sufficient resources even in market downturns. This requires regular sales of ETH to ensure adequate reserves for the coming years, and to increase our fiat reserves as planned during bull markets to fund expenditures during bear markets.

On November 8th, according to Reuters, citing multiple informed sources, officials from Trump's transition team are considering hiring Robinhood's relevant team and compiling a list of financial institution leaders to be submitted to the next president.

Among the candidates being considered for SEC Chair is Dan Gallagher, who served as a Republican SEC Commissioner from 2011 to 2015 and is currently the Chief Legal and Compliance Officer at Robinhood. Additionally, current Republican Commissioner Mark Uyeda is also one of the top contenders.

QCP Capital: Since the inception of Bitcoin, prior to this election, BTC has experienced three major elections (2012, 2016, and 2020). After each election, Bitcoin's price has reached new highs, never falling back to pre-election levels. BTC has never retreated to pre-election levels following past elections, and this upward trend is expected to continue into 2025.

In a report released last Thursday, JPMorgan stated that although the short-term stimulus brought by the election has ended, Bitcoin will continue to benefit.

The report suggests that Trump's victory will have similar repercussions to 2016 over the next eight weeks or so. Although Bitcoin and gold prices moved in opposite directions after Trump's victory, Trump may provide support for both assets in 2025. Facing currency devaluation and geopolitical pressures, both gold and Bitcoin could benefit from "devaluation trades."

JPMorgan believes that Trump's support for the digital asset industry and his desire to increase tariffs are two policies that could ultimately have a positive effect on Bitcoin.

Alex Thorn, Head of Research at Galaxy, stated: "From a fundamental perspective, the market doesn't appear to be overheating. Open interest has pushed slightly higher to yearly highs, but funding rates have remained largely unchanged."

Around the time of the election, American investors' demand for Bitcoin has been steadily rising, with the Coinbase Bitcoin premium index turning positive. Trump's political platform also mentions "keeping the crypto industry and Bitcoin in the United States."

Note: The Coinbase Bitcoin Premium Index is an indicator that measures the percentage difference between the Bitcoin price (USD pair) on Coinbase Pro and the price (USDT trading pair) on Binance. It can be used to gauge the buying pressure of U.S. investors relative to global investors.

Some views suggest that the election-driven rise in Bitcoin is a temporary phenomenon that is difficult to sustain:

The driving force behind this rise comes from event-driven 'non-sticky' purchases, made by short-term speculators seeking to hedge election risks. These buyers pose a risk of withdrawal, and we need to be vigilant about selling pressure. Although the number of short-term Bitcoin investors has rapidly increased, this is viewed as one of the bullish signals."

The contract positions for Bitcoin will continue to be crowded, which will lead to short-term spikes in Bitcoin prices. However, this price surge is limited to the finite market capacity in Q4 2024 and won't persist into next year or beyond. The speculative liquidity behind this situation is unlikely to support a long-term uptrend.

Adam (X: @BTC__options), a macro researcher at Greeks.live, also stated on X:

Despite significant optimism, profit-taking is becoming prominent, and the election speculation has come to an end.

Quoted from Uncle Zuo, Zuo's Crooked Neck Mountain "Bitcoin's Fort Knox Moment"

In Trump's view, the dollar might need a new anchor, and Bitcoin could play this "role" better than U.S. Treasury bonds, at least on par with gold as one of the anchors. The current issue is that Bitcoin cannot accommodate tens of trillions in liquidity. If each Bitcoin were worth a million dollars, it's more likely that the dollar has depreciated. The current U.S. debt is $35 trillion, while Bitcoin's current circulation is around 19.1 million coins. To solve the U.S. debt dilemma, the price of a single Bitcoin would need to reach $1,832,460. The current $75,000 is just the beginning, with a 24-fold increase still to go.

Perhaps a more realistic scenario is that Bitcoin only needs to solve the interest on U.S. debt. The current annual interest on U.S. debt is around $1 trillion, approximately equal to Bitcoin's market cap. However, this would require the U.S. government to control all or most of the Bitcoin. Even if we don't consider whether the U.S. government can achieve this, taking a huge step back, an asset without liquidity has no value.

Image Source: River Capital

Currently, the U.S. government's Bitcoin holdings are around 1%. If we include the 5.2% share of U.S. institutions (ETF issuers) and the 4.6% locked by Satoshi Nakamoto, theoretically, the U.S. government has the ability to control or influence about 10% of Bitcoin's price, qualifying as a "super whale."

Before 2034, there will be approximately $10 trillion in U.S. debt interest. Considering Trump's term is only 4 years, if Bitcoin can truly serve as a dollar reserve, it would only need to solve about half (5 trillion) of the interest problem. In this case, the price of a single Bitcoin would only need to reach $261,780, about 3 times the current price. This might be possible, as long as Trump is willing to act with a "regardless of legacy" resolve.

The entire Web3 would then enter the American era. The last internet boom yielded Silicon Valley fruits; it's unknown how this one will play out...

KOL Murad (X: @MustStopMurad) Meme Coin will initiate a super cycle.

Despite the recent rise in BTC price, BTC's market cap dominance has decreased rather than increased, which indirectly reflects that the momentum of meme coins might even surpass that of BTC.

After the general election, there are still a series of event-driven opportunities worth paying attention to:

– The next FOMC meeting is on December 17-18Currently, the market predicts that the third rate cut will be implemented in December, with about a 75% probability that the benchmark interest rate will be lowered to 4.25%-4.5%.

– Trump may appoint a new SEC chairmanMatrixport Research: A new SEC chairman and the U.S. strategic reserve could drive BTC to break $100,000 (The SEC chairman is nominated by the president and confirmed by the Senate. Currently, the Republican Party has taken control of the Senate)

– Bitcoin spot ETF optionsKbit CEO Ed Tolson believes that Bitcoin ETF options could become a liquidity and volatility amplifier for BTC.

– Official inauguration on January 20 next yearCopper.co's Head of Research Fadi Aboualfa states that by January 20, 2025, when Trump takes office as president, Bitcoin's price is likely to reach $100,000.

– Proposal of Staked Ethereum ETFNansen analyst Edward Wilson says Trump will embrace cryptocurrency financial derivative innovations, including the launch of the first staked Ethereum ETF.

– Implementation of MicroStrategy's financing and Bitcoin acquisition planJPMorgan analysts believe that MicroStrategy's aggressive financing and acquisition plan will continue to drive Bitcoin prices upward.

– "Bitcoin Bill"CoinShares Head of Research James Butterfill writes: "The relevant proposal will establish Bitcoin as a strategic reserve asset for the United States, giving Bitcoin a status similar to gold".

Cryptocurrency concept stocks generally rose last week, with some individual stocks performing particularly well.

On November 7, mining company Hut 8 predicted that after agreeing to purchase 31,145 Bitmain Antminer S21+ mining machines, the company's self-mining computing power would increase by 66% (from 5.6 EH/s to 9.3 EH/s) around the first quarter of 2025. (These purchased mining machines are planned to be delivered at the beginning of the first quarter of 2025)

Hut 8 announced a purchase option with Bitmain in September, which, if activated, would increase the company's computing power by about 15 EH/s, thereby advancing the company to reach 24 EH/s computing power in Q2 2025.

Last week, Hut 8 rose over 18%, and has increased by more than 40% year-to-date (from January 1, 2024 to November 7, 2024).

As Bitcoin's price breaks through the $76,000 mark, MicroStrategy's unrealized profit on its Bitcoin holdings has exceeded $9.2 billion.

According to the September 2024 report data, MicroStrategy holds a total of 252,220 bitcoins, with a total purchase cost of approximately $9.9 billion, averaging about $39,266 per coin.

Last week, MicroStrategy rose by approximately 18%. Year-to-date, it has already increased by over 48%.

According to data from Farside Investors as of November 8,

The total net inflow for U.S. Bitcoin spot ETFs is $1.6312 billion, including:

IBIT saw a net inflow of $1.2511 billion this week;

FBTC saw a net inflow of $295.4 million this week;

GBTC saw a net outflow of $25.5 million this week;

BITB saw a net inflow of $76.8 million this week;

ARKB saw a net outflow of $6.2 million this week.

Image Source: Farside Investors

The total net inflow for U.S. Ethereum spot ETFs is $154.7 million, including:

ETHA saw a net inflow of $94.5 million this week;

ETHE saw a net outflow of $10.8 million this week.

Image Source: Farside Investors

As ETH prices surge, an address that hoarded 11,004.9 ETH at a price of $3.45 over 8 years ago has awakened and begun selling these ETH on-chain. The profits exceed $30 million, with a return rate of over 800 times.

On November 6th, according to Onchain Lens monitoring, a certain "diamond hands" whale began accumulating BTC 7 years ago. This whale purchased BTC before 2017, with an average cost of $8,777. During the 2021 bull market, the whale sold 160 BTC, and has recently started depositing BTC again. The whale still holds 429 BTC, worth $31.75 million, with profits of approximately $43.4 million. Having weathered two cycles of bull and bear markets, they remain "steadfast".

When Bitcoin's alarm bells ring, it would be wise for investors to listen, manage risks, and devise strategies to capitalize on future market opportunities.

Bitcoin is highly correlated with global liquidity, undoubtedly marking a significant trend. With zero-commission trading available, why not give it a try?