Crypto Market Cools After Record Highs, Prepares for New Year Momentum

Bitcoin hits $108,250 before a market dip; ETFs and state funds boost optimism. Fed's rate cut and policy outlook add caution to the crypto rally.

By Tylt Editorial Team

Dec 22, 2024

Dec 22, 2024

Crypto Market Cools After Record Highs, Prepares for New Year Momentum
Crypto Market Cools After Record Highs, Prepares for New Year Momentum
Crypto Market Cools After Record Highs, Prepares for New Year Momentum

Bitcoin reached $108,250 before a market dip pulled the crypto cap to $3.2 trillion.

U.S.-listed Bitcoin ETFs surpassed Gold ETFs in assets under management (AUM).

Ohio established a state Bitcoin fund, adding to bullish momentum.

The past week saw a mix of highs and dips in the crypto market, keeping traders and enthusiasts on edge. Bitcoin achieved a historic milestone by touching an all-time high of $108,250, while other leading cryptocurrencies like Ethereum, XRP, and BNB hovered close to their peaks. However, the market soon cooled, with the overall crypto market cap dipping to $3.2 trillion. This retreat came as market dynamics shifted, driven by key developments and external economic factors.

A standout success of the year has been the launch of Bitcoin exchange-traded funds (ETFs), which have surpassed Gold ETFs in assets under management (AUM). A report by K33 Research revealed that U.S.-listed Bitcoin ETFs, including leveraged products, have accumulated $129.25 billion in AUM. This marks a significant edge over Gold ETFs, which have amassed $128.88 billion over two decades. The surge in Bitcoin ETF adoption demonstrates investor confidence in crypto assets, despite volatility.

On the legislative front, Ohio made headlines by passing the “Ohio Bitcoin Reserve Act,” making it the third U.S. state to establish a Bitcoin fund within its treasury. Spearheaded by Republican leader Derek Merrin, this initiative underscores a broader commitment to incorporating Bitcoin into state and national financial strategies. Moreover, speculation about Trump signing an executive order to establish a national Strategic Bitcoin Reserve added to the market’s optimism.

Federal Reserve developments further influenced market movements. The Fed implemented a 25-basis-point rate cut as anticipated but revised its 2025 rate cut outlook from three to two. These adjustments, coupled with broader economic commentary, introduced a cautious tone among investors. While the week began with bullish momentum fueled by Bitcoin’s record highs and ETF successes, the Fed’s actions and comments added a layer of uncertainty.

The crypto market’s fluctuating performance reflects a delicate balance of optimism and caution, setting the stage for what many anticipate to be a strong start to the new year.

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