(Bloomberg) — The Bitcoin rally sparked by US President-elect Donald Trump’s election victory in early November is stalling as 2024 draws to a close.
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The digital asset wavered at $93,670 as of 6:34 a.m. on Monday in New York, about $15,000 below the record high set in mid-December. Smaller tokens like Ether and meme-crowd favorite Dogecoin also struggled for traction.
Trump’s preference for crypto friendly regulations and support for the idea of a national Bitcoin reserve lifted digital assets. But scaled back expectations for interest-rate cuts by the Federal Reserve have cooled the speculative frenzy.
More clarity on the US crypto regime is likely to emerge after Trump assumes power on Jan. 20. The Republican’s stance contrasts with President Joe Biden’s administration, which cracked down on the scandal-prone sector.
Chris Weston, head of research at Pepperstone Group, said “the momentum has come out of the post-election move” in Bitcoin, partly due to outflows from exchange-traded funds for the token.
Meanwhile, software maker turned Bitcoin accumulator MicroStrategy Inc. has been on a buying spree in the past few weeks. Traders are waiting to see if the company — which owns more than $40 billion of the digital asset — will continue a pattern of announcing Bitcoin purchases on Mondays.
The original cryptocurrency has climbed roughly 120% this year, outstripping traditional investments such as global stocks and gold. Bitcoin also more than doubled in 2023 in a comeback from a deep bear market.
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The Bitcoin rally that has been fueled by President Trump’s economic policies and market optimism is starting to lose steam as the year draws to a close. After reaching record highs in recent weeks, the cryptocurrency has seen a slight dip in value as investors begin to take profits and uncertainty looms over the global economy.
Many analysts believe that the recent surge in Bitcoin’s value was largely driven by the positive sentiment surrounding President Trump’s tax cuts and deregulation efforts. However, with the passage of the tax bill and the ongoing investigation into potential collusion with Russia, some investors are starting to question whether the rally can be sustained in the long term.
As we head into the new year, it will be interesting to see how Bitcoin performs in the face of these challenges. Will it continue to climb higher, or will it experience a correction as investors look to secure their gains? Only time will tell, but one thing is for certain – the future of Bitcoin remains uncertain as we close out 2017.
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