Bitcoin and the broader crypto market experienced a sell-off following the Federal Reserve’s announcement of a 25 basis point rate cut to its benchmark policy rate. While the rate cut was anticipated by many traders, the market reacted negatively to Fed chair Jerome Powell’s indication that fewer rate cuts than initially expected could take place in 2025. Following the announcement, Bitcoin’s price dropped by 4.6%, falling to $101,300, and Ether saw a 5.96% decline, dropping to $3,600.
Powell’s comments about only two rate cuts in 2025 and an increased inflation outlook raised concerns among market participants. The Fed’s revised inflation forecast, which now expects a 2.5% rate in 2025, also contributed to a more cautious sentiment. Some traders view these shifts in perspective as a sign of a more hawkish stance from the central bank, particularly with the potential policy changes under the incoming administration.
Crypto analysts noted that the drop in Bitcoin’s price cleared out both long and short positions, with BTC falling into a bid zone between $100,000 and $98,000. The key for Bitcoin to maintain upward momentum will be reclaiming the $100,000 to $101,400 zone before the daily candlestick closes. The recovery is seen as crucial to restore market confidence.
European Parliament Member from France, Sarah Knafo, has called on the EU to embrace Bitcoin by establishing national strategic reserves and rejecting the European Central Bank’s (ECB) proposal for a digital euro. In a video shared on her X account, Knafo advocated for European nations to develop their crypto-mining industries and cease increasing taxes on cryptocurrency holders. She highlighted Bitcoin as a means to secure freedom and protect citizens from the overreach of centralised financial systems.
Knafo, citing the example of El Salvador‘s adoption of cryptocurrency and the US plans for a Bitcoin reserve, criticised the EU for clinging to outdated financial systems that are prone to inflation and crises. She warned that the ECB’s digital euro could lead to an over-centralised system, where officials could control transactions and potentially exclude individuals from the banking system for expressing dissenting opinions.
Knafo also pointed to the growing global trend of nations considering Bitcoin reserves to safeguard their financial stability, with countries like Japan, Russia, and Brazil exploring similar initiatives. She argued that Bitcoin could serve as a more reliable financial system, offering long-term protection from economic mismanagement.
The call for a Bitcoin reserve reflects the increasing global recognition of decentralised finance as a potential solution to financial instability, with various countries looking to Bitcoin as a safeguard for national funds.
Bitcoin prices have reached a new record, surpassing $107,000 amid speculation that President-elect Donald Trump might establish a Bitcoin strategic reserve. The milestone came shortly after prices broke through $106,000, reflecting growing optimism in the cryptocurrency market.
Meanwhile, MicroStrategy announced a $1.5 billion bitcoin purchase, adding 15,350 bitcoins at an average price of $100,386 each. The company now holds 439,000 bitcoins, worth $47 billion, and has seen its market cap soar from $1.1 billion in 2020 to nearly $100 billion. The firm’s shares have surged by 527% this year, boosted by Bitcoin’s rally and its forthcoming inclusion in the Nasdaq 100 index.
Despite its impressive growth, analysts suggest MicroStrategy may face challenges in joining the S&P 500 due to concerns over profitability. Current accounting rules restrict how gains from bitcoin holdings are recorded, although new standards expected in January 2025 could help the company more accurately reflect its bitcoin-related gains.
Bitcoin surged to a record $106,509 on Sunday before settling at $103,804.71 on Monday as investors watched for an expected interest rate cut from the Federal Reserve later this week. The flagship cryptocurrency is up nearly 8% this month and an astonishing 145% for the year, reflecting growing confidence in its future. Ether also rose, approaching the $4,000 mark, while the broader crypto market remained steady.
Anticipation of a 25-basis-point interest rate cut has fuelled optimism among Bitcoin investors. Lower rates, which weaken the dollar and expand the money supply, have historically correlated with higher Bitcoin prices. Bitcoin’s performance is now likened to tech stocks, which also thrive in low-rate environments.
Meanwhile, shares of MicroStrategy jumped 4% after the company announced its inclusion in the Nasdaq 100 and QQQ ETF. This news further bolstered market sentiment, as institutional interest in Bitcoin and related stocks continues to rise.
El Salvador has signed a mutual agreement with Argentina to advance their digital asset industries through collaboration and training. The partnership, announced by Juan Carlos Reyes, president of El Salvador’s National Commission of Digital Assets, pairs Argentina’s innovative blockchain sector with El Salvador’s expertise in digital regulation.
The agreement focuses on sharing knowledge and refining regulatory frameworks, with Reyes highlighting the benefits of cooperation. He noted El Salvador’s early adoption of digital asset regulations and its ongoing discussions with over 25 other nations for similar collaborations.
Reyes urged global regulators to act swiftly in creating effective crypto rules, warning against delays that could expose the industry to scams and financial crimes. El Salvador’s commitment to cross-border partnerships aims to foster global progress in the digital asset market.
Casa, a crypto custody company, has unveiled a new self-custody option called Praetorian, aimed at helping sovereign nations securely manage their Bitcoin reserves. The service uses multi-signature vaults spread across various jurisdictions, ensuring high levels of security and autonomy. Casa’s CEO, Nick Neuman, stated that self-custody gives nations complete control over their reserves, offering peace of mind even if the company ceases to operate.
The idea of Bitcoin as a strategic reserve is gaining traction. Investor Anthony Pompliano highlighted the global race for Bitcoin, noting how its scarcity could drive nations to secure their share. Recently, US Senator Cynthia Lummis proposed converting some gold holdings into Bitcoin, while Vancouver Mayor Ken Sim suggested Bitcoin could serve as a treasury asset to protect against inflation.
At the Bitcoin MENA 2024 conference, former Binance CEO Changpeng Zhao predicted that China would establish a Bitcoin reserve if the US moves forward with such plans under the incoming administration.
Despite cryptocurrency’s volatility, 30% of workers surveyed say they would consider receiving their salaries in digital assets, according to a new study by Clarify Capital. The study, which questioned 800 workers and 200 business owners, revealed that 20% believe crypto will become a regular part of their paychecks within the next five years, with Bitcoin being the most popular choice. A significant 72% of respondents expressed a preference for receiving their wages or bonuses in Bitcoin.
Dogecoin and Litecoin also emerged as other leading choices, with 14% and 16% of surveyed employees respectively favouring these cryptocurrencies for compensation. Interestingly, Gen Z workers — those born between 1997 and 2012 — showed the most enthusiasm, with nearly 40% expressing interest in receiving their pay in crypto. Millennials followed with 32%, while just 23% of Gen X workers shared the same sentiment.
The study also highlighted the growing appeal of crypto within the business lending sphere. Around 25% of business owners indicated they would consider taking a crypto loan to expand their operations, with sectors such as IT, retail, and finance leading this trend. Among those surveyed, 10% of businesses plan to actively pursue crypto loans in 2025, with Gen Z and millennial business owners leading the charge.
The National Center for Public Policy Research, a Washington DC-based think tank, has proposed that Amazon consider adopting a Bitcoin corporate treasury strategy. The proposal will be tabled at the company’s April 2025 shareholder meeting, highlighting concerns over inflation risks eroding Amazon’s $88 billion in cash and short-term cash equivalents. According to the proposal, the Consumer Price Index (CPI) underestimates true inflation, with authors suggesting that the actual rate may be twice the reported figure, posing risks to shareholder value.
Bitcoin is presented as a potential hedge against these economic pressures. The think tank points to Bitcoin’s performance as evidence, noting that the cryptocurrency outperformed corporate bonds by 126% over the past year and saw a 1,246% increase over the last five years. They recommend Amazon allocate at least 5% of its assets to Bitcoin to safeguard its financial reserves, drawing on the success of MicroStrategy’s own Bitcoin treasury strategy as a proven example. MicroStrategy’s holdings are currently valued at over $40 billion, putting the company at about $17 billion in profit.
The idea is gaining traction among other companies as well. MARA, formerly Marathon Digital, recently raised $1 billion through a 0% interest convertible note offering to purchase 6,474 Bitcoin for its corporate treasury. Additionally, artificial intelligence firm Genius Group has converted a portion of its treasury into Bitcoin, having acquired 110 BTC at an average price of $90,932 each. These moves suggest that a Bitcoin treasury strategy is becoming an increasingly popular choice for companies looking to strengthen their financial positions amid market uncertainty.
Donald Trump’s family and allies are heading to Abu Dhabi for the Gulf’s largest bitcoin gathering amid record-breaking highs for the digital currency. The Bitcoin MENA conference is set to draw over 6,000 attendees, including key figures in Trump’s cryptocurrency initiative. Eric Trump will deliver the keynote address, followed by exclusive sessions for top investors.
World Liberty Financial, co-founded by Trump and led by billionaire Steve Witkoff, plays a central role in the event. Trump himself is the chief crypto advocate, while his sons act as brand ambassadors. The platform has already attracted major investors like blockchain entrepreneur Justin Sun, despite Sun’s legal troubles under the Biden administration.
Bitcoin’s rise to $100,000 has fuelled excitement, with Trump pledging to make the US the global crypto hub. Former PayPal executive David Sacks has been appointed White House czar for AI and cryptocurrencies, reflecting a broader push towards digital innovation. Keynote speeches and whale-only sessions highlight the growing influence of crypto in Trump’s circle and the broader industry.
The conference also features controversial figures, such as Binance founder Changpeng Zhao, who recently served a US prison sentence. With prominent backers and growing market momentum, the event signals a pivotal moment for cryptocurrency and its role in shaping Trump’s political and economic agenda.
The Czech Republic has introduced a landmark law exempting bitcoin holdings of over three years from capital gains tax. Approved unanimously by parliament on 6 December, the new rule will take effect on 1 January 2025, offering significant incentives for long-term cryptocurrency investors.
Under the law, individuals can benefit from tax exemptions if their annual income from crypto transactions remains under CZK 100,000 ($4,000) or if digital assets have been held for over three years. Prime Minister Petr Fiala highlighted the law as a step towards modernising financial regulations and fostering a favourable environment for cryptocurrency adoption.
The tax exemption also includes provisions for assets acquired before 2025, encouraging retroactive benefits under specified conditions. The reforms align with the EU’s Markets in Crypto-Assets (MiCA) framework, placing the Czech Republic among global leaders like Switzerland and the UAE in promoting crypto-friendly policies.
