Bitcoin Slips in December as Investors Cash In on Record Rally

01/01/2025 14:45

(Bloomberg) -- Bitcoin’s record-breaking run faltered toward the end of 2024, leading to its first monthly drop since August. Most Read from BloombergDetroit’s Michigan Central Is the Building Revival Story of 2024Burned Out Parents Need Better Public SpacesMigrant Crisis Pushed US Homelessness to Record High in 2024The digital asset fell 3.2% last month as US investors cashed profits after a rally triggered by President-elect Donald Trump’s victory pushed Bitcoin to an all-time high of $108,315

(Bloomberg) -- Bitcoin’s record-breaking run faltered toward the end of 2024, leading to its first monthly drop since August.

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The digital asset fell 3.2% last month as US investors cashed profits after a rally triggered by President-elect Donald Trump’s victory pushed Bitcoin to an all-time high of $108,315 mid-December. Feverish speculation in the crypto market has cooled as expectations for interest-rate cuts from the Federal Reserve waned, eroding appetite for riskier assets.

The group of a dozen Bitcoin exchange-traded funds in the US saw a net outflow of about $1.8 billion since Dec. 19, according to data compiled by Bloomberg. Open interest — or outstanding contracts — for Bitcoin futures hosted by Chicago-based CME Group Inc., seen as a measure for US institutional interest, also fell nearly 20% from its December peak.

Even so, Bitcoin racked up a 120% gain in 2024, outperforming gold and global equities.

“While optimism surrounds crypto-friendly regulations post-Trump inauguration, we think the key catalyst may come in January as institutions readjust asset allocations,” QCP Capital said in a note to clients. “With Bitcoin now broadly adopted by a broad spectrum of institutions — adding university endowment funds to the list this year — allocations are likely to increase, strengthening Bitcoin dominance, stabilizing spot movements, and shifting volatility dynamics closer to equities.”

Bitcoin slipped 0.20%, trading at $93,518 as of 2:55 p.m. on Wednesday in Singapore. Smaller coins like Ether and Dogecoin also struggled to gain ground.