Bitcoin’s rally ends with 3.2% December grop

Bitcoin’s record-breaking rally in 2024 stalled in December, marking its first monthly drop since August with a 3.2 per cent decline.

The cryptocurrency hit an all-time high of $108,315 in mid-December, driven by optimism following President-elect Donald Trump’s victory, before retreating as profit-taking by US investors and waning expectations for Federal Reserve interest-rate cuts curbed risk appetite.

US Bitcoin exchange-traded funds recorded a net outflow of $1.8 billion since Dec. 19, while open interest for bitcoin futures on CME Group fell 20 per cent from December highs, signalling cooling institutional demand.

Despite the dip, bitcoin surged 120 per cent in 2024, outperforming gold and global equities. Analysts at QCP Capital expect institutional allocations to increase in early 2025 as asset adjustments stabilise Bitcoin’s volatility and dominance.

As of Wednesday afternoon in Singapore, bitcoin traded at $93,518, down 0.20 per cent, while smaller cryptocurrencies like Ether and Dogecoin also struggled.

Attribution: Bloomberg

Subediting: Y.Yasser