A Bitcoin rally is fizzling in the final days of a record-breaking year for the digital asset, as investors assess the remaining impetus from US President-elect Donald Trump’s embrace of the cryptocurrency sector.
The largest token changed hands at US$94,673 ($128,641.67) as of 11.38am Friday in New York, partly paring a retreat of almost 3% from a day earlier. Smaller rivals including Ether and Dogecoin, a favourite of the meme crowd, oscillated in tight ranges.
Trump is pushing ahead with a promise to create a crypto-friendly environment in the US and has backed the idea of establishing a national Bitcoin reserve. Traders are banking some of the profits sparked by the Republican’s crypto cheerleading and are waiting to see if the mooted reserve is feasible.
Options expiry
The crypto market is also braced for the expiry of a substantial quantity of Bitcoin and Ether options contracts on Friday — one of the biggest such events in the history of digital assets, according to prime broker FalconX.
See also: BlackRock’s Bitcoin ETF posts record outflow after banner year
The notional value of the Bitcoin contracts on the Deribit exchange — one of the largest for digital-asset derivatives — exceeds US$14 billion, while the equivalent figure for Ether is about US$3.8 billion.
Sean McNulty, director of trading at liquidity provider Arbelos Markets, flagged the risk of a “choppy market” amid the expiry of the derivatives positions.
MicroStrategy plan
See also: MicroStrategy buys US$209 mil of Bitcoin as purchases lessen
Bitcoin is wavering even after MicroStrategy this week signalled the possibility of expanding its program of purchases of the token. The company has transformed itself from a software-maker into a Bitcoin accumulator and now owns more than US$40 billion of the digital asset.
The original cryptocurrency is flirting with a drop for December, which would be its first monthly decline in four, according to data compiled by Bloomberg. Bitcoin reached a record high of US$108,316 on Dec 17 before pulling back.
Investors withdrew a net US$1.5 billion from a group of one dozen US spot-Bitcoin exchange-traded funds in the four trading days through Dec 24, the heaviest such outflow since Trump’s victory in the US election on Nov 5.
However, the trend reversed on Thursday, with investors pouring US$475 million into the group, ending the four-day streak.
Charts: Bloomberg
