Bitcoin declines in December as investors take advantage of record rally

(Bloomberg) — Bitcoin’s record run faltered at the end of 2024, leading to its first monthly decline since August.

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

The group of dozens of U.S. exchange-traded funds has seen a net outflow of about $1.8 billion since December 19, according to data compiled by Bloomberg. Open interest – or pending contracts – for bitcoin futures hosted by CME Group Inc. also fell. The Chicago-based stock, seen as a barometer of US institutional interest, is down nearly 20% from its peak in December.

However, Bitcoin has gained 120% in 2024, outperforming gold and global stocks.

“While optimism surrounds crypto-friendly regulations following Trump’s inauguration, we believe a major catalyst may come in January as institutions adjust their asset allocation,” QCP Capital said in a note to clients. “With Bitcoin now widely adopted by a wide range of institutions – adding university endowment funds to the list this year – allocations are likely to increase, reinforcing Bitcoin’s dominance, stabilizing spot movements, and shifting volatility dynamics closer to equities.”

Bitcoin fell 0.24%, trading at $93,487 as of 8:10 a.m. Wednesday in New York. Small currencies like Ether and Dogecoin have also struggled to make gains.

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