Cryptocurrency Week at a Glance: Cryptocurrency Market Cools Down Ahead of New Year’s Rally

Last week, the cryptocurrency market saw some big moves in both directions keeping the cryptocurrency community on its toes. Bitcoin Reached a new all-time high of $108,250 and other major currencies such as Ethereum, XRP and BNB Bank It traded near all-time highs supported by expectations of a 25 basis point interest rate cut by the Federal Reserve. Since Bitcoin reached all-time highs, the market dynamics have changed a bit, causing Bitcoin prices to rise Cryptocurrency market capitalization Up to $3.2 trillion. Despite the decline, major developments in Bitcoin reserve creation, the Ripple stablecoin and others are keeping market sentiment strong with buying interest emerging at lower levels. As we move into the final week of the year, let’s take a look at how the past week changed the dynamics of cryptocurrencies.

Bitcoin ETFs Outperform Gold ETFs

The launch of Bitcoin ETFs has proven to be the best thing that has happened to the cryptocurrency market so far. A report by K33 Research reveals that US-listed bitcoin ETFs have surpassed US-listed gold ETFs in terms of assets under management (AUM), including leveraged products such as futures-based ETFs. Since their launch in January, Bitcoin ETFs have seen over $129.25 billion in AUM, outpacing the $128.88 billion AUM of gold ETFs that have been trading for over 20 years. This number shows Bitcoin’s resilience with significant buying interest from institutional investors. While comparing spot products exclusively, gold is still slightly ahead, but the gap is closing soon and Bitcoin ETFs could overtake gold ETFs in spot ETFs as well in the next few weeks.

On the other hand, Blackrock, the world’s largest asset management company, with more than $11.5 trillion under management, has proposed a 2% portfolio allocation to portfolios which increases the confidence of individual and institutional investors in the cryptocurrency market.

Ohio Bitcoin Reserve Law

Ohio lawmakers have passed a bill to create a Bitcoin fund in the state treasury, marking the third US state to do so in just over a month. Republican Leader Derek Mirren has introduced a bill titled the “Ohio Bitcoin Reserve Act” that would give the state treasurer the authority to purchase Bitcoin as part of an “appropriate asset allocation.” The move shows the Trump administration’s commitment to creating a National Strategic Reserve for Bitcoin that could make the United States the largest holder of Bitcoin, already owning approximately 207,189 Bitcoin to date.

Additionally, news that Trump will sign an executive order to create a Bitcoin reserve on his first day in office has increased bullish sentiment in the cryptocurrency community.

Interest rate cut by the Federal Reserve, its comments and its impact

One of the major events that changed the market direction during the week was the Federal Reserve meeting. While the Fed cut interest rates by an expected 25 basis points, it also revised its 2025 rate cut forecast from three to two points. Weak inflation expectations from the largest economy led to widespread selling across all global markets including cryptocurrency markets. The US stock market saw over $1.5 trillion liquidated, while Indian markets also fell by more than 4.5%. In the same vein, the cryptocurrency market also witnessed the liquidation of more than $1 billion, causing the price of Bitcoin to fall by 5.5%. Federal Reserve Chairman Jerome Powell’s tough statements regarding the Fed’s stance against owning Bitcoin added to the selling pressure.

Launch of the Ripple stablecoin

Ripple announced the launch of its stablecoin RLUSD a few days ago, and former Reserve Bank of India Governor, Raghuram Rajan, has joined Ripple to guide the growth of RLUSD. This development has received a lot of attention from the Indian cryptocurrency community, boosting confidence in the market. Along with Rajan, Kenneth Montgomery, former senior vice president and chief operating officer of the Federal Reserve Bank of Boston, has joined the board. These appointments not only help Ripple grow but also make the markets more reliable with key people from strong banking backgrounds joining the cryptocurrency ecosystem.

Markets are moving forward

As we move towards the last week of the year, we may see some volatility as we are experiencing a cooling off period between the uptrend. The market needs to build some momentum for a potential rally after Trump takes office. These cooling off periods are crucial when there is a long-term bull market like the one we are experiencing now. Added to this are the heavy selling operations at Christmas by institutions before the New Year. Bitcoin may test key support levels before bouncing back. While these periods provide investors with attractive entry points and dollar cost averaging, traders are advised to maintain a strict stop loss to minimize risk.

Top 3 cryptocurrency gainers for the week:

1) Pudgy Penguins price increased by 380.2%

2) Liquidity increased by 32.76%

3) BitGet token increased by 20.69%

The top 3 losers in cryptocurrencies this week:

1) Gala decreased by 39.25%.

2) Celestia stock fell by 36.99%.

3) Sandbox rate decreased by 35.7%

(The author is CEO and co-founder of Mudrex, a global cryptocurrency investment platform)