COINOTAG News reported on December 31 that QCP Capital has observed a marked drop in liquidity, resulting in a notable gap in the BTC spot price. Recent attempts for recovery have been hampered by persistent selling pressure. As 2023 ends, Bitcoin’s momentum appears to be faltering, highlighted by a substantial $1.8 billion net outflow from spot ETFs since December 19, coupled with a deceleration in MicroStrategy’s BTC acquisitions.
This downward pricing trend is reflective of a broader market malaise, as evidenced by the S&P 500 and Nasdaq indices each falling over 1% on three occasions within the last eight trading days, indicating growing concerns over global trade uncertainties heading into 2025. Looking forward to Q1 2025, while there is potential optimism for more favorable crypto regulations following Trump’s inauguration, key market catalysts are anticipated to materialize in January, particularly as institutional investors reassess their asset allocations. Increased adoption of Bitcoin by institutions, including university endowments, could bolster its dominance, thereby stabilizing the spot price trends and reducing volatility to levels closer to stocks.
Furthermore, the growing demand for hedging strategies such as downside put options and active covered call selling is expected to augment market stability and provide a buffer against adverse movements, reflecting a maturation of cryptocurrency as an asset class.