cryptonewsz.com
The cryptocurrency market witnessed a mixed performance in December 2024, marked by a pullback in valuations across major digital assets. However, Bitcoin managed to end the year on a high note, delivering a staggering 121% gain for the entire year despite its recent decline.
#Crypto valuations declined in Dec. after stronger returns earlier in the year. The pullback may have reflected more hawkish signals from the Federal Reserve. The last two #Bitcoin bull markets featured many drawdowns of a similar magnitude.
Read more: https://t.co/jPNQzAxcEd pic.twitter.com/JrshN4x1M2
— Grayscale (@Grayscale) January 7, 2025
Grayscale Shares Secret Behind Bitcoin’s Growth
The report states that December’s dip in crypto prices was primarily caused by more hawkish signals from the Federal Reserve during its mid-December meeting. The central bank hinted at slowing down the pace of rate cuts in 2025, leading to a pullback in both traditional and crypto markets, Bitcoin ended the month down by 3% while Ether saw a sharper drop of 10%.
The decline in December was not unusual for Bitcoin. Historical data shows that temporary drawdowns are a recurring feature of crypto bull markets. Previous bull cycles have seen Bitcoin undergo multiple double-digit corrections before resuming its upward trajectory.
One of the major highlights of 2024 was the launch of spot Bitcoin and Ether exchange-traded products (ETPs) in the U.S. market. These products attracted considerable investor interest, with cumulative net inflows totaling $38 billion by year-end. December alone saw $4.7 billion in net inflows into these ETPs. This shows growing demand from institutional investors.
Additionally, MicroStrategy continued to run its aggressive Bitcoin accumulation strategy. The firm acquired 194,180 Bitcoin in the fourth quarter, with a year-end market value of $18.2 billion. MicroStrategy’s Bitcoin purchases were comparable to the net inflows into spot Bitcoin ETPs during the same period.