Although it will take Trump two months to officially take office after his election, the impact of his victory has been widely reflected in geopolitics and capital markets. Cryptocurrency has once again become the focus. While vote counting has not yet been completed in some parts of the United States, the price of BTC has exceeded $80,000, and Blackrocks BTC ETF (IBIT) set a record of $1.1 billion in single-day inflows last Thursday. Even the ETH ETF has seen the third-highest single-day inflow in its history.
IBIT has the third highest inflow of all US-listed ETFs so far this year, and its assets under management have surpassed iShares own gold ETF, exceeding $33 billion. During this wave of gains, centralized exchanges (CEXs) liquidated more than $800 million in short futures positions in the past week, one of the largest short liquidations this year, while the funding rate of perpetual contracts soared to around 30% as leveraged funds returned in large quantities.
In addition, despite weak on-chain activity, inflows from traditional finance have become a stabilizing support factor. The market value of stablecoins has continued to recover steadily this year and has recovered to near its historical high in 2022. Further inflows of stablecoins should provide more margin funds, and leverage is expected to continue to be maintained as prices continue to rebound.
From a political perspective, given that the incoming government is more inclined to support cryptocurrency legislation, the industry is increasingly optimistic about the emergence of a more friendly cryptocurrency regulatory framework in the future.
Back to the macro market, US stocks ignored the disappointment of Chinas stimulus policy and continued to hit new highs, while fixed income markets remained stable due to the dovish stance of the FOMC meeting last Thursday. In addition, as the market is expected to remain in risk-on mode until the end of the year, cross-asset volatility of macro assets has dropped significantly. On the other hand, as BTC broke through $80,000, the volatility of BTC and ETH rebounded slightly, and the $100,000 call option once again entered the market focus.
There is not much other important macroeconomic data this month, except for the CPI data release this week. Interestingly, the market pricing reflects that Nvidias earnings release is a more important risk event than CPI or non-farm payrolls, which shows that the market is more confident in the Feds stance and there are no obvious negative catalysts in the market environment.
So, enjoy the party while it lasts, but still maintain prudent risk management. Good luck everyone!
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