Three major catalysts, will the market trend rise amidst fluctuations?

Author: 1912212.eth, Foresight News

Recently, the price of Bitcoin has surpassed $93,000, reaching a historical high and coming within reach of $100,000. Google Trends shows that the popularity of Bitcoin has hit a high point not seen since 2021.

Additionally, CryptoQuant CEO Ki Young Ju released data indicating that the trading volume of retail-level Bitcoin (under $100,000) has reached a three-year high, signaling the entry of retail investors.

After the Bitcoin rally stagnated and began to consolidate, some funds have flowed into meme coins, while some altcoins still show weak performance.

What other catalysts are there for the bullish price momentum in the future?

MicroStrategy May Be Added to the S&P 500 Index

The S&P 500 Index, officially known as the Standard & Poor's 500 Index, is a stock market index compiled by Standard & Poor's, aimed at reflecting the performance of 500 publicly traded companies in the United States. The constituent stocks of the S&P 500 Index are selected based on a series of strict criteria, including market capitalization, liquidity, and profitability standards. The S&P 500 Index is one of the important indicators for global investors to measure the performance of the U.S. stock market and the health of the U.S. economy.

According to CCN, its new accounting standards may allow MSTR to be included in the S&P 500 Index.

If this comes true, not only will the company's importance in the U.S. stock market be enhanced, but its leading position in the industry and sustained profitability will also gain widespread recognition.

The latest MicroStrategy holding report shows that it currently holds 331,200 BTC at an approximate price of $16.5 billion, with an average holding price of $49,874. Based on a Bitcoin price of $90,000, MicroStrategy's Bitcoin holdings currently have an unrealized profit of over $13 billion.

MicroStrategy founder Michael Saylor is a staunch Bitcoin bull. According to analysis by crypto KOL Remo Uherek, MicroStrategy's most recent purchase of 51,780 Bitcoins was made using $21 billion raised through stock financing, and after this purchase, it still has $15.3 billion available for Bitcoin purchases. If this pace of Bitcoin accumulation continues, the funds could last until the end of this year.

Based on this, MicroStrategy plans to privately place $1.75 billion in 0% convertible senior notes, maturing in 2029. These notes are unsecured and interest-free, convertible into cash or stock. The proceeds will be used to purchase Bitcoin and for general corporate purposes.

Data shows that MSTR has performed well in the U.S. stock market, with returns exceeding 450% this year.

If MicroStrategy can enter the S&P 500, more qualifying companies may subsequently be included in the index, gaining higher attention and influence from traditional funds. This would undoubtedly be a significant positive for the crypto market.

Microsoft Reviews Bitcoin Investment Proposal

On October 24, Microsoft submitted an A form document to the U.S. Securities and Exchange Commission (SEC), listing issues to be discussed at the next shareholder meeting. One proposal suggests that the tech company should explore Bitcoin as a hedge against inflation and other macroeconomic impacts. On October 30, Microsoft shareholders began preliminary voting on whether the company should invest in Bitcoin.

The document also indicates that Microsoft will vote on the "evaluation of investing in Bitcoin" at the shareholder meeting on December 10. Although the board has proposed to oppose this proposal, shareholders have differing opinions. Vanguard and BlackRock are currently Microsoft's largest institutional shareholders, holding 8.95% and 7.30%, respectively.

BlackRock is not a stranger to the crypto space, with a substantial amount of funds in its Bitcoin spot ETF, and its chairman Larry Fink is also a proponent of Bitcoin. Another major shareholder, Vanguard Group, holds an opposing view, focusing solely on assets like stocks, bonds, and cash.

The current voting results are difficult to predict, and the final answer may be revealed on December 10.

In the past two months, Japanese listed company Metaplanet, German listed company Samara Asset Group plc, U.S. company Solidion Technologies (battery material supplier), Unitronix, Semler Scientific, Genius Group Limited, and Cosmos Health (healthcare group) have all incorporated Bitcoin and other assets into their reserve assets.

If the vote passes, as a publicly traded company with significant influence, it may affect and encourage more listed companies to purchase Bitcoin.

Federal Reserve May Cut Rates by 25 Basis Points in December

Cryptocurrency assets, represented by Bitcoin, are increasingly influenced by macroeconomic factors, and the Federal Reserve's interest rate cut policy still has a significant impact on the flow of funds into crypto assets.

On November 15, Federal Reserve Chairman Jerome Powell stated that due to the strong U.S. economy, the Fed does not need to "rush" to lower interest rates and will "carefully observe" to ensure that certain inflation indicators remain within acceptable ranges. Powell reiterated that the path of the Fed's policy interest rates will depend on upcoming data and the evolution of the economic outlook. He noted that the inflation rate is approaching the Fed's 2% target but has not yet reached it. The Fed will closely monitor core inflation indicators for goods and services excluding housing, which have been declining over the past two years. "We expect these indicators to continue to fluctuate in the near term, and the path to the Fed's 2% target may be bumpy at times. But we still believe we are on the right track regarding inflation."

That evening, U.S. retail sales for October recorded a month-on-month increase of 0.4%, higher than the expected 0.3%, with the previous value revised from 0.4% to 0.8%. Due to the sustained consumer spending willingness, retail sales steadily grew in October. After the data was released, spot gold briefly dipped before rising, with a short-term fluctuation of $6; the dollar index's short-term increase expanded to over 30 points. The better-than-expected retail sales data led traders to reduce bets on a Fed rate cut in 2025.

According to CME's "FedWatch": the probability of a 25 basis point rate cut by the Fed in December is 61.9%, while the probability of maintaining the current rate is 38.1%.

BlackRock's Chief Investment Officer (CIO) Rick Rieder stated that he still expects the FOMC to cut rates by 25 basis points in December. Rieder noted that the current target range for the federal funds rate of 4.5% to 4.75% is restrictive. After a rate cut in December, the Fed is expected to pause further cuts, and the FOMC will assess the frequency and pace of rate cuts. By 2025, the Fed is expected to cut rates at least twice.

Additionally, Goldman Sachs Chief Economist Jan Hatzius still expects "the Fed to cut rates consecutively in December, January, and March, followed by one cut each quarter in June and September, but he believes the FOMC may slow the pace of rate cuts more quickly, possibly as early as the December or January meetings." However, unless the employment or inflation report in November is unexpectedly strong, the likelihood of the FOMC skipping a rate cut in December is low.

The Fed's next meeting will take place from December 17 to 18.

Summary

In addition to the three catalysts mentioned above, Gary Gensler, the SEC chairman who has often been criticized for being too harsh on the crypto industry, may announce his resignation after Thanksgiving. Trump is also set to take office as the new U.S. president in January, and future crypto regulatory policies may become more lenient and friendly. Bitwise Chief Investment Officer Matt Hougan has stated, "Every year, we survey hundreds of financial advisors and ask them what is preventing them from investing in cryptocurrencies. Every year, they tell us that 'regulatory issues' are the number one reason. This is one of the reasons why this election could change the game for cryptocurrencies. In the coming months, we will see a wave of institutional capital."

The future market performance is worth watching.