Monthly Outlook(December)

Bitcoin Shatters $100,000 and Consolidates Ahead of Trump’s Inauguration

Bitcoin continued its historic rally in December, fueled by optimism surrounding Donald Trump’s presidential election victory. On December 5, 2024, Bitcoin breached the unprecedented $100,000 milestone, marking a defining moment in crypto history. Shortly after, Bitcoin surged to a new all-time high of $108,000 before entering a consolidation phase, dipping to $94,000 at the time of writing.

This pullback aligns with our November forecast, which anticipated a year-end slowdown and market recalibration as investors reassess positions. Looking into January 2025, we expect Trump’s official inauguration to potentially ignite the next leg of the uptrend.

Q1 2025 Outlook: We maintain our bullish stance, reiterating a price target of $150,000 to $200,000, contingent upon continued improvements in global liquidity and sustained institutional inflows.

Global Central Banks: Fed Turns Hawkish

The Federal Reserve’s hawkish shift contributed to recent market volatility. Despite a 25bps rate cut, bringing the target range to 4.25%-4.50%, the updated dot plot projects only two 25bps cuts in 2025, down from four previously expected. Higher inflation forecasts added to concerns, triggering sharp sell-offs in both traditional and crypto markets. With Trump taking office on January 20, 2025, markets remain uncertain about the impact of his economic policies, including tariffs, tax reforms, and immigration restrictions.

Economic Projections of Federal Reserve Board Members

Global Central Banks: BOJ Keeps Rate Prospect

The Bank of Japan (BOJ) kept its benchmark rate steady at 0.25%, defying expectations for further hikes. The yen weakened to 157 against the dollar, reflecting the BOJ’s cautious approach amid persistent economic uncertainties.

Liquidity Watch: BOJ’s potential rate hikes should be closely monitored, as past adjustments—such as the August hike—triggered massive carry trade unwinds and global market corrections.

The Evolution of AI Agents

The AI Agent narrative, which began with the emergence of Truth of Terminals in late October, further gained momentum throughout Q4. Initially driven by memes and speculative hype, AI Agents have rapidly matured into advanced frameworks and consumer-ready applications.

Our recent report, “AI Agents in the Crypto World: Revolutionary Evolution from Web2 to Web3,” explores this transformative shift. Key highlights include:

• AI Agent Foundation in the Web2 Era
• AI Agent Evolutionary Spectrum
• Technical Architecture and Innovation

We expect AI Agents to remain a dominant theme into 2025, opening up new investment avenues and utility-driven growth opportunities.

Explosive Growth of the Hyperliquid Ecosystem

HYPER achieved explosive growth in Q4, driven by its strong fundamentals and robust community cohesion. It firmly secured its position as the leader in on-chain derivatives. Both TVL and token prices surged continuously. The price climbed from $6 at the beginning of October to $27 by the end of December, achieving a 3.5x increase. During this period, the price even exceeded $35, pushing the FDV to an astonishing $35 billion.

Against the backdrop of abundant liquidity inflows, projects within the Hyperliquid ecosystem also performed exceptionally well. For instance, HFUN surged by 360% in Q4. Meanwhile, more and more high-profile project teams, such as Solv Protocol, have chosen to conduct their TGE on the Hyper chain.

Stablecoins Maintains a Bullish Liquidity Structure

Stablecoins saw a continued inflow of approximately $13 billion in December, which is close to the $14 billion inflow from the previous month when Bitcoin broke out. This indicates that market participants have not chosen to exit the market despite Bitcoin's volatility and the significant corrections in altcoins. The influx of new investors has kept the growth of stablecoins at a high level. We believe that the growth in market liquidity remains healthy, supporting a bullish market structure, and the sustained high liquidity will support the ongoing bull market and a potential altcoin season.

Economic Data & Events to Watch in Janurary 2025

Disclaimer

The content provided in this report is for illustrative purposes only and is intended to offer insights into the cryptocurrency market. It is not, and should not be interpreted as, investment advice or recommendations. The information contained herein is based on sources believed to be reliable; however, we do not guarantee its accuracy, completeness, or suitability for any purpose, and it should not be relied upon as such. Any opinions expressed reflect a judgment at the date of publication and are subject to change without notice. Readers are advised to conduct their own research and due diligence and, where appropriate, seek professional advice before making any investment decisions. The authors and publishers of this report accept no liability for any loss or damage arising from the use of the information provided.

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