Daily Crypto Signals: Bitcoin and Ethereum Rally as Vanguard Opens Doors to Crypto ETFs, Goldman Sachs Expands Digital Asset Holdings
The cryptocurrency market rebounded on December 3, 2024, with Bitcoin climbing back above $91,000 and Ethereum trading above the key $3,000
Quick overview
- The cryptocurrency market saw a significant rebound on December 3, 2024, with Bitcoin surpassing $91,000 and Ethereum trading above $3,000 due to major institutional developments.
- Vanguard's policy change allowing crypto ETFs on its platform and Goldman Sachs' $2 billion acquisition of Innovator Capital contributed to the market's recovery.
- Despite Bitcoin's recent gains, it remains 21% down from its monthly high, while Ethereum's network activity and demand show mixed signals.
- Analysts suggest that for Ethereum to sustain a rise above $3,500, there needs to be a substantial increase in institutional investment and application demand.
The cryptocurrency market rebounded on December 3, 2024, with Bitcoin BTC/USD climbing back above $91,000 and Ethereum ETH/USD trading above the key $3,000 mark, following major institutional developments including Vanguard’s reversal on crypto ETF access and Goldman Sachs’ $2 billion acquisition of Bitcoin ETF issuer Innovator Capital.
Crypto Market Developments
After a rough start to December, the digital asset market made a big comeback on Tuesday. The total value of all cryptocurrencies rose to around $3 trillion. Bitcoin has lost 21% of its value in the last month. It went from over $111,000 per token to the mid-$80,000 area at the start of December, but it has since started to gain speed again.
There were a number of reasons why the market went back up. Liquidations fell by 60% on Tuesday, bringing the total to $328 million. This means that there is less pressure on leveraged holdings. Also, prediction markets say that the chances of the Federal Reserve lowering interest rates in December are now 90%. This makes risk assets look good.
The biggest news came from Vanguard, a huge asset management company. They changed their mind about not letting ETFs and mutual funds that mostly hold cryptocurrencies trade on their platform. With almost $11 trillion in assets under management and more than 50 million clients, this change in policy makes it possible for millions of regular investors to buy Bitcoin, Ethereum, XRP, and Solana through authorized investment vehicles.
Goldman Sachs also said it will buy Innovator Capital Management for $2 billion. This would add 159 ETFs to its portfolio and make the firm one of the top 10 ETF providers in the world. The bank had more than $2 billion in Bitcoin and Ethereum ETFs by the end of 2024. This was a big change from its 2020 attitude that cryptocurrencies were not good for customer portfolios.
Bitcoin (BTC) Bitcoin was worth $92,076.51 on December 2, up 8.51% from its monthly low of around $86,000. The top cryptocurrency has been more volatile in November and early December than usual, with a number of technical and macroeconomic variables affecting its price.
Bitwise Assesses Bitcoin Fair Value at $270,000
Market reports say that a Bitwise analysis shows that Bitcoin is currently going through one of the worst macroeconomic disconnects it has seen in years. The digital asset is about 66% below the global money supply, which means that a model-based fair value is around $270,000. If Bitcoin goes back to its historical relationship with global liquidity, which has reached a record $137 trillion due to broad monetary stimulation, this valuation disparity signals that there is a lot of room for growth.
Even while there is pressure to sell, institutional adoption is still speeding up. Since its introduction in January 2024, Bitcoin spot ETFs in the US have brought in more than $40 billion in total, yet in November, they lost more than $1.45 billion. BlackRock’s iShares Bitcoin Trust (IBIT) had its worst month of withdrawals since it started, yet it is still one of the most traded ETFs in the world.
The American Bitcoin Corp (ABTC), which is related to Trump, had a lot of trouble, with shares falling more than 50% in one trading session. Eric Trump’s mining and treasury company has seen its shares drop over 78% from its September highs. This is a sign of the bigger problems that crypto-linked stocks are facing as the digital asset market slows down.
Ethereum Reclaims $3,000
Ethereum (ETH) traded at $3,022.80 on December 2, which is a 10.47% increase. This shows that Ethereum is stronger than other major cryptocurrencies. Even though it has bounced back, ETH has had a hard time with ongoing concerns about demand and falling network activity in the fourth quarter.
Ethereum derivatives markets still show that traders are not sure about a long-term rise. The annualized premium on ETH monthly futures compared to spot markets stayed at roughly 3%, which is considerably below the 5% level that usually means there is strong demand for leveraged long bets. Also, put options were trading at a 6% premium to similar call contracts, which is a sign of a negative market.
Network fundamentals give Ethereum’s short-term prospects a mixed picture. In the past three years, weekly fees have never been lower. They fell to $2.6 million over a week, down from $5.1 million four weeks before. Part of this dip is because decentralized exchanges have been less busy, with volumes dropping from a high of $36.2 billion in August to $13.4 billion now. At the same time, the costs for competing blockchains Tron and Solana went up by 9% in seven days, which shows that Ethereum is not doing as well as it may be.
Ethereum engineers are getting ready for the Fusaka upgrade, which will be released in early December. This critical update intends to make the wallet management experience better and make the system more scalable. It is a key step toward better handling the enormous number of transactions that layer-2 chains that use Ethereum as their foundation layer can handle.
However, present evidence shows that ETH is unlikely to do better than the rest of the cryptocurrency market in the short future. Analysts say that institutional money flow and application demand will need to increase dramatically for a sustainable surge above $3,500.
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