(Bloomberg) — A Bitcoin rally is crumbling in the final days of a record year for the digital asset, as investors assess the residual momentum from President-elect Donald Trump’s embrace of the cryptocurrency sector.
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The largest token settled at $96,200 at 6 a.m. in London on Friday, partially offsetting a nearly 3% pullback from a day earlier. Smaller rivals, including Ether and Dogecoin, a favorite of the meme crowd, hovered within narrow limits.
Trump is moving ahead with a promise to create a crypto-friendly environment in the US and backing the idea of establishing a national Bitcoin reserve. Traders are taking advantage of some of the profits generated from the Republican’s crypto cheerleading and waiting to see if the proposed reserve is feasible.
Options expire
The crypto market is also primed for the expiration of a significant amount of Bitcoin and Ether options contracts on Friday – one of the biggest events in the history of digital assets, according to prime broker FalconX.
The notional value of the Bitcoin contracts on the Deribit exchange – one of the largest for digital asset derivatives – is more than $14 billion, while the equivalent figure for Ether is around $3.8 billion.
Sean McNulty, trading director at liquidity provider Arbelos Markets, flagged the risk of a “market shock” amid derivatives positions expiration.
MicroStrategy Plan
Bitcoin Hesitates Even After MicroStrategy Inc. this week flagged the opportunity to expand its program for purchasing the token. The company has transformed itself from a software maker into a Bitcoin accumulator and now owns more than $40 billion in digital assets.
The native cryptocurrency is flirting with a decline for December, which would be its first monthly drop in four months, according to data compiled by Bloomberg. Bitcoin hit an all-time high of $108,316 on December 17 before retreating.
Investors withdrew a net $1.5 billion from a group of a dozen US spot Bitcoin exchange-traded funds in the four trading days through December 24, the heaviest outflows since Trump’s victory in the US election on November 5.
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