In November, exchange-traded funds (ETFs) specializing in Bitcoin and Ethereum in the United States recorded net inflows of $7.6 billion, marking a record high. This performance reflects the market’s evolution, with ETFs increasingly becoming the primary tool for traditional financial players to access cryptocurrencies. This record coincides with the election of pro-crypto President Donald Trump, which seems to have bolstered institutional interest.

Data shows consistent growth since March 2024. Ethereum, which launched its spot ETFs in July, is also gaining popularity. Between November 25 and 29, these ETFs recorded net inflows of $467 million, with $300 million coming from BlackRock’s ETHA product. Despite having a much smaller market capitalization than Bitcoin ETFs, Ethereum’s performance stood out, with its price surging by 15% during the last week of November, outpacing Bitcoin. Bitcoin ETFs, however, continue to dominate, led by products like BlackRock’s iShares Bitcoin Trust (IBIT), which has attracted $48 billion since its launch. A trend toward diversification is emerging as capital flows to altcoins, supported by growing liquidity and psychological resistance to Bitcoin breaching the $100,000 mark. This growing adoption of ETFs and market diversification highlights the structural transformation of cryptocurrencies, which are now better integrated into traditional financial markets.

BlackRock’s spot Bitcoin ETF, known as IBIT, has surpassed 500,000 bitcoins in assets under management (AUM) less than a year after its January 2024 launch. With nearly $50 billion in total assets, it reached this milestone thanks to an additional $338.3 million in net inflows in a single day, representing around 3,526 bitcoins. IBIT now holds about 2.38% of Bitcoin’s total supply of 21 million, reflecting growing institutional adoption. Experts predict these products will become standard portfolio diversification tools, with large institutions allocating 1% to 3% of their capital to such assets due to their ability to enhance risk-adjusted returns. Reaching 1 million bitcoins under management appears achievable, though Bitcoin’s rising value could slow nominal flows in 2025.

South Korean President Yoon Suk-yeol declared emergency martial law on Tuesday evening, leading to a sharp drop in cryptocurrency prices on local exchanges. In a televised address, the president stated that the law was intended to protect South Korea from perceived threats from North Korea and to eliminate anti-state elements. This type of law imposes direct military control over civilian government functions during severe public order threats, a situation not seen in the country since 1980. The declaration caused a market crash on major South Korean crypto exchanges, including Upbit, Bithumb, and Coinone. Bitcoin dropped by 12% on Upbit, while Tether briefly plunged to 1,200 won (approximately $0.84). Altcoins like Ripple, Shiba Inu, and Dogecoin also saw double-digit declines. Upbit’s market index, tracking the performance of the top 30 tokens by market capitalization, fell 13.28% in a single day. This incident underscores South Korean investors’ heavy reliance on the crypto market and the direct impact of political decisions on this sector.

The U.S. government recently transferred nearly $2 billion worth of Bitcoin seized from the Silk Road online black market to Coinbase. Blockchain data shows that 19,800 BTC, valued at approximately $1.92 billion, passed through an intermediary wallet before reaching Coinbase, the leading U.S. exchange. These funds were confiscated from James Zhong, who was convicted of fraud in 2022 after manipulating Silk Road’s transaction system in 2012 to steal 50,676 bitcoins. The Silk Road marketplace, shut down in 2014, was used for illegal activities, including drug and service purchases, often using cryptocurrencies like Bitcoin. This seizure is one of the largest ever by U.S. authorities. The recent transfer raised concerns among investors about a potential market sale, contributing to a decline in Bitcoin’s price. However, Coinbase Prime has a contract with the U.S. Marshals Service to manage and dispose of seized digital assets, meaning a sale is not necessarily imminent despite Coinbase’s involvement.

MicroStrategy recently announced a major purchase of 15,400 bitcoins for $1.5 billion. Acquired between November 25 and December 1 at an average price of $95,976 per bitcoin, this brings the company’s total holdings to 402,100 bitcoins. Since 2020, under the leadership of co-founder and executive chairman Michael Saylor, MicroStrategy has adopted a strategy centered on Bitcoin accumulation. Initially a low-profile software company, it now uses its substantial Bitcoin purchases to attract investors seeking indirect exposure to the cryptocurrency via its Nasdaq-listed shares. This strategy began with a $250 million investment in 2020, a move Saylor views as a superior way to store and grow value long-term. The company’s stock price reflects the success of this approach, rising from under $15 before its Bitcoin purchases to $389 recently, setting a record high. MicroStrategy has outperformed most S&P 500 companies. Saylor asserts that Bitcoin, due to its scarcity and consistent appreciation, is an ideal asset for generating attractive shareholder returns. The company continues to accelerate its acquisitions, leveraging Bitcoin’s price rise this year. It has also announced plans to raise $42 billion for further purchases, solidifying its position as one of the largest institutional Bitcoin holders.

Saylor has also recommended that Microsoft adopt Bitcoin as a strategic asset. During a recent presentation to CEO Satya Nadella and the board, Saylor described Bitcoin as a major digital transformation of the 21st century, calling it “digital capital.” He argued that Microsoft could significantly increase its enterprise value and stock price by incorporating Bitcoin into its financial strategy. Criticizing share buybacks and bond investments for amplifying risks to shareholders, Saylor suggested Bitcoin as a counterparty risk-free reserve asset. He estimated that this strategy could raise Microsoft’s stock price by $584 and add $4.9 trillion to its enterprise value by 2034.

Bitcoin exchange reserves have dropped to their lowest levels in years, according to a CryptoQuant report. This decline reflects a reduction in Bitcoin’s liquid supply, signaling a shift in supply and demand dynamics in the market. It also indicates growing investor confidence in holding Bitcoin for the long term. Since the U.S. presidential election on November 5, over 171,000 bitcoins have been withdrawn from major exchanges, often moved to cold storage as part of a long-term strategy. Bitcoin reserves, which stood at around 3.2 million in October 2021, have now fallen to 2.46 million, marking a steady decline since 2021. Glassnode data similarly shows a record increase in illiquid supply, now at 14.8 million bitcoins, or 75% of the total circulating supply. This reflects the rising holdings of long-term investors, further reducing the supply available for active trading.

Justin Sun, founder of the Tron blockchain, made headlines by eating a banana he purchased for $6.24 million at a Sotheby’s contemporary art auction in New York. The banana was part of “Comedian,” a conceptual artwork by artist Maurizio Cattelan featuring a banana duct-taped to a wall. The piece has become a viral symbol, inspiring multiple memes and associated cryptocurrencies. During an event at the Peninsula Hotel in Hong Kong, Sun explained his vision for the artwork before removing the banana from the wall and eating it in front of journalists. According to Sun, the banana was “much better than others.” To preserve the artwork’s integrity, the banana had been replaced recently as instructed in the certificate of authenticity provided with the purchase.

Dan Morehead, CEO of Pantera Capital, predicts Bitcoin’s price could reach $740,000 by April 2028. In a letter to investors, he attributed this forecast to historical trends and a more favorable political environment for digital assets, including the election of pro-crypto President Donald Trump and a blockchain-friendly Congress. With only 5% of global financial wealth currently invested in blockchain-related assets, Morehead sees significant growth potential for Bitcoin. He argues that the regulatory headwinds that hindered Bitcoin adoption over the past 15 years are now turning into tailwinds. He emphasizes that investors should not believe they have “missed the boat” and highlights the ongoing positive dynamics driving the adoption and long-term value increase of digital assets. This perspective underscores the growing belief that Bitcoin could become a major store of value, supported by institutional adoption and clearer regulatory frameworks.

The fund remains invested at 85% BTC and 15% SOL.

The presented information is as of December 3rd, 2024, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.