Crypto Market Updates: Bitcoin Breaks $100K

Key Takeaways

1. Bitcoin Surpasses $100K: The historic milestone reflects growing adoption and a favorable market narrative
2. Strategic Bitcoin Reserve Proposal: Senator Lummis’ BITCOIN Act receives renewed interest following November’s election result
3. FTX and Ionic Updates: FTX progresses toward creditor distributions in early 2025, while Ionic shareholders push for accountability, resulting in key board resignations and contract termination.

$100,000

On December 4th, Bitcoin broke $100,000 for the first time - a significant milestone that underscores the resilience of an asset class that continues to defy expectations. November’s election and parallel rally have set the stage for what we believe is a transformative era for Bitcoin and the broader crypto market. With an incoming administration signaling a favorable stance on crypto, the groundwork for widespread institutional adoption is taking shape.

Momentum is evident in the numbers. In November, Bitcoin spot ETF inflows surged to $6.4bn, surpassing the previous peak of $6bn in February. Despite the excitement, key positioning metrics remain measured marking the difference between a bull and an overheated market. The annualized basis for CME futures sits comfortably in the low-to-mid teens, a significant drop from the 35% levels seen in 2021. Similarly, the average open interest-weighted funding rate for offshore perpetual futures is at 16% annualized , a far cry from the overheated peaks of over 100% .

On-chain indicators, which have proven insightful in the past, suggest there is still room for further upside. The MVRV ratio currently stands at 2.7, well below the previous cycle peak of 4.0 and the market cap to thermocap ratio, which compares market value to the "book value" of coins, is at 28 or 44% off from the 50.6 peak of the last cycle. While the amplitude of each cycle has decreased over time, the narrative surrounding Bitcoin's $100,000 milestone shifted dramatically in November from “if,” to “when.”

Bitcoin Strategic Reserve

Adding to Bitcoin’s momentum, Wyoming Senator Cynthia Lummis’ BITCOIN Act of 2024, a bold proposal to establish a strategic Bitcoin reserve without increasing the national debt, among other things, has gained renewed interest following November’s election result. The plan involves acquiring 1mm Bitcoin or 5% of the total supply for ~$100bn at today’s prices. The acquired Bitcoin would be held for a minimum term of 20 years, and can be used solely for the purpose of retiring  national debt during the holding period.

The bill builds on Trump’s remarks in July at a Bitcoin conference, where he pledged to establish a "national Bitcoin stockpile," leveraging existing government-held Bitcoin assets, which are estimated at ~200,000 Bitcoin from asset seizures, yet it faces challenges. Skeptics argue the plan is risky due to Bitcoin’s volatility. Prediction markets like Polymarket estimate just a 28% chance of the proposal becoming law. Proponents, however, believe this move could drive Bitcoin’s value to $500,000, though concerns about destabilizing the gold market linger. Despite the criticism, Senator Lummis remains optimistic, buoyed by Trump’s endorsement and growing enthusiasm for crypto.

FTX Updates 

In other positive news, FTX released an updated timeline for creditor and customer distributions with the first distributions expected in early 2025. Key milestones in the distribution process include the finalization of arrangements with distribution agents by early December. The Plan is anticipated to become effective in early January 2025, with the first distributions to holders of allowed claims in the Plan's Convenience Classes expected within 60 days thereafter. To be eligible for the Initial Distribution, customers must establish an approved account with a Distribution Agent, complete KYC verification, and submit required tax forms before the distribution record date.

FTX’s latest court filings reveal a cash position of approximately $12.2bn. With around $974mm in crypto assets and $2bn in investments left to be monetized, the estate appears well-positioned to meet its stated recovery targets, particularly given the recent surge in crypto prices. As an added kicker, only ~25% of non-de minimis claim holders have completed KYC so far as of November 22nd. While users have until June 1st, 2025 to complete their KYC submissions, any value from claims with non-completed KYC reduces the total denominator, effectively increasing the recovery value per eligible claim.

Ionic Updates 

Tony Vejseli, with the support of Figure Markets and GXD Labs, continues to stand firmly in support of Ionic Digital, Inc. stockholders. 

In November, we issued a comprehensive rebuttal to Ionic’s FAQ, reaffirming our commitment to improving transparency around the company’s financial and operational performance. As part of these efforts, Tony addressed a letter to the U.S. Trustee, outlining significant concerns regarding Ionic Digital’s operations since emerging from bankruptcy, including its failure to register common stock or achieve public listing.

Shareholder support is driving change. On November 25, board members Emmanuel Aidoo and Mac Gardner resigned. A few days later it was announced that Ionic terminated the Hut 8 contract. These actions by the company are a direct result of continued support in pushing for accountability and shareholder transparency.

If you are an Ionic shareholder and would like to support our efforts and have not already, please pledge your Ionic shares here.