The cryptocurrency market is once again under intense pressure, as Bitcoin’s sharp price swings trigger massive liquidations and reignite debates over digital assets’ role in mainstream finance. In just 24 hours, more than 110,000 traders were liquidated, with over $300 million in positions wiped out, according to CoinGlass data. This wave of volatility followed a surge in market sentiment driven by political signals—only to be quickly reversed by profit-taking and risk-off behavior.
Bitcoin’s Rollercoaster Ride
Bitcoin’s price has been on a wild journey recently. On December 12, the leading cryptocurrency climbed as high as $102,500**, fueled by speculation around U.S. President-elect Donald Trump’s pro-crypto statements. However, the rally didn’t last. Prices plunged over **$3,300, dipping to $99,200** by the morning of December 13. This rapid reversal wiped out both long and short positions, with **$200 million in longs and over $100 million in shorts liquidated during the period.
This isn’t the first time Bitcoin has seen such dramatic swings. Earlier in December, it briefly fell below **$95,000** before rebounding past $100,000—a level it first breached on December 5 amid growing optimism about regulatory shifts under the incoming administration.
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Political Momentum Fuels Crypto Optimism
Market analysts widely attribute the recent bullish momentum to Trump’s vocal support for cryptocurrencies. Following his election victory on November 5, speculation intensified that his administration would roll back restrictive crypto policies implemented under President Biden.
Trump has promised to become the “crypto president” and has taken concrete steps toward that vision:
- He nominated Paul Atkins, a known Bitcoin supporter, to lead the U.S. Securities and Exchange Commission (SEC), replacing Gary Gensler.
- He appointed David Sacks, former COO of PayPal, as White House AI and crypto czar—the first such role in U.S. history.
- He publicly declared plans to establish a "strategic national Bitcoin reserve", echoing proposals already underway at the state level.
On December 12, Trump made a symbolic appearance at the New York Stock Exchange, becoming the first president-elect since Ronald Reagan to ring the opening bell. There, he announced: “I will do great things in the field of cryptocurrency.”
These moves have amplified FOMO (fear of missing out) among retail and institutional investors alike, driving capital inflows into Bitcoin and related assets.
Institutional Interest Grows: Texas and Beyond
The push for broader adoption isn’t limited to federal politics. At the state level, Texas Representative Giovanni Capriglione introduced the Texas Strategic Bitcoin Reserve Act, proposing that the state hold Bitcoin as a financial asset within a special fund.
Key elements of the bill include:
- Accepting certain cryptocurrencies for state payments and taxes (converted to Bitcoin before deposit).
- Using cold storage and secure custody solutions.
- Granting the state auditor authority to regulate compliance.
The legislation underscores Bitcoin’s potential as a hedge against inflation and aligns with Texas’ broader goal of becoming a hub for digital asset innovation.
Wall Street Weighs In: Cautious but Curious
Despite growing political tailwinds, traditional financial institutions remain cautious. At the recent Reuters NEXT conference in New York, top U.S. bank executives expressed skepticism about jumping into crypto markets.
David Solomon, CEO of Goldman Sachs, emphasized the need for clear regulation:
“Regulatory frameworks must evolve… Right now, our ability to act in these markets is extremely limited.”
He classified crypto as a speculative asset, though he acknowledged the firm would reassess if rules change.
Similarly, Robin Vince, CEO of BNY Mellon, noted that while his bank now offers custody services for crypto-based ETFs and has invested in digital asset infrastructure, any expansion will require rigorous risk controls and real-world testing across economic cycles.
Under Biden, U.S. regulators imposed strict accounting rules that made crypto custody costly for banks. With Trump’s incoming administration expected to loosen oversight, financial institutions may soon find the path clearer—but they’re waiting for certainty before moving en masse.
贝莱德's Strategic 2% Allocation Advice
One of the most influential voices in the space is BlackRock, the world’s largest asset manager. In a recent report, BlackRock advised investors interested in Bitcoin to allocate up to 2% of their portfolio to the asset.
Paul Henderson, ETF CIO and Senior Portfolio Strategist at BlackRock Investment Institute, explained:
“Investors with appropriate governance and risk tolerance have a rationale for including Bitcoin in multi-asset portfolios.”
Why Consider Bitcoin?
- Low correlation with traditional assets
- Potential for diversified returns
- Growing institutional adoption
- Scarcity-driven value proposition
However, BlackRock also issued strong warnings:
“Bitcoin remains highly volatile and susceptible to sharp sell-offs. It may not achieve widespread adoption, and at times its returns closely track equities—especially risk-on tech stocks—limiting its effectiveness as a hedge.”
The firm compared Bitcoin’s current market cap (~$2 trillion) to that of the **Magnificent 7 tech giants** (Apple, Microsoft, Nvidia, etc.), whose average market cap is $2.5 trillion. Given their outsized influence on indices like the Nasdaq—which recently hit 20,000 points—BlackRock warned that heavy exposure to either group could significantly skew portfolio risk.
Crucially, the report stressed that exceeding a 2% allocation could make Bitcoin disproportionately risky relative to an entire portfolio’s equity exposure.
ETF Boom Drives Institutional Adoption
Since January 2024, when the first spot Bitcoin ETFs launched—including products from BlackRock and Fidelity—over $100 billion in assets** have flowed into these funds in just ten months. The iShares Bitcoin Trust alone holds **$51.1 billion, making it the dominant player.
This surge reflects increasing confidence in regulated crypto access points. For many investors, ETFs offer a safer alternative to direct ownership—without managing private keys or exchange risks.
Frequently Asked Questions (FAQ)
Q: Why did over 110,000 traders get liquidated?
A: Rapid price swings—especially when leverage is involved—trigger automatic liquidations on exchanges. When Bitcoin dropped over $3,000 from its peak, margin calls wiped out undercollateralized positions.
Q: Is Bitcoin really uncorrelated with stocks?
A: Historically, Bitcoin had low correlation with equities. But during recent rallies, its price has moved more in sync with tech stocks like Nvidia and Apple—especially during macroeconomic shifts or Fed policy speculation.
Q: Can state governments really hold Bitcoin?
A: Yes—several U.S. states are exploring this. The Texas bill is one example. If passed, it would legally allow the state to hold Bitcoin as a treasury asset using secure storage methods.
Q: Why does BlackRock recommend only 2% allocation?
A: Because of Bitcoin’s volatility. Even though it can enhance returns, too much exposure increases overall portfolio risk disproportionately. Two percent balances potential upside with prudent risk management.
Q: What happens if Trump implements pro-crypto policies?
A: Easier regulations could encourage banks to offer crypto services, boost ETF inflows, and increase public trust—potentially accelerating mainstream adoption and price appreciation.
Q: Could Bitcoin reach $150,000 by mid-2025?
A: Some analysts, like Nigel Green of deVere Group, believe so. With FOMO rising and institutions buying more, combined with supply scarcity from halving events, such targets aren't out of reach—if macro conditions remain favorable.
Looking Ahead: Volatility Meets Opportunity
As Bitcoin continues its ascent past $100,000 thresholds—and faces inevitable pullbacks—the market is entering a new phase defined by institutional participation, regulatory uncertainty, and political influence.
While over 110,000 liquidations serve as a stark reminder of crypto’s risks, they also highlight the immense trading activity shaping this emerging asset class. For informed investors, tools like ETFs, risk modeling, and strategic allocations (like BlackRock’s 2% rule) offer pathways to engage without overexposure.
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Whether you're watching from the sidelines or actively trading, one thing is clear: Bitcoin is no longer a fringe experiment—it's part of the global financial conversation.