Market Commentary: Bitcoin Peaks Amid Political Victory and Altcoin Surge in Late 2024

In November 2024, the cryptocurrency market reached new heights following former President Donald Trump’s decisive victory in the U.S. presidential election. Trump’s win, coupled with the successful acquisition of key swing states like North Carolina, Georgia, and Pennsylvania, created a favorable regulatory environment that propelled Bitcoin (BTC) to a new all-time high. This political shift not only boosted investor confidence in Bitcoin but also energized the broader crypto market.

Major cryptocurrencies such as Dogecoin (DOGE) and Solana (SOL) led the gains during this period. DOGE saw significant appreciation thanks to high-profile endorsements from Elon Musk and the introduction of the Department of Government Efficiency (D.O.G.E), which enhanced its mainstream appeal. Meanwhile, SOL gained momentum due to heightened optimism surrounding the approval of a Solana ETF under the pro-crypto administration, attracting more institutional interest.

Crypto-related equities also experienced substantial growth. Companies like MicroStrategy (MSTR) and Coinbase (COIN) saw their stocks climb, alongside mining giants such as Riot Blockchain, Marathon Digital Holdings, and IREN Technologies. Analysts from Bitwise highlighted the market’s optimism for a renewed bull run, anticipating that a Republican sweep in Congress would accelerate digital asset reforms and further legitimize the cryptocurrency sector.

Brokerage firms responded positively to these trends. Bernstein elevated its price target for MicroStrategy to $600 from $290 and maintained an outperform rating, recognizing the company’s exceptional Bitcoin treasury strategy as a major attraction for global capital reserves. Under CEO Michael Saylor, MicroStrategy owns 1.7% of the world’s Bitcoin supply and announced plans to purchase an additional $42 billion in Bitcoin over the next three years, aiming to hold 4% of its portfolio in Bitcoin by 2033. Similarly, Canaccord raised MicroStrategy’s price target to $510 from $300 while reiterating a buy rating, emphasizing the firm’s innovative approach that prioritizes Bitcoin accretion per share over traditional profit and loss metrics. Both brokers cited a structural bull market for Bitcoin, supported by favorable regulations, U.S. government backing, institutional adoption, and positive macroeconomic conditions, positioning MicroStrategy as a leading investment vehicle for substantial Bitcoin exposure.

However, the optimistic trajectory faced a sharp downturn by the end of November. MicroStrategy’s stock plunged nearly 40% from its all-time high of over $540 per share, despite a year-to-date increase of 416%. This decline followed a short report from Citron Research on November 21 and coincided with a significant drop in Bitcoin’s price. The situation was exacerbated by a record-breaking retail buy on November 20, where investors purchased nearly $100 million in shares, resulting in an unprecedented trading volume of $136 billion—the highest since the GameStop frenzy. Consequently, MicroStrategy’s net asset value (NAV) premium fell to 2.09, based on its market cap of $75 billion versus its Bitcoin holdings valued at $36 billion. While brokers like Bernstein and Canaccord remain optimistic about MicroStrategy’s leveraged Bitcoin strategy, the sharp stock decline underscored the risks associated with high-volume trading in volatile markets.

As December began, XRP emerged as a standout performer, surging over 20% in a single day and achieving a 375% increase over the past month. Its market capitalization reached $139 billion, surpassing Tether (USDT) as the third-largest cryptocurrency. This meteoric rise was driven by increased retail investor interest, viral trends on platforms like TikTok, speculation about Ripple-issued stablecoins, and potential ETF approvals. Additionally, South Korea’s Democratic Party postponed a planned crypto capital gains tax, further fueling speculative trading and boosting XRP’s standing in the market.

Meanwhile, Bitcoin struggled to break the $100,000 mark, hindered by a substantial $384 million sell wall and a decline in market dominance from 61.5% to 56.5%. Analysts observed a significant capital shift from Bitcoin to altcoins like XRP and Solana, driven by Bitcoin’s resistance at the psychological barrier and growing liquidity in alternative cryptocurrencies.