Trump's recent endorsement of Bitcoin was a dramatic shift from his previous scepticism, with the president-elect now backing a bold Congressional bill that could reshape the crypto landscape. The proposed Bitcoin Act of 2024 would authorise the US government to purchase up to 200,000 bitcoins annually over five years, adding a million coins to federal reserves that would be held for at least 20 years. This massive acquisition plan would target roughly 5% of all Bitcoin that will ever exist, since the total supply is permanently capped at 21 million coins. What's interesting is that the bill is gaining bipartisan support, with Democratic leaders like Congressman Ro joining Republicans in backing the measure. The US government is already sitting on 213,000 bitcoins from various seizures, making it the largest government holder of the cryptocurrency worldwide. If passed after the 2024 election, this program could lead to massive price spikes in the crypto markets, as the government would be competing with private investors for a very limited supply of Bitcoin.
EQUITY
The S&P 500 finally cracked 6,000 while the Dow pushed past 44,000, continuing the momentum from Trump's election win and the Fed's latest rate cut. Valuation was supported by AI-linked giants and newcomers, for example Vistra and Palantir, who contributed 253% and 270%, respectively, since February. Money sitting on the sidelines in gold, bonds, and money-market funds could fuel more gains as investors gain confidence, as seen in the 10-year yield, which has jumped nearly 88 basis points from its September low to its recent high at 4.48%.
GOLD
Gold price took another left hook after an uppercut since Donald Trump victory, nearing $2,600—its lowest point since September. The inflationary policy expectations helped push the dollar to heights we haven't seen since July. However, Indian investors are seeing things differently, as their gold ETF holdings have doubled to 54.5 tonnes over the last four years while China central bank buying is still pausing. Market experts at JPMorgan don't see this recent sell-off as a major shift, calling it more of a "stumble" than a real change in direction.
OIL
Oil prices took a big hit on Monday, with WTI crude dropping 3.3% to $68 per barrel. There are multiple reasons for it, mainly China's latest economic stimulus package of $1.4 trillion that failed to impress markets, especially since it focuses mainly on helping local governments with debt rather than boosting consumer spending. The US dollar is at its highest level since July, making oil more expensive for international buyers, while projected policy suggests higher supply moving forward. OPEC's upcoming reports are monitored, mainly demand forecasts through 2025.
CURRENCY
The US dollar hit a four-month high as Wall Street bets on Trump's plans for tax cuts and tariffs driving up inflation. Major trading partners like Europe and China could face steep new tariffs, pushing the euro down to its lowest level since April and sending the Chinese yuan to three-month lows. Bitcoin took centre stage after Trump's crypto-friendly stance pushed it near $90,000 as he promised to make America "the crypto capital of the planet" and "all remaining Bitcoin to be MADE IN THE USA," supporting bitcoin mining activity.
