Crypto Weekly Digest | Cathie Wood's ARK Buys the Dip, Betting on a Fed Policy Pivot
Recently, the cryptocurrency market has experienced extreme volatility. Since the beginning of the year, $Bitcoin (BTC.CC)$ once surged above a record-breaking $126,000, only to suffer a massive correction, falling back to near $80,000. Last week, driven by a combination of the macroeconomic environment and expectations of a Federal Reserve rate cut, the crypto market temporarily halted its decline. Bitcoin returned above $91,000, but subsequently fell back below $87,000. $Ethereum (ETH.CC)$ also broke through $3,000 before retracing to near $2,800.
Top events last week
Fed Rate Cut Expectations Rise, Crypto Market Warms Up
The cryptocurrency market has recently seen a significant rebound, with Bitcoin climbing back to $90,000. Analysts point out that the main reason for the crypto market's counterattack is that the previous decline was too severe, triggering an oversold bounce for cryptocurrencies like Bitcoin and Ethereum. Additionally, rising expectations for a Federal Reserve rate cut have boosted bullish sentiment in the market.
According to the CME "FedWatch" tool, as of press time, the probability of a 25 basis point rate cut by the Fed in December has risen to 84.9%, with a 15.1% probability of maintaining current rates. Furthermore, the probability of a cumulative 25 basis point cut by January next year is 67.2%, with an 11.2% chance of rates remaining unchanged, and a 21.6% chance of a cumulative 50 basis point cut.
In other news, White House National Economic Council Director Kevin Hassett has emerged as the leading candidate for the next Federal Reserve Chairman. Analysts note that as a key confidant of President Trump, if Hassett assumes the role of Fed Chair, he will likely guide a more "dovish" monetary policy.
Regarding Bitcoin's previous crash, Nobel laureate Paul Krugman believes the slump should be blamed on Trump himself. He argues that it was Trump's election victory last autumn that catalyzed Bitcoin's earlier rally.
In his latest article, Krugman points out that Trump's declining poll numbers are having a negative impact on Bitcoin prices. He believes that since Trump promised to help the digital asset industry during his campaign, the declining approval rating of the leader inevitably affects Bitcoin prices. Krugman wrote: "Trump's political power is clearly waning, and the price of Bitcoin—which has effectively become a bet on 'Trumpism'—has plummeted along with it."
The so-called "Trump Trade" refers to traders buying cryptocurrency driven by Trump's election and his policy push. Bitcoin prices surged on the eve of Trump's victory and rose further after he took office. Krugman further noted that Bitcoin has failed to find practical utility and behaves more like a highly volatile tech stock.
"Sister Wood" Adds to Positions in Coinbase, Bullish, Circle, and Robinhood, Betting on a "Substantial Reversal" in Inflation
Cathie Wood's Ark Invest continued to increase its holdings in crypto-related stocks on Wednesday, cumulatively buying approximately $16.47 million worth of $Coinbase (COIN.US)$ stock, totaling 62,166 shares. These were distributed across three funds: $ARK Innovation ETF (ARKK.US)$, $ARK Next Generation Internet ETF (ARKW.US)$, and $ARK Fintech Innovation ETF (ARKF.US)$.
Currently, Coinbase is ARKK's fifth-largest holding, with a total value of approximately $392 million and a weighting of 5.2%. Affected by recent corrections, Coinbase's stock price has still fallen 26.7% over the past month.
Ark also increased its holdings in the $ARK 21Shares Bitcoin ETF (ARKB.US)$, buying 39,400 shares (approximately $1.17 million). Recently, Ark has continuously absorbed crypto-exposed stocks such as $Coinbase (COIN.US)$ , $Bitmine Immersion Technologies (BMNR.US)$ , $Bullish (BLSH.US)$ , $Circle (CRCL.US)$ , and $Robinhood (HOOD.US)$ , intending to utilize the window of opportunity provided by the sector's significant correction.
Cathie Wood stated on X that the liquidity squeeze currently suppressing the crypto and AI sectors is expected to reverse in the coming weeks, basing her judgment on three points:
1. The Federal Reserve may end Quantitative Tightening (QT) at the meeting on December 10;
2. With the resolution of the US government shutdown issue, market liquidity will gradually return;
3. The Fed may cut rates again next month.
In a previous webinar, Wood stated that the 10-year US Treasury yield already reflects a "sharp drop" in inflation over the past month, noting that "deflationary forces" in the tech sector are strengthening. She added, "After the impact of tariffs is digested next year, we would not be surprised to see a true breakthrough to the downside in inflation."
Prediction Markets Become the New Trend, Robinhood Stock Soars After Securing Key License
$Robinhood (HOOD.US)$ shares closed up 10.93% on last Wednesday, outperforming nearly 500 stocks in the S&P 500 index.
Robinhood rose a cumulative 19.48% last week, recovering nearly half of its November losses. Year-to-date, the stock is up 244.07%, ranking second in the S&P index, trailing only the recently hot Western Digital (+251.14%).
Earlier last week, Robinhood announced on its website that it had reached an agreement with Susquehanna International Group to jointly take over 90% of the cryptocurrency derivatives exchange MIAXdx. The new agreement will allow Robinhood and Susquehanna to directly control the infrastructure required for prediction market contracts, while MIAX will retain a 10% stake in the new company to participate in the prediction market.
Robinhood executive JB Mackenzie stated: "The company sees strong customer demand for prediction markets. Our investment in infrastructure will allow us to provide customers with a better experience and more innovative products."
Analysts at financial services firm Cantor Fitzgerald noted in a Wednesday report that although the scale of Kalshi contracts offered by Robinhood is relatively small, it has already had a huge impact on its business. "Prediction markets have become the fastest-growing product line by revenue in Robinhood's corporate history. Within a year of launch, over 1 million customers have traded more than 9 billion contracts."
According to public data aggregated by Dune Analytics last month, for the week ending October 19, the notional trading volume of US prediction market platforms Kalshi and Polymarket exceeded $2 billion for the first time, surpassing the frantic trading levels seen during last year's election.
Perspectives
ARK Invest Maintains Bitcoin 2030 Target of $1.5 Million, Expects Improved Liquidity to Drive Rebound
ARK Invest CEO Cathie Wood reiterated the firm's optimistic forecast for Bitcoin, maintaining the "bull case" target price of $1.5 million by 2030.
ARK expects that with the end of the US government shutdown crisis, approximately $300 billion in liquidity will return to the market within the next 5-6 weeks. Coupled with the Federal Reserve's plan to end quantitative tightening and shift to quantitative easing on December 1, these factors will alleviate the "liquidity squeeze" currently affecting the crypto and AI markets. Wood stated that although the development of stablecoins has distracted from some of Bitcoin's role as a safe-haven asset, the higher-than-expected rise in gold prices has offset this impact, keeping their bull market forecast unchanged.
"Wall Street Soothsayer" Tom Lee: Bitcoin Likely to Reclaim $100k This Year, "Maybe" Hit New Highs
On November 27, BitMine Chairman Tom Lee stated in an interview with CNBC that he expects BTC is very likely to stand above $100,000 this year. Regarding whether it will reclaim the historic high of $125,100 set in October within the year, he only gave a judgment of "maybe," but stated that "Bitcoin's best days are still ahead." On the 21st, Tom Lee stated he still believes Bitcoin will reach $150,000-$200,000 by the end of January next year.
Galaxy Digital Founder: Bitcoin Could Return to $100k by Year-End, But Expect Significant Selling Pressure
Mike Novogratz, founder of the well-known crypto investment firm Galaxy Digital, stated on a podcast that he remains convinced Bitcoin can return to $100,000 by the end of the year, but expects significant selling pressure at that point.
This is because the crash has dealt a psychological blow to the market that is medium-term in nature. At the same time, Novogratz stated that with clearer crypto policies and the entry of traditional financial giants, the market will become deeply bifurcated in the future, favoring tokens that can provide actual value.
Matrixport: Divergence Between Gold and Bitcoin Likely to Persist
Matrixport released a chart stating, "According to implied pricing in federal funds futures, the market expectation for a Fed rate cut on December 10 has risen to 84%, while the probability of rates remaining unchanged in January next year has also increased to 65%. Under such interest rate path expectations, even if a rate cut lands in December, the overall loosening of monetary policy remains limited.
Compared to Bitcoin, gold has a higher correlation with the US fiscal deficit and the pace of treasury issuance, making it a more direct hedge against fiscal expansion and rate cut expectations. Bitcoin relies more on actual incremental capital inflows, and currently, incremental liquidity has not been significantly released. In this environment, the divergence between gold and Bitcoin is likely to persist in the short term."
Crypto-Related Stocks Tracking
MicroStrategy to be "Excluded" from Indices? JPMorgan Report Caught in Crossfire as Crypto World Calls for "Boycott"
Voices against financial services giant JPMorgan are rapidly expanding within the Bitcoin community and among supporters of $Strategy (MSTR.US)$ , with calls to "Boycott JPMorgan" strengthening last week.
The Bitcoin community's anger stems from news that index company MSCI (formerly Morgan Stanley Capital International, responsible for deciding corporate inclusion in indices) may exclude crypto asset treasury companies from its indices in January 2026. This news was shared by JPMorgan in a research report.
In response, Bitcoin supporter and real estate investor Grant Cardone stated: "I just pulled $20 million from Chase (JPMorgan's bank) and am suing them for credit card violations." As the online boycott movement heats up, Bitcoin advocate Max Keiser also called out: "Crush JPMorgan, buy Strategy (MicroStrategy) and BTC."
MicroStrategy entered the Nasdaq 100 Index (consisting of the 100 highest market cap non-financial companies) in December 2024, thereby enjoying massive capital inflows from passive index funds. Regarding the adjustments proposed by MSCI, Michael Saylor publicly responded: "Strategy is not a fund, not a trust, and not a holding company." "Funds and trusts hold assets passively; holding companies only hold investments." He further stated that MicroStrategy is a "Bitcoin-backed structured finance company."
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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104139369 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
74368292 : Intuition
151806693 : I also believe it will hit rock bottom
151845949 : the japs are coming. with Hapan down, rate cut is now critical to prevent a fear inspired recession
Moo Queenz : Up up up
75728245 : hold
UpN : retesting levels
151292542 : Cathie Wood expects BTC to go to $1.5m by 2030.
If you believe that, I have a couple of countries to sell you, they come with free bridges.
207trading : itll decline some more, but i think a big push is coming![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
anchovy3 : btc really divides people. rn poll shows voters on here either thinking it will soar or sink. Krugman quote makes a lot of sense.
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