ALTERNATIVE MARKETS UPDATE – END NOVEMBER 2024

​Cryptocurrencies have exploded in price since Trump's victory. Prior to the election day, Bitcoin hovered between $60k and $70k. Since then, Bitcoin has narrowly missed the $100k on its latest rally. Bitcoin reached a new record high of $99.6k and has since fallen back to $91k. At the time of writing, Bitcoin has risen 37% since Trump was elected for office. With these new highs, Bitcoin nearly reached a market capitalization of $2tn. Figure 1 shows the price and market capitalization of Bitcoin since 2020 and its recent surge. Optimism in the cryptocurrency space increased significantly when Trump was elected to office. He highlighted plans for a government reserve in Bitcoin, progress on cryptocurrency regulation and the replacement of Gary Gensler as chair of the SEC. Gensler has shown a strong tendency against cryptocurrencies and is likely replaced by a person significantly more positive on cryptocurrencies.

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RESEARCH PERSPECTIVE VOL. 240 November 2024 Alternative Markets Update Cryptocurrencies have exploded in price since Trump's victory. Prior to the election day, Bitcoin hovered between $60k and $70k. Since then, Bitcoin has narrowly missed the $100k on its latest rally. Bitcoin reached a new record high of $99.6k and has since fallen back to $91k. At the time of writing, Bitcoin has risen 37% since Trump was elected for office. With these new highs, Bitcoin nearly reached a market capitalization of $2tn. Figure 1 shows the price and market capitalization of Bitcoin since 2020 and its recent surge. Optimism in the cryptocurrency space increased significantly when Trump was elected to office. He highlighted plans for a government reserve in Bitcoin, progress on cryptocurrency regulation and the replacement of Gary Gensler as chair of the SEC. Gensler has shown a strong tendency against cryptocurrencies and is likely replaced by a person significantly more positive on cryptocurrencies. Figure 1: Bitcoin Price Development & Bitcoin Market Capitalization from January 2020 to November 2024, Source: CoinMarketCap, November 2024 This steep growth of Bitcoin since Trump’s victory also makes the cryptocurrency extremely valuable compared to the world’s largest companies. Bitcoin would be the sixth largest company by market capitalization and almost twice as valuable as Berkshire Hathaway – the eighth largest company in the world. Figure 2 shows a comparison of Bitcoin’s market capitalization with the market capitalization of the largest stocks. Figure 2: Comparison of the Total Market Capitalization of Bitcoin and the Largest Stocks, Source: Pantera Capital, November 2024 While Bitcoin and cryptocurrencies combined have risen tremendously in recent years, the asset class still lacks significantly behind compared to other established asset classes. The cryptocurrency market is worth $3.3tn at the time of writing. However, the asset class is still significantly smaller than gold, which is often compared to Bitcoin as a hedge against inflation. Gold’s market capitalization is nearly $18tn, nearly six times the market capitalization of cryptocurrencies. This still pales in comparison to global government debt and the global stock market, as shown in Figure 3. Figure 3: Total Market Capitalisation of Equities, Government Debt, Gold, and Cryptocurrencies, Sources: Focus World Exchanges, IMF, CompaniesMarketCap, CoinMarketCap, November 2024 STONE MOUNTAIN CAPITAL Stone Mountain Capital is an advisory boutique established in 2012 and headquartered in London with offices Pfaeffikon in Switzerland, Dubai and Umm Al Quwain in United Arab Emirates and Tallinn in Estonia. We are advising 30+ best in class single hedge fund and multi-strategy managers across equity, credit, and tactical trading (global macro, CTAs and volatility). 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