December 2024 Macroeconomic Monthly Report: Uncertainties in Economic Stability, Outlook for the Crypto Market in 2025

The economic data for December in the United States generally met expectations, showing stable economic performance. Non-farm employment increased by 227,000 in November, slightly above expectations; the CPI in November rose by 2.7% year-on-year and by 0.3% month-on-month, both in line with expectations. The Federal Reserve lowered the target range for the federal funds rate by 25 basis points to 4.25%-4.50% as anticipated. However, the Federal Reserve subsequently indicated that the magnitude of rate cuts in 2025 could narrow to 50 basis points, which triggered market volatility, as this implies that the number of rate cuts in 2025 could decrease from the previously expected 4 times to 2 times.

The latest economic forecast from the Federal Reserve shows that the expected growth rate of the US economy for this year and next is 2.5% and 2.1%, respectively, which is an upward adjustment from the September forecast. The expected unemployment rate is 4.2% and 4.3%, respectively, which is a downward adjustment from previous forecasts. The inflation rate is expected to be 2.4% and 2.5%, while the core inflation rate is expected to be 2.8% and 2.5%, both exceeding the long-term target of 2%.

The December PMI data shows that the services sector performed strongly while the manufacturing sector appeared slightly weak. The preliminary services PMI reached 58.5, exceeding expectations and the previous value; the preliminary manufacturing PMI was 48.3, below expectations and the previous value; the composite PMI preliminary value was 56.6, surpassing expectations and the previous value. The services sector is experiencing its fastest growth since 2021, while manufacturing is affected by insufficient export demand.

Against the backdrop of a relatively stable macro environment, the US stock market has performed brilliantly. The Nasdaq index has surpassed 20,000 points, with several tech giants' stock prices reaching all-time highs. Investor sentiment is generally optimistic, with cash allocation at historically low levels and US stock allocation reaching historical highs. However, the Dow Jones index has experienced a rare "ten consecutive declines," mainly dragged down by certain component stocks.

The crypto market has also welcomed significant breakthroughs. The price of Bitcoin has surpassed $100,000 for the first time, while Ethereum has broken through $4,000. Market sentiment is high, partly influenced by political factors. Data from South Korea shows that about 30% of the country's population holds cryptocurrency, reflecting widespread investment enthusiasm.

Looking ahead to 2025, many institutions hold an optimistic view of the crypto market. Some predictions suggest that the price of Bitcoin could reach $200,000. Only 0.01% of publicly listed companies globally hold Bitcoin, indicating that there is still significant room for institutional investment. It is estimated that approximately $2.28 trillion in new funds could enter the Bitcoin market in the coming year.

The regulatory environment will become an important theme in the crypto market in 2025. The United States may face a critical moment for crypto regulation, the EU's MiCA framework will come into full effect, and several Asian countries are also advancing related regulations. The increase in global regulatory clarity is expected to attract more investors.

Besides Bitcoin, AI and stablecoins may become the new highlights of the crypto market in 2025. Several traditional financial institutions are considering entering the stablecoin market, demonstrating the immense potential of this field.

Despite the optimistic market outlook, investors still need to be wary of short-term volatility risks. The crypto market is about to迎来 "成人礼", and Bitcoin is expected to become a consensus investment in the mainstream financial circle, while stablecoins may achieve broader real-world applications. The crypto market in 2025 may be more attractive and challenging than in 2024.