(48/52) Weekly Market Insight | December Week 2 | FOMC Week

Headline News: FOMC Week

• The crypto market traded sideways in anticipation of the upcoming FOMC meeting, weighed down by persistent liquidity constraints visible in elevated Secured Overnight Financing Rate (SOFR) and Standing Repo Facility usage despite the conclusion of the Fed’s quantitative tightening. Selling pressure was further exacerbated by a hawkish Bank of Japan, which triggered an unwinding of JPY-funded risky investment. However, as the US stock market staged a mild recovery, Bitcoin also demonstrated resilience to close the week marginally higher with a 0.06% gain.

Macro-Outlook: Hawkish BOJ; Resilient US Economy

• The US ISM manufacturing PMI dropped to 52.2 in November, higher than the market expectations of 51.9. Meanwhile, the US ISM service PMI rose to 52.6 in November, also higher than the market expectations of 52.1, indicating a resilient economy.
• The Fed preferred inflation indicator PCE decreased to 2.8% in September, in line with the market forecasts. The US personal income and spending increased by 0.4% and 0.3% respectively in September, which is higher than expectations for income, while spending matched market expectations.
• The Michigan consumer sentiment increased to 53.3, higher than market forecasts of 52 and marked as the first improvement in sentiment in five months.
• The market expects roughly 80% chance of a December rate hike by the Bank of Japan on December 19 as governor Ueda signalled BOJ is considering the “pros and cons” of raising rates last Monday.
• The market expects about 88% chance the Fed will cut 25bps in the upcoming FOMC meeting. New economic projections and additional guidance on the Fed balance sheet are also expected from the upcoming meeting.

Upcoming Economic Calendar includes,

• Tuesday, December 9, 11:00pm: The JOLTs Job Openings in September and October
• Thursday, December 11, 3:00am: FOMC meeting

Weekly-Cryptos-Overview: The Inevitable Innovation Exemption

• The SEC Chair Paul Atkins stated “innovation exemption” is expected to be introduced in January 2026.
• Strategy Inc announced the establishment of a $1.44 billion reserve to cover dividend and interest payments for at least the next 12 months.
• Sony Bank plans to issue a USD-pegged stablecoin as early as 2026, aiming to facilitate payments within the Sony ecosystem for gaming and anime.
• European banks, including ING and BNP Paribas, formed a new company called Qivalis to launch a Euro-denominated stablecoin in the second half of 2026.
• Kraken acquired BackedFi to bring the issuance of xStocks fully in-house, accelerating its move into tokenized equities and 24/7 capital markets.
• Crypto.com announced a partnership with Fanatics to launch Fanatics Markets, a fan-led prediction market at the intersection of sports, finance, and culture.
• Binance introduced Binance Junior, a parent-controlled sub-account feature designed to help parents educate kids and teens about crypto savings and financial literacy.
• Coinbase introduced a minimal fee of $0.001 after 1,000 settled x402 payments per month.

Layer 1 and Layer 2s

• Ethereum successfully upgraded the Fusaka update on the mainnet, introducing features like PeerDAS to increase rollup data throughput and increasing the Layer 1 gas limit to prepare for further Layer-1 scaling.
• Optimism successfully activated the Jovian upgrade and across the Superchain (Base, Unichain), allowing chain operators to specify a minimum base fee, limit to DA usage and more.
• Base launched Base-Solana bridge, enabling seamless asset transfers between the two major ecosystems.
• TON network launched its decentralised confidential compute network, Cocoon, allowing users to process AI requests privately while enabling GPU owners to earn TON.
• ZKsync introduced ZKsync Interop, enabling ZKsync users to seamlessly access Ethereum markets on Layer-1 without leaving ZK Chain. ZKsync also announced the team will deprecate ZKsync Lite in 2026.
• NEAR introduced NEAR AI Cloud and Private Chat, enabling end-to-end privacy when interacting with open-source AI models like ChatGPT.
• Immutable introduced Immutable Audience, an AI-powered growth software that helps game developers to better identify real players from bots, target quests and campaigns to retain and reward organic audiences.

Dapps

• Kalshi announced the launch of its tokenized prediction markets on Solana, enabling prediction markets to broader crypto users and potentially new use cases of tokenised prediction markets in DeFi. The platform also announced major media partnerships with CNN and CNBC to integrate real-time prediction data into their programming.
• Trust Wallet launched a native predictions feature powered by MyriadMarkets, allowing users to trade sports, crypto, and political outcomes directly within the app, with Polymarket and Kalshi integrations coming soon.
• Polymarket launched an iOS app. MetaMask also integrated Polymarket into its MetaMask Mobile.
• MetaMask introduced MetaMask Transaction Shield, covering up to $10,000 per transaction against wallet drainers.
• Circle announced a collaboration with OpenMind to develop standards for machine-to-machine payments, aiming to build the infrastructure for autonomous AI transactions using USDC.
• Aave partnered with CoW Swap to integrate their solver network, providing users with better pricing, MEV protection, and a new intent-based flash loan product on the Aave interface.
• Curve Finance launched its first FX liquidity pool (CHF-USD) on Ethereum, powered by the new FXSwap algorithm designed for low-volatility forex pairs.
• Drift Protocol announced Drift v3, featuring a complete redesign that claims to offer 10 times faster execution and improved liquidity for traders on Solana.
• Lighter introduced spot trading, enabling users to deposit and transfer ETH as the first native asset on its network.
• Farward Industries Partners, the SOL-DAT company, partnered with Sanctum to launch fwdSOL liquid staking token.

Governance and Upcoming Alpha

• Stable, the USDT-focused layer-1, introduced its STABLE token, which will be used for staking but not as a gas token. The token is launching on December 8.
• ADI Chain will launch its mainnet and the ADI token on December 9, positioning the chain for regulated Dirham-backed stablecoin and institutional adoption in Abu Dhabi.
• Yield Basis announced activating fee switch, distributing protocol fees to veYB holders depending on staked ybBTC. The voting will end on December 10.
• Midnight, Cardano’s privacy-focused Partner Chain announced its NIGHT token allocation will begin on December 10 with a thawing schedule for token unlock.
• Solana’s biggest conference, Breakpoint, will be held from December 11 to 13 in Abu Dhabi.
• Almanak, the highly anticipated DeFAI protocol, plans to launch its ALMANAK token on December 11. The protocol will also launch an incentive campaign, Almanak Games, from December 11 to 30.
• Bittensor is expected to be halving its block reward for the first time on December 15.
• Talus, the decentralised AI agent infrastructure protocol, introduced US token as the workflow payment token and staking token for operators. The token is expected to launch very soon.
• Zama, the leading Fully Homomorphic Encryption (FHE) protocol, announced a public auction for 10% of the ZAMA supply from January 12 to 15, utilizing a sealed-bid Dutch auction on Ethereum secured by FHE to ensure fair price discovery.
• Solana Mobile revealed SKR tokenomics, allocating 30% to airdrops and 15% to Solana Mobile in January 2026. Guardians have to stake SKR to provide device authenticity verification, dapp reviews and enforce community standards.
• Fluid announced Venus X, a money market and DEX on BNB Chain powered by Fluid and Venus Protocol, scheduled for release in Q1 2026.
• Aster released its H1 2026 roadmap, confirming the Aster Chain L1 mainnet launch for Q1 2026 and the introduction of staking and governance in Q2. Shield Mode, TWAP strategies, RWA stock perpetual are expected to be launched this month.
• Celo announced an extended partnership with MiniPay to expand its payment apps to Asia and Latin America in the first half of 2026.
• Babylon partnered with Aave to build the first native Bitcoin-based Spoke on Aave v4, enabling native Bitcoin collateral on Aave.
• Scroll teased a new initiative about privacy.

Token Unlock

• LINEA token unlocks on December 10, amount representing 6.11% of the token supply.
• HOME token unlocks on December 10, amount representing 4.71% of the token supply.
• BB token unlocks on December 14, amount representing 10.9% of the token supply.
• ZKC token unlocks on December 15, amount representing 7.46% of the token supply.
• VANA token unlocks on December 16, amount representing 19.9% of the token supply.
• ZRO token unlocks on December 20, amount representing 10.3% of the token supply.
• KAITO token unlocks on December 20, amount representing 3.46% of the token supply.
• LISTA token unlocks on December 21, amount representing 13.1% of the token supply.
• XPL token unlocks on December 25, amount representing 4.94% of the token supply.
• SAHARA token unlocks on December 26, amount representing 7.42% of the token supply.