(50/52) Weekly Market Insight | December Week 4 | Santa Rally Watch

Headline News: Santa Rally Watch

• Bitcoin remained range-bound last week, posting a marginal 0.55% gain. Despite dovish macroeconomic signals, specifically a weakening labor market and cooling inflation, market expectations for a January 2026 rate cut remain subdued at just 21%. Volatility may increase due to the record level options expiry on the upcoming Friday. The market needs a clear catalyst to shift market sentiment significantly to the upside. Investors are closely watching for regulatory developments in January, specifically the advancement of the CLARITY Act or potential SEC innovation exemptions.

Macro-Outlook: Distorted Economic Data

• The US non-farm payrolls decreased by 105K in October and subsequently increased by 64K in November. The unemployment rate increased to 4.6% in November, higher than the market expectations of 4.4%. The current population survey (CPS) response rate dropped to the lowest on record of 64% in November, indicating deteriorating economic data.
• The US retail sales flattened in October, below forecasts of a 0.1% rise.
• The US inflation decreased to 2.7% in November, below forecasts of 3.1%. However, some economists described the report as downwardly biased, noting that assuming zero price changes for missing October data. New York Fed President John Williams also stated the inflation data in November was likely distorted.
• The Bank of Japan increased the interest rate by 25bps to 0.75%, aligning with market expectations.

Upcoming Economic Calendar including,

• Tuesday, December 23, 9:30pm: US Durable Goods Orders in October and Q3 Estimated GDP

Weekly-Cryptos-Overview: Broader Institutional Adoption

• Coinbase unveiled major upgrades, integrating stocks and ETFs, prediction markets powered by Kalshi, AI advisor and more in the Coinbase app. Coinbase also launched Custom Stablecoins, providing branded stablecoin issuance services to institutions.
• Visa announced that all US card issuers can now settle directly with Visa using USDC stablecoin.
• Crypto.com partnered with DBS to accept direct bank deposits of SGD and USD to the crypto exchange.
• SoFi, a US chartered online bank, launched SoFiUSD stablecoin to streamline their operations with faster and more efficient money movement.
• Bitfinex announced zero fees for maker and taker on Bitfinex across spot & margin trading, derivatives trading, securities trading and OTC trading.
• The US Federal Reserve withdrew the policy statement that restricted state member banks from novel activities like crypto.
• Securitize, the major tokenisation platform for assets such as Blackrock’s BUIDL, introduced tokenisation of stocks on the platform.
• CME Group launched spot-quoted XRP and SOL futures.

Layer 1 and Layer 2s

• Ethereum named the major upgrade after Glamsterdam, Hegota, potentially including upgrades to Verkle Trees, state management and execution optimisations. Glamsterdam is expected to be execute in the first half of 2026, introducing enshrined proposer-builder separation (ePBS), while Hegota is expected in second half of 2026.
• JP Morgan launched its USD deposit token, JPMD, on Base. JP Morgan also launched its tokenised money market fund, MONY, on Ethereum.
• ZKsync announced Managed Services, providing dedicated ZK Stack chains along with RPC, block explorer, indexers, and event delivery to simplify operations for enterprises.
• Blackrock, Mastercard and Franklin Templeton signed MOUs with ADI Chain, a Middle East-focus compliant Layer-2, to advance regulated digital asset infrastructure on ADI Chain.
• Kalshi integrated deposit and withdrawal using TRX and USDT on Tron Network.
• BOB introduced Native Bitcoin Vaults Stack, a BitVM powered infrastructure, allowing using native Bitcoin as DeFi collateral and borrowing assets on other supported chains.
• DTCC partnered with Canton Network to bring DTC-custodied US treasuries on-chain.

Dapps

• ETHGas raised $12 million led by Polychain to build Ethereum’s blockspace futures market.
• Ondo introduced Ondo Bridge for its tokenised stocks across Ethereum and BNB Chain via LayerZero. Ondo also launched its Global Markets on Solana.
• United Stables launched USD-stablecoin, U, natively on BNB and the protocol has issued more than $100 million U token.
• Brevis partnered with Opinion bringing verifiable results for the resolutions in the prediction markets.
• World (previously Worldcoin) introduced a new World App, including encrypted messaging, multi-currency support, and more.
• Rysk introduced Rysk Premium, an abstracted volatility income strategy for passive investors and customised volatility strategy for sophisticated allocators.
• Pendle launched its principal tokens (PTs) on Solana via Chainlink CCIP and Kamino.
• Phantom introduced Phantom Cash debit card and Kalshi prediction markets integration on the platform.
• Euler partnered with HypurrFi to bring full Euler lending stack integration on Hyperliquid.
• Render Network introduced Dispersed, a new AI and 3D compute network.
• PancakeSwap and YZi Labs announced a new incubated prediction markets on BNB Chain, Probable. It is the third prediction market on BNB Chain publicly backed by YZi Labs, after Opinion and Predict.fun.
• Circle acquired the core contributors of Axelar, Interop Labs, and intellectual property. Notably, the acquisition didn’t include Axelar Network.

Governance and Upcoming Alpha

• Uniswap’s final fee switch proposal, Unification, will be concluded on December 26.
• About $23.8 billion notional value worth of Bitcoin options are expiring on December 26.
• Aave is actively discussing a proposal to transfer Aave’s brand assets to Aave DAO from Aave Labs.
• Eigen Cloud proposed ELIP-12, an Incentives Committee to direct EIGEN emissions and drive value back to EIGEN holders.
• Lido is expected to launch phase 1 of Lido v3 soon, as the activation proposal passed.
• World Liberty Finance proposed to use less than 5% of unlocked WLFI on treasury to accelerate USD1 adoption. According to Arkham, the team currently holds about 46.6% of WLFI total supply.
• The White House AI & Crypto Czar, David Sacks, stated a markup for CLARITY Act is coming in January 2026.

Token Unlock

• 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.
• TREE token unlocks on December 29, amount representing 6.16% of the token supply.
• IO token unlocks on December 31, amount representing 6.09% of the token supply.
• KMNO token unlocks on December 31, amount representing 6.92% of the token supply.
• EIGEN token unlocks on January 1, amount representing 7.52% of the token supply.
• LA token unlocks on January 5, amount representing 5.94% of the token supply.
• MOVE token unlocks on January 10, amount representing 5.78% of the token supply.
• LINEA token unlocks on January 11, amount representing 6% of the token supply.