In markets
Bitcoin fell 17.6% in November, marking its worst performance on record, and opened December with a horror plunge after rising Japanese bond yields sparked a risk-off sentiment. Bitcoin plummeted to hit A$128.1K/US$83.9K, and everything else followed suit. Apart from the carry trade news, there is plenty of other FUD to go around with increased doubts over Strategy’s leveraged Bitcoin play, Tether’s ability to hold the peg, and China is once again cracking down on crypto, as news emerged that it remains the third largest Bitcoin miner despite a 2021 ban. Gold is now up 60% for the year, while Bitcoin is down 10%. The S&P 500 rose 5% from its November 21 low, as confidence grows of a December US interest rate cut. Bulls are hoping that Ethereum’s Fusaka upgrade, the end of quantitative tightening in the US and the traditional Santa Claus rally may help propel prices upwards again. Bitcoin finishes the week down 2.2% to trade around A$131,882 (US$86,298) while Ethereum is down 5.1% on the same time last week to trade around A$4,278 (US$2,799). XRP, Solana and Cardano all lost between 8% and 9%, while Dogecoin lost around 10%. The Crypto Fear and Greed Index is at 24, or Extreme Fear.
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In headlines
Japan’s carry trade
For years, large funds have borrowed trillions of dollars at nearly zero interest rates in Japan and then invested that money elsewhere. Some of that money found its way into crypto, so the news that the 2-year bond rate in Japan has risen above 1% on expectations that the central bank will begin tightening hit crypto markets very hard. The move was amplified by Sunday trading conditions, where markets are thin and at their most illiquid, resulting in hundreds of millions of dollars in leveraged positions being wiped out in an hour. BitMine’s Tom Lee claims that one-third of crypto market makers were wiped out due to the October 10 crash, which could be a factor in crypto’s recent performance, too.
Fusaka upgrade to Ethereum
Ethereum’s Fusaka upgrade goes live this week and will enable the L2s (excluding Lighter) to scale up from approximately 300 TPS at present to around 1,000 TPS within a month. The headline change is Peer Data Availability Sampling, which is akin to torrenting for data blobs – splitting the blob processing across different parts of the network, rather than requiring everyone to upload and download the entire thing. Two hard forks in the next month will progressively raise the blob count by 133% from the current six, and that could increase massively to 72 or more over the next year as well. Another upgrade ties blob fees to the Ethereum gas price, which will improve the supply and demand economics. The gas limit was also to be increased to 60 million, but this change was implemented this week after validators voted in favour of it. The L1 should now be able to process around 30TPS, with creator Vitalik Buterin suggesting a 5x increase in the gas limit is “one possible future”. There’s also support for preconfirmations to make transactions feel faster, as well as a new precompile that will enable Ethereum users to log in and approve transactions using passkeys and biometrics on their phones. The Ethereum price pumped 50% after May’s Pectra upgrade.
Australian digital assets framework
Australia’s Treasurer, Jim Chalmers, and Financial Services Minister, Daniel Mulino, introduced the Digital Assets Framework legislation into Parliament this week. The bill will create two new financial product categories: digital asset platforms and tokenised custody platforms, both of which require Australian Financial Services Licenses. The duo issued a statement saying that crypto presents “big opportunities” for the Australian economy, potentially including up to A$24 billion in productive and cost savings.
Tether could depeg, says ratings agency
Tether FUD is back, and it’s gained added credibility given it’s coming via an S&P Global rating downgrade to “weak“. The ratings agency is concerned about USDT’s ability to maintain its peg, given its exposure to high-risk assets, including Bitcoin, gold, secured loans, and corporate bonds. It stated that 5.6% of Tether’s backing is BTC, and a drop in its value could leave Tether undercollateralized. Tether released a statement pointing out that it has never refused a redemption request from a verified user. CEO Paolo Ardonio said it has an additional US$30 billion (A$45.8B) available to maintain the peg if necessary.
Strategy could sell Bitcoin: CEO
Strategy’s CEO isn’t actually Michael Saylor; it’s a guy named Phong Le, and he says Bitcoin sales are a genuine possibility. He told the What Bitcoin Did podcast: “If the stock trades below the value of our Bitcoin and we can’t raise any other capital to pay the preferred dividends, then mathematically we would have to sell some Bitcoin. It would be the last resort.” Strategy subsequently announced a US$1.4 billion (A$2.13B) “cash reserve” which can cover its dividends and interest payments for the next couple of years. The company’s share price has fallen more than 55% in a few months and now trades below the value of the Bitcoin it holds, even after accounting for its debt.
ETFs snap losing streak
Last week saw AU$368 million (US$562M) of inflows into the Ethereum ETFs, breaking a three-week losing streak of outflows that saw US$1.74 billion (A$2.65B) drained. BitMine also purchased an additional 96.8K ETH this week. The Bitcoin ETFs took in US$70.2 million (A$107.3M) last week, amid a wave of renewed concerns over the community’s perceived inability to address quantum vulnerabilities. Approximately US$4.35 billion (A$6.64 billion) left the Bitcoin ETFs over the previous four weeks.
$2.6T asset manager tokenises fund on Ethereum
Europe’s largest fund manager, Amundi, has debuted its first tokenised shares on Ethereum for a euro money market fund. The fund holds short-term debt in Euros. Amundi manages approximately US$2.6T (A$3.97T) in assets and has more than 100 million retail clients.
Japan to introduce 20% flat tax on crypto
Japan’s Financial Services Agency has proposed a 20% flat tax on crypto gains starting in 2026. Select cryptocurrencies, such as Bitcoin and Ethereum, would be reclassified as financial products and benefit from the simplified flat tax used for traditional securities.
South Korean stablecoin framework delayed
South Korea’s central bank has opposed a new stablecoin framework that was expected to be implemented by the end of the year. The Bank of Korea wants banks to be the majority owner of any licensed stablecoin issuers, while lawmakers have proposed opening up issuance to more players.
Glass half full commentators
Speaking before the recent plunge BitMEX founder Arthur Hayes said he is sticking with his US$250,000 Bitcoin (A$382K) price prediction for the end of the year. Like Ark Invest’s Cathie Wood, Hayes believes a US rate cut and increased liquidity will help risk assets such as Bitcoin. BitMine’s Tom Lee told CNBC that the end of quantitative tightening in the US this week will be a massive tailwind for markets and said the last time QT ended in 2019, markets rallied 17% in three weeks.
AutoTrader is now called Recurring Buy
The AutoTrader feature on Independent Reserve has been renamed to Recurring Buy, with an updated interface designed to simplify automated crypto purchases.
You will still be able to automate your crypto purchases with added flexibility to choose how much and when to allocate for each asset.
New listing now available: AUDM (Macropod AUD)
We are pleased to share that AUDM (Macropod AUD), a 1:1-backed Australian dollar stablecoin, is now available on Independent Reserve. AUDM is supported by Macropod, which operates under Australian Financial Services Licence (AFSL) No. 566313. It is the first AUD stablecoin connected to an AFSL-regulated framework, providing additional oversight, transparency, and operational controls.
For customers, AUDM provides a fast and efficient way to hold and move Australian dollars on-chain. It helps avoid banking delays, keeps capital trade-ready, and makes it easier to move into a stable AUD position when taking profits or managing risk. AUDM is now available for trading on Independent Reserve.
The Moonshot Dispatch – Live Crypto Market Update
Join us every Tuesday at 3 pm (AEDT) for a live market update. Hosted by Lee Eaton and Nick Fletcher, we cover the latest crypto news and price movements. Tune in weekly on Twitter/X, LinkedIn, YouTube, Facebook & TikTok.
Until next week, happy trading!
