In markets
The S&P 500 and the Dow Jones hit new all-time highs this week, but despite bullish crypto developments almost every day recently, Bitcoin fell 4.6% over the past seven days to trade around A$130,189 (US$86,471). Ethereum lost 5% to trade around A$4,473 (US$2,969), XRP lost 8.8%, Solana (-4%), Dogecoin (-8.8%) and Cardano (-10.3%). One catalyst for the negative sentiment was Bloomberg’s report that the Bank of Japan plans to raise rates at its December 19 meeting, with more rises expected in 2026. Previous BoJ rate hikes have seen Bitcoin fall around 20% — although given it’s already widely expected, the news may already be priced in.
The US Federal Reserve cut interest rates, but Jerome Powell suggested further cuts are unlikely for now. The Fed also announced A$60B/US$40 billion short-term treasury purchases from this month, sparking a debate as to whether it was “real” quantitative easing or not. US jobs and inflation data are scheduled for release this week and may spark volatility.
Unusual trading patterns in the recent week have led to speculation about manipulation, and there are unverified rumours about Wintermute dumping billions, as well as Hyperliquid market makers ABC and CyantArb and hedge fund Selini Capital sustaining heavy losses from the October 10 flash crash. Crypto trading volumes have fallen by two-thirds since the start of the year, but Bitfinex notes that this has historically preceded the next leg up. DeFi Llama reports that the correlation between the largest crypto assets has been unusually high over the past week, with many pairs having coefficients over 0.9. The Crypto Fear and Greed Index has been stuck at Extreme Fear since November and is currently at 16.
From the OTC desk
The Macro Holding Pattern
The U.S. macroeconomic backdrop remains dominated by the Federal Reserve’s monetary policy and lingering data uncertainty. In early December, the Fed delivered its third consecutive interest rate cut, trimming the federal funds rate to roughly 3.5-3.75%, its lowest level in nearly three years. Fed officials still appear divided about the path forward, which is reflected in the market, keeping participants nervous.
In response to strains in short-term funding markets, the Fed also launched a US$40B Treasury bill purchase programme to shore up money market liquidity. While this sounds like good news, it pales in comparison to the liquidity injection seen in 2020, so we don’t expect fireworks to ignite in risk assets.
In Australia, consumer sentiment slid sharply in December, reversing earlier optimism as households once again became concerned about inflation and the cost of living. The Westpac-Melbourne Institute index fell back into pessimistic territory, reflecting unease over the economic outlook even as the Reserve Bank of Australia (RBA) has kept its cash rate unchanged recently.
All of this leaves us in a holding pattern, waiting for a clear trend to be established.
OTC desk activity
On the OTC desk, we have observed large, two-way stablecoin flows, suggesting that remittance-driven activity remains relatively insulated from broader macroeconomic uncertainty. In the major tokens, buy-side interest has been more prominent, indicating some participants are positioning for a potential reversal in recent downward price action.
Key Economic Calendar Events (AEDT)
- Wednesday, Dec 17 2025 – 12:30 AM – US Unemployment Rate (Consensus 4.4%)
- Wednesday, Dec 17 2025 – 10:50 AM – JP Balance of Trade (Consensus ¥71.2B)
- Friday, Dec 19 2025 – 12:15 AM – EA ECB Interest Rate Decision (Consensus 2.15%)
- Friday, Dec 19 2025 – 12:30 AM – US Core Inflation Rate YoY (Consensus 3%)
- Friday, Dec 19 2025 – 2:00 PM – JP BoJ Interest Rate Decision (0.75%)
In headlines
Crypto banks are coming
The Office of the Comptroller of the Currency has approved conditional national trust bank charters for Ripple, Paxos, BitGo, Fidelity and Circle. The charter allows them to operate across all states, supervised by the Fed, and the ability to custody crypto assets for ETFs, treasuries, and institutions. Unlike a full-fat license, the conditional license means they can’t make loans, take deposits, and customer accounts don’t have FDIC insurance. A preliminary conditional approval can also be changed or suspended.
JPMorgan launches fund on Ethereum
The US$4 trillion (A$6T) US bank JPMorgan has announced a new money market fund launching on Ethereum. Shares in the My OnChain Net Yield Fund (MONY) will be issued and tracked on the blockchain using JPMorgan’s Kinexys platform, with a minimum investment of US$1 million (A$1.5T). It’s the first tokenised fund from JPMorgan, and it’s the largest GSIB (Global Systemically Important Bank), to launch such a vehicle on a public blockchain.
DTCC to tokenise stocks
The SEC has issued a No Action Letter that clears the way for the Depository Trust and Clearing Corporation’s subsidiary, the DTC (Depository Trust Company), to tokenise assets on pre-approved public blockchains for three years. The DTCC handles clearing, settlement and trading for quadrillions of securities annually. The DTC will tokenise highly liquid assets, such as stocks in the Russel 1000 index, ETFs tracking major indices, and US Treasuries.
Tokenised RWAs will have “all the same entitlements, investor protections and ownership rights as the asset in its traditional form,” the DTCC said. NYDIG analysts put out a note suggesting that stock tokenisation won’t bring immediate benefits to crypto: “The benefits to networks these assets reside on, such as Ethereum, are light at first but increase as their access and interoperability and composability increase.” Meanwhile, hearings on the proposed crypto market structure bill have been delayed until early next year.
Bitcoin After Dark ETF
A proposed new Bitcoin ETF plans to only hold Bitcoin ETFs and derivatives overnight and sell ahead of the US markets’ opening. Called the Nicholas Bitcoin and Treasuries AfterDark ETF, the application states it will trade Bitcoin futures, ETFs, and options. Since the Bitcoin ETFs began trading, if you’d followed the strategy, you’d be up 222%, while if you’d only held during the day, you’d be down 40.5%. One reason is the “10 am dump” that’s been a source of much discussion recently, with some theorising that it is a big player manipulating the price to accumulate in size. ZeroHedge believes it is Jane Street that has amassed US$2.5 billion (A$3.76B) of BlackRock’s IBIT ETF. Others say it’s just morning volatility due to thinner liquidity after other markets close.
Solana’s Firedancer is live
Solana Breakpoint gave the alt L1’s community a welcome shot in the arm, even if the price remains 55% below its peak. The long-awaited Firedancer client hit mainnet and is running on 21% of validators. While it boosted speeds to around 1,129 TPS according to Chainspect, that’s still a long way from the “1 million TPS” promised. The Solana ETFs are performing well, taking in US$674 million (A$1B) in inflows to date since their launch in October. TVL has fallen by US$10B (A$15B) from its September peak, and the number of active traders on Solana has dropped from 4.8 million at the start of the year down to 680,000 now.
Asia is the new global hotspot for crypto
Two new surveys suggest that Asia is quickly becoming the global hub for cryptocurrency. Sygnum’s High Net Worth Investor Report 2025 found that six in ten wealthy individuals in Asia plan to increase their crypto purchases. Almost nine in ten already have some exposure, with an average portfolio allocation of 17%. A 79-country crypto adoption index from Bybit and DL Research found that Singapore overtook the US as the world’s leading country for crypto adoption. The ranking was based on regulatory clarity, institutional maturity and user engagement. Six Asia-Pacific countries were in the top 20, including Vietnam (9), Hong Kong (10), Australia (11), the Philippines (17) and South Korea (20).
Other Asian crypto news
Japan’s Financial Services Agency has released a report detailing its plan to shift crypto assets out of the payments regulatory regime and into its framework for securities and investments. The plan will see increased disclosures for Initial Exchange Offerings and a crackdown on unregistered platforms. The Hong Kong-listed stablecoin and payments firm OSL Group has partnered with Avalanche on RWA tokenisation in the Asian markets, aiming to channel US$100 million (A$150M) in asset liquidity into the ecosystem. Air Asia operator Capital A and Standard Chartered Malaysia have inked a deal to explore a Ringgit-backed stablecoin. South Korea’s Financial Services Commission has missed a government-imposed deadline to submit a draft stablecoin bill, citing a need for additional time.
The Moonshot Dispatch – Live Crypto Market Update
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Until next week, happy trading!
