By Omkar Godbole (All times ET unless indicated otherwise)

If you follow financial markets, you’ve probably come across the terms “risk-on” and “risk-off.” Now we seem to be entering a new era of “tariffs on/tariffs off.”

In a risk-on environment, growth-sensitive assets like stocks and cryptocurrencies tend to rise due to expectations of economic expansion or accommodative monetary policy. Conversely, risk-off situations reflects a lack of investor confidence, leading to sell-offs and a preference for safer assets.

But this week, President Trump’s tariffs announcement have single-handedly guided markets. Early Monday, bitcoin (BTC) plummeted to nearly $91,000 as Canada and Mexico retaliated against Trump’s tariffs. That was “tariffs on” trading.

Later, it rebounded above $100,000 after Trump paused the Mexico tariffs for the 30 days and announced the creation a sovereign wealth fund, which generated hopes of potential investments in BTC. That was “tariffs off.”

The bullish momentum ran out of steam early Tuesday as China retaliated against Trump’s import tax, reviving “tariffs on” trading. BTC fell over 3% to $98,000, dragging altcoins lower. Nasdaq futures dropped over 0.5% and the dollar drew haven bids.

Bitcoin and the broader crypto market will likely rebound should Trump announce an 11th-hour deal with China, just as he did with Mexico and Canada on Monday. Foreign-exchange market activity suggests that’s likely. The AUD/CAD is down just 0.3% for the day, a sign traders don’t expect a prolonged tariff war between the U.S. and China. (The Australian dollar is widely seen as a proxy for China).

“A cross like AUD/CAD should trade sharply lower in this situation given Canada has dodged tariffs and China has not, but it is only 0.5% lower on the day. That signals markets are pricing in a good chance that the US and China will also strike a deal and delay tariffs,” ING said in a note to clients.

That said, you can never be sure of Trump. So, expect heightened volatility and stay alert!

What to Watch

• Crypto:
• Macro
  • Feb. 4, 10:00 a.m.: The U.S. Bureau of Labor Statistics (BLS) releases December’s Job Openings and Labor Turnover Survey (JOLTS) report.
    • Job Openings Est. 7.88M vs. Prev. 8.098M
    • Job Quits Prev. 3.065M
  • Feb. 4, 2:30 p.m.: White House AI and Crypto Czar David Sacks, along with four congressional leaders, hold a press conference on digital assets cooperation. Livestream link.
  • Feb. 4, 7:30 p.m.: Fed Vice Chair Philip N. Jefferson is giving a speech titled “U.S. Economic Outlook and Monetary Policy.”
  • Feb. 5, 9:45 a.m.: S&P Global releases January’s US Services PMI (Final) report.
  • Feb. 5, 10:00 a.m.: The Institute for Supply Management (ISM) releases January’s Services ISM Report on Business.
    • Services PMI Est. 54.3 vs. Prev. 54.1
    • Services Business Activity Prev. 58.2
    • Services Employment Prev. 51.4
    • Services New Orders Prev. 54.2
    • Services Prices Prev. 64.4
  • Feb. 5, 10:00 a.m.: U.S. Senate Banking Committee hearing on “Investigating the Real Impacts of Debanking in America,” featuring four witnesses including Nathan McCauley, co-founder and CEO of Anchorage Digital. Livestream link.
  • Feb. 5, 3:00 p.m.: Fed Governor Michelle W. Bowman is giving a speech titled “Brief Economic Update and Bank Regulation.”
• Earnings
  • Feb. 5: MicroStrategy (MSTR), post-market, $-0.09
  • Feb. 10: Canaan (CAN), pre-market, $-0.08
  • Feb. 11: HIVE Digital Technologies (HIVE), post-market, $-0.11
  • Feb. 11: Exodus Movement (EXOD), post-market, $0.14 (2 ests.)
  • Feb. 12: Hut 8 (HUT), pre-market, break-even
  • Feb. 12: IREN (IREN), post-market
  • Feb. 12 (TBA): Metaplanet (TYO:3350)
  • Feb. 12: Reddit (RDDT), post-market, $0.25

Token Events

• Governance votes & calls
  • Compound DAO is discussing the creation of Morpho-powered lending vaults on Polygon curated by Gauntlet. Polygon Labs is set to offer $1.5 million in POL, matched with $1.5 million in COMP to incentivize usage.
  • Arbitrum DAO is voting on whether to transfer 1,885 ETH in Nova transaction fees to its Treasury through the modernized fee collection infrastructure outlined in the ova Fee Router Proposal.
  • Aave DAO is nearing the end of a vote on deploying Aave v3 on Sonic, a new layer-1 Ethereum Virtual Machine (EVM) blockchain with a high transaction throughput.
  • Lido DAO is discussing distributing rewards to LDO stakers based on the protocol’s net revenue, as well as the use of a percentage of its annual revenue to buyback LDO tokens.
  • Feb. 4, 1 p.m.: TRON DAO and CryptoQuant to host a network review diving into performance, adoption and key metrics.
  • Feb. 4, 12 p.m.: Stellar to host its Q4 quarterly review.
• Unlocks
  • Feb. 5: XDC Network (XDC) to unlock 5.36% of circulating supply worth $81.58 million.
  • Feb. 5: Kaspa (KAS) to unlock 0.67% of circulating supply worth $17.29 million.
  • Feb. 9: Movement (MOVE) to unlock 2.17% of circulating supply worth $31.60 million.
  • Feb. 10: Aptos (APT) to unlock 1.97% of circulating supply worth $68.20 million.
• Token Launches
  • Feb. 4: Vine (VINE), Bio Protocol (BIO), Swarms (SWARMS), and Sonic SVM (SONIC) to be listed on Kraken.

Conferences:

Token Talk

By Shaurya Malwa

• Entities behind President Donald Trump’s memecoin TRUMP amassed nearly $100 million in trading fees within two weeks of its Jan. 17 introduction.
• The fees were generated on Meteora, a DeFi exchange where the initial TRUMP coins were traded. Here, fees are charged for liquidity provision, which benefits the coin’s creators by allowing them to earn from trading activities indefinitely, according to Reuters.
• A marketwide drop on Monday sent the token spiraling further down, bringing losses from the peak to a staggering 75%.
• The president continues to endorse the token on his social media platform, Truth Social, where he posted “I LOVE $TRUMP!!” alongside a link to purchase the token over the weekend.

Derivatives Positioning

• Perpetual funding rates for SOL, DOGE, ADA, LINK and AVAX remain negative, indicating a bias for short positions. These coins may see outsized gains on the back of a short-squeeze should the market environment flip back to “tariffs off” during the American hours.
• Deribit’s ETH volatility index has retreated to 70% from above 100%. BTC’s volatility has faded from Monday’s spike to 61%.
• The perpetual futures open interest-adjusted cumulative volume delta for most large-cap tokens, excluding TRX, is negative for the past 24 hours. That raises a question on the sustainability of the price recovery.
• Deribit’s BTC, ETH options expiring this month continue to exhibit downside fears. The broader bias for bullish calls remains intact.
• Block flows featured a bear call spread in SOL, a calendar spread in BTC and long positions in the ETH $3K and $3.2K calls.

Market Movements:

• BTC is down 1.85% from 4 p.m. ET Monday at $99,347.23 (24hrs: +4.4%)
• ETH is up 2.3% at $2,777.08 (24hrs: +7.45%)
• CoinDesk 20 is down 2.21% at 3,154.76 (24hrs: +5.33%)
• CESR Composite Staking Rate is up 88 bps at 3.91%
• BTC funding rate is at 0.0035% (3.76% annualized) on Binance
• DXY is down 0.39% at 108.57
• Gold is down 0.16% at $2,814.16/oz
• Silver is up 0.18% at $31.65/oz
• Nikkei 225 closed +0.72% at 38,798.37
• Hang Seng closed +2.83% at 20,789.96
• FTSE is down 0.12% at 8,572.97
• Euro Stoxx 50 is up 0.13% at 5,224.71
• DJIA closed on Monday -0.28% at 44,421.91
• S&P 500 closed -0.76% at 5,994.57
• Nasdaq closed -1.2% at 19,391.96
• S&P/TSX Composite Index closed -1.14% at 25,241.76
• S&P 40 Latin America closed +0.25% at 2,376.48
• U.S. 10-year Treasury is up 2 bps at 4.58%
• E-mini S&P 500 futures are down 0.16% at 6012.75
• E-mini Nasdaq-100 futures are unchanged at 21,398.50
• E-mini Dow Jones Industrial Average Index futures are down 0.21% at 44,472.00

Bitcoin Stats:

• BTC Dominance: 61.70 (1.06%)
• Ethereum to bitcoin ratio: 0.02750 (-3.27%)
• Hashrate (seven-day moving average): 833 EH/s
• Hashprice (spot): $57.5
• Total Fees: 6.1 BTC / $592,574
• CME Futures Open Interest: 164,925 BTC
• BTC priced in gold: 35.0 oz
• BTC vs gold market cap: 9.94%

Technical Analysis

• Bitcoin’s daily chart shows a classic “stair step” bull run, characterized by price rises followed by consolidations, representing accumulation periods.
• The latest consolidation between $90,000 and $110,000 is the third such pattern since 2023. A breakout would mean continuation of the uptrend.
• Note, however, that gains seen after the second consolidation between $50,000 and $70,000 were significantly less than those seen after the first breakout in late 2023.

Crypto Equities

• MicroStrategy (MSTR): closed on Monday at $347.09 (+3.67%), down 1.35% at $342.40 in pre-market.
• Coinbase Global (COIN): closed at $284.41 (-2.38%), down 0.47% at $283.08 in pre-market.
• Galaxy Digital Holdings (GLXY): closed at C$28.02 (-1.62%)
• MARA Holdings (MARA): closed at $17.95 (-2.13%), down 1.23% at $17.73 in pre-market.
• Riot Platforms (RIOT): closed at $11.99 (+0.93%), down 0.58%% at $11.92 in pre-market.
• Core Scientific (CORZ): closed at $12.33 (+0.49%), down 1.05% at $12.20 in pre-market.
• CleanSpark (CLSK): closed at $10.59 (+1.44%), down 0.85% at $10.50 in pre-market.
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $22.69 (+0.62%).
• Semler Scientific (SMLR): closed at $50.46 (-2.89%).
• Exodus Movement (EXOD): closed at $59.59 (+19.47%), unchanged in pre-market.

ETF Flows

Spot BTC ETFs:

• Daily net flow: -$234.4 million
• Cumulative net flows: $40.26 billion
• Total BTC holdings ~ 1.177 million.

Spot ETH ETFs

• Daily net flow: $83.6 million
• Cumulative net flows: $2.84 billion
• Total ETH holdings ~ 3.648 million.

Source: Farside Investors

Overnight Flows

Chart of the Day

• Google trends for the worldwide search query “how to buy crypto” shows retail investor interest in digital assets has cooled since hitting a peak of 100 last month.

While You Were Sleeping

• Ethereum Raises Gas Limits for First Time Since 2021, Boosting ETH Appeal (CoinDesk): Ethereum’s gas limit rose to nearly 32 million units, which should help increase the network’s throughput and potentially lower transaction costs during periods of high demand.
• Lending Protocol Aave Processes $200M in Liquidation Without Adding to Bad-Debt Burden (CoinDesk): Aave processed $210 million in liquidations on Monday, the most since August, without adding new debt. Strong risk controls reduced existing liabilities by 2.7% amid market volatility.
• TRON, Movement Labs Deny ‘Token Swap’ Deal for World Liberty Financial Inclusion (CoinDesk): Representatives from TRON and Movement Labs rejected allegations of token swap deals for treasury inclusion with World Liberty Financial (WLFI).
• Yuan Extends Loss With China Proxies as US Trade War Reignites (Bloomberg): China’s retaliatory tariffs on U.S. coal, LNG, oil and agricultural equipment spooked Asia-Pacific markets, pressuring offshore Chinese yuan. Talks between the U.S. and China could help deescalate the trade war.
• Stocks Erase Gains After China Retaliates Against U.S. (Financial Times): Shortly after Trump’s 10% tariff on all Chinese goods took effect on Tuesday, Beijing hit back by imposing import tariffs on various U.S. goods, causing global stocks to give back some of Monday’s gains.
• Euro Stays Weaker Amid Tariff Risks (The Wall Street Journal): Danske Bank’s Stefan Mellin says Trump’s threats of tariffs on EU imports are likely to keep the euro under pressure over the next several weeks even though these might just be “primarily a negotiating tool.”

In the Ether

By Omkar Godbole (All times ET unless indicated otherwise)

Bitcoin and ether’s bull momentum has hit a roadblock. The U.S. Producer Price Index (PPI) came in hotter than expected Thursday, prompting investors to tighten their stances and keep a bid for the dollar, as we anticipated. There’s also the Truflation index stirring up concern. Seen by some as more reliable than government numbers, it rose above 3% for the first time in over two years.

But guess what? Fed fund futures remain confident the central bank will cut rates by 25 basis points next week, and traders on decentralized exchanges, who have a knack for catching big trends, remain as bullish as ever.

The sentiment is reflected in the impressive $64.8 million open interest for active BTC call options on Derive, the leading on-chain options protocol. That’s a staggering six times larger than the open interest in put options. Ether traders are also leaning heavily toward calls, figures from Amberdata show.

On top of that, funding rates for BTC, ETH, and SOL on HyperLiquid, a prominent on-chain perpetuals trading protocol, are also positive, albeit with reservations. They’re hovering well under an annualized 50%, showing that while the sentiment is bullish, the leverage level is measured and not overly aggressive.

In the broader market, AVAX, the native token of the Avalanche network of blockchains, struggled to chew through selling pressure near $55, teasing a “double top” pattern on the charts. The lackluster price action comes on the heels of Thursday’s $250 million fundraise led by Galaxy Digital, Dragonfly and ParaFi Capital. Keep an eye out for a pick-up in volatility as the highly anticipated Avalanche9000 upgrade, aimed at making the platform more affordable and flexible for creating layer-1 chains, is set to go live on Dec. 16.

LQTY, the native token of censorship-resistant decentralized stablecoin lender Liquity, took a breather near $2.45, having more than doubled in value in the past four weeks because of the V2 launch and overall bullish market sentiment.

The Polygon ecosystem token, POL, wasn’t stirred by a proposal suggesting deploying DAI, USDC and USDT reserves locked in the PoS bridge — the equivalent of cash under a mattress — into yield-generating strategies.

Lastly, a survey by Vietnam’s leading digital assets exchange, Coin68, showed over half of respondents reporting profits from their investments last year and 93.5% anticipating an altcoin season in 2025. Emerging countries, in general, could see more pivot toward alternative investment vehicles as President-elect Donald Trump’s tariffs cause fiat volatility, although that could also motivate local governments to implement capital controls. So stay alert out there.

What to Watch

• Crypto:
  • Dec. 13: Nasdaq announces its annual changes to the Nasdaq-100 index. MicroStrategy (MSTR), the world’s largest corporate holder of bitcoin, is widely expected to be added.
  • Dec. 18: CleanSpark (CLSK) Q4 FY 2024 earnings. EPS Est. $-0.18 vs Prev. $-1.02.
• Macro

Token Events

• Governance votes & calls
  • Arbitrum DAO has an active vote to allocate 22 million ARB ($22.8 million) to cover operating costs for OpCo, an entity it can use to create a more structured approach to governance. The vote closes Dec. 19.
  • The Polygon community is evaluating a governance proposal that would see the deployment of $1 billion of its stablecoin reserve to generate a yield.
• Unlocks
  • Axie Infinity (AXS) will unlock $6.4 million worth of tokens on Dec. 13, representing 0.52% of circulating supply.
  • Starknet (STRK) will unlock $41.5 million worth of tokens on Dec. 14, representing 2.83% of circulating supply.
  • Sei (SEI) will unlock $49 million worth of tokens on Dec. 15, representing 2.07% of circulating supply.
• Token Launches
  • Binance announced that data sovereignty platform Vana (VANA) will release a token on the launchpool. Trading will start Dec. 16.

Conferences:

Token Talk

By Shaurya Malwa

This digital fart is worth nearly $700 million.

The scatologically named AI agent token fartcoin (FART) has zoomed to over $670 million in market cap, lifted by gains in the general AI agent sector we discussed on Thursday.

The coin allows users to engage with the token by submitting fart-related memes or jokes to claim tokens. It boasts a “Gas Fee” system — a parody of gas fees on serious projects such as Ethereum — with certain transactions producing a name-appropriate digital sound, adding a unique layer of what some might call fun.

Some community members see the token as more than just a meme; they view it as a cultural phenomenon within the crypto space — one that gets funnier as prices rise.

Fartcoin was conceived within the digital conversation space known as “Infinite Backrooms,” the chatroom that directly led to the creation of the first AI agent, Gospel of Goatse (GOAT).

The idea was initially discussed by an AI agent known as “Terminal of Truths” (@truth_terminal on X) in conversation with another AI bot. It was explored, among other token launch concepts, as part of a broader discussion on how to raise funds for various projects, including making a film and supporting environmental initiatives.

Derivatives Positioning

• BTC and ETH calls continue to be pricier than puts.
• Still, flows have been mixed in BTC, with uptake for $70K puts expiring in February and March.
• Speculative excesses remain at bay, keeping perpetual funding rates positive but low.

Market Movements:

• BTC is up 0.69 % from 4 p.m. ET Thursday to $100,468.14 (24hrs: -0.14%)
• ETH is up 0.83% at $3,899.63 (24hrs: -0.15%)
• CoinDesk 20 is up 0.36% to 3,830.21 (24hrs: -1.1%)
• Ether staking yield is up 7 bps to 3.24%
• BTC funding rate is at 0.01% (10.95% annualized) on Binance

• DXY is unchanged at 106.99
• Gold is unchanged at $2,689.5/oz
• Silver is up 0.38% to $31.35/oz
• Nikkei 225 closed -0.95% at 39,470.44
• Hang Seng closed -2.09% at 19,971.24
• FTSE is up 0.11% at 8,321.32
• Euro Stoxx 50 is up 0.44% at 4,987.3
• DJIA closed on Thursday -0.53% to 43,914.12
• S&P 500 closed -0.54% at 6,051.25
• Nasdaq closed -0.66% at 19,902.84
• S&P/TSX Composite Index closed -0.96% at 25,410.7
• S&P 40 Latin America closed -2.02% at 2,349.72
• U.S. 10-year Treasury is up 7 bps at 4.34%
• E-mini S&P 500 futures are up 0.34% to 6,081.25
• E-mini Nasdaq-100 futures are up 0.68% to 21,798.0
• E-mini Dow Jones Industrial Average Index futures are up 0.24% at 44,083.00

Bitcoin Stats:

• BTC Dominance: 56.47% (24hrs: +0.11%)
• Ethereum to bitcoin ratio: 0.03888 (24hrs: +0.18%)
• Hashrate (seven-day moving average): 763 EH/s
• Hashprice (spot): $64.3
• Total Fees: 19.68 BTC/ $1.9 million
• CME Futures Open Interest: 196,355 BTC
• BTC priced in gold: 10.64%
• BTC vs gold market cap: 37.4 oz
• Bitcoin sitting in over-the-counter desk balances: 422.9k

Basket Performance

Technical Analysis

• The chart shows the upside in Avalanche’s AVAX being capped at around $55, the resistance level seen earlier this month.
• A renewed decline from here would translate into a double-top bearish reversal pattern. Keep an eye on this.

Crypto Equities

• MicroStrategy (MSTR): closed on Thursday at $392.19 (-4.67%), up 1.87% at $399.52 in pre-market.
• Coinbase Global (COIN): closed at $312.96 (-0.27%), up 0.9% at $315.83 in pre-market.
• Galaxy Digital Holdings (GLXY): closed at C$27.45 (+0.59%)
• MARA Holdings (MARA): closed at $22.58 (-2.97%), up 1.42% at $22.90 in pre-market.
• Riot Platforms (RIOT): closed at $12.33 (+4.76%), up 1.46% at $12.51 in pre-market.
• Core Scientific (CORZ): closed at $15.54 (-2.02%), down 0.26% at $15.50 in pre-market.
• CleanSpark (CLSK): closed at $12.33 (-3.9%), down 2.6% at $12.01 in pre-market.
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $27.86 (-0.11%).
• Semler Scientific (SMLR): closed at $71.84 (+11.33%), down 1.17% at $71.00 in pre-market.

ETF Flows

Spot BTC ETFs:

• Daily net inflow: $597.5 million
• Cumulative net inflows: $35.14 billion
• Total BTC holdings ~ 1.121 million.

Spot ETH ETFs

• Daily net inflow: $273.7 million
• Cumulative net inflows: $2.24 billion
• Total ETH holdings ~ 3.440 million.

Source: Farside Investors

Overnight Flows

Chart of the Day

• Solana leads all blockchains with the highest number of new developers actively exploring its ecosystem.

While You Were Sleeping

• Trump Advisers Seek to Shrink or Eliminate Bank Regulators (The Wall Street Journal): Advisers to President-elect Donald Trump are said to be exploring eliminating or consolidating major U.S. bank regulators such as the FDIC and CFPB, raising concerns about deposit insurance stability and financial industry oversight.
• LINK Surges to 2021 Levels as Trump’s World Liberty Buys More Chainlink Tokens (CoinDesk): Donald Trump-backed DeFi project World Liberty Financial bought $1 million in Chainlink’s LINK token for a second straight day, making the token its fourth-largest holding and helping drive the price up 22% in the past seven days.
• Solana Was the Biggest Draw for New Crypto Developers in 2024: Electric Capital (CoinDesk): Cryptocurrency developer numbers held steady in 2024, according to Electric Capital, with Solana outpacing Ethereum in new talent while Ethereum retained dominance across all continents with the largest number of developers.
• Ether Volume Overshadows Bitcoin on HyperLiquid as Platform Activity Hits $500B (CoinDesk): HyperLiquid’s ether perpetuals outpaced bitcoin this week, driving the platform’s total trading volume past $500 billion. Its HYPE token has surged over 300% in the past two weeks.
• UK Economy Unexpectedly Contracts in New Blow for Rachel Reeves (Reuters): The UK economy shrank 0.1% in October, missing forecasts, as services stagnated and manufacturing declined, highlighting ongoing challenges amid slow post-pandemic growth.
• Europe Has Choice of Doing Hard Work or Facing Next to No Growth (Bloomberg): Europe risks prolonged economic stagnation, The Conference Board warns, urging reforms to boost private investment, accelerate green transitions, and address labor shortages amid aging populations and geopolitical challenges.

In the Ether

(All times ET unless indicated otherwise)

By Omkar Godbole

Bitcoin is starting the week on a despondent note, trading 2% lower at $95,000 amid risk-off sentiment in traditional markets. European stocks are falling and the euro is diving against the dollar as concern the French government is on the verge of collapse pushes its bond yields to levels matching those of debt-ridden Greece.

BTC’s decline follows a failed attempt to break through the multimillion-dollar wall of sell orders near $100,000 over the weekend and MicroStrategy’s Michael Saylor’s bitcoin presentation to Microsoft.

Still, bulls shouldn’t lose hope just yet, because the supply scarcity is real, with nearly 75% of bitcoin classified as illiquid and less than 14% in centralized exchanges, according to Andre Dragosch of Bitwise.

There’s chatter about countries adopting BTC as a strategic reserve, with a Middle Eastern nation potentially unveiling something big at the Abu Dhabi Finance Week that runs Dec. 9-12. The noise could get louder as the event draws close.

Ether’s technical analysis is particularly bullish, reminiscent of BTC’s positioning in mid-October, which was signaling a massive rally even before the U.S. elected crypto-friendly Donald Trump as president.

Market flows are on the same page. On Friday, net inflows into nine ether ETFs listed in the U.S. hit nearly $333 million. That’s even more than the BTC funds’ $320 million. Talk about the change in market leadership. In addition, ETH whales have snapped up ETH worth $5.7 billion in 20 days, according to IntoTheBlock.

Meanwhile, XRP has surged over 27% in just 24 hours, making it the third-largest cryptocurrency by market value and pushing Tether’s USDT to fourth place. The rally was accompanied by record volumes in South Korea, indicating strong retail participation. While a surge of 350% in four weeks may look overstretched, that’s not necessarily the case. XRP’s market value-to-realized value (MVRV) ratio, a popular metric modeled alongside the price-to-book ratio in equities and tracked by Santiment, has bounced only to its lifetime average, meaning prices need to rise more before we can start talking about overvaluation.

On the macro front, this week’s focus is the U.S. ISM non-manufacturing PMI on Wednesday, along with Friday’s payrolls and average hourly earnings report. If the employment component and wage growth exceed expectations, the dollar could get a lift while trimming Fed rate-cut bets. Additionally, there’s talk of more easing from China, though the impact of earlier measures has been downplayed. Stay alert!

What to Watch

• Crypto:
  • Dec. 18: CleanSpark (CLSK) Q4 FY 2024 earnings. EPS Est. $-0.18 vs Prev. $-1.02.
• Macro
  • Dec. 2, 3:15 p.m.: Fed governor Christopher J. Waller gives a speech (“Economic Outlook”) at the American Institute for Economic Research (AIER) Monetary Conference, in Washington, D.C.
  • Dec. 4, 4:00 a.m.: The Organisation for Economic Co-operation and Development (OECD) is set to release its latest Economic Outlook. Secretary-General Mathias Cormann and Chief Economist Álvaro Pereira present the findings during an event available online.
  • Dec. 4, 10:00 a.m.: The Institute for Supply Management (ISM) releases its Services Purchasing Managers Index (PMI) for November. Est. 55.5 vs Prev. 56.0.
  • Dec. 4, 1:45 p.m.: Fed Chair Jerome H. Powell takes part in a moderated discussion at The New York Times DealBook Summit in New York City.
  • Dec. 4, 2:00 p.m.: The Fed releases the Beige Book, an economic summary used ahead of FOMC meetings.
  • Dec. 6, 8:30 a.m.: The U.S. Bureau of Labor Statistics releases the October Employment Report.
    • Nonfarm Payrolls (NFP) Prev. 12K.
    • Unemployment Rate Prev. 4.1%.

Token Events

• Token unlocks
  • Ethena (ENA) to unlock 0.44% of circulating supply worth $10.75 million on Dec. 3.
  • Cardano (ADA) to unlock 0.05% of circulating supply worth $20.18 million on Dec .4.
  • Jito (JTO) to unlock 102.7% of circulating supply worth $464.1 million on Dec. 7.
• Governance votes
  • SafeDAO opened preliminary discussions on allocating $50,000 toward creating a modular treasury management system. The discussion opened on Dec. 1.
  • Arbitrum is voting on allocating $20,000 to research user behavior and subsequent development direction. The vote closes Dec. 5.

Conferences:

Token Talk

By Oliver Knight

HyperLiquid’s native token, HYPE, hit the market last week to become one of the most profitable airdrops of the year. It tripled in price over the weekend after debuting at a $1 billion market cap. The token is now trading at $8.57 after touching a record high of $9.79.

Unlike many other generic native tokens that offer utility through governance votes, HYPE can be staked to secure HyperBFT, the proof-of-stake consensus algorithm that powers the HyperLiquid exchange. It is also being used as the primary token for paying transaction fees on the network.

True to its ticker, the token garnered notable attention among crypto enthusiasts on X (the so-called Crypto Twitter community) with almost all of the well-known influencers mentioning, recommending and occasionally scrutinizing it.

The bull case for HYPE is in the tokenomics because supply is skewed toward the community as opposed to venture capitalists and early investors. As a result, it is trading more like a meme coin with a viral following without the risk of supply suppression by anyone who bought in a funding round at a cheaper price.

Quant trader Flood, who goes under the X account @ThinkingUSD, wrote that they were “adding huge” under $4 on the day of release. Since then trading terminal Insilico announced it was strategically accumulating a HYPE reserve, allocating 25% of weekly revenue.

Derivatives Positioning

• The three-month basis in BTC and ETH futures on offshore exchanges has softened from weekend highs, suggesting a moderation in bullish sentiment.
• Perpetual funding rates across the broader market are normalizing, which could pave the way for a more sustained price rally.
• In the options market, calls for BTC and ETH are still trading at a premium to puts. However, ETH calls are more expensive than BTC calls, indicating bullish expectations for ether relative to bitcoin.
• IBIT and MSTR’s high implied volatility has sparked interest in covered call strategies.

Market Movements:

• BTC is down 2.6% from 4 p.m. ET Friday to $94,939.66 (24hrs: -2%)
• ETH is down 0.5% at $3,579.86 (24hrs: -3%)
• CoinDesk 20 is up 3.6% to 3,641.28 (24hrs: 6+2.13%)
• Ether staking yield is unchanged at 3.07%
• BTC funding rate is at 0.017% (18.8% annualized) on Binance

• DXY is up 0.4% at 106.2
• Gold is down 0.6% at $2,635.20/oz
• Silver is up 1.2% to $30.26/oz
• Nikkei 225 closed +0.8% at 38,513.02
• Hang Seng closed 0.65% at 19,550.29
• FTSE is up 0.14% at 8,273.78
• Euro Stoxx 50 is 0.20% at 4,813.85
• DJIA closed on Friday +0.42% to 44,910.65
• S&P 500 closed +0.56% at 6,032.38
• Nasdaq closed +0.83% at 19,218.17
• S&P/TSX Composite Index closed +0.41% 25,648
• S&P 40 Latin America closed -1.58% at 2,328.18
• U.S. 10-year Treasury was unchanged at 4.2%
• E-mini S&P 500 futures are down 0.2% to 6039.50
• E-mini Nasdaq-100 futures are down 0.21% to 20949
• E-mini Dow Jones Industrial Average Index futures are down 0.12% at 44999

Bitcoin Stats:

• BTC Dominance: 56.78% (-0.04%)
• Ethereum to bitcoin ratio: 0.0379 (-0.37%)
• Hashrate (seven-day moving average): 744 EH/s
• Hashprice (spot): $62.14
• Total Fees: 20.1 BTC/ $1.9 million
• CME Futures Open Interest: 181,105 BTC
• BTC priced in gold: 36.2 oz
• BTC vs gold market cap: 10.32%
• Bitcoin sitting in over-the-counter desk balances: 421,809

Basket Performance

Technical Analysis

BTC’s dominance rate has slipped below an ascending trendline that tracks its year-to-date rise. The breakdown points to a continued investor preference for altcoins over bitcoin.

TradFi Assets

• MicroStrategy (MSTR): closed on Friday at $387.47 (-0.35%), down 2.17 % at $379.05 in pre-market.
• Coinbase Global (COIN): closed at $296.20 (-4.75%), up 0.22% at $296.84 in pre-market.
• Galaxy Digital Holdings (GLXY): closed at C$25.61 (+1.83%)
• MARA Holdings (MARA): closed at $27.42 (+1.86%), down 1.42% at $27.03 in pre-market.
• Riot Platforms (RIOT): closed at $12.65 (+2.26%), down 1.03% at $12.52 in pre-market.
• Core Scientific (CORZ): closed at $17.88 (+0.96%), down 1.17% at $17.67 in pre-market.
• CleanSpark (CLSK): closed at $14.35 (+3.54%), up 0.14% at $14.37 in pre-market.
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $29.14 (+4.18%).
• Semler Scientific (SMLR): closed at $57.02 (-6.6%), up 0.63% at $57.38 in pre-market.

ETF Flows

Spot BTC ETFs:

• Daily net inflow: $320 million
• Cumulative net inflows: $30.67 billion
• Total BTC holdings ~ 1.076 million.

Spot ETH ETFs

• Daily net inflow: $332.9 million
• Cumulative net inflows: $576.8 million
• Total ETH holdings ~ 3.047 million.

Source: Farside Investors

Overnight Flows

Chart of the Day

• The chart shows the 30-day change in the fully diluted market capitalizations of tokens grouped by category.
• The store-of-value sector, comprising cryptocurrencies with BTC-like appeal, has seen an industry-beating 262% surge in four weeks.
• DeFi, meanwhile, has put in a below-average performance.

While You Were Sleeping

• XRP Replaces Tether as 3rd-Largest Cryptocurrency While BTC Faces $384M Sell Wall (CoinDesk): XRP has surged 375% in 30 days to $2.40, becoming the third-largest cryptocurrency by market cap. TikTok trends, speculation on a Ripple stablecoin and ETF hopes are fueling interest. Bitcoin, meantime, faces resistance near $100,000, with a $384 million wall of sell orders.
• Ether’s Price Chart Now Mirrors a Pattern That Foretold Bitcoin’s Record Rally (CoinDesk): Ethereum’s price chart shows a bullish breakout, ending an eight-month corrective trend and resuming its October 2023 uptrend from $1,500. Similar to Bitcoin’s October rally, it may trigger cascading gains. Supporting this are rising network activity and $332.9 million in net inflows to U.S. spot ether ETFs last Friday.
• Ethereum ETFs See Record $333M Inflows, Outpacing Bitcoin Funds as Catch-Up Trade Gains Momentum (CoinDesk): Ethereum ETFs in the U.S. saw record inflows Friday, totaling $332.9 million, led by BlackRock and Fidelity funds. Last week, ether outpaced bitcoin in ETF flows and price gains, hitting $3,700. Analysts attribute the resurgence to improving DeFi sentiment, anticipation of regulatory clarity and potential bottoming in the ETH-BTC ratio after three years.
• Establishment’s Takeover of Bitcoin Creates a New List of Risks (Bloomberg): Spot bitcoin ETFs hold over 1 million tokens, or 5% of the supply, rivaling Satoshi Nakamoto’s stash. Rising institutional demand, potential U.S. government stockpiles and supply constraints fuel price forecasts of high as $1 million per BTC. However, concentrated ownership and policy risks could create market vulnerabilities despite ongoing price surges.
• Yen Strengthens Past 150 per Dollar on BoJ Rate Rise Expectations (Financial Times): The yen has strengthened past 150 per dollar after stronger Tokyo inflation data fueled speculation of a December Bank of Japan interest-rate increase. Core CPI rose 2.2% year-on-year, driven by higher rice costs. Despite recent yen declines and $100 billion in interventions, a rapid yen appreciation could deter the bank from raising rates.
• Russia’s Central Bank Acknowledges ‘Short-Term’ Impact on Ruble Exchange Rate (The Moscow Times): On Friday, Russia’s Central Bank attributed the ruble’s drop to U.S. sanctions on Gazprombank while expressing confidence in its own actions, including halting foreign currency purchases and maintaining a 21% interest rate. Friday’s official rate was 109.57 per dollar and 116.14 per euro, with officials optimistic about currency stabilization.

In the Ether