Capital Rotation Away From Crypto

DAILY MARKET OVERVIEW

Patience Over Exposure

👋 Hey, Crypto Enthusiasts! Crypto is not out of the mud yet so let’s explore what’s happening.

🔻 The crypto market continues to face heavy pressure, while silver is reaching new highs and gold appears to be following. Capital flows are clearly shifting away from crypto.

From a statistical perspective, crypto open interest remains significantly lower and has yet to recover from the major October crash. At the same time, active perpetual traders continue to decline, suggesting that many participants are either taking a break, exiting the market, or reallocating capital elsewhere.

Selling pressure from Coinbase is also returning, with the Coinbase Premium Index turning negative again after a brief period of relief. Additionally, ETFs have resumed selling, with close to $500 million in combined outflows from BTC and ETH.

🇨🇳 Rumors surrounding China potentially shutting down Bitcoin mining operations and selling seized BTC are further weighing on market sentiment.

For now, it’s best to remain patient and avoid heavy exposure to crypto.

THIS NEWSLETTER IS BROUGHT TO YOU BY:
OPENWALLET

Next-level security for your digital assets

Experience top security with Open Wallet. Your wallet blends user-friendliness with strong security.

SOCIAL SENTIMENT

Aave Building The Future of Finance

Aave has cemented its status as the largest, most trusted, and most liquid decentralized lending protocol, processing over $3.33 trillion in deposits and originating nearly $1 trillion in loans since its launch. It now commands 59% of the entire DeFi lending market. But according to the founder, this is just "day zero."

The recently unveiled multi-decade vision aims to bring the next trillion dollars in assets and the next several million users into the Aave ecosystem. The roadmap for 2026 is built on three transformative pillars: Aave V4, Horizon, and Aave App.

1. Aave V4: The New Financial Backbone

Aave V4 is a complete architectural redesign intended to make Aave the foundational credit layer for all finance.

• Unified Liquidity: V4 introduces a Hub and Spoke model, replacing fragmented liquidity pools. "Hubs" of capital will exist on each network, allowing specialized "Spokes" (tailored lending markets) to be built on top.

• Scaling to Trillions: This unified structure is designed to handle trillions of dollars in assets, making Aave the go-to choice for institutions, fintechs, and companies seeking deep, reliable liquidity.

2. Horizon: Onboarding Institutional Capital

Launched earlier this year, Horizon is Aave's dedicated market for institutional Real-World Assets (RWAs). It is designed to bridge traditional finance with DeFi by meeting the strict compliance and operational needs of major financial players.

• Institutional Gateway: Horizon allows qualified institutions to use tokenized assets like U.S. Treasuries as collateral to borrow stablecoins.

• Trillion-Dollar Asset Base: This solution is positioned to expand Aave's reach into the $500 trillion+ traditional finance sector. The goal for 2026 is to quickly scale the current $550M in deposits to $1 billion and beyond, by onboarding major global asset classes (equities, real estate, bonds) with partners like Circle and Franklin Templeton.

3. Aave App: Mass Adoption for Millions

The Aave App is the flagship mobile application designed to bring DeFi to everyone, abstracting away the protocol's complexity for the everyday user.

• Cash-to-DeFi Experience: The app is integrated with "Push," a global, zero-fee on/off-ramp for stablecoins. The goal is to offer the best, simplest cash-to-DeFi experience on the market.

• Tapping a New Market: By focusing on user experience, the app targets the $2+ trillion mobile fintech industry (think CashApp/Venmo users). The full rollout begins early next year with the goal of reaching the first million users, directly fueling growth for the Aave Protocol through an entirely new market segment.

The Aave Labs team, which is the largest holder of AAVE, emphasizes that their ultimate goal is to build financial infrastructure that is a fundamental improvement upon the traditional system, ensuring that Aave will win as the global credit layer for the onchain economy.

NEWS OVERVIEW

The Latest Crypto Headlines 📰 

BitMine Buys the Dip, Adding $140 Million Worth of ETH to Treasury 
Tom Lee's BitMine reportedly purchased another $140 million in ETH as the price briefly fell below $3,000, continuing its aggressive acquisition strategy toward a goal of owning 5% of the total circulating supply.

US Senators Introduce Bipartisan Bill to Combat Crypto Fraud 
Senators Slotkin and Moran introduced the SAFE Crypto Act, a bipartisan bill to establish a federal task force for identifying and disrupting crypto fraud, hacks, and scams, in response to rising on-chain criminal activity.

Tether Launches Peer-to-Peer Password Manager PearPass to Curb Cloud Breach Risks Tether unveiled PearPass, a free, open-source, P2P password manager that stores data locally on devices, eliminating cloud and server vulnerabilities to give users full, decentralized control of their credentials.

Trump to Interview Pro-Crypto Christopher Waller for Next Fed Chair 
President Trump is set to interview Federal Reserve Governor Christopher Waller, a known supporter of stablecoins and DeFi, as a potential successor to Fed Chair Powell, viewed by some as a bullish catalyst for crypto markets.

YOUTUBE INFLUENCER SUMMARY

Summary From The Top Influencers 📷️ 

Benjamin Cowen – The Unemployment Rate Rises to 4.6% (17.12.2025 Summary)

Benjamin Cowen discusses the latest labor market report, noting that the unemployment rate has now risen to 4.6%. He suggests that this rising rate may serve as the current market's narrative to justify a Bitcoin top, similar to how rising inflation justified the top in 2021.

• Macro Headwinds: The unemployment rate has been trending steadily higher since June, signaling a weakening labor market due to a drop in job openings and hiring. This weakness ultimately justifies the need for lower interest rates and money printing, which are the only tools the Federal Reserve knows.

• Fed Easing Status: Despite recent rate cuts, the Fed is not yet in a true easing stance because the Fed Funds Rate (3.75%) is still above the 2-year Treasury yield (3.5%). The Fed typically needs to chase the 2-year yield lower before a massive run in Bitcoin begins.

• Short-Term Price Path: Cowen expects sustained macro headwinds for Bitcoin into early 2026. He forecasts a local low in late December/early January, followed by a bounce up to the 200-day or 50-week moving average. However, this bounce will likely result in a macro lower high before more weakness.

• Preferred Pattern: Due to the top being driven by apathy rather than euphoria, he believes the price action is more likely to mirror 2019, involving a sweep of the prior low before a counter-trend rally occurs.

The Takeaway

Cowen believes the true macro tailwinds for Bitcoin will not arrive until mid to late 2026, which is when Jerome Powell is likely to be replaced, allowing the new Fed Chair to aggressively cut rates to tackle the rising unemployment rate. Ultimately, he concludes that regardless of the macro narrative, Bitcoin is simply following its historical pattern of topping out in Q4 of the post-halving year (2013, 2017, 2021, 2025).

CoinBureau – Mike Novogratz on BTC's Slide, Altcoins & Big 2026 Predictions (17.12.2025 Summary)

Mike Novogratz, CEO of Galaxy Digital, acknowledges that the market is currently "stuck" in less-than-thrilling sideways action after Bitcoin failed to sustain the $100,000 level, which now acts as a key area of psychological resistance due to a mass of "trapped longs" and stop-outs.

• Short-Term Price Path: Novogratz expects a rebound to push the price back above $100,000 in the next 6 weeks to 6 months. Near-term price action requires getting back above the $95,000 level to even have a shot at approaching the resistance at $100,000–$102,000.

• Macro Catalyst: The primary driver for the next major leg up will be the appointment of a "dovish Fed chair" who is expected to cut interest rates down to 2.5%. He believes the US government will inevitably "print money" to fund its deficit, eventually leading to a "hyperliquid space".

• Liquidity & Market Structure: The recent flash crash was detrimental, eliminating 20–30% of market makers and causing institutional trading volumes to drop by 30%, which is why liquidity is currently tight.

• The Altcoin Problem: The DAT narrative is "dead," and these structures (like Nakamoto, VEX) will trade at large discounts, no longer serving as a major buyer for the system. The focus has shifted from "storytelling assets" to the need for blockchains with genuine utility.

• Next Wave of Buyers: The next major source of capital will come from the slow, continued trickle of wealth from registered investment advisors (RIAs). A small 3% allocation from the $45 trillion managed in US wealth platforms would bring over $1.2 trillion into the market, dwarfing previous capital flows.

The Takeaway

Novogratz is more convinced than ever that the long-term future of blockchains and digital assets is "as bullish as it's ever been". The fundamental value of Bitcoin is that of a store of wealth and a hedge against the West's "unbelievably irresponsible fiscal and monetary policy". He sees the political backlash against inequality and the resulting potential for a "wealth tax" as the biggest long-term risk to markets, which underscores the need for an asset like Bitcoin.

CRYPTO MEMES

HELP US IMPROVE

WE ALSO READ