Christmas Rally Possible?

DAILY MARKET OVERVIEW

Inflation Cools and BTC Holds

👋 Hey, Crypto Enthusiasts! BTC may have a real chance of a larger relief rally so let’s explore!

The crypto market continues to trade in a choppy and indecisive manner. Yesterday brought a notable surprise on the macro front, with Core CPI coming in at 2.6%, well below the 3% consensus expectation.

This softer inflation reading, combined with ongoing signs of weakness in the labor market, increases the likelihood of another Federal Reserve rate cut in January. However, expectations remain limited for now, with Polymarket pricing the probability at roughly 23%.

We also saw news from Japan today, where the Bank of Japan raised interest rates. Since this decision was largely anticipated, the market reaction was muted.

🎅 With most major macro data now behind us and Bitcoin still printing lower highs, conditions may be forming for a potential Christmas relief rally. The key question is how much upside such a move could realistically deliver.

• We believe Bitcoin has a solid chance of revisiting the $100,000 level. Whether price can break above this area or faces rejection will be a critical development to monitor.

That said, price action remains choppy. Seasonal factors such as tax loss harvesting may still be weighing on the market. As a result, we remain cautious, though it would not be surprising to see Bitcoin and the broader crypto market push higher from current levels.

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The 2026 Outlook: A Great Filtering Process

Messari, one of the industry’s most widely followed and respected crypto research firms, has released its 2026 outlook. Their core argument is that crypto isn’t disappearing, but instead consolidating. After years of excess and experimentation, the market is becoming far more selective about what actually earns a lasting monetary premium.

Bitcoin (BTC): The Global Non-Sovereign Asset

Messari argues that Bitcoin has now fully separated from the rest of the crypto market.

• The Thesis: It is increasingly treated as a global, non-sovereign monetary asset.

• The Context: While BTC underperformed versus gold and equities in late 2025, the report frames this as temporary. This dip was driven by profit-taking from early holders and a slowdown in institutional inflows, rather than a failure of the long-term thesis.

• The Outlook: Bitcoin is still expected to absorb value from both fiat currencies and other crypto-assets over longer horizons.

Ethereum (ETH): The Beta Companion

Ethereum’s path is less straightforward, but Messari notes it is "no longer broken."

• The Recovery: After a deep identity crisis earlier in 2025, ETH recovered as ETF demand returned and ETH-focused corporate treasuries began to build positions.

• The Shift: The report is clear that Ethereum no longer accrues value directly from network usage. Its upside now depends on being a "higher-beta companion" to Bitcoin: essentially a secondary form of cryptomoney.

Layer-1s: Under Pressure

The sector faces a widening gap between valuation and reality.

• The Struggle: Across the sector, revenues are falling while valuations remain elevated.

• The Verdict: Many tokens are priced on "hoped-for" monetary relevance rather than actual fundamentals. Even strong ecosystem growth has struggled to translate into outperformance against Bitcoin.

The Rise of Privacy & "Application Money"

Some of the most interesting developments are happening outside the base layers:

• Zcash as Private Money: Growing surveillance and the rise of institutional custody have renewed interest in privacy. Messari now frames Zcash as private cryptomoney rather than a niche asset.

• Application Money: In low-friction crypto environments, applications are starting to issue their own monetary assets to capture value directly. Early experiments in social and AI suggest this model works, often at the expense of traditional Layer-1 monetary narratives.

The Bottom Line

Crypto in 2026 looks less like a "rising tide lifts all boats" scenario and more like a filtering process. Bitcoin sits at the monetary core, Ethereum remains a conditional beneficiary, and value is flowing toward assets that solve specific needs (like privacy or application-specific utility) that the current system lacks.

NEWS OVERVIEW

The Latest Crypto Headlines 📰 

Ethereum Names 2026 'Hegota' Upgrade to Tackle State Bloat 
Ethereum developers have officially named the late-2026 upgrade "Hegota," focusing on the long-awaited integration of Verkle Trees to enable lightweight, "stateless" clients.

Coinbase Sues Three States to Protect Prediction Market Launch 
Escalating a battle over jurisdiction, Coinbase has sued Michigan, Illinois, and Connecticut, arguing that prediction markets fall under federal CFTC control rather than state gambling laws.

Bitwise Files for SUI ETF with Staking Rewards 
Bitwise has joined the race for a spot SUI ETF, submitting a filing that includes a unique plan to stake the fund's tokens and pass validation rewards on to shareholders.

Senate Sets January Date for Landmark 'CLARITY' Crypto Bill 
The Senate will begin marking up the CLARITY Act in January, moving the U.S. closer to a formal regulatory framework despite heated debates over privacy and regulatory independence.

YOUTUBE INFLUENCER SUMMARY

Summary From The Top Influencers 📷️ 

Bankless – Crypto Prices Are Down...Builders Aren’t! (19.12.2025 Summary)

This episode tackles the "Great Divergence" of 2025: while the "Total Crypto Market Cap" has dipped below the critical $3 trillion mark and prices are struggling, the actual infrastructure of the industry is undergoing its most significant upgrade since the birth of Ethereum. The hosts argue that we are currently in a "Wealth Destruction Zone" for speculators, but a "Golden Era" for the technology.

• Coinbase’s Transformation into an "Everything App": Coinbase has officially moved beyond crypto. In a massive system update, they launched direct stock trading (Nvidia, Tesla, etc.) using USDC and introduced equity perpetuals (24/7 leveraged trading on stocks). This bridges the gap between traditional brokerage and onchain finance, aiming to compete directly with giants like Robinhood.

• The Rise of Prediction Markets: Prediction markets (via a partnership with Kalshi) are being integrated directly into the Coinbase interface. The hosts highlight how these are evolving from niche gambling tools into "Truth Machines" that provide clearer data on macro events than traditional news outlets.

• Institutional "On-Mainnet" Shift: In a major milestone, JP Morgan deployed directly on the Ethereum Layer 1. This signals that the world's largest banks are finally moving away from "private blockchains" and accepting the public Ethereum network as the global settlement layer for finance.

• The Buffett Irony: Warren Buffett recently expressed deep concerns about the "natural course of government" to devalue fiat currency. The Bankless team notes the paradox: Buffett’s macro logic perfectly describes the necessity of Bitcoin, even though he remains one of its most vocal critics.

• Solana’s Fire Dancer Upgrade: Despite a 45% price drop on the year, Solana announced progress on its "Fire Dancer" upgrade. This is designed to provide the throughput required for high-frequency institutional trading, proving that technical development is decoupled from price volatility.

The Takeaway

The "Builders aren't down" thesis posits that we are transitioning from a Speculative Phase (based on hype) to an App Phase (based on utility). While the market feels bearish because prices are "barting" (moving sideways/volatile), the entry of JP Morgan and the tokenization of equities on Coinbase suggest that the "plumbing" for the next bull cycle is being completed right now.

Altcoin Daily – They Are The Ones Responsible for the Crypto Dump (19.12.2025 Summary)

The crypto market is currently falling because the US Senate has officially "punted" (delayed) the Clarity Act, the bill that would finally decide which cryptos are legal commodities and which are regulated securities. Without these rules, big institutional investors are hesitant to jump in, causing the price to stall and dip.

• The 2026 Delay: The Senate Banking Committee was supposed to vote on crypto rules this month. Instead, they pushed it to early 2026. The delay is caused by internal fighting over whether politicians (like the Trump family) should be allowed to own crypto businesses and how much control the government should have over decentralized finance (DeFi).

• The "Wait-and-See" Price Action: Bitcoin’s price dropped on this news because markets hate uncertainty. Even though the "tech" is working fine, the "Legal Infrastructure" is stuck in traffic. Investors who were betting on a 2025 "green light" from the government are now selling off.

• Wall Street is "Buying the Fear": Interestingly, while the general market is dumping, professional investors are using ETFs to accumulate XRP and Solana. XRP ETFs have seen 30 straight days of buying, and Solana ETFs lead in new cash. This suggests that while retail traders are scared of the delay, "Smart Money" is happy to buy at these lower prices.

• Binance’s Safety Pivot: To survive this "no-rule" environment, Binance secured a major license in Abu Dhabi that forces them to act like a traditional bank. They are splitting their business into three separate pieces (Exchange, Custody, and Broker) so that if one part fails, the customers' money in the other parts stays safe.

• Mining as a Hedge: The video explains that when prices are down, Bitcoin Mining becomes a strategic move. It allows business owners to earn Bitcoin while getting tax breaks, essentially turning a market "dump" into a tax-saving opportunity.

The Takeaway

The "dump" is being caused by politicians, not technology. The market was prepared for a legal "Clarity Act" victory in 2025, and now that it’s pushed to 2026, the hype has died down. However, the fact that JP Morgan is still building on Ethereum and XRP/Solana ETFs are seeing record inflows proves that the big players believe the "rules" are a matter of when, not if.

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