📊 The Bitcoin market in transition

Last week the price of Bitcoin fell to a 6-month low after US spot ETFs recorded a total of $1.15 billion in net outflows over two trading days.

On Thursday alone, $866 million were withdrawn - the second-worst figure since the products were launched according to Farside Investors. The outflows began immediately after the end of the 43-day US government shutdown and show that political détente in the US has not triggered new demand.

Another possible cause is the probability of an interest rate cut in December, which fell from almost 67% to just 45.9%, according to the CME Group.

The US Federal Reserve emphasized that a new cut was by no means certain. According to analysts, this uncertainty is weighing on the markets' risk appetite, as falling interest rates normally create additional liquidity - a prerequisite that was missing in the recent movements. The October interest rate move also failed to provide any boost because it had already been fully priced in.

The BTC price fell to $94,590 on Friday after stock markets also came under pressure due to weakness in the AI sector.

In addition, a single person sold $600 million worth of bitcoins held since 2011, which added to the downward atmosphere, although analysts emphasized that this was an isolated event.

Liquidations of around $900 million in long positions wiped out less than 2% of open futures contracts, a sign that the market structure is more stable than in previous periods of stress.

Despite the weakness, several market observers urge caution. CryptoQuant CEO Ki Young Ju believes that the overall upward trend will only be threatened if BTC falls below $94,000 on a sustained basis, which is the average purchase price of buyers over the last six to twelve months.

Bitwise CEO Hunter Horsley also argues that since the introduction of ETFs, Bitcoin has been undergoing a new market structure in which classic four-year cycles are less relevant. He believes it is likely that the market has already been in a bear market for six months, and has largely run its course.

Robert Kiyosaki also attributes the current weakness not to trend reversals, but to a global liquidity crunch. He expects massive monetary expansion ("big print"), which he believes will boost both Bitcoin and precious metals.

At the same time, the Fear & Greed Index shows extreme fear with a value of 16 - a range that has historically been interpreted in some cases as a potential zone to buy Bitcoin.

However, Santiment warns against prematurely expecting a bottom to form: in previous cycles, resilient lows emerged primarily when investors priced in further declines, not when they proclaimed a trend reversal.

To summarize, the current signals - ETF outflows, interest rate uncertainty, pressure from the tech sector, and cautious traders - point to a market that is repositioning itself between macroeconomic pressure and structural robustness. Whether the six-month low already marks a capitulation remains open given falling liquidity and conflicting indicators.

In other terms, it is a market in transition. Strong ETF outflows and falling interest rate cut probabilities meet cautiously optimistic assessments of the medium-term structure. The key question mark remains liquidity: without new capital inflows via interest rate channels or institutional demand, short-term recoveries are unlikely to last. At the same time, robust derivatives data and the behavior of major market participants suggest that there has not yet been a fundamental shift away from Bitcoin, but rather a phase of defensive positioning.

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🔎 Bitcoin reserves in focus

The recent turmoil in the crypto market has significantly tightened the environment for institutional Bitcoin holders. Strategy came into focus after the company moved 58,915 BTC worth $5.77 billion to new wallets and its net asset value (NAV) fell below 1 for the first time.

At the same time, central banks and government institutions in Europe and Asia are pushing ahead with their Bitcoin strategies: the Czech central bank made its first BTC purchase, and Taiwan is considering establishing a national Bitcoin reserve.

The excitement surrounding Strategy began when the massive wallet transfer triggered speculation about possible sales. However, analysts described the process as "custodial relocation" and explained that bots amplified the market reaction. More significant was the fall of the NAV below 1 - a historic first, signaling that the market now values Strategy at a discount to its BTC holdings.

According to K33 Research, the equity premium has shrunk by $79.2 billion since November 2024, while $31.1 billion in capital has been raised through dilution. On the other hand, around $48.1 billion in implied BTC demand has never been realized.

Despite valuation concerns, analyst Willy Woo sees the risk of forced liquidation as limited: as long as the stock remains above $183.19 until 2027 - corresponding to approximately $91,500 per BTC at a NAV of 1 - Strategy is sufficiently hedged.

CEO Michael Saylor also dismissed rumors of sell-offs, stating that the company had neither sold 47,000 BTC nor changed its strategy; rather, it continues to buy despite a price decline of over 4% within 24 hours.

While Strategy is under pressure, government institutions are taking the opposite approach. The Czech National Bank (CNB) purchased $1 million worth of digital assets for the first time, including Bitcoin, a USD stablecoin, and a tokenized deposit. The aim is to gain practical experience with digital reserves and ensure competitiveness in an on-chain financial system. The CNB is already experimenting with blockchain technologies and is considering larger BTC holdings in the long term — Governor Aleš Michl had proposed up to $7.3 billion in January, although the board did not approve this.

Taiwan is also considering a new course of action. Prime Minister Zhuo Rongtai announced a report that will record all confiscated bitcoins by the end of the year and assess the opportunities and risks of a national bitcoin reserve. Several lawmakers are in favor of a model similar to the US Strategic Bitcoin Reserve, which was introduced in March. It has been proposed that up to 5% of Taiwan's national reserves be used to hedge against geopolitical and economic uncertainties. Taiwan is also pursuing regulatory liberalization, for example with pilot programs for institutional custody services.

This creates a stark contrast: while private companies such as Strategy feel the pressure of valuation and mistrust on the capital market, national institutions are increasingly approaching Bitcoin strategically. The divergence underscores a structural transition in which government actors are entering the market more strongly, while corporate treasuries are having to redefine their role. The key question will be whether national reserves have a stabilizing effect in the long term, or whether they intensify competition between states and companies for control over scarce on-chain assets.

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🌦 Ethereum's cloudy weather

Ethereum is currently under significant pressure: long-term investors are selling more ETH than they have since February 2021, while ETF outflows, declining on-chain activity, and broken chart supports are clouding the picture. At the same time, metrics in the broader altcoin market are showing remarkable resilience, and new infrastructure projects are attempting to fundamentally change access to Web3 development.

According to Glassnode data, long-term holders who have held their ETH for more than 155 days are currently selling an average of 45,000 ETH per day from three- to ten-year-old wallets - around $140 million daily. At the same time, Ethereum ETFs recorded net outflows for four consecutive days, with $259 million on the most recent trading day and a total of $1.42 billion since the beginning of November.

The end of the 43-day US government shutdown also failed to revive demand. The pressure is reflected on-chain as well in a 21% decline in TVL within 30 days and a 42% drop in fees to $27.54 million, while Solana fees declined by only 9.8% and BNB Chain revenues declined by 45%.

The aspect of the price chart is also deteriorating. Ethereum has lost the 50-week EMA at around $3,350 - a level whose breach has triggered significant downward movements in the past, most recently a 60 percent decline from $3,400 to $1,380. At the same time, market sentiment has fallen back to a level last seen during the sell-off triggered by US tariff announcements in April.

On a structural level, Bitcoin and Ethereum are developing in "different monetary universes," according to a joint analysis by Glassnode and Keyrock.

Around 61% of all BTC has not been moved for a year, and the daily circulation velocity is only 0.61% of the free float, a profile that increasingly positions BTC as a store of value.

Ethereum shows a different pattern: turnover is around 1.3% per day, long-term ETH investors mobilize dormant coins about three times faster than BTC investors, and around one in four ETH is tied up in staking or ETFs.

While holdings on exchanges are down 1.5% for Bitcoin, they are falling by almost 18% for Ethereum as coins migrate to institutional vehicles and on-chain applications.

This increased activity is interpreted differently by analysts. Proponents see a productive on-chain asset that supports staking, credit collateralization, and institutional products. However, critical voices such as 10x Research warn that the momentum could also reflect structural fragility, especially as Bitcoin dominates treasury flows and some Ethereum-focused companies are said to have only limited financial reserves. BitMine is cited as an example: Although inflows into Ethereum treasuries stagnated in the fourth quarter after a 124% increase in the third quarter, BitMine continues to accumulate and now holds 3,505,723 ETH, including 110,288 ETH since November 10.

The market capitalization of altcoins excluding BTC and ETH (TOTAL3) is only about 17% below its all-time high, although broad indicators such as CryptoBreadth50 and CryptoBreadth200 see only a small proportion of coins above central moving averages, at 11.2% and 6.3% respectively.

BTC dominance has fallen by more than 7 percentage points to 57.8% in six months, while classic altcoin season indicators still signal "Bitcoin season" at 41/100.

Overall, Ethereum is caught between short-term selling pressure, subdued ETF flows, and declining on-chain demand on the one hand, and increasing functional differentiation from Bitcoin and a professionalizing altcoin and infrastructure ecosystem on the other.

Whether the current phase should be seen as a harbinger of a deeper downturn or as a correction before a qualitatively different growth cycle depends largely on whether Ethereum succeeds in translating productive use in DeFi, staking, and institutional structures into sustainable demand for ETH itself.

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📈 Stablecoins keep gaining traction

Tether has already granted around $1.5 billion in loans to commodity traders - partly in US dollars and partly directly in USDT. Through its newly created trade finance unit, the company finances traditional commodity transactions such as agricultural commodities and oil, and intends to expand this involvement "dramatically." With nearly $184 billion USDT in circulation, Tether is one of the most profitable companies in the industry per employee.

At the same time, the gold-backed token Tether Gold has grown strongly during the recent gold bull market; according to CEO Paolo Ardoino, the company now holds more than 100 tons of physical gold;

On the regulatory side, Aave is taking the next step toward mainstream acceptance. Aave Labs is one of the first major DeFi projects to be approved under the European MiCA regulation:

Through its "Push" service, the company can now offer regulated on- and off-ramps between euros and crypto assets throughout the European Economic Area, including its own stablecoin, GHO. The Irish Central Bank granted the license to Push Virtual Assets Ireland Limited, making Ireland an important hub for MiCA-compliant on-chain financial services - Kraken also received its license there. Conversion fees are set to zero, making Aave particularly competitive compared to traditional fintechs and centralized exchanges. According to DefiLlama, Aave has processed a volume of $542 million in the last 24 hours, with user-borrowed assets totaling more than $22.8 billion.

Meanwhile, Circle is targeting the world's largest financial market: foreign exchange. With "Circle StableFX," the USDC issuer is introducing an institutional on-chain FX platform built on Arc1, its own layer 1 blockchain.

According to the Bank for International Settlements, the global FX market has a daily volume of $9.6 trillion, more than twice as much as all global stock markets combined. StableFX aims to enable regulated institutions to trade stablecoin currency pairs with 24/7 on-chain settlement, fewer intermediaries, and reduced counterparty risk. In addition, Circle is launching a program for regulated regional stablecoins. The service is currently running on the Arc testnet, with the alpha version set to launch alongside the Arc mainnet in 2026 for selected partners. Circle itself reported third-quarter revenue of $740 million, up 66% year-over-year, and is working with companies such as Goldman Sachs, BlackRock, and Visa on further rollouts.

The capital market reflects this development. Cathie Wood's ARK Invest has made another move after Circle's share price fell significantly below $90, buying 542,269 CRCL shares for around $46 million in two days. ARK had previously sold around 1.7 million shares at an average price of $200 in June, investing a total of $352 million. Following the latest purchases, ARK holds 3.1 million shares. At the same time, ARK increased its position in Bitcoin mining company Bitmine Immersion Technologies, which has also become the largest publicly traded Ethereum holder - an indication that stablecoins, infrastructure, and underlying assets are increasingly seen as a coherent ecosystem.

Against this backdrop, the size of the stablecoin market is becoming increasingly important: global supply exceeded the $300 billion mark in 2025, with CoinGecko recently putting the market capitalization at around $310 billion. Tether dominates with a market share of around 60%, while institutional banks such as JPMorgan and Citigroup, as well as payment providers such as Visa, are pushing ahead with their own stablecoin or tokenization initiatives. Stablecoins thus no longer function solely as a trading chip in the crypto market, but as a bridge technology for payments, trading, foreign exchange, and on-chain financial products.

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🌎 UK sandbox, US restart and digital dirham

Former British MP Lisa Cameron, founder of the UK-US Crypto Alliance, expects a joint sandbox between the UK and the US to address licensing and passporting issues for crypto companies in both jurisdictions. This is based on discussions with US senators and the SEC's crypto task force.

The Bank of England has also published a consultation paper on "systemically important" stablecoins in pounds, while a transatlantic task force is already exploring short- to medium-term cooperation on digital assets. However, Cameron warns that the UK could fall behind if companies move to other countries due to a lack of political priority.

In the US, President Donald Trump ended the 43-day government shutdown by signing a funding bill. SEC and CFTC employees are returning to work after both agencies had to significantly scale back their operations, including the review of ETF applications, market surveillance, and rulemaking processes.

The SEC now has to work through a backlog of registration and ETF applications, while the CFTC prepares to confirm Mike Selig as its new chairman. The Treasury Department can now also evaluate the public feedback on the GENIUS Act on stablecoins that was received during the shutdown.

On the other side of the globe, the Central Bank of the United Arab Emirates reports progress on the "Digital Dirham" CBDC project. In collaboration with the Ministry of Finance and Dubai Finance, the first transaction was carried out via the mBridge platform in less than two minutes. The pilot phase serves to verify technical integration and operational readiness for payments between federal and local authorities. According to the policy paper, the digital dirham will be introduced in several phases, initially focusing on payments so as not to compete with interest-bearing savings and investment products. Globally, however, the market remains hesitant: according to a tracker by the Atlantic Council, only Nigeria, the Bahamas, and Jamaica have officially introduced a CBDC so far, while 49 other countries are in the pilot phase.

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🛡 Scams, freezes, and quantum risks

With pig butchering scams, state-orchestrated scam complexes, frozen user funds on dozens of blockchains, and the debate about a possible quantum attack on Bitcoin, the security topic in the crypto space is hotter than ever.

According to Chainalysis, pig butchering has evolved from consumer fraud to a transnational crime model. Fraud networks operate in Southeast Asia via isolated compound structures, where workers recruit victims, build emotional bonds, and then direct them to fake crypto platforms. The US Department of Justice seized over $112 million in connection with these scams in 2023, while Chainalysis reports an increase of nearly 40% for 2024.

Victims often fall prey to a second wave of fraud, as they are specifically targeted by "recovery" scammers after their initial loss. Authorities are responding with strike forces and cross-border asset freezes, including a joint APAC operation worth $47 million.

At the same time, an analysis by Bybit Lazarus Security Lab reveals that 16 blockchains are technically capable of freezing user funds via hardcoded mechanisms, configuration files, or on-chain blacklists. Those include BNB Chain, EOS, Sui, and Aptos. Another 19 networks could introduce similar functions through minor protocol changes. The existence of such control mechanisms - even if they are intended for emergency measures - intensifies the debate about the actual decentralization of blockchains.

At the same time, a new discussion is igniting the question of long-term protocol security: Bitcoin expert Willy Woo recommends holding BTC on SegWit addresses, whose public keys only become visible during a transaction, as an interim solution to mitigate potential quantum risk.

Critics such as Charles Edwards disagree, warning that SegWit does not offer real protection and that the industry needs a faster, more coordinated upgrade. While some experts consider quantum risks to be exaggerated, Woo emphasizes that quantum resilience is unlikely to become relevant until 2030 - but preparations are already underway.

The security landscape is evolving from isolated cases of fraud to complex, globally networked attack vectors: human manipulation, protocol governance, government intervention, and future technological risks are increasingly overlapping. Security is not a single mechanism, but rather an interplay of personal vigilance, technical architecture, and institutional coordination. Anyone who uses crypto today needs an understanding of security that goes far beyond wallet handling.

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