Crypto Markets Consolidate, Ether Treasury Trade Unwinds, DeFi Regulation Debated

Article Summary

• Cryptocurrency markets continue to consolidate following the recent recovery.
• Ethereum treasuries see a significant decline in holdings.
• Debate surrounding Decentralized Finance (DeFi) regulation intensifies following a proposal from Citadel Securities.
• Warnings issued about a potential collapse of the new Monad token.
• Crypto lending market grows with increased transparency.
• Portal to Bitcoin raises new funding to launch atomic OTC trading desk.

Markets Await US Interest Rate Decision

Following last week's long-awaited recovery, cryptocurrency markets saw another week of consolidation. While Bitcoin (BTC) remained above the $90,000 level, investor sentiment lingered in a state of "fear," with a slight improvement in CoinMarketCap's Fear & Greed index from 20 to 25 during the week. Investors are also awaiting a crucial interest rate decision during the US Federal Reserve's upcoming meeting on Wednesday for further insights into monetary policy heading into 2026. Markets are pricing in an 87% chance of a 25 basis point interest rate cut, up from 62% a month ago, according to the CME Group's FedWatch tool.

Ethereum Institutional Holdings Decline

The Ethereum treasury trade appears to be unwinding, with monthly acquisitions declining by 81% in the past three months from August's peak. However, BitMine Immersion Technologies, the largest corporate Ether holder, continued to accumulate, while other treasury firms continued fundraising efforts for future acquisitions. According to Bitwise, investments from Ethereum digital asset treasuries (DATs) fell 81% in the past three months, from 1.97 million Ether in August to 370,000 ETH in November.

Citadel Sparks Debate on DeFi Regulation

Citadel Securities has caused a stir by urging the US Securities and Exchange Commission (SEC) to tighten regulations on Decentralized Finance (DeFi) regarding tokenized stocks, sparking backlash from crypto users. Citadel Securities recommended in a letter to the SEC that DeFi developers, smart-contract coders, and self-custody wallet providers should not be granted "broad exemptive relief" for offering trading of tokenized US equities. The company argued that DeFi trading platforms likely fall under the definitions of an "exchange" or "broker-dealer" and should be regulated under securities laws if offering tokenized stocks.

Warning of Monad Token Collapse

Crypto veteran Arthur Hayes has issued a warning over Monad, saying the recently launched layer-1 blockchain could plunge as much as 99% and end up as another failed experiment driven by venture capital hype rather than real adoption.

Crypto Lending Market Grows Transparently

The crypto lending market has become more transparent than ever, led by the likes of Tether, Nexo and Galaxy, and has just hit an aggregate loan book of nearly $25 billion outstanding in the third quarter. According to Galaxy Research, the size of the crypto lending market has increased by more than 200% since the beginning of 2024.

Portal to Bitcoin Launches Atomic OTC Trading Desk

Portal to Bitcoin, a Bitcoin-native interoperability protocol, has raised $25 million in funding amid the launch of what it describes as an atomic over-the-counter (OTC) trading desk.

DeFi Market Overview

According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red. The Canton (CC) token fell 18%, marking the week's biggest decline in the top 100, followed by the Starknet (STRK) token, down 16% on the weekly chart.