As Bitcoin price tries to catch its footing above $93,000, investors are starting to ask themselves, what will it take to plunge Bitcoin into yet another bitter crypto winter? For Bitwise, there are two scenarios that pose the biggest threats to the current crypto cycle. One is a collapse in AI stocks while the second is a regulatory reversal in Washington, D.C. In a December 3 presentation with investors, Bitwise CIO Matt Hougan and European head of research André Dragosch laid out what needs to happen ...

Core Viewpoint - Concerns have risen regarding the potential collapse of Bitcoin treasury strategy due to bearish news, including possible removal from stock indices and the acknowledgment by Michael Saylor that the firm may need to sell Bitcoin for the first time [1] Group 1: Company Performance - The company holds 650,000 Bitcoin valued at approximately $60 billion, representing 3.1% of the total Bitcoin supply [1] - The stock price of Strategy (MSTR) has decreased by 30% to $185.88 over the past month, influenced by a 13% decline in Bitcoin during the same period [2] - MSTR has fallen 65% from its all-time high reached in November 2024, while Bitcoin has decreased by 6% in that timeframe [2] Group 2: Historical Context and Comparisons - Historical examples of public companies collapsing include Enron and Lehman Brothers, with recent bankruptcies of banks like Silicon Valley Bank, Silvergate, and Signature, which resulted in equity holders losing their investments [2][3] - Enron, once the seventh-largest U.S. company, saw its stock plummet from $90 to $0.26 due to fraudulent accounting practices [3] - The concept of "too big to fail" emerged from the 2008 financial crisis, where major financial firms collapsed, challenging the belief that some companies were immune to failure [3] Group 3: Perspectives on Company Stability - Some observers argue that the Bitcoin treasury firm cannot collapse due to its public trading status, suggesting that a bailout would occur to prevent disastrous consequences [4] - The company is ranked as the 433rd largest by market capitalization, which some believe would attract support in the event of financial distress [4] - Others, like Mitchell "Nom" Rudy, express that failure is unlikely for the firm [5]

Group 1: Euro-Backed Stablecoin Initiative - A consortium of European banks is working on a euro-backed stablecoin called Qivalis, which includes major banks such as BNP Paribas and CaixaBank [1][2][4] - Qivalis aims to launch in early 2026 under EU regulations, supporting real-time cross-border payments and settlements [2][4] - The initiative is seen as a response to the dominance of U.S. dollar-backed stablecoins, providing a local alternative for European businesses and consumers [4] Group 2: Stripe's Acquisition of Metronome - Stripe has acquired Metronome, a usage-based billing platform, to enhance its monetization capabilities [3][5] - Metronome has raised $128 million over four funding rounds, with a recent $50 million Series C round [5] - The partnership aims to integrate metered pricing into Stripe's offerings, which is expected to significantly impact revenue generation models [5] Group 3: Sony's Stablecoin Development - Sony is entering the stablecoin market by partnering with Bastion to provide services for its U.S. dollar-backed stablecoin [7][8] - The stablecoin is expected to launch in 2026 and will enhance payment options within the Sony Group ecosystem [9] - Sony's Innovation Fund has invested in Bastion, indicating a commitment to innovation in financial technology [10] Group 4: Ripple's Regulatory Approval in Singapore - Ripple Markets APAC has received expanded payment activity approvals from the Monetary Authority of Singapore [13][14] - This allows Ripple to sell payment products and settle payments in RLUSD and XRP, enhancing its operational capabilities in the region [13][14] Group 5: Mastercard's Agent Pay Launch - Mastercard plans to launch Agent Pay in Latin America and the Caribbean in early 2026, utilizing tokenization technology [15][16] - The initiative aims to enhance agent-led commerce and digital transformation in the region [17] Group 6: Kraken's Debit Card Introduction - Kraken is launching a debit card in the UK and EU that offers cashback rewards and allows spending from multiple balances [18][19] - The Krak Card follows similar offerings from other cryptocurrency exchanges, indicating a growing trend in the rewards card market [19] Group 7: AI in Cash and Liquidity Management - The Bank of International Settlements has found that generative AI models can effectively manage cash and liquidity in payment systems [20][21] - AI agents demonstrated the ability to maintain liquidity buffers and prioritize payments under various scenarios [22]

Market Overview - Cryptocurrencies are experiencing a rise, with Bitcoin increasing by 1.5% to around $92,000 and Ether climbing 3% to $3,88 [2] - American Bitcoin, a mining stock linked to the Trump family, is recovering after a significant drop of about 40% [3] Company Developments - Binance has appointed a new co-CEO, Yihei, to work alongside Richard Tang, who took over leadership after CZ stepped down in 2023 [4] - BlackRock's CEO, Larry Fink, reaffirmed his belief in Bitcoin's long-term potential, highlighting the growing number of long-term holders [5] - Coinbase's CEO, Brian Armstrong, emphasized the company's efforts in Washington to advocate for crypto-related legislation [7] Legislative Efforts - Coinbase's chief legal officer, Paul Greywall, is heading to Washington, D.C. to discuss crypto market structure legislation, which is a priority for both Coinbase and the broader crypto industry [10][18] - There is a bipartisan consensus emerging in Congress regarding the definition of digital asset securities and the regulatory roles of the SEC and CFTC [21][22] - The Senate Agriculture Committee has released a draft bill for crypto market structure, which includes provisions for the CFTC to have more regulatory authority [22] Future Outlook - The crypto industry is hopeful for the passage of market structure legislation by the end of the year, despite potential delays due to the upcoming elections [28][30] - The focus on crypto legislation remains bipartisan, with past successes indicating a strong possibility for future advancements [30]

Group 1 - The recent decline in Bitcoin presents potential reward/risk tradeoffs for investors, particularly during market events like "buy the dip" rallies [1][2] - A significant selloff in assets like stocks or ETFs can lead to larger percentage gains needed to recover previous highs, making the current market conditions intriguing for Bitcoin [2][3] - The use of option collars can provide a strategy for investors looking to capitalize on a potential Bitcoin recovery while managing risk [3][4] Group 2 - The iShares Bitcoin Trust ETF (IBIT) is highlighted as the largest spot Bitcoin ETF, with over $73 billion in assets, despite experiencing a nearly one-third decline in value recently [4] - The Volatility 2X Bitcoin Strategy ETF (BITX) is a leveraged ETF that tracks Bitcoin's price, moving approximately two times as much as Bitcoin daily, which poses risks during rapid declines [5] - MicroStrategy, referred to as a Bitcoin-buying machine, has seen its stock decline significantly, indicating the challenges faced by companies heavily invested in Bitcoin [6]

Market Performance - Bitcoin experienced its fifth best daily return of the year, gaining 5.7% [1] - On December 3, Bitcoin briefly surpassed $93,000 but quickly retraced, indicating a potential 'fake breakout' [2] - Bitcoin's trading volume increased by 16%, totaling $128 billion [3] Investment Flows - There was a significant increase in funds flowing into Bitcoin ETFs, with $58.5 million on Tuesday compared to $8.5 million on Monday [4] - BlackRock's iShares Bitcoin Trust attracted $120 million in new capital, while ARK 21Shares Bitcoin ETF faced a net loss of $90.9 million [4] Macroeconomic Factors - Analysts noted that traders are preparing for potential catalysts, with an 89% probability assigned to a third rate cut by the Federal Reserve [5] - The Federal Reserve is currently lacking fresh inflation or employment data, which may impact upcoming decisions [6] - Betting markets suggest an 85% probability that Kevin Hassett will become the next Fed Chair, raising questions about future monetary policy [7]

PayPal USD (PYUSD), the stablecoin launched by PayPal, has recorded 216% growth in under 90 days, with new data from DeFiLlama showing a sharp increase in the stablecoin’s circulation and on-chain usage. The expansion comes at a moment when sentiment around stablecoin issuers is shifting, especially as Tether faces renewed regulatory scrutiny. PayPal USD surges to sixth-largest stablecoin As of September 2025, PayPal USD had a market capitalization of $1.28 billion. In less than three months, increased ...

Core Insights - Rapid growth of stablecoins may introduce financial stability risks, prompting calls for closer oversight from the European Central Bank (ECB) analysts [1][2] - The market cap of stablecoins has reached a record of over $314 billion this year, with projections suggesting it could hit $2 trillion by 2028 [5] Group 1: Financial Stability Risks - The main vulnerability of stablecoins is a potential loss of confidence in their peg, which could trigger a run, particularly impacting the cryptocurrency market [2] - A failure of a single stablecoin entity could have widespread repercussions, even without a systemic crisis [3] - Widespread adoption of stablecoins could lead to a flight of bank deposits, increasing banks' vulnerability to economic shocks [3] Group 2: Regulatory Concerns - Regulatory arbitrage from "multi-issuance" poses a risk, where EU entities partner with non-EU entities to issue stablecoins, potentially leading to reserve shortfalls [4] - ECB analysts recommend additional pre-conditions for EU market access to mitigate these risks [4] Group 3: Market Dynamics - The enactment of the GENIUS Act in the U.S. has provided guidelines for stablecoin issuance, facilitating greater market adoption [6] - Institutions and companies that previously hesitated to enter the stablecoin market are now actively participating due to the new regulatory framework [6]

Welcome to The Protocol, CoinDesk's weekly wrap of the most important stories in cryptocurrency tech development. I’m Margaux Nijkerk, a reporter at CoinDesk. In this issue: Ethereum Developers Prep for Fusaka, Second Upgrade of 2025 Anthropic Research Shows AI Agents Are Closing In on Real DeFi Attack Capability Ethereum Devs Push ZK ‘Secret Santa’ System Toward Deployment Bitnomial Prepares to Debut First CFTC-Regulated Spot Crypto Market Unknown block type "divider", specify a component for ...

Core Insights - Firelight is a new decentralized finance (DeFi) protocol that enables XRP users to stake their tokens while providing on-chain protection against hacks [1] - The protocol aims to introduce a risk infrastructure similar to traditional finance, enhancing the resilience of the DeFi ecosystem [2] Group 1: Protocol Features - Firelight allows XRP holders to stake their tokens and earn rewards linked to the demand for DeFi "cover," which helps protocols absorb losses from exploits [1] - The staking process involves two phases: users deposit XRP to receive stXRP, a liquid ERC-20 token, which can be traded or used as collateral, and the staked XRP backs the Firelight cover pool [2] - If a protocol incurs a loss that meets Firelight's criteria, the cover pool can pay out from the capital staked by users, similar to how traditional insurers operate [3] Group 2: Technical Infrastructure - Firelight utilizes Flare's FAssets system to integrate XRP into DeFi, allowing users to mint FXRP, a wrapped version of XRP, without relying on centralized bridges [4] - The protocol has undergone audits by OpenZeppelin and Coinspect and has initiated a bug bounty program with Immunefi to enhance security [4] Group 3: Market Context - Despite XRP's significant market capitalization of $130 billion, it has lacked native staking options, with total value locked on XRPL at only $72 million [5] - Firelight aims to provide XRP holders with a new yield-earning opportunity while establishing a security layer that aligns with institutional standards in the DeFi space [5]