As the year draws to a close, the cryptocurrency market is experiencing significant volatility, with Bitcoin (BTC) climbing 1.4% overnight to trade near $89,000. Analysts are divided on its near-term trajectory, with some predicting a reclaim of the $100,000 level before 2026, while others warn of a potential crash below $75,000. The macro environment, however, is providing reasons for optimism. The Bank of Japan's recent rate hike appears to be priced in, while both the United States and United Kingdom are embarking on periods of Quantitative Easing (QE), a policy shift expected to lead to further rate cuts in 2026.
This dovish monetary policy is seen as a bullish catalyst for risk assets like crypto. Adding to the liquidity narrative, prediction markets platform Kalshi indicates a 40% chance of a 'Trump stimulus' arriving before 2027, which would inject more capital into the ecosystem. Recent CPI data has also been more bullish than expected, supporting the case for continued accommodative policy.
Despite a volatile 2025 marked by geopolitical tensions and institutional dominance via altcoin ETFs, on-chain data suggests underlying strength. The Ethereum ecosystem has reached a new all-time high in monthly transaction count, led by Layer 2 networks Base (452.8M tx), Arbitrum (80.1M tx), and World Chain (53M tx). Furthermore, the total stablecoin supply has hit a record $304 billion, with nearly $196 billion of that liquidity residing on Ethereum, poised to fuel future speculative buying.
Concurrently, stablecoin yield products are facing increased regulatory pressure. U.S. banks and consumer groups are urging the Treasury to act under the proposed GENIUS Act, arguing that attractive yields on stablecoins could trigger a massive flight of deposits from traditional banks, threatening lending capacity and overall financial stability. Key entities like the Bank Policy Institute and the American Bankers Association have voiced concerns about "trillions in deposits" potentially leaving. Circle, the issuer of USDC, is advocating for a consistent, globally interoperable regulatory framework. The push for oversight has been amplified by past events like the USDC de-peg, highlighting the risks and the critical need for robust 1:1 backing.
