ARP's Crypto Digest

General Digital Asset Market View:

Last week, U.S. Bitcoin spot ETFs saw a significant rebound, attracting $2.73 billion in inflows and recovering from the previous week’s $135 million outflow. BlackRock’s IBIT led with $2.29 billion, representing 83.5% of the total inflows. Despite this surge, the record for weekly inflows is still held by the week of November 18–22, 2024, with $3.35 billion. Concurrently, Grayscale’s GBTC experienced $303.5 million in outflows.

Additionally, MicroStrategy continued its aggressive Bitcoin acquisitions, purchasing $1.5 billion last week, totaling $13.5 billion since November with a current profit of 71% on these investments. This buying spree helped push Bitcoin’s price above $100,000 for the first time, hitting an all-time high of $103,097 on December 5, before a sharp correction occurred. Despite this, Bitcoin’s price stabilized around $100,000 by the end of the week.

Macro:

The key economic focuses this week will be US pricing data for November (CPI, PPI, IPI) and a run of central bank meetings (RBA, BoC, BCB, ECB, SNB). Elsewhere we have Japan’s Q4 Tankan survey, China TSF/CPI/PPI and the monthly data dump out of the UK.

More Crypto:

In November, spot crypto exchanges saw a dramatic increase in trading volume, reaching $2.71 trillion, the highest since May 2021 and more than double October’s $1.14 trillion.

Key highlights:

• Binance dominated with over $986 billion in trades, about 36% of the total volume.

• Crypto.com, Upbit, and Bybit each exceeded $200 billion in monthly volume.

• Both Bitcoin and Ethereum futures trading volumes hit their highest levels since May 2021, with $2.59 trillion and $1.28 trillion respectively.

This surge in trading activity coincided with a significant crypto market rally following the reelection of pro-crypto President Donald Trump on November 6.

When we examine the progress of the crypto ecosystem, it is clear that we’re experiencing a seismic shift in both perception and usage. Although the cryptocurrency market can be volatile with extended bear cycles, one trend is consistent: the linear and upward growth of wallets with a positive balance. Today over 400 million wallets actively hold cryptocurrency.

Stablecoins Metrics and News:

Metrics:

The recent cryptocurrency rally has spiked demand for stablecoin liquidity, doubling the borrowing costs for USDT and USDC on Binance since late October due to increased leveraging in markets. This rise accompanies a record high in stablecoin market cap and higher borrowing rates on Aave V3, driven by a higher utilization rate of borrowed funds. Additionally, USDT’s dominance among USD-backed stablecoins surged to 86% in November, reflecting a significant trader shift from fiat to stablecoins, while First Digital’s FDUSD faced net selling following its August selloff.

In the past month, EUR-backed stablecoin trading volumes spiked from $5 million daily in October to over $70 million in early November, stabilizing above $20 million daily thereafter. This surge was primarily driven by the Eurite (EURI) stablecoin and Circle’s EURC, which together accounted for over 90% of November’s trading. 

Despite EURC holding a roughly 50% market share, EURI has been on the rise since its Binance listing in late August. Market dynamics shifted following MiCA regulations in late June, notably with Tether discontinuing its EURT stablecoin, which saw its volumes drop to $1.6 million from a previous 60% market share.

News:

• Hong Kong government unveils Stablecoins Bill to regulate fiat-referenced stablecoins — Link

• FSOC urges Congress to regulate stablecoins as Tether holds 70% market share — Link

• Ripple’s Stablecoin Near Approval, Launch Countdown Underway — Link

• Crypto payment firm Dtcpay shifts to stablecoin-only payments model — Link

What Happened This Week:

• Trump appoints David Sacks as White House crypto, AI czar. David Sacks is known as a former advisor to $ZRX, which has seen $ZRX rise sharply.

• Ethena’s stablecoin $USDe has surpassed 5B in issuance. $sUSDe currently offers 27% APY.

• Fed’s Powell said bitcoin is like gold, except it’s digital. Bitcoin is used as a speculative asset and is a competitor to gold, not the U.S. dollar.

• Paul Atkins, known as a pro-crypto figure and advisor to $RSR, accepted Trump’s nomination to chair the SEC.

• Grayscale has filed a proposal with the U.S. SEC to convert its Grayscale Solana Trust (GSOL) into a spot ETF listed on NYSE Arca.

What to Look Out For:

• ETH Spot ETF Net Inflows are increasing noticeably. Today’s BlackRock (ETHA) Daily ETH Flows doubled from the previous day to +295.7m.

• Roaring Kitty is back and tweeting after a long absence, sending GME stock jumping and possibly impacting the memecoin sector.

• OpenAI has announced that it will be livestreaming for 12 days, announcing new things big and small. AI Sector may be affected.

• Ripple’s stablecoin, $RLUSD, was scheduled to launch on Dec 4th, but the launch has been delayed and has announced that it is working to get final approval.

What we enjoyed reading and listening to:

• This week’s AI updates — Link

• Summary of what’s going on in Korea Martial law + Crypto prices on Upbit Dropping — Link

• a16z: A few of the things we’re excited about in crypto (2025) — Link

• The Trillion Dollar Opportunity — Link

ARP Digital is regulated by the Central Bank of Bahrain as a Category 3 Crypto Asset Service Provider. All communications and services are directed at Professional Clients only, persons other than Professional Clients, such as Retail Clients, are NOT the intended recipients of our communications or services. ARP Digital does not provide investment advice, and nothing herein shall be considered, construed as, or deemed to be, investment advice. Furthermore, nothing herein is intended to be, or shall constitute, an offer or invitation to buy securities or any form of financial instrument or investment product by ARP Digital or any of its related parties or persons.