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Cryptocurrencies and risk assets continue to show weakness as the end of the year approaches, and are not adding to the holiday spirit. Risk assets are looking for a floor, driven by fundamental flows backed by ETFs or protocol buybacks.
Indicators
This week concludes with continued weakness across the board, and in crypto risks in particular. The S&P 500 and Nasdaq 100 both fell more than -1% this week, with gold the only instrument showing strength. At the same time, every cryptocurrency index we track traded lower over the course of the week. It is worth noting that the exchange tokens, buyback leaders, and 2025 Crypto Stocks Outperformed BTC during the week, while everything else underperformed.
The artificial intelligence sector was the biggest loser during the week, as its trading fell by -26%. The downtrend was led by TAO, which posted new multi-month lows after being the best performer in October.
Broadly, cryptocurrencies continue their downtrend, with major coins like BTC, ETH, and SOL showing weakness while longer altcoins make larger moves to the downside. Risk is looking for a fundamental floor, which may remain lower until the price/buybacks become very compelling, and the buyback flows from these protocol cash flows can reach a low level. Likewise, major currencies may need a slight increase in ETF flows to reach lows, while the support provided by these vehicles has been weak in recent weeks.
Weekend reading
Michael W. Green published a blog post titled “Step Back Step Forward” that reframes economic fragility in the United States through a structural and mathematical lens. Drawing on Olli Peters’ “equation of life”, Green claims that wealth is naturally concentrated without redistribution (τ < 0), leading to overall inequality. He criticizes distorted CPI measures, technocratic complacency, and housing scarcity as mechanisms of economic extraction. With credit spreads artificially narrow despite high defaults, it warns of financial fragility. Green calls for civic engagement and institutional accountability, paving the way for more political articles and interviews focused on systemic reform. Read more
The Sky Frontier Foundation published a research report titled “Annual State of the Sky Ecosystem” outlining the protocol’s key achievements and financial growth in 2025. The Sky Ecosystem saw an 86% increase in the supply of USD (to $9.86 billion), outpacing the broader stablecoin market. Sky Protocol generated revenue of $435 million and profit of $168 million, with significant buybacks of SKY tokens and staking bonuses. With new regulatory clarity through the GENIUS Act and the launch of multiple Sky Agents, the report forecasts strong institutional adoption and expansion of the protocol in 2026, positioning Sky as a leader in yield-paying decentralized stablecoins. Read more
Omid Malkan published a blog post titled “Beware the lofty promises of TradFi companies embracing tokenization” which criticizes traditional financial institutions (DTCC, Visa, SWIFT, Stripe, PayPal) for selectively embracing the benefits of blockchain while ignoring existential threats to their legacy business models. These companies promote tokenization, but avoid decentralization, which risks exploiting the underlying values of cryptocurrencies, Malkan says. He warns that permissioned chains and regulatory pressure may dilute the fundamental principles of cryptocurrencies. While he calls for engagement with TradFi, he urges the cryptocurrency community to defend permissionless public networks and resist compromising decentralization for mainstream adoption.
@DeFi_Cheetah posted on The article explains how Basel III regulations, liquidity restrictions, and G-SIB sanctions discourage banks from holding non-USD inventories or servicing emerging market corridors. The result is a liquidity vacuum in foreign exchange markets other than the US dollar. The author calls for native DeFi solutions to bootstrap non-USD stable liquidity, warning that relying on traditional FX infrastructure will fail by design. Read more
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