Market Watch
Things to Watch This Week (Dec 22 - Dec 26)
Bitcoin and Ethereum CME Expiry - Dec 26
This week, markets are focused on approximately $23.6 billion worth of Bitcoin options and $3.8 billion worth of Ethereum options approaching expiration at the end of the week. Such a large notional value means that even small price movements around expiry could trigger heightened volatility, especially as traders adjust or unwind their positions. One thing to note is max pain, the strike price at which the maximum number of options would expire worthless, sits at $96,000.
Random Musing This Week
Bitcoin ETF Flows Report
Much has been discussed in recent times about how Bitcoin ETF flows have increasingly become a primary driver of spot price behavior, with periods of strong inflows consistently lifting market liquidity and trend momentum, while even moderate outflows have shown an ability to stall rallies and amplify downside during risk-off conditions.
In today's edition, we highlight Amberdata’s latest report of the Bitcoin ETF ecosystem, modeling how $127 billion in institutional BTC exposure would respond under varying levels of market stress. It quantifies how aggregate cost basis, entity-level thresholds, and behavioral firebreaks interact during potential drawdowns, offering a clear picture of where stress could emerge and how it might propagate.
The analysis identifies $80,000 as the aggregate floor across the 11 ETF issuers, with a “fortress zone” of structural support between $65,000 and $70,000. A decline toward $71,000 would flip a majority of ETF positions negative, marking the point where mechanical, behavioral, and risk-model pressures converge.
A central concentration point emerges around BlackRock’s cost basis at $83,000. Because BlackRock holds 53 percent of ETF BTC, a break below this level materially alters the structure of ETF profitability.
The takeaway from this report is ETF structure remains stable, but its protective buffer has thinned. The vulnerability lies in the combination of compressed cost basis distance and the exposure of recent buyers, whose average cost is ~$115,000 and currently sits materially underwater. The transition from stability to stress will be marked by a shift in whether the market trades closer to key cost-basis thresholds and positioning becomes more sensitive to downside volatility. The coming weeks will hinge on whether flows continue to reflect healthy rotation or begin migrating toward distress.
Recap of Top Stories (Dec 15 - Dec 19)
Interesting
JPMorgan Launches Tokenized Money Market Fund on Ethereum as Wall Street Moves Onchain
Commentary: JPMorgan Chase is rolling out a tokenized money-market fund on Ethereum, pushing deeper into blockchain-based finance amid growing demand from institutional clients. The move marks JPMorgan’s first tokenized money market fund, making it the largest GSIB, or Global Systemically Important Banks, to launch such a vehicle on a public blockchain.
The fund, dubbed My OnChain Net Yield Fund (MONY), is seeded with $100 million from the bank’s asset management division and is set to open to external, qualified investors this week. JPMorgan built MONY on Kinexys Digital Assets, the bank’s in-house tokenization platform. The product will likely serve as a test case for expanding the bank’s lineup of onchain offerings.
Ethereum’s ‘Glamsterdam’ upgrade aims to fix MEV fairness
Commentary: Ethereum developers, fresh off last month’s successful Fusaka upgrade, which cut down costs for nodes, are already moving full-steam ahead on planning the blockchain’s next major change. Glamsterdam is two simultaneous upgrades taking place on Ethereum’s two core layers. The execution layer, where transaction rules and smart contracts live, will undergo the Amsterdam upgrade, while the consensus layer, which coordinates validators and finalizes blocks, will see an upgrade known as Gloas.
At the heart of Glamsterdam is enshrined Proposer-Builder Separation (ePBS), formally tracked as EIP-7732. The proposal would bake into Ethereum’s core protocol a rule that separates nodes who build blocks from those who propose them, preventing any single actor from controlling which transactions are included or how they are ordered.
SoFi unveils the first bank-issued stablecoin for enterprise payments
Commentary: SoFi has launched SoFiUSD, a U.S. dollar stablecoin backed 1:1 by cash held at the Federal Reserve and issued by its FDIC-insured national bank.
The coin is issued by SoFi Bank, a nationally chartered and FDIC-insured institution, making it the first U.S. national bank to offer open access to its stablecoin infrastructure. Initially limited to internal use, SoFiUSD is expected to roll out to SoFi members in the coming months as part of a broader payments strategy.
ECB’s Christine Lagarde shifts focus to digital euro rollout after holding rates
Commentary: European Central Bank President Christine Lagarde said the central bank has completed its technical and preparatory work on the digital euro and that it is now up to political institutions to act.
While monetary policy holds steady, Lagarde pointed to the digital euro as a strategic priority for Europe’s financial future. “Our ambition is to make sure that in the digital age there is a currency that is the anchor of stability for the financial system,” Christine Lagard said.
U.S. SEC aids brokers on crypto custody, looks more closely at ATS activity
Commentary: A new U.S. Securities and Exchange Commission statement is steering brokers who deal in customers’ crypto on how to handle the assets without running afoul of government supervisors.
The agency also released a set of frequently asked questions digging into activity at alternative trading systems that deal with crypto assets.
Brazilian stock exchange B3 to launch its own tokenization platform and stablecoin
Commentary: Brazil’s main stock exchange B3 is planning on deepening its involvement in the cryptocurrency space through the launch of a tokenization platform and its own stablecoin next year.
The tokenization platform is set to allow assets to be tokenized and traded on the exchange, with Luiz Masagão, B3’s vice president of products and clients, saying both systems will share the same liquidity pool.
Ripple expands institutional trading push with TJM partnership
Commentary: Ripple said it deepened its relationship with brokerage firm TJM Investments, buying a minority stake that takes it further into the behind-the-scenes infrastructure that institutions use to trade and settle assets.
The relationship builds on Ripple’s institutional platform, Ripple Prime, which provides trading, financing and collateral tools to hedge funds, asset managers and family offices.
Upcoming Market Events
December 26 - BTC (BTCZ25) & ETH (ETHZ25) CME Expiry
December 31 - FOMC Minutes
January 28 - FOMC Interest Rate Decision