Market Watch
Things to Watch This Week (Dec 29 - Jan 2)
December FOMC meeting minutes - Dec 31
Minutes from the December Federal Open Market Committee meeting will be released this week, offering insight into the Fed’s policy bias heading into the new year. With a light holiday calendar, markets may react more sharply to any signals on rates and inflation.
Random Musing This Week
Uniswap’s UNIfication
Uniswap’s activation of the Fee Switch represents a structural shift in how protocol usage translates into token value. For years, Uniswap processed some of the highest trading volumes in DeFi, yet nearly all protocol-generated fees accrued exclusively to liquidity providers. UNI, meanwhile, remained largely a governance-only asset.
With the Fee Switch turned on, this relationship changes. A portion of swap fees now flows to the protocol and is used to buy back and burn UNI, directly linking network activity to token supply reduction. In effect, higher usage of Uniswap increasingly translates into economic pressure on UNI’s circulating supply.
The proposal also includes a one-time burn of 100 million UNI from the treasury — worth over $600 million at current rates — which can be interpreted as a retrospective adjustment, capturing value that accumulated during years when the Fee Switch remained inactive. While the immediate impact is a sharp reduction in supply, the more important signal is strategic: it establishes a clear framework for how future protocol revenues may be reflected in UNI’s long-term economics.
Taken together, the Fee Switch and the expected burn mechanism suggest that UNI is transitioning from a pure governance token toward an asset that partially reflects cash flows generated by Uniswap’s trading infrastructure. Markets appear to be recognizing this shift.
The divergence is visible in relative performance: UNI has shown resilience compared to AAVE over the same period, as Aave recently faced a failed governance vote following strong community pushback.
Recap of Top Stories (Dec 22 - Dec 26)
Interesting
Aave slides as community debates over who controls the brand
Commentary: Aave governance is debating control over its brand assets, including domains and social media, which are currently managed by third parties.
A dispute over who controls the brand and online presence of Aave, a decentralized lending platform, has spilled into governance and procedures. After several days of discussion, Aave founder moved the proposal to a Snapshot vote.
Crypto M&A hits record $8.6 billion in 2025 as Trump’s regulatory stance spurs deals
Commentary: The crypto industry saw a record $8.6 billion in mergers and acquisitions in 2025, up from $2.17 billion in 2024.
The surge in M&A activity and public listings, including $14.6 billion raised by 11 crypto firms, was driven in part by a rush for licenses as new compliance rules take hold. As new compliance rules take hold globally, including those around stablecoins and the EU’s MiCA framework, financial institutions are acquiring firms with approved licenses to speed their entry into crypto markets.
Amplify ETFs targeting stablecoin and tokenization sectors open for trade
Commentary: Amplify ETFs has brought to market two new ETFs that give investors targeted exposure to companies and cryptocurrencies behind stablecoins and tokenized assets.
The timing of the offerings coincides with regulatory shifts. The U.S. GENIUS Act, signed in July, created a federal framework for stablecoins and also paved the way for institutions to settle tokenized assets using stablecoins by clarifying compliance and audit requirements.
Crypto exchanges brace for pressure as banks like JPMorgan enter spot trading
Commentary: The U.S. federal banking watchdog signaled a regulatory shift that could fundamentally reshape competition in trading services across the United States.
That shift became apparent today, after Bloomberg reported that JPMorgan is exploring crypto trading services for institutional investors, marking one of the clearest indications yet that Wall Street banks are preparing to move beyond experimentation and into execution.
U.S. SEC aids brokers on crypto custody, looks more closely at ATS activity
Commentary: The U.S. federal banking watchdog signaled a regulatory shift that could fundamentally reshape competition in trading services across the United States.
The guidance confirmed that financial institutions may facilitate so-called “riskless principal” crypto-asset transactions, effectively allowing them to broker crypto trades without holding inventory or taking market risk. “Stand-alone crypto exchanges that lack banking licenses will feel competitive pressure, particularly at the entry-level consumer segment,” Ünsal added
Tensions over El Salvador’s bitcoin holdings ease as IMF praises economic progress
Commentary: The International Monetary Fund (IMF) praised El Salvador’s stronger-than-expected economic growth in a statement on Monday.
Despite previous IMF recommendations, El Salvador continues to increase its bitcoin holdings, adding over 1,000 BTC during November’s market downturn. El Salvador’s real GDP growth is projected to reach around 4%, with a positive outlook for 2026.
EU’s crypto tax reporting starts in January with threat of asset seizure
Commentary: The European Union’s newest tax transparency law for digital assets takes effect Jan. 1, marking a shift in how crypto activity faces scrutiny across the bloc.
The rules require crypto-asset service providers, including exchanges and brokers, to collect and report detailed information on users and transactions to national tax authorities. Those authorities then share the data across EU member states. That cooperation includes the power to embargo or seize crypto assets linked to unpaid taxes, even when assets or platforms sit outside a user’s home jurisdiction.
Upcoming Market Events
December 31 - FOMC Minutes
January 13 - U.S. CPI
January 14 - U.S. PPI
January 28 - FOMC Interest Rate Decision