Volatility deepens as ETF outflows bite and stablecoin rails go global

Markets endured another sharp leg lower this week as Bitcoin revisited the high-$80K range, ETF outflows re-accelerated, and liquidations climbed again across majors. At the same time, regulators tightened their focus on MiCA implementation and systemic stablecoin risks, while institutions continued to build infrastructure around Ethereum treasuries, tokenized products, and dollar-denominated payment rails.

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Bitcoin slides below $90K as liquidations flare again

Bitcoin’s latest selloff pushed prices back below the psychologically important $90,000 level, with BTC briefly touching $88,420 before stabilizing near $89,200. The move extends a highly volatile stretch that saw the asset fall from its October all-time high of $126,080 to a late-November low around $81,000, leaving BTC almost 30% off the peak and reinforcing concerns that the market remains in a corrective phase.

The drawdown was broad-based. Ethereum slipped more than 4% to roughly $3,021, while XRP dropped to $2.03 and Solana and Dogecoin each fell around 7%, to $132 and below $0.14 respectively. Over the last 24 hours, liquidations exceeded $493 million, with roughly $412 million coming from long positions and BTC alone accounting for $191 million—a sign that highly leveraged bullish positioning is still being flushed out, even as equities indices like the S&P 500 trade near record highs.

The divergence from traditional risk assets is notable given rising market confidence in another 25 bps Fed cut at next week’s FOMC meeting. Crypto-linked equities moved in lockstep with tokens: mining stocks such as CleanSpark, Bitfarms, and Hive dropped between 5–8%, while listed bellwethers Coinbase, Strategy, and Robinhood registered milder losses. Combined with October’s record $19 billion liquidation event, the pattern suggests that crypto is undergoing its own de-risking cycle, partly decoupled from broader risk sentiment.

Italy sets hard MiCA deadlines as systemic concerns grow

Italy’s market regulator Consob issued a pointed reminder that virtual asset service providers (VASPs) face a December 30, 2025 deadline to transition into fully authorized MiCA crypto-asset service providers (CASPs). Under the EU’s transitional regime, firms that apply by the cutoff can continue operating until their application is approved or rejected—but no later than June 30, 2026—while those that opt out must wind down Italian operations, close client relationships, and return customer assets by year-end 2025.

The clarification highlights a major structural shift: Italy’s current framework requires simple registration with the OAM, whereas MiCA authorization will subject CASPs to ongoing prudential oversight, operational standards, and investor-protection rules aligned with EU-wide expectations. Consob’s communication mirrors a broader ESMA push to harmonize the MiCA transition across member states, reducing scope for regulatory arbitrage as large providers consolidate their European footprints.

In parallel, Italy’s Committee for Macroprudential Policies—which includes the Bank of Italy, Consob, IVASS, COVIP, and the Treasury—warned that crypto-related vulnerabilities are rising as links with the traditional financial system deepen. Authorities flagged concerns around retail exposure, indirect holdings via funds and products, and uneven international regulation, launching a review of safeguards for household investors. Italy’s stance reinforces that MiCA is not just a licensing formality but part of a broader macro-prudential response to crypto integration.

Basis unwind drives fresh ETF outflows despite thinning exchange supply

U.S. spot Bitcoin ETFs logged $194.6 million in net outflows on Thursday—their largest single-day withdrawal in two weeks—led by BlackRock’s IBIT with $112.9 million and Fidelity’s FBTC with $54.2 million. Smaller outflows from products such as VanEck’s HODL, Grayscale’s GBTC, and Bitwise’s BITB rounded out a day that reversed Wednesday’s more modest $14.9 million in redemptions. Trading volumes also cooled, slipping to $3.1 billion from $5.3 billion on Tuesday and $4.2 billion on Wednesday.

Strategists attribute the flows to the mechanical unwinding of basis trades as futures-spot spreads compress below breakeven. With volatility elevated and front-month futures rolling over, arbitrage desks are forced to exit positions by selling ETF holdings, translating derivatives repricing into spot outflows. This dynamic helps explain why BTC drifted roughly 1.4% lower to $91,989 despite exchange balances declining to around 1.8 million BTC, the lowest level since 2017, according to aggregated on-chain data.

BRN’s Timothy Misir argues that the market remains structurally supported—via persistent accumulation and thinning exchange supply—but lacks a decisive trigger to break into the $96,000–$106,000 band. On the Ethereum side, spot ETFs saw $41.6 million in outflows Thursday after $140.2 million of inflows the day prior, with Grayscale’s ETHE accounting for the bulk of redemptions. With investors watching upcoming inflation prints and the December 10 Fed decision, ETF flows are acting as a real-time barometer of institutional risk appetite.

IMF warns dollar stablecoins may turbo-charge currency substitution

A new IMF report, Understanding Stablecoins, warns that rapidly growing dollar-denominated stablecoins could accelerate currency substitution in economies with high inflation, weak institutions, or low confidence in domestic monetary frameworks. With USDT and USDC tripling in size since 2023 to roughly $260 billion in combined market cap and facilitating around $23 trillion in trading volume in 2024, the fund argues that households and firms may increasingly opt for digital dollars over local currencies, bypassing traditional banking systems.

The IMF notes that Asia now leads in absolute stablecoin activity, but usage relative to GDP is highest in Africa, the Middle East, and Latin America—regions already familiar with dollarization and capital-flight episodes. In such environments, easy, cross-border access to stablecoins can worsen capital-flow volatility, weaken capital controls, and complicate macroeconomic management. The report also highlights run risk: if confidence in redemption rights falters or reserve assets fall in value, forced liquidations could transmit stress into traditional financial markets.

At the same time, the IMF acknowledges that well-regulated stablecoins could expand access to digital payments, reduce remittance costs, and support financial inclusion where mobile money already outpaces banking penetration. The fund’s comparative review of regimes in Japan, the EU, the U.S., and the UK underscores that rules on who can issue stablecoins, how reserves are held, and how foreign issuers are treated remain fragmented. With the U.S. GENIUS Actnow in force and other jurisdictions piloting their own frameworks, the IMF’s central message is that stablecoins are “here to stay,” but their systemic impact will hinge on coordinated regulation that mitigates substitution and fragmentation risks.

21Shares launches first U.S. Sui ETP as a 2x leveraged product

Switzerland-based issuer 21Shares introduced the first U.S. exchange-traded product referencing Sui (SUI)—and did so via a 2x leveraged structure rather than a standard spot product. The new 21Shares 2x SUI ETF (TXXS), listed on Nasdaq, targets 200% of the token’s daily return using derivatives, positioning itself squarely at sophisticated traders seeking amplified exposure to one of 2025’s more active smart-contract networks.

The launch underscores both investor demand for targeted altcoin exposure and regulators’ ongoing caution. While Sui has passed milestones such as $10 billion in 30-day DEX volume and four consecutive months above $180 billion in stablecoin transfer volume, the SEC recently stepped in to halt planned 3x and 5x leveraged crypto ETFs, emphasizing limits under Rule 18f-4 and narrowing perceived “loopholes” in derivatives VaR treatment. Against that backdrop, TXXS represents the outer edge of leverage currently tolerated in U.S. public markets.

Market-structure implications are notable. TXXS is the 74th crypto ETF launched this year and the 128th overall, with Bloomberg’s Eric Balchunas projecting another 80 products over the next 12 months. That the first Sui-linked product is leveraged, rather than spot, highlights how the ETP landscape is fragmenting into increasingly specialized, short-horizon tools.

Kraken–Deutsche Börse tie-up blurs lines between TradFi and digital assets

In one of the year’s most expansive TradFi–crypto collaborations, Kraken and Deutsche Börse Group announced a broad strategic partnership spanning trading, custody, settlement, derivatives, FX, and tokenization. The deal creates reciprocal market gateways: Deutsche Börse clients gain access to Kraken’s U.S. trading and custody infrastructure for crypto and tokenized assets, while Kraken’s institutional base can tap into European markets via platforms such as Eurex, Clearstream, and FX venue 360T.

The first phase focuses on FX integration. By linking Kraken directly to 360T, the firms aim to bring bank-grade FX liquidity to crypto users, tightening spreads and improving on-/off-ramp efficiency for institutions that straddle both ecosystems. In parallel, the partnership will extend Kraken Embed—the exchange’s white-label infrastructure product—to banks and fintechs in Deutsche Börse’s network, allowing them to offer regulated crypto trading and custody under familiar market-infrastructure umbrellas.

Tokenization is a core pillar. Kraken plans to integrate xStocks, the tokenized-equity standard it gained via its acquisition of Backed Finance, into Deutsche Börse’s 360X ecosystem while also enabling Clearstream-custodied securities to be distributed in tokenized form to Kraken clients. Pending regulatory approvals, Kraken users will gain access to Eurex-listed derivatives, while Deutsche Börse’s clientele can route crypto trades and custody through both Crypto Finance and Kraken. Coming on the heels of Kraken’s confidential U.S. IPO filing at a $20 billion valuation, the partnership accelerates the convergence between regulated exchange infrastructure and digital-asset liquidity.

MoneyGram taps Fireblocks to rebuild its cross-border rails

Global remittance heavyweight MoneyGram is turning to Fireblocks to power a new stablecoin-enabled settlement layer for its cross-border network. With more than 50 million customers across 200+ territories, MoneyGram is one of the largest legacy money transfer operators—a segment that blockchain proponents have long argued should be disrupted by cheaper, borderless rails.

Rather than viewing stablecoins as an existential threat, MoneyGram is positioning them as the next iteration of its infrastructure. Fireblocks will supply a programmable, multi-chain settlement layer, enabling MoneyGram to route value across several blockchains in real time while maintaining its own compliance, on/off-ramp, and distribution stack. In theory, this architecture could reduce correspondent-banking costs, shorten settlement cycles, and unlock new programmable-money features such as escrow-like flows and conditional payouts.

The partnership aligns with a broader trend: traditional financial institutions and payment companies are increasingly embracing stablecoins as back-end plumbing, even as they retain consumer-facing brands and channels. MoneyGram’s earlier launch of a non-custodial wallet and its investments in crypto compliance give it a head start versus peers that are only now experimenting with digital assets.

BitMine doubles down on ETH treasuries as peers slow purchases

Ethereum treasury specialist BitMine continued its aggressive accumulation campaign, adding an estimated $150 millionin ETH on Wednesday via flows traced through BitGo and Kraken wallets—roughly 48,600 ETH combined, according to Arkham data. The purchases follow a late-November buying spree of 96,798 ETH, pushing BitMine’s holdings above 3% of circulating supply as it works toward a public target of 5%.

The timing is notable against a backdrop of softer demand from other digital-asset treasuries. Recent Bitwise data show Ethereum DATs collectively purchased around 370,000 ETH in November, an 81% drop from August’s 1.97 million ETH buying peak as firms shifted from accumulation to capital-efficiency measures like buybacks and balance-sheet optimization. BitMine stands out as a contrarian allocator, explicitly framing Ethereum as core infrastructure for future financial-market services rather than a trading asset.

Fundstrat co-founder Tom Lee, who chairs BitMine, has reiterated his view that Ethereum is likely to bottom near $2,500before rallying toward $7,000–$9,000 by January 2026. He cites catalysts including the successful Fusaka upgrade and the Fed’s planned end to quantitative tightening as reasons to ramp purchases during weakness. ETH is currently trading near $3,215, up about 5.7% over the last day, while BitMine’s own stock remains down over 21% for the month despite a 5.5% gain on Wednesday—highlighting the disconnect between balance-sheet growth and equity valuations in the current risk environment.

Sony Bank prepares USD stablecoin to power its content ecosystem

Sony Bank, part of Sony Financial Group, is preparing to launch a U.S. dollar-pegged stablecoin in the United States as early as fiscal 2026, according to local reports. The bank has applied for a U.S. banking license and partnered with U.S. issuer Bastion to provide the underlying infrastructure, signaling that Sony intends to operate the project within the regulated perimeter rather than as a purely offshore initiative.

The strategic goal is tightly integrated payments within Sony’s global content universe. The stablecoin is expected to be used for video games, anime, subscriptions, and digital content, allowing U.S. customers to pay directly in a Sony-branded digital dollar instead of relying on card networks, thereby reducing fees and gaining finer control over settlement. With more than 30% of Sony Group’s external sales coming from the U.S. and the dollar stablecoin market now above $290 billion in capitalization, the move aims squarely at aligning Sony’s commerce rails with the rise of programmable dollars.

The initiative dovetails with Japan’s broader push into regulated stablecoins. Domestically, authorities have green-lit projects such as JPYC and are backing a joint yen-stablecoin pilot involving the country’s major banks. Sony’s own Soneium Layer 2, launched on Ethereum mainnet in January, is positioned as the primary ecosystem for creators and fan communities; a Sony-issued USD stablecoin could become a foundational asset within that stack. The plan underscores how large consumer brands are beginning to treat stablecoins not just as payment tools, but as strategic infrastructure for digital distribution and ecosystem lock-in.

At Finery Markets, we continue to monitor how evolving regulatory frameworks, monetary policy shifts, and new market infrastructure are shaping digital asset adoption globally. Follow us for deeper insights into institutional flows, stablecoin strategies, and trading technology innovation. This newsletter is provided for informational purposes only and does not constitute investment, financial, or other professional advice.