In December, crypto markets continued its decline amid cautious investor sentiment despite the Fed easing, with Bitcoin and Ethereum gaining dominance as treasury companies continued accumulating. January may mark a turning point for the bearish momentum, as investors consider rotating back into cryptocurrencies from overvalued asset classes.
Metals dominated 2025 as the standout asset class, driven by a convergence of monetary easing, AI demand, and a shift toward "Commodity Control," where sovereign actors actively weaponize supply chains and accumulate reserves. Despite benefiting from similar macro tailwinds, Bitcoin diverged in Q4 due to the absence of a "Strategic Asset Premium" – meaning it lacked state-level support (the so-called "Sovereign Put") that currently underpins physical commodities. However, this divergence may be transient: as U.S. legislation moves to institutionalize a Strategic Bitcoin Reserve and potentially pivot from holding seized assets to active fiscal procurement, Bitcoin’s valuation framework is poised to realign with that of strategic metals.
Market participants are pricing in a faster easing for 2026 – driven by tariff shocks, labor fragility, and a dovish leadership pivot – while simultaneously demanding a higher long-term premium to compensate for "Fiscal Dominance" and a looming $50T+ debt wall. This steepening curve rejects the Fed's "soft landing" narrative and creates a perfect setup for Bitcoin to capitalize on both the short-term influx of cheap liquidity and the long-term erosion of fiat credit.
Altcoin ETFs have attracted mostly positive inflows since launch, lifting cumulative flows above US$2B, led primarily by XRP and SOL with smaller but steady contributions from other assets. In contrast, BTC and ETH spot ETFs have experienced persistent outflows since October, highlighting a divergence in marginal demand as market momentum has slowed. While still early, additional altcoin ETF approvals and sustained inflows could increasingly shape liquidity distribution, particularly if broader market inflows re-accelerate.
In 2025, six new stablecoins surpassed US$1B, showing varied growth based on their target users. Consumer-focused coins like PYUSD and USD1 had volatile growth, while institutional coins BUIDL and RLUSD showed distinct adoption patterns. As their global adoption continues, stablecoin metrics are becoming increasingly important indicators of global financial activity.
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