Crypto Market Slides: BTC and ETH Lead Declines Amid Regulatory Shifts

I. Crypto Market Overview

Key Takeaways

Macro Environment

Lithuania will enforce strict MiCA licensing for crypto firms from January 2026, increasing regulatory certainty but causing short-term disruption. Russia's major exchanges are preparing to launch regulated crypto trading, signaling a shift from gray market activity to formal oversight. Kazakhstan is advancing crypto regulation by allowing investments but banning payments, aiming to reduce gray market activity and shift investor behavior.

Crypto Market

The crypto market saw broad declines over the past 12 hours, with BTC down 4.4% to $97,474 and ETH falling 9.3% to $3,144, pressured by ETF outflows and weak risk sentiment. Most altcoins dropped, led by ARB (-11.7%), FET (-12.6%), and SOL (-8.7%), while M bucked the trend, rising 2.0%. The downturn was driven by declining spot demand and sector-wide risk-off flows.

Today's Outlook

No major token unlocks or protocol launches are scheduled for today, and no significant macroeconomic events are expected. Market participants should monitor for unexpected regulatory updates or large-scale fund movements, as these could drive volatility in the absence of scheduled catalysts.

Fear and Greed Index

36.00% Annual Percentile

27 Fear

Total Crypto Market Cap

$2.95T

0.57%

Total Market Trading Volume

$94.98B

44.93%

Altcoin Season Index

18.18%

Quarterly Percentile

16 / 100

Total Futures Market Open Interest

2.24B

33.33%

Futures

769.43B

10.23%

Perpetuals

II. Industry Updates

Macro-economic Policies

Silver surged to a record $79 per ounce, reflecting a 10% increase as investors seek alternative assets amid global economic uncertainty. This shift in capital allocation may boost demand for crypto assets as a hedge against fiat volatility.

Global M&A activity reached $4.5 trillion in 2025, driven by 68 megadeals and low financing costs. Increased corporate dealmaking signals robust liquidity, which can enhance DeFi activity and support higher crypto market valuations.

Ethereum ETFs saw $853 million in outflows over two weeks, with ETH trading near $2,964. Institutional caution and declining ETF inflows may pressure DeFi liquidity and impact overall crypto market sentiment.

The USDC Treasury minted 250 million new USDC tokens, indicating sustained demand for stablecoins. This expansion in stablecoin supply supports on-chain liquidity and facilitates trading across DeFi and NFT markets.

Sharplink CEO forecasts a tenfold increase in Ethereum's TVL by 2026, driven by stablecoin and RWA growth. Anticipated capital inflows could significantly enhance DeFi liquidity and strengthen Ethereum's position in the crypto ecosystem.

Cryptocurrency Regulatory Trends

Lithuania will enforce mandatory MiCA licensing for all crypto firms from January 1, 2026, with unlicensed platforms facing shutdowns and criminal liability, increasing regulatory certainty but causing short-term market disruption.

Lithuania's central bank urges investors to verify their crypto providers' MiCA compliance plans, warning that non-compliant platforms may halt services, impacting user access and market stability across the EU.

Kazakhstan is advancing crypto regulation by allowing investments in digital assets but banning their use for payments, aiming to move trading onto licensed exchanges and reduce gray market activity, which may shift investor behavior.

Russia's major exchanges, MOEX and St. Petersburg, are preparing to launch regulated crypto trading for retail and professional investors once the legal framework is finalized, signaling a shift from gray market activity to formal oversight.

Japan will establish a dedicated crypto and stablecoin regulatory division in 2026, focusing on specialized oversight and stricter rules, which is expected to boost institutional confidence and foster innovation in the digital asset sector.

Telcoin (TEL): TEL surged 11.6% in 24h to $0.00424, driven by strong trading volume ($6.89M) and momentum from its US digital asset bank charter and eUSD stablecoin launch.

Midnight (NIGHT): NIGHT rose 10.7% in 24h to $0.09, fueled by recent exchange listings, Cardano ecosystem integration, and privacy narrative, with trading volume and bullish sentiment spiking.

MemeCore (M): M gained 8.7% in 24h to $1.44, supported by double-digit weekend gains, increased investor attention on meme coin infrastructure, and strong technical recovery.

Smart Money Movements

Bitmine staked 74,880 ETH worth $219 million in Ethereum's PoS system, raising its total holdings to 4.066 million ETH and potentially earning $371 million in annual interest.

Anchorage Digital transferred 580.6 BTC valued at $39.2 million to anonymous addresses, indicating a strategic adjustment in large-scale Bitcoin holdings.

Pantera Capital-linked wallets deposited 5,264 ETH, approximately $15.39 million, to Coinbase Prime, reflecting ongoing institutional positioning in Ethereum.

A crypto whale invested 1,586 ETH ($4.7 million) to acquire 30,003 AAVE tokens, increasing total holdings to 59,955 AAVE, but is currently facing a $4.26 million loss.

New Jersey's $9.5 billion pension fund increased its MicroStrategy investment to $16 million, further boosting its indirect Bitcoin exposure through traditional financial vehicles.

Events to Watch

Dec 26 (Fri)

New York Fed accepts $17.25B in repo facility submissions, reflecting ongoing liquidity management in U.S. financial markets.

Dec 30 (Tue)

Slash Vision will unlock $9.25 million in tokens, potentially impacting token supply and market liquidity.

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