Why This May Be Crypto's Most Monumental Week of The Year

Bitcoin continues to flip and flop around the $90,000 mark as a monumental week for markets shapes up with the Fed rate cut decision on Wednesday.

As prices continue to chop sideways, two of the biggest names in the space flexed their conviction Monday — with bulls Michael Saylor and Tom Lee both revealing some of their biggest buys of Bitcoin and Ethereum, respectively, in months. And SEC Chair Paul Atkins continues to say pro-crypto things that would have seemed unimaginable just a few months ago.

One way or another, this seems like the week we finally find out whether the cycle rolls on or if another crypto winter really has arrived.

Last week, Glassnode published some interesting charts showing just how many new Bitcoin holders may now be feeling the pain. According to their analysis of top holders by cost basis, about a quarter of Bitcoin held is trading below where it was acquired.

“Since mid-November, spot price has fallen below the 0.75 quantile, now trading near $96.1K, placing more than 25% of supply underwater. This creates a fragile balance between the risk of top-buyer capitulation and the potential for seller exhaustion to form a bottom. Nevertheless, the current structure remains highly sensitive to macro shocks until the market can reclaim the 0.85 quantile (~$106.2K) as support.”

If there is a sliver of enthusiasm among bullish buyers here, it’s that consensus in the market is extremely apathetic to bracing for any sort of breakout. If there is a breakout post-Fed decision, it could catch many traders flat-footed and trigger a chase into year-end. As Glassnode also notes:

“[T]raders are not positioning for an aggressive breakout ahead of the FOMC meeting. Instead, flow reflects a more cautious stance, where upside is being sold rather than chased. The recent recovery, therefore, lacks the conviction typically needed to challenge a level as significant as [$]100K.”

CoinShares data Monday showed a continued rebound in positive weekly net-inflows for crypto asset investment products. That, in part, is why Bernstein is feeling confident in that Bitcoin’s usual four-year cycle may be over.

“In view of recent market correction, we believe, the Bitcoin cycle has broken the 4-year pattern (cycle peaking every 4 years) and is now in an elongated bull-cycle with more sticky institutional buying offsetting any retail panic selling. Despite a ~30% Bitcoin correction, we have seen less than 5% outflows via ETFs. We are moving our 2026E Bitcoin price target to $150,000, with the cycle potentially peaking in 2027E at $200,000. Our long term 2033E Bitcoin price target remains ~$1,000,000.”

Strategy and Tom Lee’s BitMine Back to Buying

It had been a while since we had seen larger buys from the two big digital asset treasury companies in Strategy and BitMine, but that all changed Monday.

Michael Saylor announced a near $1 billion purchase of Bitcoin — his largest buy since July — and Tom Lee’s BitMine announced a purchase of $435 million ETH — his largest buy in more than a month.

If you recall from last week’s newsletter, Strategy recently raised a cash buffer of $1.4 billion to assuage fears that it may fall into a position of needing to sell its Bitcoin. Interestingly, this time around, MSTR shares traded 2% higher on Monday after the company announced it had funded the new Bitcoin purchase by selling an additional 5.1 million MSTR shares.

Fed Decision Looms

We’ve talked about the December Fed decision ad nauseam, and funnily enough odds of a rate cut are right back where they were (90%) before Fed Chair Jerome Powell said last month that a cut was not guaranteed. Odds of a cut in the aftermath fell as low as 67%.

Chair Powell will deliver the Fed’s decision at 2 PM ET on Wednesday and deliver his remarks at 2:30 PM. All eyes will be on forward guidance and potential dissents. According to Reuters, the Fed’s committee has not had three or more dissents at a meeting since 2019, and it has happened just nine times since 1990.

SEC Chair Paul Atkins Goes Full Tokenization

The night and day at the SEC when it comes to crypto continues. New SEC Chair Paul Atkins is continuing to signal to the market he’s leaning into letting companies experiment when it comes to tokenization.

Speaking on Fox News this past week, Atkins mentioned it’s more likely to be a couple of years rather than a decade before stocks are readily traded onchain.

"I think that all of this modernization of the markets I think is good ... you know, the SEC ... historically it never was necessarily at the vanguard of pushing new innovations," he said. "I believe that we need to be embracing it to keep the United States at the forefront."

Case in point on how the winds keep turning — one of the tokenization leaders, Ondo Finance, announced that the SEC shut down its investigation into the project after the Gensler-led agency opened one into potential security violations back in 2024.

“Regulators are shifting from enforcement-first approaches toward frameworks that support modernized market infrastructure,” Ondo wrote in their announcement. “The path is now clearer than ever for tokenized Treasuries and tokenized equities to become core components of U.S. capital markets.”

Some of this is fueling more hope that the next remaining hurdle for crypto regulation — the Clarity Act, which seeks to lay out a framework for rules around issuing and selling tokens, and how they may cross from “securities” to “commodities” — could potentially see its light of day in the Senate. Some are hopeful a markup on a draft could be ironed out before the holiday break. So far, the wait continues.

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