📉Markets Dip After Meteoric Rally

GM Defiers!

Markets are looking bearish following crypto’s meteoric gains last week. Both digital assets and stocks are losing ground, with the Federal Reserve’s reluctance to further reduce interest rates likely playing a factor.

Optimistic expectations continue to build for Trump’s second term in the Oval Office. Gary Gensler appears to be readying to step down from the SEC, while New York will devote fewer resources to policing crypto.

BONK is gaining ground in anticipation of next month’s token burn. However, the event is likely to have a big impact on supply, with the project aiming to offset less than two months’ worth of vested unlocks.

Also, activity on Base tags fresh highs, and Spark targets cross-chain USDS functionality.

✍️ In today’s newsletter:

Bears control early-week price action
Onlookers expect crypto-friendly climate under Trump
BONK rallies but token burn could be overhyped
Transaction volume on Base soars to new highs
Spark Liquidity Layer launches

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⬇️Crypto Markets Tumble As Week Starts Bearish For Stocks

The combined capitalization of cryptocurrencies dipped 1.5% in 24 hours as last week’s over-exuberant bullishness subsided. Digital assets fell alongside major stock market indexes, with the U.S. Federal Reserve’s decision to hold off on further interest rate cuts likely inspiring investors to hedge their bets.

👮‍♂️Regulatory Scrutiny Surrounding DeFi Tapers

Reports indicate that the regulatory climate overseen by Trump’s incoming administration will be friendly to crypto. Trump is nominating Jay Clayton, the former SEC chair known affectionately as “crypto Dad,” to serve as the U.S. Attorney for the Southern District of New York. Trump is also expected to select a pro-crypto official to head the SEC.

🔥BONK Rallies As Burn Event Commences, But Supply Impact Will Be Minimal

BONK, a top five memecoin by market cap, is rallying after the project launched its BURNMas campaign. Bonk will earmark tokens for a Dec. 25 burn every time users interact with the project and its social channels. However, Bonk’s target of burning 1 trillion tokens would only offset 52 days’ worth of vesting unlocks.

🚀Base Tokens Rebound as Chain Activity Hits All-time High

Base hosted an all-time high of 47 million transactions last week amid a resurgence in memecoin trading, marking a 2,000% increase in activity since the start of the year. Top gainers on the network include VIRTUAL, KEYCAT, and MIGGLES.

⛓️Spark Liquidity Layer To Unlock Multi-Chain Functionality For Sky’s USDS Stablecoin

Spark launched its liquidity layer, laying the groundwork to unlock multi-chain functionality for Sky’s USDS stablecoin. Spark aims to roll out liquidity layer support for Solana and leading Layer 2 networks next month, with the move coming as USDS growth appears to have stalled.

🌍 ELSEWHERE

Lido Co-Founders Said to Plot Competitor to Sam Altman's World Network (CoinDesk)
MicroStrategy acquires another 51,780 bitcoin for $4.6 billion, taking holdings to 331,200 BTC (The Block)
Bitdeer reports $50 million loss due to Bitcoin halving, increased R&D costs (CryptoSlate)