Crypto winter or late-year rally ahead?

Bitcoin gives up its gains for the year, and Ether slips into the red

Equities might be undergoing a modest bout of volatility, but the real bloodbath has been in crypto currencies. Bitcoin is now essentially flat on the year, while ether has surrendered all its gains and has fallen into negative territory for 2025. The crypto space is in recovery mode in early trading this morning, but it is far from clear that a low has formed. The history of the past two months has seen hopes of a sustained bounce dashed time and again, and so far it doesn’t feel like we’ve hit ‘washout’ territory in terms of sentiment.

ECB stablecoin warning seems misplaced

The ECB has warned that the rapidly expanding $300 billion stablecoin market, dominated by dollar-pegged tokens, threatens European financial stability and monetary sovereignty. Officials fear a run on stablecoins could trigger large-scale Treasury sales and force intervention, prompting Europe to accelerate its own euro-backed stablecoin and digital euro plans. Yet this feels somewhat overblown – the scenario requires several unlikely events to align, and likely reflects the ECB's struggle to justify digital currency plans that have failed to match the market appeal of dollar-denominated alternatives.

What we’re watching

Nvidia earnings dominate the landscape this week in a way that only the largest company in the world can, but US data starts to return as well, just as jitters about the Fed swerving a December rate cut seem to have reached a peak. But these are just distractions for crypto investors, who will be watching price action and nothing else, hoping that the gains we’ve seen on Monday can last out the week.