Key Insights: When Doves Align

Majors bounced across the board this week, with BTC, ETH and SOL up 6.4%, 11% and 7.9% respectively. BTC gained as the DAT and ETF bid returned following the orange coin’s very own ‘Black Friday’ low prices. MicroStrategy added another 130 BTC, Vanguard opened BTC ETF access to 50m clients, and BlackRock flagged sovereign buying. ETH outperformed as the Fusaka upgrade massively expanded block capacity. In line with BTC, ETH ETF flows picked up at $140m for the week, with BitMine reaching the milestone of having accumulated nearly 3% of supply. SOL rose 7.9% on continued ETF inflows, Revolut’s integration for payments and staking, a fresh ATH in USDC supply, and surging x402 agent activity.

Derivatives positioning remains constructive without showing signs of excess. BTC OI ended the week slightly lower, down 0.9% WoW, despite price strength, while ETH OI climbed 5.8%, indicating new risk-taking concentrated in ETH specifically. Funding rates stayed mildly positive across both assets, pointing to a measured long bias but far from the overheated conditions seen earlier this cycle.

Institutional flows extended its two week positive streak, gaining momentum after a month of outflows. Crypto ETPs saw $704m of net inflows, following $349m the prior week. By asset, BTC led with ~$376m, ETH added over $140m, and SOL ~$12m, marking the first time since early Q4 that institutional channels have been net buyers of majors for two consecutive weeks. The alignment between ETP flows, spot strength, and on-hain accumulation marks a notable sentiment shift.

Sector performance, however, remained highly uneven. Social tokens were the only category in the green, up 3.9% WoW, while Exchange tokens slipped 6.8%. The rest of the market saw broad de-risking.

Our Take: The market is clearly entering a phase where majors are absorbing the lion’s share of flows, supported almost entirely by institutional activity, while most sectors continue to capitulate. With leverage relatively restrained and ETP flows turning positive, we feel positive about the current set-up in majors, though down the risk continuum we will need to see flickers of life before gaining conviction.

Onchain lending markets moved in wayward fashion this week, lacking a coherent sense of direction across majors. USDC and USDT supply APYs on Aave fell 4.7% and rose 17.2% WoW respectively, while WETH dropped 9.6%. The moves were almost entirely supply driven, as opposed to changes in demand for borrowing the assets. The broader rate environment still signals defensive positioning, with lenders preferring passive yield over directional risk-taking.

Chain netflows were mixed, with clearer dispersion than prior weeks. Polygon PoS led with a strong +$66m inflow, driven by continued stablecoin settlement growth and payments activity. Ethereum followed with +$54m, supported by post-upgrade flows and a mild recovery in ETF interest. On the other side, Hyperliquid saw $36m in outflows as unlock pressures hit, while Unichain and several mid-tier L2s bled liquidity amid rotation into more established ecosystems. The flows reflect a market searching for real catalysts, a state we have found ourselves in for a number of consecutive weeks now, favouring utility chains over speculative perps-driven venues.

RWA flows were broadly flat, with aggregate AUM down just 0.03% WoW. Maple led with a 6.4% gain as institutional credit demand continued recovering from recent distractions. Paxos also saw positive flows, while Securitize, down 8.3%, and Ondo, down 0.5%, experienced modest outflows tied to broader rotations within tokenized yield markets.

Our Take: Onchain markets continue to reflect late-cycle defensiveness with softer rates, selective liquidity rotation, and steady RWA resilience. With leverage largely flushed and capital consolidating into higher-quality venues, the market is positioning for catalysts rather than chasing noise. It’s a cleaner setup heading into the year-end than price action alone suggests, though without a catalyst, we anticipate sideways chop in price action and activity.

Ethereum’s Fusaka upgrade went live on Dec 4, marking a major step forward in the network’s scaling roadmap. The headline feature, PeerDAS, introduces a new data-handling model that removes the old requirement for every node to download and store all blob data. Instead, nodes only need to store a fraction of it. In practical terms, this is Ethereum’s first real move into danksharding to unlock far more data capacity at the base layer.

PeerDAS now enables Ethereum to scale blob capacity up to roughly 8×, because each node is responsible for storing only about 1/8 of total blob data. That opens the door to significantly higher throughput across the ecosystem as more blobs translate directly into lower L2 transaction costs, faster settlement, and more blockspace for builders.

The network also saw its default block gas limit increase from 45m to 60m. Our chart shows how validator gas-limit signaling evolved over recent weeks as the shift from blue (≤45M) to orange (≥60M) captures the growing share of validators reconfiguring their nodes to support the higher limit. Notably, this shift was already well underway even before Fusaka, and the adjustment was automatically applied on Nov. 25 once more than 50% of validators signaled approval, the threshold required under Ethereum’s current consensus rules.

Our Take: Ethereum’s next major milestone is the 2026 Glamsterdam upgrade (Gloas + Amsterdam), which aims to scale the network even further through larger blob capacity and more efficient execution. Ethereum is steadily scaling L1 to position itself as a high-throughput settlement layer capable of supporting institutional flows, real-world assets, and global financial rails, without sacrificing decentralization. Fusaka is a material proof point that Ethereum can scale meaningfully while preserving its core security guarantees, and Glamsterdam pushes that ambition even further.

Join our Telegram Channel to get it delivered directly to your phone.