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🏛️💸 BTC Leverage: Legalized In The US

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Hello there you embodiment of curiosity;

Welcome to today's edition of Osiris News. The "Trump Trade" has evolved into a structural overhaul of U.S. market plumbing. While retail traders chase volatility on offshore venues, the CFTC just quietly legalized that exact high-octane model on American soil.

The suits aren't just buying the dip; they are rewriting the rulebook to ensure they own the casino before the doors officially open in 2026. Bitcoin reclaimed $93,000 not on retail hype, but on a $38 billion liquidity injection from Fed repo operations, signaling that the macro machine is back in gear regardless of the noise on Twitter.

🔍 Quick Overview

• CFTC Onshore Margin: The CFTC greenlights leveraged spot trading. The U.S. just legalized the offshore casino model.

• TradFi Invasion: Schwab confirms direct spot trading for 2026. A $12 trillion AUM fee war is coming.

• Citadel vs. DeFi: Citadel petitions to regulate DeFi as exchanges. Wall Street is trying to litigate its competition.

• Self-Custody Risk: Wrench attacks are surging. The physical cost of holding your own keys is rising.

• Ethereum's Pivot: Fusaka upgrade ships, boosting L2s. Ethereum is now a settlement layer, not a computer.

Trending News

⚖️🏛️ CFTC Approves First Spot Crypto Trading With Oversight

Chicago-based Bitnomial became the first US exchange authorized to offer margined spot crypto trading under direct CFTC supervision. This regulatory milestone firmly establishes Bitcoin as a commodity, offering a regulated domestic alternative to offshore leverage venues.

⚡️🛣️ Ethereum Built a Superhighway, But the On-Ramps Are Broken

The network successfully activated the "Fusaka" upgrade, introducing PeerDAS to massively boost data capacity for Layer 2s like Arbitrum and Base. While this lowers costs, Vitalik Buterin warns that L1 execution bottlenecks still hinder true global scalability.

🏦🌉 Germany's Old Guard Builds Crypto Bridge With Kraken

Deutsche Börse Group partnered with Kraken to launch a fully regulated digital asset trading and custody venue for European institutions. The "full-stack bridge" integrates Clearstream’s $23T infrastructure to rival US-based ETF dominance in the institutional sector.

💰🔓 The Walls Are Down, But Crypto Is Still Locked Out

Vanguard reversed its strict "No Crypto" policy, finally allowing clients to purchase funds holding Bitcoin and other digital assets. Despite this pivot, subtle "soft bans" and high net-worth requirements continue to restrict widespread retail access to these products.

This tiny pause brought to you by “please let this help pay the bills” 👀

Beyond the Noise

The most significant market structure shift of the year happened this week, largely ignored by price action. The Commodity Futures Trading Commission (CFTC) authorized Bitnomial to offer spot cryptocurrency trading using borrowed funds. This is not a futures contract; it is the ability to buy and sell actual digital assets using borrowed capital under federal oversight. For years, this capital efficiency was the exclusive domain of offshore giants like Binance and Bybit. By bringing it onshore under a Designated Contract Market (DCM) framework, the CFTC has effectively bypassed the SEC’s securities gridlock and established Bitcoin as a federally regulated commodity with margin capabilities. This creates a safe harbor for institutional capital that requires cleared settlement but demands the ability to trade on margin, directly undercutting the "Wild West" narrative that regulators have used to stifle domestic growth.

The financialization of crypto has entered its final, most aggressive phase. Charles Schwab, managing $12 trillion in client assets, confirmed it will launch direct spot crypto trading in the first half of 2026. This goes beyond a simple exchange listing; it represents a direct threat to the fee dominance of crypto-native incumbents like Coinbase. Schwab clients already hold nearly 20% of all crypto ETPs in the U.S. By moving to direct spot trading, Schwab cuts out the ETF management fees. If they apply their zero-commission equity model to crypto, margins for every crypto-native exchange will face immediate compression. Simultaneously, Vanguard has reversed its hardline "No Crypto" policy, allowing clients to access crypto funds. The walls are down, but the incumbents are now positioned to dictate the toll prices for entry.

While the CFTC opens doors, Citadel Securities is attempting to weld others shut. The firm formally petitioned the SEC to regulate Decentralized Finance (**DeFi**) protocols exactly like traditional stock exchanges. In a letter dated December 2nd, Citadel argued that any protocol matching buyers and sellers must register as a broker-dealer. This is a calculated offensive. Citadel is simultaneously pouring $500 million into Ripple—a regulated infrastructure play—while trying to legislate permissionless competitors like Uniswap out of existence. Hayden Adams, Uniswap’s founder, correctly identified this as rent-seeking behavior designed to protect traditional market making spreads from open-source code that lowers liquidity costs. The bifurcation is clear: regulated, permissioned chains will receive Wall Street capital, while permissionless DeFi faces a regulatory siege.

Institutional custody solutions are gaining traction not just for compliance, but for physical safety. Security reports indicate a surge in "wrench attacks"—physical violence, kidnapping, and torture—targeting crypto holders globally. There were 21 such attacks in the first five months of 2025 alone, including a murder in Vienna and a kidnapping in France. Compounding this risk, Ledger’s security team identified a vulnerability in Android phones with Mediatek chips. An attacker can use an "electromagnetic fault injection"—a precise EMP pulse—to bypass boot security and access software wallets. As the technical barrier to entry for theft lowers and the physical violence escalates, high-net-worth individuals are migrating back to custodians. The newly formed alliance between Deutsche Börse and Kraken, which integrates Clearstream’s $23 trillion infrastructure, is targeting exactly this demographic: capital that wants exposure without the risk of personal violence.

On the protocol layer, Ethereum successfully shipped the "Fusaka" upgrade. The headline feature, PeerDAS, allows nodes to verify data integrity by sampling small random chunks rather than downloading entire blobs. This creates a massive capacity boost for Layer 2 networks like Base and Arbitrum, slashing their operational costs. The market reaction was muted because the Layer 1 execution bottleneck remains unsolved. As Vitalik Buterin noted, this upgrade solves data availability, not execution speed. The network is solidifying its role as a settlement layer for rollups rather than a user-facing computer. The fix for L1 execution isn't scheduled until the "Glamsterdam" upgrade in 2026. Until then, activity will continue to migrate to L2s, evidenced by the new Chainlink-powered bridge connecting Base directly to Solana, linking the two most active retail ecosystems and further abstracting the Ethereum mainnet away from the end user.

Prediction markets are fracturing along jurisdictional lines. Kalshi and Polymarket have secured data integrations with mainstream financial outlets like CNBC, CNN, and Google Finance, validating their odds as legitimate economic indicators. Yet, state-level regulators are hostile. Connecticut issued cease-and-desist orders to Kalshi, Polymarket, and Robinhood, classifying their contracts as unlicensed gambling. This creates a direct conflict between the federal view of these contracts as commodities (under CFTC oversight) and state views of them as casino games. While the data is now considered "news," the platforms themselves are fighting for survival in specific US jurisdictions.

This Caught My Eye:

Here’s a breakdown:

• BTC’s late-November washout pushed both RSI and MACD into deeply oversold territory, a zone that has historically aligned with local bottom formation.

• The rebound back into the Bollinger Bands and a momentum flip toward neutral suggests sellers are exhausted and the market is stabilizing around its long-term trend.

Looking Ahead

The immediate focus shifts to the Bitnomial launch scheduled for the week of December 8th. If institutional volume flows into this CFTC-regulated venue, it validates the thesis that capital wants to trade with borrowed funds but demands a U.S. regulatory wrapper. We also have U.S. inflation data dropping on December 9th, followed by the Federal Reserve’s interest rate decision on the 10th.

The market is pricing in cuts, but the bond market remains jittery about inflation re-accelerating. If the Fed signals a pause or a hawkish turn, the liquidity fueling the $93k Bitcoin reclaim could evaporate. Until then, watch the flows into the new Solana ETFs; the recent $32 million net outflow suggests that while Wall Street is buying Bitcoin, they are still hesitant to marry Solana.

Until Monday,
- Dr.P