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⚖️🔥 Fed Pivot: Why Crypto Is Still Hesitating

Hello there you embodiment of curiosity;

Welcome to today's edition of Osiris News. Bitcoin is trading above $91,000. The macro environment is signaling "risk-on" as loudly as it can. A dovish Fed pivot is all but confirmed, and the frontrunner for the next Fed Chair is an open proponent of cutting rates. This should be rocket fuel for crypto.

But the market is hesitating. The price action is a grind, not an explosion. It's because the crypto-native industry is a mess of conflicting signals. For every bullish macro development, there's a regulatory contradiction, a major exchange hack, or an institutional downgrade that keeps capital cautious. The market is caught in a tug-of-war between a green-lit macro environment and a chaotic, uncertain crypto industry.

🔍 Quick Overview

• The Fed: A pro-growth, rate-cutting candidate is now the 60% favorite to be the next Fed Chair. Risk assets, including Bitcoin, reacted accordingly.

• Prediction Markets: Volumes hit a weekly ATH of $3.6B as regulators deliver a split decision. The CFTC greenlit Polymarket for brokers while a Nevada judge shut down Kalshi for sports wagering.

• Tether's Backing: S&P Global downgraded USDT's stability rating to its lowest level, citing its growing BTC and gold reserves. Tether's definition of "cash-equivalent" continues to diverge from traditional finance.

• Exchange Security: Upbit lost over $30M in a hot wallet hack, marking the anniversary of a 2019 breach with another one. The exchange is covering user funds, again.

• Fintech Adoption: Klarna, a fintech with 114M users, launched a stablecoin on Stripe's new Tempo chain. The "on-chain payments" narrative just got a major corporate validator.

Trending News

🔌🤖 Bitcoin Miner Pivots to Renting Power to AI

HIVE Digital Technologies is pivoting to a "dual-engine" model, expanding its high-performance computing division to rent GPU power to the AI industry. The company announced an equity program to sell up to $300 million in stock to fund this strategic expansion. This shift leverages existing data center expertise, moving the firm away from being solely a crypto miner.

🚀💰 SpaceX Moves $105 Million in Bitcoin

SpaceX executed a massive transaction, moving 1,163 BTC valued at $105.4 million to two new, anonymous digital addresses. This transfer is likely internal security housekeeping to consolidate older holdings rather than an immediate buy or sell decision. The event confirms major corporations remain actively involved in managing significant digital asset reserves.

🌏🤝 Korean Tech Giants Bet $6.8B on Digital Won

Naver and Dunamu announced a partnership pledging 10 trillion Korean won ($6.8 billion) to rebuild financial infrastructure using AI and blockchain technology. The immediate goal is creating a won-pegged stablecoin for instant digital payments, setting up a conflict with the Bank of Korea which opposes tech firms issuing stablecoins.

📉⚖️ ALT5 Stock Plummets 80% After Conviction

Nasdaq-listed ALT5 Sigma Corporation's stock plummeted 80% following a chaotic pivot to a volatile Digital Asset Treasury structure. The collapse was exacerbated by the undisclosed fact that a Rwandan court found the company criminally liable for money laundering earlier this year. Regulatory agencies are now scrutinizing the firm for unusual trading volumes.

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

Beyond the Noise

The biggest tailwind just got stronger. Kevin Hassett, a former Trump economic advisor and Coinbase council member, is now the clear frontrunner to be the next Fed Chair, with Polymarket odds hitting 60%. Hassett is explicitly dovish. He's on record saying he'd be cutting rates right now, prioritizing growth over a strict 2% inflation target. This development solidifies the market's bet on a December rate cut and signals a potentially sustained period of cheaper money ahead. For risk assets like Bitcoin, this is the most bullish macro signal possible.

Yet, the regulatory environment remains completely incoherent. This week gave us a perfect picture of the chaos. Prediction market Polymarket scored a landmark victory, securing CFTC approval to operate through registered brokerages in the US. This is a huge step toward mainstream legitimacy. On the exact same day, a federal judge in Nevada shut down competitor Kalshi, ruling its sports contracts were illegal "wagering," not financial swaps. The rules are being made up on the fly by different agencies and courts in different jurisdictions. This uncertainty acts as a brake on institutional capital. Grayscale is forcing the issue on another front, filing to convert its Zcash Trust into a spot ETF, daring the SEC to make a decision on privacy coins.

This same bifurcation is happening in the stablecoin market. It's splitting into two worlds: the regulated and the crypto-native. Fintech giant Klarna just launched KlarnaUSD on Tempo, a new payments-focused blockchain from Stripe and Paradigm. This is the "rail replacement" thesis in action, a compliant, bank-friendly dollar built for Klarna's 114 million customers to sidestep the costs of cross-border payments. On the other side is Tether. S&P Global just downgraded USDT's stability score to its lowest possible rating. The reason? Its reserves are becoming too crypto-native. S&P sees its growing Bitcoin holdings as a liability, not a feature. This is the core conflict: is the future of on-chain money a fully-controlled bank token or an offshore, crypto-backed asset?

On-chain, the market is digesting these conflicts. ETF flows show a clear rotation. After weeks of bleeding, Spot ETH ETFs saw $236 million in net inflows. Meanwhile, Spot Solana ETFs, after a 21-day hot streak, posted their first-ever day of outflows. Bitcoin ETF outflows have slowed to a trickle, but the buying pressure isn't decisive. This suggests capital is repositioning, perhaps front-running ETH-specific catalysts, rather than making a broad market-wide bet. The $30 million hack of Upbit's hot wallet serves as a timely reminder of the persistent operational risks. The fact that it happened on the anniversary of their 2019 breach, and just a day after their parent company's massive merger with Naver was confirmed, only adds to the sense of underlying fragility.

This Caught My Eye:

Here’s a breakdown of the chart:

• Exchange BTC balances continue trending lower, and the latest ~3,959 BTC outflow reinforces the broader pattern of coins moving into self-custody rather than being positioned for near-term selling.

• This persistent drain mirrors previous accumulation phases where supply tightens on exchanges, often creating a supportive backdrop for medium-term price stability or recovery.ccumulation or a delayed correction.
  

Looking Ahead

The immediate on-chain catalyst is the Ethereum Fusaka hard fork, scheduled for December 3. It’s a significant technical upgrade that will increase ETH's burn rate over time. Combined with the sudden reversal in ETF flows, this sets up a potentially positive narrative for ETH heading into next week.

The bigger picture, however, is all about the US economy. The entire rally is built on the foundation of a dovish Fed. That foundation will be tested by a series of crucial data releases in December. It starts with the ISM Manufacturing PMI on Monday and runs through a string of labor market reports. The main event is the CPI inflation data on December 10, the same day as the Fed's interest rate decision. A low inflation print would validate the rate cut narrative and could finally ignite the breakout the market is waiting for. A high number would shatter it.

Until tomorrow,
- Dr.P