The crypto ecosystem is on the cusp of one more important week, ushered in by a number of main developments going down throughout completely different networks. This week’s highlight falls on Bitcoin, Fantom, Avalanche, Stacks, and LayerZero, every of which is going through a pivotal milestone. The broader macro backdrop can be important, significantly the December 18 Federal Open Market Committee (FOMC) interest-rate determination in the USA.
#1 Bitcoin And Crypto Await The FOMC Determination
Bitcoin merchants and buyers are watching the Federal Reserve’s coverage assembly scheduled for Wednesday, December 18, at 2:00 pm ET, with Fed Chair Jerome Powell’s press convention to comply with at 2:30 pm ET. Saxo Financial institution writes of their newest investor word, “The Federal Reserve is extensively anticipated to ship a 25 basis-points (bps) charge lower this week, lowering the goal vary for the federal funds charge to 4.25-4.50%.”
In line with futures knowledge, there’s a 95% chance of this transfer, which follows an analogous lower in November. Whereas the speed lower is seemingly priced in, the market will scrutinize the Fed’s Abstract of Financial Projections (SEP) and its “dot plot,” which depict the anticipated path of coverage charges for 2025 and past.
Any sign that the Federal Reserve might restrict the tempo of future cuts—significantly if it revises the dot plot from 4 charge cuts in 2025 down to 3 and even two—would possibly weigh on risk-on property comparable to Bitcoin and cryptocurrencies. Many analysts level to the labor market, which has been softening, and to easing shelter inflation, evidenced by slowing rental value progress, as key justifications for added charge cuts.
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Nonetheless, the Fed might convey a extra cautious stance and spotlight so-called “Trump-flation” dangers, referencing the potential for renewed commerce tariffs underneath the incoming Trump administration that would push inflation greater. If such inflationary dangers stay persistent, the Fed would possibly pause or cut back the tempo of cuts in 2025, which might be seen as a hawkish twist.
The brand new dot plot for 2025 is presently anticipated to point out round 3.625%—a baseline assumption of three charge cuts subsequent yr—however the market has speculated that this might transfer to three.875% if the Fed turns into extra cautious. The fast response in Bitcoin will probably hinge on the assembly’s tone, with a much less dovish Fed probably introducing volatility to BTC value motion.
#2 Fantom (FTM)
Fantom is coming into a brand new period with the upcoming Sonic L1 mainnet launch, a transformative improve that may dramatically enhance community throughput and value effectivity. Builders behind Fantom have highlighted that Sonic is able to processing roughly 10,000 transactions per second, with near-instant finality—a marked leap from present community capabilities.
The deliberate modifications are additionally set to chop operational expenditures, with a reported 66% lower in validator node prices and minimized storage necessities. One other vital element is Fantom’s determination to take care of compatibility with the Ethereum Digital Machine, which ought to make it easy for EVM-based purposes emigrate to the upgraded chain with out modifying their underlying code.
Sonic may also debut a brand new token, denoted as S, which is able to change the prevailing FTM token at a one-to-one ratio.
The crypto dealer Jacob Canfield acknowledged by way of X, “Shared this setup x subs final week, however FTM is near a value discovery break. Must clear the bearish impulse base and shut a 4 hour candle and we’ll most likely see swift value discovery. The chart coincides properly with the SONIC launch.”
#3 Avalanche (AVAX)
Avalanche will probably be one other focus within the crypto business, because the Avalanche9000 improve is ready to go dwell on the mainnet right this moment, on December 16. This follows a testnet debut on the “Fuji” testnet on November 25.
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The extremely anticipated mainnet launch is described by Avalanche’s core builders as probably the most important improve within the chain’s historical past. Compounding the excitement is Avalanche’s December 12 announcement of a $250 million personal token sale led by Galaxy Digital, Dragonfly, and ParaFi Capital, with greater than 40 different entities taking part.
In line with official statements, this fundraising spherical strengthens Avalanche’s treasury, already valued at round $3 billion in AVAX tokens, and comes on the again of a earlier $230 million token sale in 2021.
Avalanche9000 incorporates the Etna Improve and key group proposals ACP-77 and ACP-125, altogether reimagining how Avalanche’s subnets perform—now known as layer-1s. In doing so, Avalanche transitions from a pricey validator system requiring 2,000 AVAX per occasion to a extra subscription-like mannequin that expenses 1.33 AVAX monthly. The improve additionally focuses on cross-chain connectivity, enabling extra refined interchain communication inside Avalanche’s broader ecosystem.
#4 Stacks (STX)
Stacks is one other title to maintain on the radar because it prepares to launch sBTC on Tuesday, December 17, at 11:00 am ET. This new BTC-backed asset is designed to convey Bitcoin’s liquidity straight into the DeFi sphere on Stacks, providing a rewards program that’s notably freed from staking necessities.
In line with the mission’s official announcement, the sBTC Rewards Program gives a 5% annual Bitcoin reward, paid out in bi-weekly installments, and the distribution is made in precise Bitcoin, not third-party tokens.
This system’s first part, commencing on December 17, will deal with deposit performance and fast rewards accrual for sBTC holders. The second part, presently deliberate for March 2025, is predicted to layer in additional superior DeFi capabilities and reward constructions, thereby broadening the utility of sBTC.
#5 LayerZero (ZRO)
LayerZero rounds out the week’s watchlist with a governance milestone. On December 20, 2024, at 00:00 UTC, ZRO token holders will interact within the community’s first-ever charge swap referendum, a vote that would activate a protocol charge on each LayerZero message.
The referendum is easy, posing the only query, “Flip the charge swap on?” A majority vote of “Sure,” assuming quorum is met, would enact a charge that matches the underlying DVN and Executor prices for every message, successfully doubling the price of every cross-chain transmission.
The collected charges would then be used to purchase again and burn ZRO, probably lowering the circulating provide and impacting the token’s economics. ZRO balances throughout Ethereum, Optimism, Base, Polygon, Avalanche, BNB Chain, and Arbitrum are all factored into every holder’s voting energy, consolidated seamlessly by means of LayerZero’s lzRead function.
The referendum will final seven days, concluding on December 27, 2024. A 60% quorum of the circulating provide is required for the vote to be legitimate; if that threshold is just not met, the end result defaults to “No.” If the referendum passes, the protocol charge could be instantly activated, probably shifting the dynamics of how builders and customers handle cross-chain communications.
This governance mechanism is ready to repeat each six months, although the quorum requirement would lower by 5% every time if it’s not met, right down to a minimal flooring of 20%.
At press time, Bitcoin traded at $104,748.
Featured picture created with DALL.E, chart from TradingView.com