Robert Jenrick’s leaked plan for Reform
Bitcoinâs latest pullback may already be bottoming out, with asset manager Grayscale arguing that the market is on track to break the traditional four-year halving cycle and potentially set new all-time highs in 2026.
Some indicators are already pointing to a local bottom, not a prolonged drawdown, including Bitcoinâs (BTC) elevated option skew rising above 4, which signals that investors have already hedged âextensivelyâ for downside exposure.
Despite a 32% decline, Bitcoin is on track to disrupt the traditional four-year halving cycle, wrote Grayscale in a Monday research report. âAlthough the outlook is uncertain, we believe the four-year cycle thesis will prove to be incorrect, and that Bitcoinâs price will potentially make new highs next year,â the report said.
Related: Cathie Wood still bullish on $1.5M Bitcoin price target: Finance Redefined
Still, Bitcoinâs short-term recovery remains limited until some of the main flow indicators stage a reversal, including futures open interest, exchange-traded fund (ETF) inflows and selling from long-term Bitcoin holders.
US spot Bitcoin ETFs, one of the main drivers of Bitcoinâs momentum in 2025, added significant downside pressure in November, racking up $3.48 billion in net negative outflows in their second-worst month on record, according to Farside Investors.
More recently, though, the tide has started to turn. The funds have now logged four consecutive days of inflows, including a modest $8.5 million on Monday, suggesting ETF buyer appetite is slowly returning after the sell-off.
While market positioning suggests a âleverage reset rather than a sentiment break,â the key question is whether Bitcoin can âreclaim the low-$90,000s to avoid sliding toward mid-to-low-$80,000 support,â Iliya Kalchev, dispatch analyst at digital asset platform Nexo, told Cointelegraph.
Related: Strategy unveils new credit gauge to calm debt fears after Bitcoin crash
Fed policy and US crypto bill loom as 2026 catalysts
Crypto market watchers now await the largest âswing factor,â the US Federal Reserveâs interest rate decision on Dec. 10. The Fedâs decision and monetary policy guidance will serve as a significant catalyst for 2026, according to Grayscale.
Markets are pricing in an 87% chance of a 25 basis point interest rate cut, up from 63% a month ago, according to the CME Groupâs FedWatch tool.
Later in 2026, Grayscale said continued progress toward the Digital Asset Market Structure bill may act as another catalyst for driving âinstitutional investment in the industry.â However, for more progress to be made, crypto needs to remain a âbipartisan issue,â and not turn into a partisan topic for the midterm US elections.
That effort effectively began with the passage of the CLARITY Act in the House of Representatives, which moved forward in July as part of the Republicansâ âcrypto weekâ agenda. Senate leaders have said they plan to âbuild onâ the House bill under the banner of the Responsible Financial Innovation Act, aiming to set a broader framework for digital asset markets.
The bill is currently under consideration in the Republican-led Senate Agriculture Committee and the Senate Banking Committee. Senate Banking Chair Tim Scott said in November that the committee planned to have the bill ready for signing into law by early 2026.Â
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Polandâs President Karol Nawrocki declined to sign a bill imposing strict regulations on the crypto asset market, drawing praise from the crypto community and sharp criticism from others in the government.
Nawrocki vetoed Polandâs Crypto-Asset Market Act, saying its provisions âgenuinely threaten the freedoms of Poles, their property, and the stability of the state,â according to a statement by the presidentâs press office on Monday.
Introduced in June, the bill has drawn criticism from industry advocates such as Polish politician Tomasz Mentzen, who had anticipated the presidentâs refusal to sign it as it cleared parliamentary approval.
Although crypto advocates welcomed the veto as a win for the market, several government officials condemned the move, claiming the president had âchosen chaosâ and must bear full responsibility for the outcome.
Why the president vetoed the bill
One of the main reasons cited for the veto was a provision allowing authorities to easily block websites operating in the crypto market.
âDomain blocking laws are opaque and can lead to abuse,â the presidentâs office said in an official news release.
The presidentâs office also cited the billâs widely criticized length, saying its complexity reduces transparency and would lead to âoverregulation,â especially when compared with simpler frameworks in the Czech Republic, Slovakia and Hungary.
âOverregulation is an easy way to drive companies to the Czech Republic, Lithuania or Malta, rather than create conditions for them to operate and pay taxes in Poland,â the president said.
Nawrocki also highlighted the excessive amount of supervisory fees, which may prevent startup activity and favor foreign corporations and banks.
âThis is a reversal of logic, killing off a competitive market and a serious threat to innovation,â he said.
Critics jump in: âThe president chose chaosâ
Nawrockiâs veto has triggered a strong backlash from top Polish officials, including Finance Minister Andrzej DomaĆski and Deputy Prime Minister and Minister of Foreign Affairs RadosĆaw Sikorski.
DomaĆski warned on X that âalready now 20% of clients are losing their money as a result of abuses in this market,â accusing the president of having âchosen chaosâ and saying he bears full responsibility for the fallout.
Related: Spainâs junior ruling party proposes 47% crypto tax in âattack against Bitcoinâ
Sikorski echoed the concern, saying that the bill was supposed to regulate the crypto market. âWhen the bubble bursts and thousands of Poles lose their savings, at least they will know who to thank,â Sikorski argued on X.
Crypto advocates, including Polish economist Krzysztof Piech, quickly pushed back, arguing that the president cannot be held responsible for authorities failing to pursue scammers.
He also noted that the European Unionâs Markets in Crypto-Assets Regulation (MiCA) is set to provide investor protections across all EU member states starting July 1, 2026.
Magazine: When privacy and AML laws conflict: Crypto projectsâ impossible choice
The US Federal Deposit Insurance Corporation will propose a framework for implementing US stablecoin laws later this month, according to its acting chair, Travis Hill.
âThe FDIC has begun work to promulgate rules to implement the GENIUS Act; we expect to issue a proposed rule to establish our application framework later this month,â Hill said in prepared testimony to be delivered on Tuesday to the House Financial Services Committee.
He added the agency will also have a âproposed rule to implement the GENIUS Actâs prudential requirements for FDIC-supervised payment stablecoin issuers early next year.â
President Donald Trump signed the GENIUS Act in July, which created oversight and licensing regimes for multiple regulators, with the FDIC to police the stablecoin-issuing subsidiaries of the institutions it oversees.
The FDIC insures deposits in thousands of banks in the event that they fail, and under the GENIUS Act, it will also be tasked with making âcapital requirements, liquidity standards, and reserve asset diversification standardsâ for stablecoin issuers, said Hill.
Federal agencies, such as the FDIC, publish their proposed rules for public feedback, and they then review and respond to the input, if necessary, before publishing a final version of the rules, a process that can take several months.
Related: Republicans urge action on market structure bill over debanking claims
The Treasury, which will also regulate some stablecoin issuers, including non-banks, began its implementation of the GENIUS Act in August and finished a second period of public comment on its implementation proposal last month.
FDIC is working on tokenized deposit guidelines
Hill said in his remarks that the FDIC has also considered recommendations published in July by the Presidentâs Working Group on Digital Asset Markets.
âThe report recommends clarifying or expanding permissible activities in which banks may engage, including the tokenization of assets and liabilities,â Hill said.
âWe are also currently developing guidance to provide additional clarity with respect to the regulatory status of tokenized deposits,â he added.
Fed helping regulators with stablecoin rules
The Federal Reserveâs vice supervision chair, Michelle Bowman, will also testify on Tuesday that the central bank is âcurrently working with the other banking regulators to develop capital, liquidity, and diversification regulations for stablecoin issuers as required by the GENIUS Act.â
Bowman added, according to her prepared remarks, that âwe also need to provide clarity in treatment on digital assets to ensure that the banking system is well placed to support digital asset activities.â
âThis includes clarity on the permissibility of activities, but also a willingness to provide regulatory feedback on proposed new use cases,â she said.
The House Finance Committeeâs hearing on Tuesday will also see remarks from the heads of the Office of the Comptroller of the Currency and the National Credit Union Administration, which will both have a role in implementing stablecoin rules.
Magazine: Bitcoin vs stablecoins showdown looms as GENIUS Act nearsÂ
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