Vanguard & BofA Capitulate on Crypto: The Institutional Floodgates Just Opened
Digital Asset Market: Bitcoin rebounded above $90,000 on Tuesday, erasing most of its earlier drop below $84,000, while Ethereum and other major altcoins also recovered strongly. The rally followed Vanguard’s decision to allow clients access to crypto ETFs and Bank of America’s approval of limited bitcoin ETF allocations. Analysts noted that rising Japanese bond yields could still pressure global and crypto markets, as Bitcoin remains sensitive to Asian capital movements and leverage on platforms like Binance. However, derivatives data suggest traders expect support in the $80,000-$85,000 range and are positioning for continued support through year-end.
Meanwhile, American Bitcoin Corp. (ABTC), a bitcoin mining and treasury firm founded by Eric and Donald Trump Jr., plunged as much as 50% amid heavy trading despite bitcoin’s rally to nearly $92,000. In comparison, majority owner Hut 8 (HUT) also fell 12%. Trading volume for ABTC surged to 55 million shares, up from its 3 million daily average, suggesting intense selling pressure even though no specific news triggered the drop. The fall is striking given that most crypto-related stocks rose alongside bitcoin, and SEC filings show that major ABTC shareholders are restricted from selling until 2026.
Macro Economics: Eurozone inflation rose slightly to 2.2% in November, just above the European Central Bank’s 2% target, according to Eurostat data. Economists had expected 2.1%, with services showing the highest annual rate at 3.5%. Core inflation remained stable at 2.4%. The ECB kept its key deposit rate at 2% for the third consecutive meeting after cutting it in June, ending a period of record highs. Although inflation remains close to target, policymakers have signaled that the rate-cutting cycle may soon conclude. ECB President Christine Lagarde said the euro area economy is in a relatively good position but emphasized that policy decisions will continue to depend on incoming data. However, the reality on the ground is not as rosy, with underlying economic challenges still weighing on growth and consumer confidence.
Equities: Stocks rose Tuesday as gains in bitcoin and major technology names helped the market recover from earlier losses. The Dow gained 128 points, or 0.3%, the S&P 500 rose 0.1%, and the Nasdaq advanced 0.4%. Bitcoin climbed 6%, while AI-related companies like Nvidia, Credo Technology, and Astera Labs boosted sentiment, though trading remained choppy. Investors are hopeful that the Federal Reserve will cut interest rates at its December meeting, with markets pricing in an 87% chance of a cut. Analysts noted that bullish momentum is supported by strong technical and fundamental factors heading into December, historically a favorable month for stocks. Meanwhile, in the tech world, OpenAI CEO Sam Altman reportedly declared a “code red” to improve ChatGPT amid intensifying competition from Google’s Gemini 3 and Anthropic’s fast-growing enterprise business. OpenAI, now valued at about $500 billion, is shifting resources to focus on ChatGPT while managing massive infrastructure commitments of more than $1.4 trillion. Despite concerns about sustainability, Altman remains optimistic, projecting more than 20 billion dollars in annualized revenue this year and expecting dramatic growth by 2030.
The Fed and US Treasury: Investor attention is centered on the upcoming December Federal Reserve policy meeting, as markets await signals on whether the central bank will begin cutting interest rates. Despite some signs of weakness in parts of the economy, analysts note that overall conditions remain strong. The forthcoming release of the Fed’s preferred inflation gauge, the Personal Consumption Expenditures Index, is expected to shape expectations for next week’s decision. Meanwhile, speculation is mounting over who will lead the Fed after Jerome Powell’s term ends in 2026, intensifying focus on the institution’s future direction. Trump, however, is keeping his cards close to his chest regarding his choice for the next Fed chairman.
Geopolitical: US envoy Steve Witkoff and Jared Kushner met with President Vladimir Putin in Moscow to present former President Trump’s proposed Ukraine peace plan, following earlier talks in Miami with Ukrainian representatives about potential territorial concessions in Donbass. Putin expressed anger toward Europe, accusing it of promoting war and obstructing US peace efforts, while condemning recent drone strikes on Russian oil tankers as piracy. He warned that if Europe provokes a conflict, Russia is ready to respond immediately, and vowed to expand strikes on Ukrainian ports. Ukrainian President Volodymyr Zelensky acknowledged the challenges ahead but sees a chance to end the war. At the same time, European leaders remain excluded from the US-led talks and reject any deal that might pardon Putin for war crimes, raising fears about NATO’s future and Europe’s defense readiness.
View from our desk
Crypto Momentum Remains Frozen
Markets are still searching for direction after the latest selloff, and the bid to “buy the dip” looks premature. Digital Asset Treasury companies have added structural fragility, magnifying both upside and downside through leveraged treasury strategies. These vehicles work when flows and sentiment are supportive, but unwind violently in stress. With positioning stretched, liquidity thinning, and confidence deteriorating, the market setup points to prolonged stagnation rather than a quick rebound. The current crypto winter has more room to run.
EV Adoption Pulls Back as Policy Tailwinds Reverse
Ford’s November data captured a broader shift across the U.S. auto market: EV demand is slipping as incentives roll off and cost-conscious consumers return to combustion models. Sales of Ford’s electric lineup fell by more than 60 percent after the expiration of tax credits, with Hyundai, Kia, and Honda showing a similar retrenchment. The policy reset under the Trump administration has accelerated this slowdown, reducing the regulatory and financial support that powered last decade’s rapid adoption curve. Analysts are now recalibrating expectations, and OEMs are cutting production to avoid excess inventory. The U.S. EV transition is losing momentum, and manufacturers must adjust to a slower, more uneven path forward.
Mining Economics Breakdown as Capital Rotates to AI
American Bitcoin Corp’s collapse, despite reporting profitability and growing reserves, underscored the deteriorating fundamentals of the mining sector. Margins have compressed as Bitcoin fell from the $120k range to sub-$80k, while power costs continue to rise and investors grow impatient with cyclical volatility. The result is a strategic pivot: miners are accelerating moves toward AI compute infrastructure, where excess power capacity and data center assets can generate steadier returns. The firms that reallocate quickly may stabilize revenue, but those tied too closely to legacy mining economics risk being left behind as the industry restructures.
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The 1Konto Team
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