SitReps
Dec 31, 2025
Market SitRep
CW 01
Fenris | Quantitative Systems Engineer
Market Maker in trouble?
GM to a quick Market SitRep, focusing on the transition into the new year!
The cryptocurrency market exhibited no willingless to leave its range yet, as indicated last week.
Looking back to last week, thin liquidity indeed dampened December 26th’s impact and the brief swing to $90k was observed on the 29th’s.
Our focus assets BTC, ETH, XRP, BNB, and SOL remain range-bound, while our shorted assets keep bleeding - as quite typical for riskier assets in ranging markets.
Institutions
Corporate accumulation continues, highlighted by Strategy’s latest BTC purchase of a total of $108.8M at an average of $88,568/BTC, on December 29th. Correlating with its intraday push to $90k/BTC, Saylor posted bullish imagery, supporting attention, light-heartedness, and correlated to the short-covering:
These are some of the biggest institutional players here.
Another one, Metaplanet, often dubbed Japan’s Strategy, states to have acquired 4279 BTC during Q4 2025, for a total of $451Mat at an average of ~$105,412/BTC. As of December 30th, they hold a total of 35,102 Bitcoin.
On the side of ETFs, last week to-date has not seen many inflows.
Retail / Investors
Pro-crypto policies under the Trump administration provided optimism earlier in 2025, but this year-end slump erased gains worldwide: BTC down YTD despite October’s peak at ~$126k. Retail investors are, when requiring a bull market to make money, pulling out of crypto markets and shifting their focus to metals and stocks.
Many are chasing into the silver’s parabolic run - the strongest since 1979 in some metrics - exposing themselves to excessive tail-end risk. With blow-off potential, indicated by recent plunges post-peak, chasing late exposes to sharp corrections. NFA - but be careful.
Another example: -17% Palladium’s largest daily drop in history (LINK)
Our advantage: We trade algorithmically. We do not need a Bull Market. We only need volatility. We profit from price action and trend, whether it is up or down.
That’s important to be aware of: For Crypto Investors it was extremely challenging to achieve profitability in 2025. Even with profitable signals, to achieve this did require excellent execution and rigorous discipline with instant reactivity; another challenge in and of itself for any busy investor who has a lot of decisions to make on a daily basis.
The beauty of the automated systems is that they eliminate human error and stick to the math, regardless of how "scary" the market looks, regardless of the time, and regardless of how many decisions an investor’s shoulders carry.
This avoids getting wicked around and getting influenced by assumptions (LINK), which are usually just gambling with additional steps.
Stocks
We expect this topic will come up among Crypto investors, community, and broader discussion more and more.
From an algorithmic perspective, stocks perform much worse than Crypto.
The stock market is highly "efficient," slow-moving, and saturated with massive institutional players. It is very hard to exploit an edge there and the returns are minimal and small.
We stay in Crypto specifically because it is "inefficient." This inefficiency is exactly what allows our algorithms to outperform significantly. In a way, the relative "weakness" of the crypto market is exactly what generates profit.
Regulatory / Political
No new announcements yet; ongoing clarity supports long-term accumulation.
The most important changes coming into effect on January 1st, 2026:
In Europe, the EU’s DAC8 directive activates on Jan 1. Crypto-asset service providers (exchanges, brokers, etc.) serving EU residents must begin collecting detailed user identification, transaction, and balance data for automatic reporting to national tax authorities. This information will be shared cross-border within the EU to combat tax evasion, with potential for asset freezes in non-compliance cases. Full technical compliance is required by July 1, 2026, but data collection starts immediately in 2026 - first reports are due in 2027.
Two horizons on impact:
Short-term: Increased compliance costs for Crypto Asset Service Providers, and potential retail caution in EU markets.
Long-term: Greater institutional confidence through regulatory clarity, boosting availability to institutions.
Immediate focus for deployment
On a side-note, we anticipate that the U.S. will shift in Q2 2026, with the replacement of Powell. We introduce PAXG’s as dynamic hedging asset to USD in January. This together with adjustments to the short exposures and filtered unbiased asset rotations to our short systems are within our very immediate deployment plans.
Events Calendar
No major events for BTC, ETH, XRP, BNB, or SOL at the end of this year or into January 6th.
The end of the year belongs to you, your friends, and your loved ones. We tend to agree with CZ here (LINK).
May our profits be fruitful. GM! and have a
Happy New Year!
Overview