Weekly Market Update: The Wizards are Back

As the long-awaited sequel “Wicked: For Good” broke box office records over Thanksgiving, let’s spare a thought for the original story that Hollywood has so successfully sanitised. One with a purpose and meaning that is even more relevant this week as the U.S. Fed officially begins a new easing cycle into a world burdened with over $300 trillion of debt. 

In 1900 L. Frank Baum didn’t write a children’s book; he smuggled a populist monetary manifesto into The Wonderful Wizard of Oz.

Dorothy: the American worker blown helpless by financial cyclones. Scarecrow: the farmer branded brainless by bankers while he feeds the country. Tin Man: the factory slave rusted solid, heart repossessed by debt. Cowardly Lion: William Jennings Bryan, roaring “you shall not crucify mankind upon a cross of gold” yet too scared to bite. 

Yellow Brick Road: the gold standard bleeding the heartland dry. Emerald City: Washington, green only because citizens are forced to wear banker-issued spectacles. Wizard: hot-air elites hiding behind a curtain. And the silver slippers (silver, not ruby): the explosive demand for free coinage of silver – the people’s money that would have snapped the deflationary noose forever.

The message was loud and clear: real money isn’t handed down by wizards. Real money is already on your feet – you just have to recognize it!

One hundred and twenty-five years later, we see a similar thing playing out in a world drowning in paper promises and hyper-financialisation. Bitcoin is the hardest money in history that no wizard can inflate, rehypothecate, or confiscate with a signature.

The wizards have noticed! Because 2025 is the year that they decided to try and steal the ‘silver slippers’ one more time.

It kicked off in May: Jim Chanos goes on TV “long Bitcoin, short MicroStrategy”. July: JP Morgan quietly hikes MSTR margin requirements from 50% to 95%. August: BlackRock rolls out IBIT derivatives – why let you own real BTC when they can sell you paper? 

October 10: MSCI (Morgan Stanley’s offspring) proposes banning any company with >50% in digital assets from major indices. Four days later Morgan Stanley files for its own IBIT product; JP Morgan follows weeks after. 

November 20: they launch the notes to clients and conveniently revive the MSCI threat, perfectly timed to crush MSTR during the sell-off. Same Wall Street crew, same playbook: kill the one public vehicle giving pure leveraged Bitcoin exposure so they can repackage and sell it back to you at a markup.

We’ve seen this movie before! Big bankers have been accused of using this same playbook since The Wonderful Wizard of Oz was first written: create fear to force sales and vacuum up the asset into instruments they control – repeat until they maintain control over the future of money.

So here we are again, back at the same crossroads Baum wrote about: Are you going to keep begging the Wizard for a heart, a brain, courage, or a way home… or are you going to look down, see the private keys already on your feet, and click?

The movie’s playing in theaters. The real story is playing in the order book. See you on the other side of the rainbow.

Market sentiment has recovered slightly to: Fear

Crypto market moves: 

• Shortly after closing the week at $90.2k, the sharpest BTC plunge in 6 months dropped the price below $84k in hours leading to over $900m in liquidations.
• Just as sharp as the drop was Bitcoin’s rebound on Tuesday jumping $6k shortly after the Vanguard ETF ban lifted, with $1 billion in IBIT volume in the first 30 min of trading.
• Bitcoin has never had 3 ‘red’ months in a row in Q4, will this time be different?
• ETFs flows were relatively muted during the short U.S. holiday week – but expect high outflows to start this week, mirroring the Monday sell off. 
• The total crypto market cap has managed to stay above $3 trillion.
• Bitcoin weekly RSI remains in oversold territory at 40.
• Consumer search volume and sentiment remains low and in “Fear” as investors are stepping aside to wait for the shakeout to end.
• Polymarkt shows just 33% chance that BTC will drop to $80k in 2025 and 45% chance that it will get back to $100k. 
• Bitcoin dominance is stuck at 59% as traders wait for a clear direction.
• Altcoins continue to lag behind as just 20 of the top 100 outperformed BTC in the L3M.
• The big winner of the week is QNT (Quant) +9.7% as RWA regains some momentum.
• The surprise mover of the week is SUI (Sui) +7.8% on a Coinbase listing for NY residents and pending futures trading.
• The big loser of the week is ZEC (Zcash) -38.7% as privacy coin mania cools off.

View all top gainers: Visit the top gainers page to find out more.

Highlights from the crypto space

Bitcoin led the crypto market recovery through the Thanksgiving long weekend, holding above $90k as many analysts revised their near-term price targets back up, before the surprise sell-off and subsequent rebound. Even perma-bull Tom Lee finally succumbed to a more realistic price prediction, walking back his “$250k Bitcoin by year end,” to a more realistic “new all-time highs.”

Bitcoin price action is tracking the 2022 bear market with concerning accuracy, with 98% correlation and the end of the year just weeks away. Can the bulls still regain control?

Bitcoin saw the largest open interest drop this cycle from $45B to $28B within a few days, signaling a leverage washout rather than a bear market, according to CryptoQuant.

Bitcoin supply on exchanges has fallen to a new low:

Binance is witnessing a dramatic shift in its reserves as BTC and ETH holdings have plummeted while stablecoin deposits (especially USDT) have surged to unprecedented levels – analysts are calling this “a calculated repositioning” as investors wait for conditions to improve.

S&P Global downgraded Tether’s USDT to the lowest score on its Stablecoin risk scale, citing an increase in higher-risk assets in reserves and persistent gaps in disclosure. Cue USDC?

ALT5 Sigma Corporation, Nasdaq-listed fintech that morphed into a digital asset treasury company committed to accumulating World Liberty Financial, has been dealing with significant internal turmoil alongside its stock’s collapse. Not surprising at all!

The stock price of Michael Saylor’s Strategy has fallen over 50% since the BTC highs on 6 October in one of its sharpest declines on record. The company holds 650,000 Bitcoin that is worth over $56 billion today but is trading at a total market cap of just $46 billion. Go figure!

CEO Phong Le has confirmed that Strategy would consider selling Bitcoin only if the stock falls below net asset value and the company loses access to fresh capital – then unloading BTC becomes “mathematically” justified to protect “Bitcoin yield per share.” The Strategy truthers are already wringing their hands as the company launched a USD reserve.

Tether announced it is now shutting down Bitcoin Mining operations in Uruguay after failing to negotiate for lower energy prices, as miners enter one of the harshest margin environments yet.

Eric Trump’s American Bitcoin stock is down nearly 50% from recent highs.

The UK government’s budget has confirmed that UK-registered trading platforms will have to record personal details of their customers including transactions and tax numbers, as it seeks to raise an extra $417 million in tax by April 2030. CARF is coming to NZ in April too! 

The Vanguard Group will finally allow Bitcoin and crypto-linked ETFs and mutual funds to trade on its platform. Just in time for a Santa rally?

Pro-crypto Kevin Hassett, who served on Coinbase’s advisory council, is now the front running candidate to replace Fed Chair Powell in 2026.

Other crypto news

• The Marshall Islands has announced a universal basic income (UBI) system for its 33,000 residents with blockchain as its main mode of delivery.

• Upbit was hacked for $36 million in Solana-based assets, occurring just after its parent company agreed to a $10.3 billion takeover by Naver.

• China’s central bank has renewed vows to stamp out ‘illegal activities’ like trading in crypto and Stablecoins.

• BlackRock’s Bitcoin ETF has become its top revenue source despite managing over 1,400 ETFs and $13.4 trillion in total assets.

• Prediction market platform Kalshi is facing a proposed class action in New York accusing it of running unlicensed sports betting.

• AI models competing in a trading tournament are now all in the red, with every system posting losses. Even bots can’t handle the current price swings!

Sony is planning to issue a US dollar-pegged stablecoin in 2026 and expects it to be used for purchases of PlayStation games, subscriptions and anime content.

🌎 Macro news TLDR: We’ve seen this movie before

The post-COVID stimulus tsunami lit a fire under inflation that never fully died. By late 2025, central banks are nearing the end of their rate-cutting cycles – the ECB led the way down to 2% and the Fed is still playing catch up, yet price pressures remain stubbornly sticky. 

Core inflation in Germany unexpectedly rose to 2.6% in November, and the U.S. was at 3% at the last reading in September – both well above the 2% target and showing no clean surrender. Recovery is underway, but it’s fragile. Unemployment is creeping higher, consumers are squeezed, and political pressure is mounting to reopen the fiscal and monetary taps earlier and harder than planned. 

That’s the classic 1970s rerun: stop-start tightening, repeated money injections and commodity supply shocks, all resulting in second and third wave inflation surges that eventually forced Paul Volcker’s bold 20% interest rates. 

Today’s twist is the debt mountain. Global public debt is already >100% of GDP and climbing in most advanced economies; the U.S., eurozone, and especially Japan can only service it with permanently cheap money. Central banks are trapped: hike too hard and trigger a debt crisis, ease too soon and inflation roars back. 

The path of least resistance is more liquidity – but that almost guarantees another inflationary spike within the next 2-4 years.

The inflation train is just about leaving the station again. If the past is prologue then it could be time to load up on real assets – before the 1970s sequel hits the big screen. 

*Not financial advice.

Economic news from the Americas

Weaker-than-expected U.S. economic data upped bets for another Fed interest rate cut in December, giving global equities a boost into the Thanksgiving holiday weekend before sliding into December. 

The U.S. experienced one of its busiest Thanksgiving travel seasons in 15 years, with an estimated 81.8 million Americans traveling at least 50 miles away for the holiday. Americans may not be feeling jolly about their economic prospects, but that didn’t stop shoppers from spending new records online on Black Friday of $11.8 billion and +9.1% from last year.

Google is surging on expectations that it is winning in the AI race! Alphabet’s ‘AI comeback’ could be of concern for Nvidia because the company is leveraging its own custom chips.

U.S. economists are forecasting slightly faster economic growth in 2026 but sluggish employment and slowing Fed rate cuts remain key headwinds. The survey of 42 professional forecasters found the median outlook was for growth of 2%.

Venezuela has condemned US President Trump’s statement that all airspace around the country should be “considered closed”, calling it “another extravagant, illegal and unjustified aggression against the Venezuelan people”. The conspiracists are already in overdrive!

Over in Europe & the Middle East…

The U.K. is hiking taxes across the board in its 2025 budget including freezing income tax thresholds, increasing rates on property, dividend and savings income, while simultaneously implementing major welfare reforms, such as removing the two-child benefit cap to address the cost of living. Ouch! 

Inflation figures from some of the biggest eurozone economies including France, Spain and Italy, show no immediate threat of rate hikes. However, German annualised inflation figures came in unexpectedly higher at 2.6% in November compared with 2.3% in October.

Russian President Putin has broken his silence on the U.S.-backed peace plan to end the war in Ukraine, saying Moscow is ready for “serious” discussions about the draft proposals which could be the basis of a deal that ends the almost four-year long conflict. Here’s hoping!

President Zelenskyy’s ever present chief of staff resigned after an anti-corruption raid at his home last week, injecting fresh uncertainty for Ukraine’s leadership. President Trump added insult to injury saying the corruption scandal engulfing the Ukraine’s government is “not helpful” to the ongoing peace talks.

And in Asia Pacific…

Chinese industrial firms saw their earnings drop 5.5% in October from a year ago, as trade tensions with the U.S. flared that month while broader growth in the economy faltered.

And China’s factory activity unexpectedly contracted in November, as soft domestic demand continued to cast a shadow over the world’s second-largest economy – PMI dropping to 49.9 and missing analysts’ expectations of 50.5. 

The Bank of Japan is likely preparing to raise rates again in December as USD/JPY approaches multi-decade lows. The 2-year bond yield, as an early warning indicator, just rose to 1% for the first time since 2008. Keep an eye on the Yen carry trade unwind!

In AU, Investment banks and the bond market are betting the RBA will raise interest rates rather than cut them next year after a red-hot inflation report wrong-footed everyone.

Back in NZ, economists are saying that after last week’s OCR cut it’s now highly likely the easing cycle is done and the OCR is now on hold. But the Reserve Bank governor says the inflation danger has passed and solid growth is ahead! Finally some good news.

Business confidence as measured by ANZ’s Business Outlook survey for November has hit its highest level in 11 years – rising another 9 points to 67. ANZ’s chief economist says the improvement in sentiment “is rooted in an improvement in experienced activity, not just hope”.

The NZ government is progressing a rates cap for local councils, with analysis suggesting a target range of 2% to 4% increases per year. Great news!

That’s a wrap for this week!

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