Welcome to the institutional newsletter, Crypto Long & Short. This week:

• Insights on the next big step for stablecoins (hint: it’s not another USD token) by Martin Bruncko of Schuman Financial
• A vibe check on the post-holiday crypto selloff, the upcoming Fusaka upgrade, and why ETH’s role is crucial in leading any broader market recovery by Andy Baehr
• Top headlines institutions should read by Francisco Memoria
• “Hyperliquid Weekly Volumes v/s HYPE/BTC” in Chart of the Week

-Alexandra Levis

Expert Insights

Don’t Write Off Euro Stablecoins Just Yet

- By Martin Bruncko, CEO & co-founder, Schuman Financial

Stablecoin rankings are overwhelmingly dollar-based. USDT, USDC and other USD tokens dominate supply and usage, with dollars representing around 99% of a $300+ billion market. Euro stablecoins, at roughly $600 million, appear insignificant, especially at a time when Europe’s public debate focuses more on CBDC than on privately issued euro stablecoins.

However, today’s numbers can be misleading. Stablecoins already settle real economic activity at scale. In 2024, they processed roughly $28 trillion, surpassing Visa and Mastercard combined. This signals the emergence of a parallel settlement rail that already functions at a systemic scale.

The problem for Europe is that almost all of this activity settles in dollars rather than euros. Euro stablecoins aren’t small because the euro leg is unnecessary. They’re small because Europe hasn’t connected its currency to infrastructure that is already operating, but the shift to tokenized finance is irreversible.

Traditional payment rails still rely on cut-off times and reconciliation cycles measured in days. Around this ageing stack, a new one is forming in which assets and payments settle directly on-chain. Stablecoins are becoming an essential core infrastructure of financial services. Standard Chartered projects $30 trillion in tokenized real-world assets by 2034; Citigroup predicts up to $5 trillion in tokenized digital securities by 2030, with tokenized assets potentially reaching 10% of global GDP. None of this works without on-chain fiat, the world’s second-largest currency is too important not to play a part. The eurozone is a $16 trillion economy and the world’s second-largest currency bloc.

Suppose we accept two simple facts: 1. the euro is not going to disappear, and 2. Europe is not going to dollarize, so then a globally significant euro stablecoin is a logical outcome. The underlying euro economy is enormous. In 2023, the Eurosystem’s T2 platform processed roughly €2.2 trillion per day. According to the Bank for International Settlements (BIS), average global FX turnover reached $9.6 trillion per day in April 2025, with the USD on one side of about 89% of all trades; the euro ranked as the second most-active currency globally. If even 0.1% of euro flows move on-chain, that implies €2.2 billion settling daily, or more than €800 billion per year. This is more than enough to support a euro stablecoin ecosystem worth hundreds of billions.

For policymakers and investors, the real question is not whether euro stablecoins win outright, but what mix of on-chain euro options best balances innovation and financial stability.

Dollar stablecoins had a decade head start. Europe is now catching up. The next major expansion in stablecoins is not another USD token but rather a credible, scalable euro stablecoin, built for the size of Europe’s economy and privately issued.

Headlines of the Week

- By Francisco Rodrigues

This week’s headlines suggest institutional conviction is deepening and smart money positions for the long haul, despite the short-term volatility. Japan and the Fed are showing signs that volatility isn’t going away in the near future.

• Bank of America Greenlights Wealth Advisers to Recommend Up to 4% Bitcoin Allocation. The news comes just hours after longtime crypto holdout, asset management giant Vanguard, said it would allow its clientele access to digital asset ETFs.
• JPMorgan’s IBIT-Linked Structured Note Fits Halving Cycles: JPMorgan has introduced a new investment product that aligns payouts with bitcoin's four-year halving cycles.
• Michael Saylor Sunday Change-Up Suggests New Announcement Coming: Michael Saylor teased a switch from orange dots to green dots in what's become a common social media post announcing more BTC purchases.
• Japan to Cut Crypto Tax Burden to 20% Uniform Rate in Boost for Local Bitcoin Traders: The proposed tax change, supported by the government, will categorize crypto profits under a separate-taxation framework.
• Bitcoin ETFs Are Now BlackRock’s Top Revenue Source, Exec Says: The firm’s spot bitcoin ETFs unexpectedly became a top revenue-generating product.

Vibe Check

Sunday Scaries, Wednesday Upgrade

- By Andy Baehr, CFA, head of product and research, CoinDesk Indices

Capping a mercifully tranquil long Thanksgiving weekend, crypto markets delivered a fireball of Sunday scaries. Bitcoin shed 5% in hours, ether slid 7% and $200 billion of recently recaptured market cap vanished. All the confident optimism of my crypto week-in-review podcast playlist evaporated with it.

“...at least we could enjoy the long weekend.”

The selloff continued Monday, with another leg lower pushing bitcoin towards $84,000 and ether to $2,700. By the 4pm close, CoinDesk 20 Index lost 8.15% to 2695.59 in 24 hours. If we thought we were out of the woods, we thought wrong.

ETH matters

Back in April, as the tariff tantrum was settling down, we wrote "W(h)ither ETH?" pleading for an ETH-led rally to counter bitcoin's narrative dominance and create breathing room for the broader asset class. By July 20, when we published "Ether Real," our wish was granted. ETH’s rally was so powerful, it briefly carried higher weight than bitcoin in the CoinDesk 20, fueled by stablecoin and tokenization optimism, epitomized by the passage of the Genius Act.

We continue to believe that there can be no broad digital asset class rally without ETH participating — if not leading.

Which brings us to Wednesday's Fusaka upgrade — “Fusaka” being a characteristic Ethereum portmanteau combining Fulu (a star) and Osaka (the earthly host city) — Ethereum's second major hard fork of 2025. While traders panicked over Sunday's flush, Ethereum developers were finalizing what Fidelity Digital Assets calls "arguably the most compelling upgrade in years."

Why Fusaka matters

Fusaka represents a strategic inflection point — the first Ethereum upgrade shaped by clearly defined economic priorities rather than disparate technical wishes. As Consensys notes in a recent post, the upgrade delivers "some of the biggest gains in network scaling since the Merge" through backend improvements rather than flashy user experience features.

The centerpiece is PeerDAS (Peer Data Availability Sampling), which enables nodes to verify blocks without downloading all data. This democratizes validation effort and makes a planned 10x increase in blob capacity feasible, dramatically expanding Layer 2 throughput. The mainnet gas limit also increases to 60 million units, boosting capacity for direct Layer 1 transactions.

The strategic shift toward Layer 1 value accrual is what matters most. Increased mainnet activity drives revenue directly to Ethereum's base layer through two mechanisms: higher rewards to validators from increased transaction fees and MEV, and deflationary pressure from EIP-1559's fee burn. More activity means more ETH burned, creating a "share buyback-like" enhancement to the token's value while simultaneously increasing staking yields.

CESR, the composite ether staking rate, could improve with Fusaka

Fast money, slow money

As bitcoin lethargy, DAT doubt, liquidity woes and retail inertia plague the fast money, the determined direction of Fusaka may help ETH lead once again. The quiet march of Ethereum development continues regardless of price action. Consensys emphasizes that developers now aim for an "accelerated twice-a-year cadence" of hard forks, maintaining momentum on The Surge phase of Ethereum's roadmap.

While Sunday's selloff dominated headlines, Wednesday's upgrade might matter more.

Chart of the Week

Hyperliquid Weekly Volumes v/s HYPE/BTC

Despite a clear declining trend in Hyperliquid's Weekly Volumes post-October 2025 - driven by increased competition from platforms like Lighter and Paradex, alongside a general market slowdown - the HYPE/BTC ratio has shown some divergence, maintaining a positive or flat trend. This suggests that HYPE has held a favorable price action relative to Bitcoin compared to most altcoins, even absorbing recent token unlock events. Assuming the HYPE/BTC ratio continues to hold its current strength, a future pickup in platform fundamentals (weekly volumes) would create a favorable technical environment for the HYPE token's price action.

Listen. Read. Watch. Engage.

• Listen: How CoinDesk aims to professionalize crypto investing. David LaValle, President of CoinDesk Indices and Data, sits down with The Wealth Advisor.
• Read: Stablecoins and CBDCs Report. The stablecoin market fell $4.54B to $303 billion, the steepest monthly decline since November 2022.
• Watch: The major causes of the recent crypto market downturn, with Andrew Baehr and Galaxy Head of Credit Trading Beimnet Abebe.
• Engage: For research, reports and market insights delivered straight to your inbox, subscribe to the new CoinDesk research monthly newsletter.

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