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The cryptocurrency ecosystem is on the cusp of another important week, heralding several key developments taking place across different networks. This week, Bitcoin, Fantom, Avalanche, Stacks, and LayerZero are in the spotlight, each facing a pivotal milestone. The broader macro backdrop is also important, especially the FOMC interest rate decision on December 18th in the US.
#1 Bitcoin and Cryptocurrencies Awaiting FOMC Decision
Bitcoin traders and investors are watching the Federal Reserve’s policy meeting scheduled for Wednesday, December 18, at 2:00 PM ET, with Fed Chairman Jerome Powell’s press conference at 2:30 PM ET. Saxo Bank writes in its latest report Investor note“The Fed is widely expected to cut interest rates by 25 basis points this week, reducing the target range for the federal funds rate to 4.25-4.50%.”
According to futures data, there is a 95% probability of the move, which comes on the heels of a similar cut in November. While the rate cut appears to be priced in, the market will scrutinize the Fed’s Summary of Economic Projections (SEP) and its “dot chart,” which depicts the expected path of interest rates for 2025 and beyond.
Any sign that the Fed may limit the pace of future cuts — especially if it revises its dot plan from four interest rate cuts in 2025 to three or even two — could impact riskier assets like bitcoin and cryptocurrencies. Many analysts point to the softening labor market and easing housing inflation, as evidenced by slower rental price growth, as key justifications for additional interest rate cuts.
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However, the Fed may take a more cautious stance and highlight so-called “Trump inflation” risks, citing the possibility of renewed trade tariffs under the incoming Trump administration that could lead to higher inflation. If these inflationary risks persist, the Fed may pause or reduce the pace of cuts in 2025, which could be seen as a hawkish development.
The new dot plot for 2025 is currently expected to show around 3.625% – a key assumption of three interest rate cuts next year – but the market has forecast that this could move to 3.875% if the Fed becomes more dovish. The immediate reaction in Bitcoin will likely depend on the tone of the meeting, with a less dovish Fed likely to introduce volatility into Bitcoin price action.
#2 Phantom (FTM)
Fantom is entering a new era with the launch of the upcoming Sonic L1 mainnet, a transformative upgrade that will dramatically improve network throughput and cost efficiency. Fantom developers have highlighted that Sonic is capable of processing approximately 10,000 transactions per second, with near-instant finality – a notable leap from the current network’s capabilities.
Planned modifications are also set to reduce operational expenses, with a 66% reduction in verification node costs and reduced storage requirements. Another important detail is Fantom’s decision to maintain compatibility with the Ethereum Virtual Machine, which should make it easier for EVM-based applications to move to the upgraded chain without modifying their underlying code.
Sonic will also launch a new token, referred to as S, which will replace the current FTM token at a one-to-one ratio.
“I shared this x subs setup last week, but the FTM is getting close to breaking the price discovery,” said crypto trader Jacob Canfield via Good with SONIC launch.
#3 Avalanche (AVAX)
Avalanche will be another focal point in the cryptocurrency industry, as the Avalanche9000 upgrade is scheduled to go live on the mainnet today, on December 16. This comes after the testnet debuted on the Fuji Testnet on November 25.
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Avalanche’s core developers have described the upcoming mainnet launch as the most important upgrade in the series’ history. Adding to the hype, Avalanche announced on December 12 a $250 million private token sale led by Galaxy Digital, Dragonfly, and ParaFi Capital, with more than 40 other entities participating.
According to official data, this fundraising round bolsters Avalanche’s treasury, which is already worth around $3 billion in AVAX tokens, and comes on the back of a previous token sale worth $230 million in 2021.
Avalanche9000 includes the Etna upgrade and key community proposals ACP-77 and ACP-125, reimagining how Avalanche subnets work – now referred to as Layer 1. In doing so, Avalanche moves from an expensive verification system that requires 2,000 AVAX per instance to A more subscription-like model charges 1.33 AVAX per month. The upgrade also focuses on cross-chain communication, enabling more complex communications between chains within the broader Avalanche ecosystem.
#4 Stacks (STX)
Stacks is another name to keep on the radar as it prepares to launch sBTC on Tuesday, December 17, at 11:00 AM ET. This new BTC-backed asset is designed to bring Bitcoin liquidity directly into the DeFi space on Stacks, providing a rewards program that is significantly free of staking requirements.
According to the person responsible for the project advertisementThe sBTC Rewards Program provides a 5% annual Bitcoin bonus, paid in bi-weekly installments, and distribution is made in actual Bitcoin, not third-party tokens.
The first phase of the program, starting on December 17, will focus on deposit functionality and accumulating instant rewards for sBTC holders. The second phase, currently planned for March 2025, is expected to include more advanced DeFi capabilities and reward structures, thus expanding the utility of sBTC.
#5 Zero Layer (ZRO)
LayerZero completes our Watch List of the Week with a significant governance milestone. On December 20, 2024, at 00:00 UTC, ZRO token holders will participate in the network’s first-ever toll switch referendum, a vote that could activate the protocol’s fee on every LayerZero message.
the Referendum It’s pretty straightforward, asking the only question, “Do you want to turn on the graphics switch?” A majority vote of “yes”, assuming a quorum is met, would impose a fee consistent with the underlying DVN and port costs per message, effectively doubling the cost of each on-chain transmission.
The collected fees will then be used to buy back and burn the ZRO, potentially reducing the circulating supply and impacting the economics of the token. ZRO balances across Ethereum, Optimism, Base, Polygon, Avalanche, BNB Chain, and Arbitrum are factored into each holder’s voting power, and are seamlessly integrated through LayerZero’s lzRead feature.
The referendum will last seven days, ending on December 27, 2024. A quorum of 60% of the rolling supply is required for the vote to be valid; If this limit is not met, the default result will be “No”. If the referendum is approved, protocol fees would go into effect immediately, potentially changing the dynamics of how developers and users manage cross-chain communications.
This governance mechanism is scheduled to recur every six months, although quorum requirements will be reduced by 5% each time if they are not met, down to a minimum of 20%.
At press time, Bitcoin was trading at $104,748.
Featured image created with DALL.E, a chart from TradingView.com
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