Welcome to the institutional newsletter, Crypto Long & Short. This week:
- Analysis on the upcoming developments in stablecoins (hint: it’s not just another USD token) by Martin Bruncko from Schuman Financial
- A market assessment of the crypto selloff post-holidays, the anticipated Fusaka upgrade, and the vital role of ETH in any potential market recovery by Andy Baehr
- Essential headlines for institutions to follow by Francisco Memoria
- “Hyperliquid Weekly Volumes v/s HYPE/BTC” featured in the Chart of the Week
Expert Insights
Don’t Dismiss Euro Stablecoins Just Yet
– By Martin Bruncko, CEO & co-founder, Schuman Financial
The landscape of stablecoins is predominantly dollar-centric. USDT, USDC, and other USD tokens make up around 99% of a $300+ billion market. Euro stablecoins, totaling approximately $600 million, seem trivial, especially when Europe’s focus leans more towards CBDC than privately issued euro stablecoins.
Yet, current figures might be deceiving. Stablecoins have already settled substantial economic transactions at scale. In 2024, they processed around $28 trillion, exceeding the combined totals of Visa and Mastercard. This indicates a developing parallel settlement system functioning at a systemic level.
For Europe, the challenge is that most of this activity is dollar-denominated rather than euro-based. Euro stablecoins aren’t limited because the euro is irrelevant; they’re limited due to Europe’s inability to integrate its currency with existing operational infrastructure, even as tokenized finance continues to evolve irreversibly.
Old payment systems still depend on lengthy cut-off times and reconciliation processes. Meanwhile, a new ecosystem is emerging where assets and payments can settle directly on-chain. Stablecoins are becoming vital foundational infrastructure for financial services. Standard Chartered forecasts a $30 trillion market in tokenized real-world assets by 2034; Citigroup estimates up to $5 trillion in tokenized digital securities by 2030, with tokenized assets potentially reaching 10% of global GDP. None of this will function without on-chain fiat; given the eurozone’s $16 trillion economy, its role is essential.
Assuming we acknowledge two straightforward points: 1. the euro will remain, and 2. Europe will not dollarize, a globally important euro stablecoin becomes a clear possibility. The euro economy is vast. In 2023, the Eurosystem’s T2 platform managed around €2.2 trillion daily. According to the Bank for International Settlements (BIS), global FX turnover averaged $9.6 trillion daily in April 2025, with the USD involved in about 89% of trades; the euro ranked as the second-most traded currency globally. If merely 0.1% of euro transactions migrate on-chain, that could mean €2.2 billion in daily settlements, totaling over €800 billion annually—sufficient to sustain a euro stablecoin ecosystem worth hundreds of billions.
For investors and policymakers, the central inquiry isn’t whether euro stablecoins will triumph absolutely, but rather how to craft a combination of on-chain euro products that optimally balances innovation with financial stability.
Dollar stablecoins enjoyed a decade-long lead. Now, Europe is catching up. The next significant advancement in the space won’t be another USD token, but a viable, scalable euro stablecoin designed to reflect the scale of Europe’s economy and issued privately.
Headlines of the Week
– By Francisco Rodrigues
This week’s news indicates a growing institutional confidence, as savvy investors prepare for the long term despite short-lived volatility. Japan and the Fed are signaling that volatility is likely to persist in the near term.
Vibe Check
Sunday Dread, Wednesday Upgrade
– By Andy Baehr, CFA, head of product and research, CoinDesk Indices
Following a thankfully calm long Thanksgiving weekend, crypto markets were jolted by a wave of Sunday dread. Bitcoin dropped 5% in mere hours, ether fell 7%, and $200 billion in recently reclaimed market capitalization disappeared. The cheerful optimism from my crypto week-in-review podcast playlist evaporated swiftly.
“…at least we could enjoy the long weekend.”
The downturn persisted on Monday, with another drop pushing bitcoin down to around $84,000 and ether to $2,700. By the 4pm close, CoinDesk 20 Index fell 8.15% to 2695.59 within 24 hours. If we thought we escaped the downturn, we were mistaken.
ETH is Significant
Back in April, as tariff anxieties settled, we remarked “W(h)ither ETH?” calling for an ETH-driven rally to counter bitcoin’s prevailing narrative and provide space for the broader asset class. By July 20, when we published “Ether Real,” our desires manifested. ETH’s surge was so robust that it temporarily outweighed bitcoin in the CoinDesk 20, driven by optimism around stablecoins and tokenization following the passage of the Genius Act.
We maintain that a comprehensive digital asset rally cannot occur without ETH’s involvement — if not leading the charge.
This leads us to Wednesday’s Fusaka upgrade — “Fusaka” blending Fulu (a star) and Osaka (the earthly host city) — Ethereum’s second significant hard fork of 2025. While traders panicked over Sunday’s downturn, Ethereum developers finalized what Fidelity Digital Assets deems “arguably the most significant upgrade in years.”
Importance of Fusaka
Fusaka marks a key inflection point — the first Ethereum enhancement prompted by specific economic objectives rather than assorted technical desires. As Consensys highlighted recently, this upgrade offers “some of the most considerable scaling improvements since the Merge” through backend enhancements rather than eye-catching user experience upgrades.
The highlight is PeerDAS (Peer Data Availability Sampling), allowing nodes to verify blocks without needing to download all data. This democratizes the validation process and makes a proposed tenfold increase in blob capacity practical, substantially boosting Layer 2 throughput. The mainnet gas limit also rises to 60 million units, enhancing capacity for direct Layer 1 transactions.
The strategic adjustment towards Layer 1 value capture is paramount. Increased mainnet activity directly augments revenue for Ethereum’s base layer via two main avenues: higher rewards to validators driven by increased transaction fees and MEV, as well as deflationary pressure from EIP-1559’s fee burn. More activity results in more ETH being burned, simulating a “share buyback-like” boost to the token’s value while simultaneously enhancing staking returns.
CESR, the composite ether staking rate, is set to improve with Fusaka
Quick Money vs. Steady Investments
As lethargy in bitcoin, doubts about DAT, liquidity challenges, and retail stagnation haunt fast money, the determined progress of Fusaka may help ETH assert leadership again. The steady advancement of Ethereum development continues regardless of market fluctuations. Consensys highlights that developers are now aiming for an “accelerated semi-annual schedule” of hard forks, maintaining momentum on Ethereum’s roadmap phase known as The Surge.
While Sunday’s selloff stole the spotlight, Wednesday’s upgrade might prove even more significant.
Chart of the Week
Hyperliquid Weekly Volumes v/s HYPE/BTC
Despite a clear decreasing trend in Hyperliquid’s Weekly Volumes since October 2025—attributed to rising competition from platforms like Lighter and Paradex and a general market slowdown—the HYPE/BTC ratio has shown divergence, maintaining a stable or positive trend. This indicates that HYPE has exhibited favorable price movements relative to Bitcoin in comparison to most altcoins, even absorbing recent token unlock events. Assuming the HYPE/BTC ratio maintains its current strength, any future improvement in platform fundamentals (weekly volumes) would foster a favorable technical backdrop for HYPE token price movements.
Listen. Read. Watch. Engage.
Looking for more? Get the latest crypto updates from coindesk.com and market insights from coindesk.com/indices.
