December 9, 2025

🔮 Welcome Home Fusaka, Farcaster Pivot, Prediction Markets Doing What They Do Best, Banks Change Their Stances, Financial Mainstream

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Hyperliquid Holds Steady as Futures Open Interest Drains from CEXs

Open interest on Hyperliquid has remained flat at about $6.4 billion since the October 10 liquidation event, even as broader futures markets have weakened. While Hyperliquid volume fell 22 percent month-over-month in November, total CEX futures volume dropped even more at 27 percent. CEX futures open interest is down roughly 30 percent since the crash, compared to Hyperliquid’s near stability, making its flat OI look more like relative resilience. Analysts point to stronger product stickiness from equity perps and HIP-3, which expanded use cases and trader alignment. Poor sentiment around forced auto-deleveraging on some CEXs may have also pushed more capital away from centralized venues than from Hyperliquid.

Source: Hyperliquid, The Block

Ethereum Activates Fusaka Upgrade to Boost L2 Scalability and Fee Predictability

Ethereum has activated its 17th major upgrade, Fusaka, launching a new twice-a-year hard fork schedule just seven months after Pectra. The headline feature, PeerDAS, increases blob capacity and lowers bandwidth demand for Layer 2 networks without weakening security. The upgrade also introduces new pricing rules with minimum fees and surge pricing to make L2 costs more predictable and stabilize ETH burns. Additional backend improvements include a higher gas limit cap, support for device-native passkeys, and a new opcode to improve zero-knowledge performance and prepare for future security risks. Developers are now shifting focus toward the next major upgrade, Glamsterdam, expected in 2026.

Source: Dune

Ethena Hits Institutional Milestones as USDe Faces Its Toughest Drawdown

Ethena made major institutional gains this week with Europe’s first physically backed Ethena ETP launch and expanded bank-grade custody through Anchorage Digital. These moves signal growing legitimacy, but they come as USDe supply fell 24 percent in November amid collapsing funding rates that crushed yields and unwound leveraged DeFi strategies. More than $2 billion in redemptions followed as APYs dropped below borrowing costs, shrinking the system nearly in half from its peak. Regulatory pressure in Europe and a shift toward safer fiat-backed stablecoins added to the risk-off mood. Ethena now faces a defining transition from degen-driven yield growth to a more regulated, institution-first model.

BlackRock Pushes BUIDL Beyond Ethereum with Major BNB Chain Expansion

BlackRock has rapidly expanded its BUIDL tokenized Treasury fund from Ethereum to multiple chains, including Solana, Arbitrum, Polygon, and most notably BNB Chain. The BNB integration, built with Securitize and Wormhole, introduces a new BUIDL share class and allows the fund to be used as off-exchange collateral for institutional trading. More than $500 million in BUIDL has already moved to BNB, making it the second-largest chain for the product after Ethereum. Ethereum’s share of BUIDL supply has fallen sharply from 87 percent in mid-October to just 28 percent today. The shift signals that real world assets are increasingly migrating to faster, lower-fee chains built for high-frequency DeFi activity.

Source: Dune

Farcaster Pivots Away From Social Network Toward Wallet-First Strategy

Farcaster is moving away from its original Twitter-like social network after co-founder Dan Romero said the team failed to find a sustainable growth model after nearly five years. Instead, the project is doubling down on its rapidly growing in-app wallet, which Romero says is the closest the company has come to product-market fit. The shift follows Farcaster’s recent acquisition of the AI-driven token launchpad Clanker and deeper onchain tool integrations. The new strategy flips the original approach by adding social features to a growing wallet rather than trying to attach a wallet to a stagnant social feed. Similar social-first crypto projects like Steemit and BitClout followed comparable paths with limited long-term success. Farcaster will now test whether practical onchain tools can succeed where social incentives alone fell short.

Regulation

Prediction Markets Capture Record Share of Crypto Trading Activity

Prediction market volume has reached a record 0.57 percent of total crypto spot trading as of November 2025, up sharply from just 0.1 percent four months ago. Kalshi and Polymarket each posted over $9 billion in monthly volume, more than quadrupling their August levels. Over the same period, crypto spot exchange volume fell about 15 percent, amplifying the relative shift. The ratio also far exceeds the 0.24 percent peak seen during the 2024 U.S. election cycle. The data suggests prediction markets are now becoming a persistent speculative sector rather than a one-off political trade.

Source: Kalshi, The Block

UK Creates New Legal Property Class for Digital Assets

The UK has formally recognized digital assets as a third category of property after the Property (Digital Assets etc) Act 2025 received Royal Assent. The law confirms that assets like bitcoin and stablecoins carry enforceable property rights separate from physical goods or contractual claims. Crypto advocates called it one of the most significant updates to English property law in centuries. Industry groups say the change will strengthen legal processes for ownership disputes, asset recovery, insolvency, and estates. The reform follows a 2023 Law Commission recommendation and codifies what courts had already been doing on a case-by-case basis.

JPMorgan Says Strategy’s BTC Flywheel Will Drive Bitcoin’s Next Move

JPMorgan says Strategy’s ability to keep its enterprise-value-to-bitcoin ratio above 1 and avoid selling BTC is now the key driver of Bitcoin’s near-term direction. The bank argues this matters more than miner stress, even as falling hashrate and rising costs pressure miners to sell. Bitcoin’s estimated production cost has dropped to about $90,000, keeping market sentiment fragile while prices trade below that level. Strategy’s $1.44 billion cash reserve reduces the risk of forced BTC sales and helps stabilize the outlook. JPMorgan adds that a positive MSCI decision or steadier conditions could spark a rebound, with its long-term model still pointing to a potential $170,000 Bitcoin within a year.

Armstrong and Fink Say Crypto Has Entered the Financial Mainstream

Coinbase CEO Brian Armstrong and BlackRock CEO Larry Fink said at the DealBook Summit that rising institutional interest and new legislation are pulling crypto into the heart of global finance. Armstrong called 2025 the year crypto moved from a gray market into a fully established regulatory framework, citing the passage of stablecoin and market-structure bills. He also criticized prior U.S. policy for pushing crypto activity offshore and said political support from groups like Fairshake reflects growing voter demand for clear rules. Fink said his view on Bitcoin has evolved after years of client discussions, now seeing it as a legitimate use case and a hedge in times of fear. Both leaders predict that banks will ultimately embrace stablecoins rather than fight them, as competition forces higher yields and better products.

BlackRock Files for Staked Ethereum ETF to Add Yield to ETH Exposure

BlackRock has filed an S-1 with the SEC for ETHB, a new staked Ethereum trust ETF that would track ETH’s price while adding staking rewards. The filing follows the recent formation of a Delaware trust and comes after earlier attempts to add staking to BlackRock’s existing spot ETH ETF, ETHA. ETHA remains the dominant Ethereum ETF with over $11 billion in assets, far ahead of rivals like Grayscale. Other staking ETFs have launched since October but have not dented BlackRock’s lead. If approved, ETHB would trade on Nasdaq alongside BlackRock’s other crypto ETFs.

Other Domestic Regulation Updates

Other International Regulation Updates

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This reflects the views MJL Capital LLC (“MJL”), but it should in no way be construed to represent financial or investment advice. Nothing in this correspondence is intended to constitute or form part of, and should not be construed as, an issue for sale or subscription of, or solicitation of any offer or invitation to subscribe for, underwrite, or otherwise acquire or dispose of any security, including any interest in any private investment fund managed by MJL. Any such offer may only be made pursuant to a formal confidential private placement memorandum of any such fund, which may be furnished to potential investors upon request and which will contain important information to be considered in connection with any such investment, including risk factors associated with making any investment in any such fund. Further, nothing in this correspondence is, or is intended to be treated as, investment or tax advice. Each recipient should consult their own legal, tax and other professional advisors in connection with investment decisions.

Domenic Salvo

Domenic Salvo is a Managing Partner at MJL Capital, helping lead Portfolio Research and Investor Relations.

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