The Daily: JPMorgan says Strategy is key to bitcoin's next move, IMF warns stablecoins may weaken central bank control, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Friday! The crypto market looks shaky but still intact, BRN analysts told The Block, amid a softer macro tone.

In today's newsletter, JPMorgan says Strategy is key to bitcoin's next move, the IMF warns stablecoins may weaken central bank control, spot Bitcoin ETFs see their largest daily outflow in two weeks, and more.

Meanwhile, the Coinbase-incubated Ethereum Layer 2 Base network rolls out a bridge to Solana.

P.S. Don't forget to check out The Funding, a biweekly rundown of crypto VC trends. It's a great read — and just like The Daily, it's free to subscribe!

JPMorgan says Strategy's resilience is key to bitcoin's price direction in the near term

JPMorgan analysts said Strategy's ability to keep its enterprise-value-to-bitcoin ratio above 1 and avoid selling BTC is the key driver of the cryptocurrency's next move.

• The bank argued that matters more than miner stress, even as falling hashrate, tougher economics, and China's renewed crackdown squeeze high-cost miners into selling bitcoin.
• The analysts said their estimated modelled bitcoin production cost has dropped to $90,000, noting sub-production trading continues to pressure miners and shape market sentiment.
• JPMorgan highlighted Strategy's new $1.44 billion cash reserve as a buffer that lowers forced-sale risk and stabilizes bitcoin's near-term outlook.
• The bank said MSCI index exclusion risk is largely priced in after Strategy's 40% slide since October, with downside limited unless bitcoin stays below production cost for an extended period.
• A positive MSCI decision or steadier conditions could spark a strong rebound toward pre-Oct. 10 levels, the analysts concluded, with JPMorgan's volatility-adjusted comparison to gold still pointing to a theoretical bitcoin price of $170,000 within six to 12 months.
• Meanwhile, Strive urged MSCI to "let the market decide" on bitcoin treasury companies.

IMF warns stablecoins may accelerate currency substitution, weaken central bank control

The International Monetary Fund warned that dollar-backed stablecoins could accelerate currency substitution in weak monetary systems, undermining central banks' control over capital flows.

• It said USDT and USDC's explosive growth — now a combined $260 billion — heightens risks in high-inflation and low-trust economies where households may favor dollar stablecoins over local currencies.
• The IMF also cautioned that inconsistent global rules invite regulatory arbitrage, while runs, illicit flows, and degraded macro data remain core systemic threats.
• Despite the risks, the IMF says stablecoins are here to stay and could expand financial access if strong, coordinated international regulation prevents fragmentation.

Spot Bitcoin ETFs see $195 million exit, largest daily outflow in 2 weeks

U.S. spot Bitcoin ETFs logged $194.6 million in net outflows on Thursday — the largest in two weeks — with BlackRock's IBIT and Fidelity's FBTC leading the withdrawals.

• Analysts said the selling stems from basis-trade unwinds as the futures–spot spread slipped below breakeven, forcing arbitrage desks to exit positions amid heightened volatility.
• Traders are now closely monitoring the Federal Reserve's upcoming Dec. 10 rate decision, with expectations of a 25-basis-point cut potentially stabilizing sentiment if it signals further easing, they added.
• Meanwhile, spot Ethereum ETFs also swung negative with $41.6 million in net outflows, reversing the prior day's strong inflows and adding to broader risk-off flows across crypto ETFs.

Italy warns crypto firms to meet year-end MiCA deadline or shut down

Italy's financial regulator, Consob, warned crypto firms to meet its Dec. 30 MiCA compliance deadline, saying VASPs must apply for CASP licensing in Italy or another EU member state or prepare to shut down operations.

• Under the transition rules, firms that apply before the deadline may continue to operate until a decision is made, but no later than June 30, 2026.
• Consob said VASPs that do not seek MiCA authorization must cease business in Italy by the end of the year, terminate existing contracts, and return client assets.
• Separately, Italy's macroprudential committee flagged rising crypto-related risks as interconnections with the financial system deepen and global regulation remains uneven.

International operation busts crypto fraud network that laundered more than $815 million

Europol supported a two-phase international operation that dismantled a fraud network that laundered more than €700 million ($815 million) through fake crypto investment platforms and social engineering call center scams, moving victims' funds across multiple blockchains and exchanges.

• Authorities arrested nine suspects across Cyprus, Germany, and Spain in the first phase, seizing bank funds, crypto, and cash, along with devices and high-value watches.
• A second wave of raids targeted the network's affiliate marketing arm, which used deepfake ads impersonating celebrities and media outlets to funnel victims into the schemes, striking at the broader infrastructure behind the operation.

Looking ahead to next week

• The U.S. Federal Reserve's latest interest rate decision is due on Wednesday. U.S. jobless claims figures are out on Thursday. UK GBP numbers are released on Friday.
• ECB President Christine Lagarde will speak on Wednesday, followed by the U.S. FOMC press conference. Bank of England Governor Andrew Bailey speaks on Thursday.
• Euler, Axie Infinity, Linea, Aptos, and Wormhole are among the crypto projects set for token unlocks.
• Bitcoin MENA and Solana Breakpoint kick off in Abu Dhabi.

Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.