The total market capitalization for cryptocurrency has climbed above $3 trillion.
However, this rebound “reflects exhaustion” and not a reinvigorated conviction in the crypto space, CoinDesk reported Tuesday (Dec. 23). Bitcoin is down more than 22% in the fourth quarter, which makes this one of the weakest closing quarters for the crypto market outside of major downturns.
The market’s recent strength is mostly technical and fueled by a low base following weeks of selling, FxPro Chief Market Analyst Alex Kuptsikevich said, according to the report.
“The crypto market is making a new attempt at growth, but this is not yet a recovery,” Kuptsikevich said, per the report, adding that there has only been a moderate improvement in sentiment.
The crypto market’s fear and greed index has risen to 25, a sign that traders may be moving away from extreme pessimism, yet still not embracing risk, the report said. While bitcoin was trading at close to $88,000 in Asia Tuesday, Kuptsikevich cautioned that short-term momentum could be misleading. Bitcoin is still 30% below its peak from this year, trading at levels seen at the beginning of 2025.
“Attempts to bring year-to-date performance back to zero are little consolation,” Kuptsikevich said, per the report, adding that disappointment has supplanted the optimistic mood of earlier in the year.
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Meanwhile, stablecoins evolved this year as the economy surrounding these digital assets became “increasingly real, increasingly regulated and increasingly institutional,” PYMNTS reported last week.
That reality was illustrated by a series of developments from the sector, such as SoFi’s unveiling of an enterprise stablecoin and Coinbase’s rollout of a white-label stablecoin issuance product designed for corporations and banks.
The Federal Deposit Insurance Corp. undertook new rulemaking, an indication of a new era of regulatory clarity. PayPal introduced stablecoin financial tooling designed for artificial intelligence-native businesses, while Visa expanded its stablecoin settlement capabilities in the United States.
“Looming over it all, JPMorgan poured a bucket of cold water on market hype, stating it does not foresee a trillion-dollar stablecoin market any time soon,” PYMNTS wrote. “The banking giant, for its own part, likely prefers tokenized deposits to stablecoins.”
