Risk back on the table as crypto ETFs bounce back

Source: Blockworks Original Title: Risk back on the table as crypto ETFs bounce back Original Link: https://blockworks.co/news/risk-back-on-table

Market Overview

BTC bounced off $85,000 lows and recovered to $92,000. Over the past three weeks, BTC has increased 5%, with significant volatility throughout. Notably, BTC has been underperforming during the EU session, while outperforming in US and APAC sessions.

Sector Performance

Over the past week, oracles, lending, and Ethereum ecosystem tokens performed well, each up just over 4%. Crypto equities led with 6.7% gains, primarily driven by HOOD outperformance.

Traditional markets continued their upward grind with Nasdaq 100 (+1.70%) and S&P 500 (+0.78%), while Gold underperformed (-0.85%).

Gaming tokens significantly underperformed with -23% returns over the past week, with LGCT declining -75%.

Macroeconomic Context

Odds on prediction markets (78% on Kalshi) suggest Kevin Hassett will be nominated as the next Federal Reserve Chair. Hassett’s alignment with lower interest rate policies could have significant implications for risk asset valuations.

ETF Flow Reversal

Bitcoin ETF flows reversed sharply in November following steady inflows from May through October. The month recorded roughly $3.46 billion in redemptions, erasing the $3.42 billion in new inflows from October and marking the worst outflows since February 2025 ($3.56 billion).

The positive reversal has begun, with the first week of December marking the first positive net inflow week for BTC ETFs since late October, with $70.2 million in net inflows. Ethereum and Solana ETFs showed stronger momentum with $312 million and $108 million in net inflows, respectively.

Network and Application Revenue

Network revenue figures remain stable week-over-week, with Hyperliquid leading at 35% of all network revenues, followed by Tron (20%) and Solana (15%). BNB chain revenue remains at lows following October peaks, with Hyperliquid and Solana capturing the majority of shifted revenue.

Application revenue has halted its decline, reaching $38 million (10% higher than last week) after four weeks of sustained decreases. Hyperliquid continues to dominate (35%), followed by pump.fun (25%) and Axiom (8%).

Solana Governance Update

Helius’ Lostin and Ichigo proposed SIMD411, which aims to accelerate Solana’s emission schedule by doubling the disinflation rate from -15% to -30%, while maintaining the 1.5% terminal inflation. This change would reduce inflation from ~4.14% today to 1.5% in approximately 3.1 years (early 2029), rather than the current 6.2-year timeline (early 2032).

If implemented, SIMD411 would cut 22.3 million SOL ($2.9 billion) in emissions over six years compared to the current inflation path, reducing sell pressure from the “leaky bucket” effect.