Government action, including the shutdown and a welcome IRS decision, along with market analysis and stablecoin talk, dominated Web3 minds this week.
Growing Ethereum stablecoin volume a good sign
“While we continue to see some negative sentiment around ETH due to its decline from nearly $5,000 towards the end of August to just $3,559 on Nov 11, the fundamentals of Ethereum have never looked stronger, which is being driven by massive growth in stablecoins.
“According to DeFi Llama, the total value locked in stablecoin RWA protocols on Ethereum grew from $133.8 billion at the beginning of August to over $167.5 billion on Nov 11. This compares to a decline in total crypto market cap from around $3.85 trillion to $3.67 trillion over the same period.
“Ethereum stablecoin volume hit a record $2.8 trillion in October as the broader market slowdown seems to have driven traders to seek further yield opportunities through stablecoins on Ethereum-based DeFi protocols.”
“More importantly, though – and as observed by Wall Street heavy hitters like Nick Ruck, director at LVRG Research, and BitMine’s Tom Lee – Ethereum is emerging as Wall Street’s favourite blockchain thanks to the potential for stablecoins as a ‘viral’ use case for payments. Indeed, Lee is even calling for ETH at $15k by December.”
“That may be on the wilder end of the spectrum when it comes to predictions, but nonetheless, we continue to see nothing but support for the long-term future of both Ethereum and ETH, all driven by the exponential growth of stablecoins.”
– Kevin Rusher, founder of RAAC
“What we’re witnessing is the modernization of financial plumbing in real time. Liquidity is no longer content to sit in static bank accounts or centralized exchanges; it’s moving into programmable, transparent, and composable systems that run 24/7 on-chain.”
Ethereum has effectively become the clearinghouse for this new economy. Stablecoins are its cash layer, the base money of a digital financial system that operates without borders. The more velocity and issuance you see, the more you realize that the chain itself has become the trust layer. Settlement, lending, trading, and payments are converging around a shared infrastructure that is neutral, open, and auditable by design.”
“The implications are massive. We’re not just watching DeFi grow; we’re watching the early architecture of a global operating system for money and credit. The rails are being rebuilt in public, and stablecoins are the first proof that the experiment is working.”
– Sid Sridhar, founder and CEO of BIMA Labs
“Ethereum’s stablecoin scene went kind of wild last month; on-chain volumes hit an all-time high around $2.8 trillion, with USDC and USDT doing most of the heavy lifting. That demonstrates the extent to which traders and protocols are actively cycling liquidity through DeFi, farming yields, and managing exposure while waiting for market clarity.”
“It’s a strong signal that stablecoins have become the bloodstream of Ethereum finance, the quiet infrastructure making everything else possible, from DEX swaps to real-world asset flows. Basically, this kind of volume says capital wants to move, but it also wants flexibility and safety while doing so.”
“And that’s where permissionless margin trading and lending for any token starts to make real sense. If you’ve got trillions moving in stablecoins every month, the logical next step is letting that liquidity work harder, not just sit there. Allowing anyone to lend, borrow, or take leveraged positions across any token pair unlocks a deeper layer of capital efficiency, especially when it’s automated or AI-driven.”
“The traders holding all that USDC want optionality; permissionless protocols give them that without gatekeepers. It’s riskier, sure, but it’s also the kind of frontier that pushes DeFi forward, from passive capital to active intelligence.”
– Sky, founder of LIKWID
“I have enough time in crypto to remember when stablecoins were just a dream, a thought experiment on Bitcointalk. That dream is now a full-scale reality. What’s remarkable is that Ethereum, which many once saw as the antithesis of Bitcoin, has become the delivery vehicle for Bitcoin’s original promise: internet-based money.”
“Stablecoins have effectively completed the money PMF of Bitcoin — they are the connective tissue between crypto and the global economy — while Bitcoin itself has evolved into the world’s most liquid store of value. This dynamic says something profound: open, composable systems like Ethereum tend to out-innovate static ones, even when helping to fulfill the original vision of their predecessors.”
– Dylan Dewdney, co-founder and CEO of Kuvi.ai
“The recent surge in stable-coin issuance and trading on the Ethereum network is highly significant. According to multiple data-sources, monthly transaction volume of stablecoins on Ethereum reached approximately US$2.82 trillion in October, up roughly 45% from the previous record of about US$1.94 trillion in September. We’re seeing stable-coins being used as foundational liquidity rails, hedging instruments, and settlement mechanisms rather than merely as speculative proxies.
“In parallel with this volume growth, it becomes clearer that blockchain-infrastructure is poised to redefine consumer finance, particularly via on-chain identity and decentralized payments. When you have massive stable-coin flows on a chain like Ethereum, you create the conditions for real-time settlement, global access, and programmability of money. Embedding verified on-chain identity layers (for example via decentralized identifiers, KYC modules or private identity schemes) allows users to transact seamlessly, borrow, lend or make payments with far fewer intermediaries.
“Moreover, decentralized payments infrastructure means tokens can move 24/7, cross-border, and with programmable hooks (think automatic repayments, escrow, credit scoring). In that sense, the stable-coin boom provides the “liquid plumbing” upon which a next-gen consumer finance system can be built.”
– Mori Xu, co-founder of Tabi Chain
What the shutdown means for Web3
“Markets are hanging by a thread as the House prepares for a vote to end the longest US government shutdown in history. Looking at the charts, the nervousness is palpable, and that’s because once government workers return, this opens the floodgates to a backlog of economic data that will show exactly how the economy is holding up – and how much damage the shutdown has caused.”
“Over the past month, we’ve seen the US dollar and gold firming, and 10-year Treasury yields have held above 4%, amid fears that rates will stay higher for longer. This is hardly the environment for high-risk assets to fly. However, the tech-heavy Nasdaq has continued to advance, buoyed by strong earnings from big tech and AI names like Apple, Microsoft and AMD.”
“Digital assets, however, have had no such luck. The crypto market has been struggling to regain momentum since October’s pandemonium, and Bitcoin appears to be fighting one battle after another, dragged down by US dollar strength and higher Treasury yields, long-term holders selling, and macro uncertainty.”
“It’s unsettling to see crypto and tech stocks diverging when they typically move in lockstep. This dynamic shows that Bitcoin isn’t just a proxy for the Nasdaq. It’s more sensitive to macro headwinds and liquidity concerns, but it is also perfectly positioned to break out once those concerns dissipate.”
“As the US re-opens and data starts flooding back in, we may see the BTC price wobble over the coming weeks. But Bitcoin has defended the $100,000 threshold twice already this month, and it will do so again. The real test will be the FOMC’s interest rate decision on December 10, but it remains likely that the news will be positive, which could set the stage for a Santa rally in crypto and other risk assets.”
“It (also) appears the government shutdown has created a black hole in the flow of federal data that may never get repaired.”
“This is the worst outcome from the point of view of policymakers – it’s tantamount to walking a tightrope with a blindfold on. So it’s no wonder we’ve seen the odds of a December rate cut fall sharply, with just over half of market participants expecting lower rates come Dec. 10, according to the CME’s FedWatch tool.”
“Without a clear indication of how the economy is doing, investors may jump to worst-case scenarios. So, as the most uncertain FOMC meeting of the year looms, we could see a further flight to safety and defensive assets.”
“Traders would do well to stay on their toes in the next few weeks, especially if they’re allocating to high-risk assets like Bitcoin.”
– Nic Puckrin, crypto analyst and co-founder of The Coin Bureau
“The end of the longest U.S. government shutdown finally takes a bit of fear out of the market. When D.C. stops tripping over itself, people start feeling braver about taking risk again, and that usually gives Bitcoin and other high-volatility assets some breathing room.
“However, the crypto fear and greed index is today at 24 (extreme fear), so we won’t be expecting substantial price recoveries overnight. What happens next depends on how fast people can actually move capital. From my vantage point that’s where permissionless margin trading and lending for any token really matters, no approvals, no middlemen, just quick reactions when the market shifts.”
– Sky, founder of LIKWID
“Markets are breathing a sigh of relief, but what’s really happening is a repricing of uncertainty. The end of the shutdown doesn’t erase the underlying fiscal dysfunction; it just delays it. High-risk assets like Bitcoin often perform best in periods when confidence in traditional governance starts to fray. Every time the political system stumbles, decentralized systems gain a little more legitimacy.”
“Bitcoin today isn’t just a speculative hedge. It’s evolving into an alternative liquidity network that exists entirely outside political cycles and bureaucratic risk. Investors are beginning to see it as an escape valve, a way to hold an asset that continues to function when traditional systems falter. The shutdown may be over, but the broader structural issues that make Bitcoin attractive as a parallel financial system are still very much alive.”
– Sid Sridhar, founder and CEO of BIMA Labs
“The end of a historic government shutdown doesn’t just flip a switch and return markets to normal. The uncertainty lingers, and for high-risk assets like Bitcoin, that environment can actually be bullish. When trust in institutions falters, even temporarily, people look to decentralized systems. We’ve seen that repeatedly over the past decade.”
“Bitcoin and broader on-chain ecosystems act like a pressure valve for economic anxiety. But let’s be clear: short-term volatility will remain. Traders will react to rate signals, liquidity flows, and political noise. What matters more is the long-term shift we’re seeing—more professionals, builders, and institutions entering the space not just for speculation, but to hedge against exactly this kind of systemic instability.”
“At Bondex, we’re watching how talent moves in and out of markets like these. And the trend is clear: periods of institutional dysfunction only accelerate the move toward decentralized platforms for work, capital, and identity.”
– Ignacio Palomera, CEO of Bondex
The increasing correlation between DeFi and TradFi
“Gold’s latest rally underlines its continued strength as a cornerstone asset as global market sentiment shifts. As investors look for resilience and diversification, gold’s long history and enduring appeal continue to shine through.
“At the same time, the tokenization of real-world assets is accelerating – from currencies and treasuries to these long held commodities such as gold. This evolution is reshaping how investors interact with these markets, opening new avenues to better bridge the gap between physical and digital markets.
“As the worlds of traditional and digital finance continue to converge, we will see investors increasingly seek out secure ways to hold and benefit from assets like gold – combining the security of a proven store of value with the accessibility provided by modern financial infrastructure.”
– Björn Schmidtke, CEO of Aurelion
IRS removes major staking barrier
“Today, the IRS released guidance giving crypto ETPs a clear path to stake digital assets and share staking rewards with their retail investors. This is another meaningful step toward a coherent digital asset policy framework in the United States.”
“It builds on the SEC’s recent staking guidance and removes a major barrier that prevented institutions from participating in staking. It also shows that Treasury is delivering on key areas of focus outlined in the President’s Working Group Report.”
“This guidance affirms what the market already knows: staking is here to stay, and thoughtful policy can ensure it thrives responsibly in the United States.”
– Alison Mangiero, senior director, staking policy and industry affairs, Crypto Council for Innovation