Christmas Cheer A-Comin’?

While last Wednesday’s FOMC meeting turned out to be a sell-the-news event, some are interpreting it as bullish in the longer term. Today’s forward guidance argues that the liquidity taps are being turned on and the macro data coming our way this week may be enough to get the market moving up again.

Elsewhere, there’s a broad consensus that prediction markets are going to go stratospheric in 2026 and this crypto niche is definitely one to watch. So today, we take a look at the sector and examine the types of traders who inhabit it. We also reveal some ways in which you can explore the various platforms and track the users there who make some serious money.

🐻 A Bear Speaks Out 🐻

While many are bullish on crypto prices in 2026, there are a few bears lurking out there in the woods as well. One of these is Markus Thielen, the founder and CEO of crypto-native research firm 10x Research.

Over the past year, 10x has had some of the most accurate calls on BTC, ETH and other altcoin rotations. Yet Markus believes that we have definitively entered a bear market, with 2026 set to be a down year.

Nic spoke with Markus recently and they discussed Bitcoin’s recent pullback; the global liquidity “myth”; why alts will continue underperforming and why he thinks 2026 could see Bitcoin falling by 60%.

You can watch that interview here.

📈 Crypto Market Forecast 📈

This year, Fed chairman Jerome Powell decided to be Santa Claus. That’s because last week’s Fed meeting was more dovish than expected, despite what the headlines might have you believe. This is partially because of the Fed’s lower-than-expected inflation expectations for 2026, but mostly because of what the Fed decided to do with its balance sheet.

As you’ve probably heard, the Fed will buy 40 billion dollars of US bonds every month until mid-2026, specifically short term bonds. Officially, this doesn’t count as Quantitative Easing (QE), because QE involves buying longer term bonds with the intention of lowering bond yields, which lowers interest rates by extension. Unofficially, this is an injection of liquidity, full stop.

That’s precisely why the markets rallied so much on the news, particularly risk assets like small cap stocks, with the Russell 2000 (RUT) being on the brink of a massive, multi-year breakout. For those unfamiliar, the RUT has historically been highly correlated to altcoins, and that’s mostly because there’s overlap in the cohorts that buy small cap stocks and altcoins: retail.

This begs the question of whether last week’s market bounce will turn into a rally. The answer largely depends on the macro catalysts coming up this week. That’s because the two most important data prints for November will be coming out: unemployment and inflation. By now you’ll probably know that ideal if the former comes in higher, and the latter comes in lower.

This begs a bigger question, and that’s if this will happen. When it comes to unemployment, Powell revealed that the Fed believes that the employment situation is much worse than the official data suggests, which means a better-than-expected unemployment print may not move the markets as much. This is possible simply because of temporary hiring around the holidays.

Inflation is where things get interesting. Two of the biggest components of inflation are rent and energy costs. Rents in the US have been falling ever since the Trump administration started cracking down on illegal immigration, and recent actions are likely to dampen legal immigration too. At the same time, oil prices have also been falling, and they fell quite sharply in November.

This suggests that inflation is likely to come in lower than expected, but it may not be by much. If you look at US CPI over the last couple of years, you can clearly see that inflation appears to have bottomed around 3%. Thankfully, Powell revealed that the Fed believes most of this overshoot is being caused by tariffs, which will either be struck down or become irrelevant.

Taken together, this means that next week’s macro data is likely to be bullish for the markets. All that’s missing is crypto catalysts that attract attention and investment. As it so happens, recent concerns around companies such as Oracle have reportedly resulted in investors rotating into other sectors. It seems investors believe most of the AI gains have been made for now.

Meanwhile, the crypto industry has started leaning heavily into tokenized assets, with Coinbase expected to make a big announcement about tokenization this Wednesday. Stablecoins are also popping up in the headlines a lot more, with YouTube recently announcing that it will integrate PYUSD payments for content creators. These two crypto sectors seem to be going mainstream.

Logically then, it would be prudent to watch cryptos that are involved in these two niches, as they should benefit the most when the attention and capital comes. For stablecoins, the largest chains are Ethereum, Tron, Solana, BNB, and Base. Given that Tron and BNB will be mostly off limits to onshore investors, this means ETH, SOL, and Coinbase’s stock (until there’s a Base token).

For tokenized assets, Ethereum, BNB, Solana, Arbitrum, and Stellar top the list, at least in terms of distributed (actively tradeable) RWAs. If you sort the list by the total number of RWA holders, you get Plume, Ethereum, Solana, Avalanche and Polygon, and if you sort it by the total value of RWAs regardless of the type, you get Canton, Provenance, Zksync, Avalanche, and Polygon.

In case it wasn’t clear enough, these are cryptos to watch closely in the coming weeks as stablecoins and tokenization continue to enter the spotlight. What will be the specific catalyst, you ask? Easy answer: the passing of the CLARITY Act, which could reportedly come sooner than the markets are currently pricing in. With luck, it will be before the end of 2025.

In sum then, the next week is likely to be mildly bullish for the crypto market due to macro tailwinds and catalysts that are likely to be bullish, and crypto tailwinds and catalysts that are also likely to be bullish. The real fireworks will happen in the two weeks after that, because that’s when the famous Santa rally is technically scheduled to begin. More on that next week!

🤑 Prediction Market Playbook 🤑

Despite broader crypto market volatility, prediction market platforms have been bucking the trend.

Data from Dune shows that weekly transactions on prediction markets have grown from 2.2M in late August to nearly 11.4M as of last week. That’s almost a 5x increase in under five months. Both TVL and notional volumes on these platforms have also seen a sharp increase during the same time frame.

A closer look at the data shows that the majority (nearly 95%) of volume and activity comes from just three platforms - Polymarket, Kalshi and OPINION (BNB-based). While much of this recent growth may be attributed to increasing regulatory certainty for prediction market platforms in the US, we believe it also hints at shifting focus among crypto-native investors. Notably, with traders now bracing for a potential bear market, many view the probabilistic certainty of prediction market event contracts as a higher r:r trade. Combine this with heavy influencer marketing programs, potential airdrops and major partnerships from these prediction market platforms, it’s easy to see why more traders are exploring them.

That said, as with all markets, there are different categories of participants.

Nick Whitaker and Zachary Mazlish have famously categorised market participants into three types - the ‘savers’, the ‘gamblers’ and the ‘sharps.’

Put simply, savers are risk-averse investors who look to build wealth safely and slowly (401(k)s, bank deposits, or brokerage accounts). Gamblers are thrill-seeking investors focused on making big gains very quickly (memecoins and sports bettors). Sharps are market participants who use analysis and data to gain the edge on their bets (quant traders/professional traders).

Until now, sharps have largely stayed away from prediction markets due to the relative lack of liquidity needed to see meaningful profit. However, the game has changed with the recent surge in crypto traders and retail participants flooding these platforms.

Studies show that most retail participants love betting on long-shot outcomes – i.e., they consistently take lower-probability bets; likely driven by greed and emotional betting. The study linked to above also notes that buyers of low-probability bets suffer materially higher percentage drawdowns than those backing higher-probability bets. We’ve seen this dynamic in memecoin trading as well. Most memecoin traders tend to end up in a loss as they become exit liquidity for more sophisticated traders – either insiders, snipers or whale traders who use volume or influence to attract more flows to a particular coin.

Similarly, for prediction markets, the users with consistent success are the sharps: professional investors who trade either using privileged information or data to spot inefficiencies on certain probabilities for event contracts. In other words, they’re trading probabilistic errors rather than pure directional outcomes.

This understanding underpins the two strategies that seem to produce the most consistent profits for traders on prediction marketplace platforms – scalping and wallet tracking.

Scalping is as straightforward as the name suggests. This strategy focuses on making relatively small gains (1% to 3%) in relatively short time frames with large sums of capital. Over time, these gains compound – some wallets on Polymarket make over $100K monthly through this strategy.

In theory, scalping can be done in a number of different ways – including cross-platform arbitrage, mutually exclusive event arbitrage, and late-stage bidding.

Cross-platform arbitrage opportunities refer to trades that capture the temporary difference in probabilities for a single event on two different prediction market platforms. For instance, an event contract on BTC hitting $100K at the end of 2025 may be priced as 80% YES & 20% NO on Polymarket, while Kalshi traders price it as 84% YES & 16% NO. This presents a 4% difference between both platforms. An arbitrage trader would buy the same number of shares of YES on Polymarket as he would on NO in Kalshi. Typically, these divergences occur as a result of low liquidity or uncertainties around event contract rules.

Mutually exclusive event arbitrages are trades where one takes a bet on different event contracts whose resolutions will be directionally opposite to each other. For instance, a bet on Trump winning the presidency can be paired with a bet on a Democrat winning the presidency. This trade is profitable as long as the price of YES on both contracts is less than $1 (minus fees).

Late-stage bidding refers to an arbitrage strategy that looks to scalp 2% to 5% gains on prediction markets that are set to resolve soon (within hours). Usually, soon-to-resolve markets see a dump right before resolution since early bettors go risk off on possible black swan events closer to resolution time. This causes contracts to trade at 96% instead of 100%.

That said, almost all of these arbitrage strategies are typically executed with bots. For most retail participants, running bots may be a tad complicated – which brings us to our second strategy: wallet tracking.

Wallet tracking on Polymarket refers to identifying wallets or whales that have an edge from seemingly having access to privileged information not accessible to the general public. This can either be insiders or data scrapers who pull information from the internet ahead of public release. Recently, we saw two whales who seemed to have early access to information about the results in Google’s yearly search trends report and TIME magazine’s Person of the Year, 2025 pick. These insider wallets can be identified by monitoring order books on some of the more trending event contracts and comparing that wallet’s historical betting activity. If that sounds too complicated, there are a number of X users who track such wallets and post about them early.

So, we recommend you take some time and explore the prediction market section of CT to curate a good following of prediction market analysts. Two accounts we’ve seen post some high-quality alpha are Tomdnc and igorizuchaetcrypty.

🔥 Hot Deal Of The Week 🔥

When is the best time to learn about crypto? Many people think it’s when the market is rallying. The problem with this is that there is so much market noise and it's easy to get caught up in the hype.

A smarter way is perhaps now! When markets are down or boring. We made the Coin Bureau Club to be the crypto education hub we wished we had back in 2017. Over there you can get access to:

* Small and mid-cap altcoin reviews
* Vote on what altcoins we cover
* Access the insights of our researchers in real time
* See the personal portfolios of key team members!
* Exclusive deals and discounts
* Our members-only Discord

Access to the Club starts at just $29.99 a month!

👉 Check out the Coin Bureau Club!

🔮 Video Pipeline 🔮

Coin Bureau Finance:

* Russia’s Frozen Assets: What's going to happen?
* Tax The Rich: Is this a good idea?
* BlackRock 202 Outlook: What do they think will happen?
* US National Security Strategy: What it means for us all?

🏆 What's New at CoinBureau.com This Week? 🏆

* 2026's Top Crypto-Friendly Banks: Where to Manage Your Digital Assets
* Is Exodus Wallet Still Safe and Reliable in 2026? A Comprehensive Review
* MetaMask Review 2026: Still the Top Ethereum Wallet for Web3?
* Explore the Top iOS Crypto Wallets for Secure Transactions in December 2025
* Where & How To Purchase XRP: A Beginner’s Guide
* Crypto Frozen? Here's How to Get Control Back

📖 Quote of the Week 📖

If you’re still here, reading this newsletter and learning about crypto, you’re handling the market better than most.

“Success is not final, failure is not fatal: It is the courage to continue that counts.” - Winston Churchill

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.