Back At It

Normal service is being resumed as we emerge from the holiday season and get back to the grind. And what better way to shed those extra pounds than by fretting over the crypto market?

Today’s forward guidance takes stock of where we are as 2026 begins, and looks at some of the factors in the markets’ favour over the coming weeks. However, there are potential pitfalls ahead which could choke out any good news, including the ongoing menacing of Venezuela by the US. Will Trump roll the dice and start shooting, or is it all just sabre rattling?

We also take a look at one of the most important concerns in crypto right now: the disconnect between token and equity holders. Recent stories concerning Aave and Axelar have underlined the precarious position most tokenholders are in - vulnerable to bad news, but not as exposed to potential upside as they’d like to be. This year could see big and long overdue changes to what tokens offer to those who hold them.

🎲 Prediction Markets Insider 🎲

You might recall how we discussed prediction markets in a recent edition of this newsletter and, since then, the noise around them has only continued to grow. In today’s video, we dive further into this emerging sector and examine its chances of success in what should be prediction markets’ breakout year. Will they live up to expectations, or will the challenges they face prove too difficult to overcome?

You can watch that video here.

📈 Crypto Market Forecast 📈

After a choppy holiday season, the markets are finally going to get their first full week of 2026. With investors returning from vacation, we should get a sense of whether markets are going to break out or break down in the first weeks of the new year. As always, this heavily depends on upcoming macro and crypto catalysts, the first of which will be the jobs data released on Friday.

If unemployment rose again in December 2025, then the Sahm Rule indicator could be close to triggering. To refresh your memory, the Sahm Rule indicator reading above 0.50 means that the US economy is in recession. The Sahm Rule indicator bottomed in the summer of 2025 at 0.10, and has since risen to 0.43.

This would explain why the Fed was more dovish than expected at its December 2025 meeting, and why even the Fed minutes warned that risks to employment and GDP are to the downside. To be exact, the Fed minutes stated that there is a ‘risk of a sharper-than-expected weakening in the economy’, a strong statement that was not included in the previous meeting minutes.

The silver lining is that a higher unemployment print would mean more interest rate cuts from the Fed in 2026, specifically more rate cuts than the Fed had signalled in its last Summary of Economic Projections. This is why some economists are expecting the Fed to ‘surprise’ with more rate cuts than investors expect in the first half of 2026, which would be bullish for markets.

The catch is that the risks of a geopolitical black swan appear to be rising. As you may have heard, the US invaded Venezuela over the weekend. Now the Trump administration has vowed to intervene in Iran if violence is used to suppress the recent protests there. If that wasn’t enough, China recently did large military drills around Taiwan, leading to concerns of an invasion.

As we noted in a previous newsletter, January-February happens to be when demand for oil in the US is the lowest. Obviously, less oil demand results in lower oil prices. What’s not so obvious is that lower oil prices make it easier for the US to escalate with oil producing countries like Venezuela and Iran. The caveat is that this escalation is extremely unpopular with voters.

With the midterms now less than a year away, there’s only so much more radical change the Trump administration can implement before it starts hurting Republicans in the polls more than it already has. Some would say this increases the chances of an imminent escalation, since it won’t be possible to do later. Others would say the window for escalation has already passed.

For what it’s worth, the next few weeks are likely to be bullish for crypto so long as there aren’t any unexpected surprises on the geopolitical front. That’s mostly because the CLARITY Act is expected to be debated in the second week of January. As we also noted in a previous newsletter, the GENIUS Act was the only bullish catalyst that pumped crypto prices in 2025.

Given that the passing of the CLARITY Act would be a similar catalyst, it could have a similar impact on the crypto market, specifically that prices rise before, during, and after CLARITY is passed. FYI, the GENIUS Act caused crypto to rally by around 50% on average, especially smart contract cryptos like ETH. CLARITY could trigger a similarly sized rally.

As a cherry on top, the liquidity backdrop is likely to be supportive of such a rally, since the Treasury General Account started being drained in early November, and the Fed started doing ‘not QE’ bond buying in early December. Since crypto lags liquidity by around three months, this suggests that it could catch a liquidity tailwind by the end of January, and especially in February.

In sum, the start of 2026 is looking bullish for the crypto market, but the high risk of geopolitical escalation could cut any rallies short. But as a rule of thumb, betting on a black swan is not wise, because as the popular internet meme says, ‘nothing ever happens’.

🏁 Crypto’s Internal Battle 🏁

Over the past couple of weeks, more conversations are being heard around one of crypto’s fundamental misalignments - the divide between token holders and equity stakeholders in crypto projects.

For those not following, for a long time now, crypto projects have been operating a dual ownership and fundraise structure. There’s a development company which builds the initial product/protocol, whose equity is entirely owned by private players - founders and/or venture capital investors. Then, there’s a decentralised governance body (known as a ‘DAO’) which governs/manages changes to the underlying onchain technology layer, among other related things. Notably, this DAO is created by the development company through the issuance of crypto tokens which act as representations of stake in the DAO.

The issuance happens either through a token sale to the general public and/or an airdrop to the protocol’s earliest users. As with all things crypto, they are freely tradeable on secondary markets post-drop.

While not expressly promised, the demand for these tokens on secondary markets is driven by the general expectation that the success of the project will directly/indirectly enrich the token’s holders over the long-term. Similarly, the equity arm of this equation also expects to generate revenue for its continued work on the underlying protocol. However, where there’s an overlap in interests, there are lingering questions about where, what and how each entity (the DAO and the development company) is entitled to derive value from.

Until now, this conversation has mostly been swept under the rug for fears of attracting attention from securities regulators like the US SEC. However, with the recent regime change in the US, crypto teams and communities are revisiting this divide – especially after the recent Aave drama and Axelar acquihire. We believe the outcome of this discussion will play a pivotal role in the value proposition of governance tokens, directly affecting the future demand for token launches and sales.

In Aave’s case, the debate was focused on the fee-revenue allocation between Aave Labs and the DAO. Specifically, Labs was accused of redirecting approximately $10M annually in CoW Swap frontend fees to equity-controlled entities rather than the protocol treasury. While the community claims this is against token holder interests, Labs argues the monetisation of non-protocol products is within acceptable bounds. The dispute triggered a 13% price decline for $AAVE and heightened uncertainty about the future of the token. While there’s more to the conflict, it’s primarily focused on which assets each entity owns. One of the primary demands of the DAO is that the ownership of all brand value assets must rest with the DAO, while the Labs entity argues that it has a claim to all self-funded product-layer enhancements (including the CoW Swap integration).

In Axelar’s Case, the debate was around M&A operations that effectively result in abandoned projects. For context, Axelar's core development entity, Interop Labs, was acquired by Circle recently in a transaction that excluded the AXL token and transferred the entire development team and IP to the acquirer. In effect, the acquisition abandoned the Axelar network without its original builders, leaving token holders with a protocol under "community governance" but no compensation or participation in the deal's value.

For context, this acquihire trend is a strategy that comes from Silicon Valley. Dubbed the ‘Hire and License Out,’ it originally started in web2 as a way to bypass antitrust laws. Circle's recent acquisition of Interop Labs is the most notable example of its implementation in web3. However, this strategy has far more extractive effects in web3 than in web2. At least in Silicon Valley, some if not all shareholders of the husk entity receive some sort of value trickle down by way of a ‘license fee.’ For Axelar’s token holders, there is none. It’s no wonder then that AXL’s token price fell by 37% after the announcement, with community members calling the move as a "rug pull" that prioritised equity holder exits over token holder interests.

Thankfully, there are projects attempting to solve this divide. The most recent example is Uniswap’s UNIfication proposal. The proposal, jointly submitted by Uniswap Labs and the Uniswap Foundation, fundamentally restructures protocol economics to align all stakeholders around token value. Under the proposal, all protocol fees will now be directed to UNI token burns. This directly accrues all value to token holders through supply reduction.

It also folds the Uniswap Foundation entity into Uniswap Labs, shifting from a grant-based model to an "execution-first" operating company. Labs drops its front-end, wallet, and API fees to zero, focusing on protocol growth with a 20M UNI annual growth budget. In effect, the value accrual for Labs becomes tied to UNI holdings on its balance sheet, creating shared upside.

Other examples of possible solutions to align incentives include a performance-based token unlock model in ICOs popularised by the likes of MetaDAO. Variant Fund has also recommended a legally enforceable DAO governance model like the Wyoming DUNA. For context, this model provides tokenholders with limited liability and legal personhood so that they can enter contracts, pay taxes, and enforce their rights in court. This effectively grants token holders the legal right to represent the protocol in business and legal dealings.

In summary, this discussion will spur solutions and ideas that dictate the value proposition of altcoins in the years to come. This is one to watch.

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🔮 Video Pipeline 🔮

Coin Bureau Main

* Gold Vs Bitcoin Rotation: Why Bitcoin often lags gold?

Coin Bureau Finance

* China’s Stimulus: Why China’s crazy stimulus failed to revive growth?
* Canada Is Cooked: Why is the economy over?
* China’s Military: How is it expanding & is it a threat?
* Buffett’s $382 Billion Farewell: Warren’s final moves & what it signals about markets?

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

* Aave Reviewed: Features, Rates and Performance Tested for 2026
* Uniswap Reviewed: Features, Fees and Performance Tested for 2026
* The Top Monero Mining Pools In 2026: Everything You Need to Know
* How to Run a Bitcoin Node in 2026: The Ultimate Guide
* Top 7 AI Crypto Trading Bots Reviewed And Tested in January 2026

📖 Quote of the Week 📖

It’s a new year, which brings with it new hope. What happens to the markets is out of your control, but how you choose to live the year is completely up to you.

“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” - Benjamin Franklin

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.