Alpha Navigator: Quest for Alpha [December 2025]
Crypto and Fixed Income decreased in December, while Equities and Real Assets were mixed. BTC's 1-month performance correlation was negative with Fixed Income, but mixed across Equities and Real Assets.
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Executive Summary
- Crypto and Fixed Income decreased in December, while Equities and Real Assets were mixed.
- Bank of Japan (BoJ) raised its key interest rate to 0.75% in December 2025, marking its highest level in 30 years.
- US Federal Reserve’s dot plot of officials’ rate cut expectations showed just one cut in 2026 and another in 2027. US consumer price index (CPI) rose by 2.7% year-on-year in November, below the 3.1% expected by economists surveyed by Dow Jones. US GDP grew by 4.3% in the third quarter, well above the 3.2% expected by economists polled by Dow Jones. Additionally, Japan’s government approved a record ¥122.3 trillion (US$783 billion) budget while earmarking bond issuance at ¥29.5 trillion.
- Crypto prices in December were impacted by ETF net outflows, uncertainty around the US Fed’s rate outlook, valuation concerns across risk assets, and evolving macroeconomic data heading into year-end.
- Upcoming key macro events include interest rate decisions in the US, Canada, China, and Japan.
- BTC's 1-month performance correlation was negative with Fixed Income, but mixed across Equities and Real Assets.
- ETH showed a similar pattern; its 1-month performance correlation was negative with Fixed Income, but mixed across Equities and Real Assets.
- BTC’s rolling 30-day return correlation turned negative with S&P 500 and FTSE EPRA Nareit Global Real Estate Index, and decreased with Gold.
- BTC options implied volatility (IV) decreased for all durations in December.
- Aggregated open interest (OI) of BTC futures across exchanges fell by 3% in December. CME OI decreased by 28%, while others increased by 3%.
- US spot BTC ETFs recorded a net outflow of $1.1 billion in December, lower than the $3.4 billion net outflow in November.
- In December, spot ETH ETFs saw a net outflow of $616 million, lower than the $1.4 billion net outflow recorded in November.
- ARB/OP showed the strongest price performance correlation at 0.92, followed by DOT/ATOM at 0.90.
- All DeFi pairs showed moderate positive correlations, led by CRV/CVX at 0.85.
- The price ratio (BTC price divided by ETH price) hovered between -1 standard deviation (SD) and mean level in December.
- Our style-factor screens track momentum, value, growth, and risk for the Layer-1 and Layer-2, DeFi, Gaming, and NFT categories. Below is the screen for selected top crypto tokens by market cap in the Layer-1 and Layer-2 category. L1 and L2 token prices all dropped in December, except for TON (+1.6%). POL (-22.9%) led the drop.
- Our events section shows recent and upcoming events for selected tokens, as well as important macroeconomic events.
Token | 1M Price (%) | Events |
Bitcoin (BTC) | -2.7% | US spot BTC ETFs saw $1.1B in net outflows in December, compared with $3.4B in November. |
Ether (ETH) | -0.7% | US spot ETH ETFs recorded $616M in net outflows in December. Ethereum activated the Fusaka upgrade on its mainnet on 3 December. Ethereum Foundation announced a new technical roadmap for zkEVM, which includes a 128-bit security target by 2026 to align with cryptographic standardisation bodies. |
Cronos (CRO) | -14.9% | Cronos Labs introduced Cronos One, a unified onboarding hub that consolidates bridging, topping up the Crypto.com Card directly from a non-custodial wallet, and completing on-chain verification. |
USDT (USDT) | N/A | Tether is considering tokenising its stocks to enhance investor liquidity. A shareholder was reportedly interested in selling at least $1B of equity at a $280B valuation. |
USDC (USDC) | N/A | Circle partnered with Intuit to integrate USDC into Intuit products such as TurboTax and QuickBooks, adding stablecoin capabilities across tax refunds and payouts. Circle received a Financial Services Permission licence from Abu Dhabi Global Market (ADGM) and obtained conditional approval from the US OCC to establish a national trust bank. |
Uniswap (UNI) | -7.4% | Uniswap’s UNIfication governance proposal, which involves activating protocol fees and burning UNI tokens, passed with more than 125M votes in favour. |
Synthetix (SNX) | -24.6% | Synthetix significantly brought its core operations back to the Ethereum mainnet with the launch of its perpetual futures DEX, which utilises a hybrid central limit order book (CLOB) system to ensure efficient trading while maintaining on-chain settlement. |
AAVE | -17.9% | An ongoing governance dispute between Aave DAO and Aave Labs over fee distribution saw Aave Labs redirect an estimated $200,000 weekly in fees. Aave co-founder Stani Kulechov defended the action, purchasing $10 million in AAVE to show commitment amid conflict over tokenholder vs equity holder rights. |
Read the full Alpha Navigator report: Alpha Navigator [December 2025]
Author
Research & Insights Team
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