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Markets remained under pressure on Monday as crypto sold off even as reduced prices rose. Bitcoin traded lower for the entire session, at one point down more than 6% on the day, before ending around 4.5%. Nasdaq 100 (-0.2%) and S&P 500 (-0.3%) edged lower, while gold (+0.1%) also outperformed BTC and held close to recent highs.
It seems that the markets remain focused on the situation in the United States. The CME FedWatch Tool now gives an 87% chance of a 25bps cut in December, and we see the recent move in SOFR, again above the Fed, as a clear sign of looming monetary and bank stress. When the price of the overnight security rises above the index, it indicates that the reserves are shrinking and the amount of the money is decreasing. All eyes will be on the Fed’s next move, as changes in the balance sheet or rate control tools will be needed to ease the pressure and reset money market prices in the desired range.
Back on the crypto side, performance was weak as most indices underperformed BTC after a difficult month for the economy. The best performing group was Crypto Miners (+ 2.3%), which continued to escape from all the difficulties, while Crypto Equities (+ 0.1%) was slightly better. At the other end of the spectrum, Modular was down 11.3%, Sports was down 9.1%, and the AI basket was down 8.1%. Meanwhile, the L2, DEX, and DePIN indicators are also down between 6% to 8% per day. We see this policy as consistent with further risk mitigation on the most dangerous indicators, as markets await clear confirmation that the Fed will take steps to address concerns about the current financial situation.
Market Changes
Strategy (MSTR) was front and center yesterday as the stock extended its decline. Shares traded below $160 on Monday before closing near $171, leaving MSTR down nearly 37% in the past month and down 60% from its July 2025 high.
We see the high mNAV ratio drop below 1 in early November and now slide to 0.75 as a reflection of the environment in danger. This also raises concerns about what could happen because these vehicles could increase sales and force sales if the business were to discount the underlying products.
When a vehicle like the Strategy trades at a constant discount to NAV, the issuance of new capital ceases to increase and becomes wasteful, removing one of its main sources of income. This pushes the company to other activities – selling bitcoin or selling derivatives on bitcoin – at a time when the token and the currency are already under pressure, and the market starts to rise in price ahead of time.
However, yesterday’s company announcements show that Strategy has built up $1.4 billion in capital which has been backed by recent funding. This is set to pay for at least 12 months, with the goal of extending it to 24 months to continue paying dividends without touching ~650K bitcoin even if they are short. The announcement helped the stock make up some of its losses yesterday by assuring investors that it could meet its share price without selling bitcoin.
Source: The way
Management cut its year-end BTC price estimate from $150K to $85K to $110K, lowering its BTC revenue target to around $8.4 billion-$12.8 billion and making full-year GAAP profit more sensitive to BTC’s final publication. In the investor call, he pointed out that a year-end BTC price below about $94K would mean operating at a loss, while a price above $94K would support a good investment.
Source: The way
Many ETFs built around trading strategies are facing a major challenge, and MSTX and MSTU, which focus on the daily return of the 2x Strategy, are among the 10 best performing ETFs this year after losing 80%. The new MSTP has fallen similarly since its launch, and the trio’s value has dropped from $2.3 billion in early October to about $0.8 billion today. Together these products show how 60% drawdown in stock and 30% pullback in BTC can be increased by volatility decay, which increases profits and losses can chip away at the return even if the stock ends up flat. This has left late traders with huge losses, turning the once popular MSTR trade into a confusing book of information.
HumidiFi ICO: Dark AMM, dark revelations
HumidiFi’s WET token sale will take place tomorrow, Dec. 3. WET will be the first ICO on Jupiter’s Decentralized Token Formation (DTF price) platform, with commercials available on Meteora and HumidiFi at TGE on Friday, Dec. 5. In context, HumidiFi is an AMM prop developed by Temporal, a Solana-native R & D firm. Apart from HumidiFi, Temporal also runs Nozomi, an access service for Solana, and Harmonic, a block building system that aims to compete with Jito. Ahead of the ICO, the team published a story and WET’s tokenomics.
WET will have a maximum supply of 1 billion tokens, with 10% allocated to ICO participants. Eligible participants in the ICO fall into three categories:
- Wetlist (6%)reserved for white bags, including “HumidiFi users, HumidiFi sponsors and supporters, and HumidiFi’s Discord community.”
- JUP Strikers (2%).
- Public Trading (2%)done on a first-come, first-served basis.
In the announcement, HumidiFi said that the image was taken on Nov. 11 to determine the distribution before it is sold to HumidiFi users (ie, high-end traders). The chart below shows that traders with a lifetime value of over $100 million have accounted for over 50% of HumidFi’s daily volume. These wallets are market makers and arbitrage bots, and can be registered for trading.
The table below shows the distribution of WET tokens and the opening schedule. As mentioned, 10% will be given to the participants of the ICO, and the remaining 90% will be divided between Zero Position Foundation (40%), Ecosystem (25%), and Labs (25%).
Presumably, the Foundation will be managed by Temporal, although the announcement does not link the work of Zero Position to a particular organization, leaving this information before the announcement one day before the ICO. Labs’ distribution in the token distribution table probably also refers to Temporal, due to its role as HumidiFi’s engineering assistant. The announcement also shows that HumidiFi has benefited from a wide ecosystem of partners, including engineering teams, market makers and funders, and shows that the bucket Ecosystem can be used to encourage and reward contributors.
WET will start with a 23% float, reminiscent of the very low, high FDV startups that have plagued Solana DeFi (eg, JTO, KMNO, JUP). It is surprising, to say the least, that the Temporal team decided to launch with a low float, given how the market has punished these tokens over the past two years. As shown below, 19.25% of the total amount (192.5 million tokens) will be opened every six months for two years from TGE.
On a related note, HumidiFi has joined as a major part of AMM in trading over the past few months. It accounted for 51% of SOL-stablecoin volume on-chain in November, and 36% of Solana DEX volume, surpassing all other DEXs, including “traditional AMMs” such as Orca, Raydium and Meteora.
HumidiFi not only dominates the Solana DEX market share, it also outperforms most CEXs in SOL-USD volumes. The chart below shows that HumidFi is about $1 billion in daily SOL-USD volumes, just ahead of Binance as the top spot. HumidiFi’s rapid rise since its launch in June reflects the incredible progress the core team has made in AMM’s development.
Until now, there has not been a clean way to identify prop AMMs. The only way to express the idea that prop AMMs would control liquid volumes on Solana was to shorten the traditional AMM tokens like RAY and ORCA. Unfortunately, it appears that WET does not provide those who drive the vehicles while waiting.
When it comes to using the tokens, users will be able to deposit WET to repay the fee, the team notes that “WET should not be considered as money.” A day before the token sale, several questions remain unanswered. Why does the profit desk raise money through ICO? Does the symbol represent any ownership of the prop AMM? Who will manage the foundation, which will be given 40% of the assets? Only time can answer these questions, and only time will tell if WET will make any profit or if it will just be the latest MetaDAO trade.
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