ETFs Turn Green, On-Chain Perps Surge

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It’s Wednesday, December 31st, and we’re closing out 2025 with a few late-breaking turns. US spot Bitcoin ETFs just flipped back to net inflows after a week of steady outflows... on-chain perpetuals — perps — quietly racked up another trillion-dollar month... KuCoin is rolling out a new AI assistant on its platform... the Financial Times says US anti-money-laundering fines plunged this year, with crypto enforcement dialing back... and markets finish the year on a cautious, range-bound note, with Bitcoin hovering in the high eighty thousands. Let’s unpack what matters, why it matters, and what to watch heading into 2026.

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Story one: the ETF tide turns — at least for a day.

After seven straight sessions of net outflows, US spot Bitcoin ETFs posted about 355 million dollars in net inflows, according to The Block.

That’s not a monster number by 2025 standards, but the timing is notable — it lands right as portfolio managers rebalance for year-end and tax-loss harvesting wraps before the December 31 deadline.

A one-day reversal doesn’t make a trend... but it does suggest there’s still dip-buying demand around the eighty-five to ninety thousand dollar zone.

We’ll see if creations follow through in the first week of January, when volumes normalize — but for now, it’s a green print into the close of the year.

Why this matters: throughout the fourth quarter, ETF flows have been a key driver of spot liquidity — sometimes amplifying selloffs when redemptions spike, and sometimes cushioning drops when buyers step back in.

With many allocators still underweight after a choppy autumn, any pickup in ETF creations to start 2026 could be the spark for a fresh range test back above ninety thousand. We’ll be watching day two and day three prints early next week for confirmation.

Story two: on-chain perps keep climbing the leaderboard.

Perpetual futures on decentralized exchanges — DEXs — hit roughly 1 trillion dollars of volume again in December, extending a fourth quarter run that saw on-chain derivatives shoulder more of the market’s leverage after October’s whipsaws.

Data aggregated by DeFiLlama shows momentum that started in the fall carried through year-end — another sign that liquidity and user experience on decentralized perps have quietly crossed a usability threshold for active traders.

Hyperliquid remained among the top engines, but the broader takeaway is structural — on-chain venues are no longer a sideshow. In certain weeks, they’re where a chunky share of leverage gets expressed.

What to watch: spreads and funding. The last time DEX perps pushed records, funding went deeply positive and set up nasty squeezes when spot rolled over. If ETF inflows create a gentle bid while on-chain leverage reloads, early January could start with a tug-of-war between a cautious spot bid and a jumpy derivatives complex.

But the bigger 2026 theme is venue diversification — risk is migrating from a few centralized pipes to a more distributed set of rails, which changes how volatility shocks propagate.

Story three: exchanges lean into AI for the next onboarding wave.

KuCoin announced the full rollout of K I A — a crypto-native AI assistant that lives inside its platform to help users parse markets, simplify workflows, and surface answers conversationally. Think: less digging across tabs, more chat-style prompts for context and how-tos.

It’s a press release reveal, so we’ll want to test it hands-on... but directionally it matches a broader trend we’ve seen all year — wallets and exchanges adding AI layers to demystify crypto for newcomers and to speed up power-user tasks.

If the assistant proves accurate and safe — big ifs — it could reduce friction for first-timers and lighten support queues during volatility spikes.

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Story four: the enforcement downshift.

The Financial Times reports US fines for money-laundering and sanctions breaches fell 61 percent this year to about 1.7 billion dollars — the lowest in years — amid a policy pivot toward a more business-friendly stance under the current administration.

The report notes this retreat included some crypto-related investigations being paused or dropped by agencies, contributing to the overall decline.

For the industry, lighter headline enforcement has coincided with legislative movement — notably around stablecoins and market-structure debates — but it also raises the stakes for self-policing and for exchanges to maintain robust AML programs, because when big blow-ups happen, the pendulum can swing back fast.

Here’s the nuance: fewer fines don’t inherently mean fewer rules — it can just mean fewer big penalty actions this calendar year. With new frameworks maturing in 2026 — plus ongoing global coordination on crypto AML — the smart assumption is that compliance obligations trend up over time even when fine totals zigzag. Builders should treat today’s breathing room as an opportunity to institutionalize stronger controls before scrutiny tightens again.

Story five: markets wrap 2025 on a cautious note.

As of this morning, Bitcoin is orbiting the high eighty thousands, Ethereum near 2,900, and sentiment sits in a familiar holiday-thin range.

Year to date, Bitcoin finishes roughly 5 percent lower after a wild round trip — up to October’s 126,000 dollar peak, then a 30 percent drawdown into late fourth quarter.

The tape into New Year’s remains two-way and choppy, with traders balancing ETF flow signals against macro crosswinds and a still-healing risk appetite.

Practically speaking, the first real test arrives once liquidity returns in the first full week of January. Until then, expect range trading and more noise than signal.

A quick connect-the-dots heading into 2026: if ETF creations stay positive and on-chain perps remain active without funding getting frothy, the path of least resistance is a retest of 90 to 92 thousand. A break below 85 thousand, on the other hand, would reopen the 82 to 83 thousand pocket we saw defended in November — watch derivatives positioning closely if we approach those levels.

And for builders, the exchange-plus-AI story will be worth tracking. The first platforms that make crypto feel like chat... will likely capture the next cohort of users.

That’s your December 31st rundown: ETFs back in the green, on-chain perps chalking another trillion-dollar month, KuCoin debuting an AI helper, enforcement easing in the US by the numbers, and a market that ends the year... not with fireworks, but with a steady hum. We’ll be back tomorrow — new year, new tape — to see whether those ETF inflows have legs and how traders position for week one of 2026.

Thanks for listening and see you tommorow!