Crypto Watchlist: Top 5 Coins To Watch This Week

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As a seasoned cryptocurrency enthusiast and investor with over a decade of experience under my belt, I find myself captivated by the vibrant landscape that unfolds before us this week. From Bitcoin to Stacks, LayerZero, and beyond, the blockchain universe is brimming with innovation and potential.

This upcoming week looks set to be another important one for the cryptocurrency world, with several key events happening across various platforms. The focus this time around is on Bitcoin, Fantom, Avalanche, Stacks, and LayerZero, each of which is approaching a crucial turning point. Additionally, it’s worth keeping an eye on the broader economic context, particularly the Federal Open Market Committee (FOMC) interest-rate decision scheduled for December 18 in the U.S.

#1 Bitcoin And Crypto Await The FOMC Decision

Bitcoin traders and investors are keeping a close eye on the upcoming policy meeting of the Federal Reserve on Wednesday, December 18 at 2:00 pm ET. This will be followed by a press conference led by Fed Chair Jerome Powell at 2:30 pm ET. As per Saxo Bank’s latest investor note, it is widely anticipated that the Federal Reserve will lower interest rates by 0.25% during this week, bringing the target range for the federal funds rate down to between 4.25% and 4.50%.

Based on future data analysis, there’s a 95% likelihood that this move mirrors a previous reduction in November. Although the rate cut has been largely anticipated, investors will closely examine the Fed’s Economic Projections (SEP) summary and the “dot plot” to gauge the predicted trajectory of policy rates through 2025 and beyond.

Any indication that the Federal Reserve may slow down the speed of future interest rate reductions – especially if they adjust the dot plot from four rate cuts in 2025 to three or even two – could have a dampening effect on risky assets like Bitcoin and cryptocurrencies. Numerous experts attribute this potential need for further rate cuts to the weakening labor market and slowing inflation in housing, as demonstrated by decreasing rental price increases.

Instead, the Federal Reserve might express a more cautious outlook and emphasize potential “Trump-era inflation” threats, pointing to the prospect of renewed trade tariffs under the new Trump administration, which could lead to increased inflation. If these inflationary concerns persist, the Fed could slow down or even stop interest rate cuts in 2025, a move that would be seen as a more aggressive stance (or hawkish).

For the year 2025, the projected dot plot stands at approximately 3.625%, based on an assumption that the Federal Reserve will implement three rate cuts in the coming year. However, some market analysts believe this could rise to 3.875% if the Fed exhibits a more cautious stance. The price fluctuations in Bitcoin are likely to be influenced significantly by the Fed’s meeting tone, as a less accommodative Fed might trigger increased volatility in the BTC market.

#2 Fantom (FTM)

The cryptocurrency Fantom is stepping into a fresh chapter with the impending launch of its Sonic L1 mainnet, a significant update that aims to boost network speed and cost effectiveness significantly. The creators of Fantom have emphasized that Sonic can handle around 10,000 transactions per second, offering near-instant confirmation—a substantial jump from the current network performance level.

As an analyst, I am excited about the upcoming changes, as they are designed to reduce operational expenses significantly. Specifically, we anticipate a 66% reduction in validator node costs and a minimization of storage requirements. Additionally, one key aspect worth noting is Fantom’s commitment to maintaining compatibility with the Ethereum Virtual Machine (EVM). This means that transitioning EVM-based applications to our upgraded chain should be a smooth process without requiring any modifications to their underlying code.

Sonic will also debut a new token, denoted as S, which will replace the existing FTM token at a one-to-one ratio.

Last week, crypto trader Jacob Canfield, via X, mentioned that he had previously shared a setup involving x sub-units. However, he noted that Fantom (FTM) is approaching a potential price breakout in its discovery phase. To confirm this breakout, FTM needs to overcome the bearish trend and close a 4-hour candlestick. If it does so, we may witness rapid price movements. This chart alignment seems fitting with the upcoming SONIC launch.


#3 Avalanche (AVAX)

Today, December 16, marks the highly anticipated launch of the Avalanche9000 upgrade on the main network, making avalanches a significant topic in the crypto sphere once again. Following its initial introduction on the “Fuji” test network on November 25.

The eagerly awaited release of Avalanche’s mainnet, as described by its primary developers, marks the most substantial update in the chain’s lifespan to date. This excitement is further amplified by Avalache’s December 12 announcement of a private token sale worth $250 million, headed by Galaxy Digital, Dragonfly, and ParaFi Capital, with over 40 other entities also involved.

As reported, this latest fundraising event bolsters Avalanche’s existing wealth, currently estimated to be worth approximately $3 billion in AVAX tokens. This new funding follows a significant token sale for $230 million that occurred in the year 2021.

Avalanche9000 adopts the Etna Update and important community proposals ACP-77 and ACP-125, fundamentally reshaping how Avalanche’s subnets operate—now known as layer-1s. This shift transforms Avalanche from a costly validator system with 2,000 AVAX per instance fee to a more subscription-based model that bills 1.33 AVAX monthly. The update primarily emphasizes cross-chain interoperability, fostering advanced communication between chains within the broader Avalanche network.

#4 Stacks (STX)

Keep an eye out for Stacks as they plan to debut sBTC on Tuesday, December 17, at 11:00 am ET. This new digital asset tied to Bitcoin aims to introduce its liquidity into the Decentralized Finance (DeFi) world on Stacks. Notably, this asset comes with a rewards program that doesn’t require staking.

As stated in the project’s formal declaration, the sBTC Rewards Program offers a 5% annual Bitcoin incentive, disbursed in fortnightly payments, with the distribution being actual Bitcoin, not tokens issued by third parties. The initial stage of this program, beginning on December 17, concentrates on enhancing deposit features and instant Bitcoin rewards for sBTC holders. The subsequent phase, tentatively scheduled for March 2025, aims to incorporate more complex DeFi functionalities and reward systems, thereby increasing the versatility of sBTC.

#5 LayerZero (ZRO)

This week’s watchlist concludes with an important milestone for LayerZero. On December 20, 2024, at midnight UTC, ZRO token holders will participate in the network’s first-ever referendum regarding a fee switch. If this vote passes, it could activate a small fee on every message transmitted through the LayerZero protocol.

As a crypto investor, I’m facing a simple question in this referendum: “Should we activate the fee mechanism?” If a majority agrees (“Yes”) and quorum is met, this decision will introduce fees that correspond to the DVN and Executor costs for each message, thereby doubling the expense of every cross-chain transaction.

Option: The accumulated charges will subsequently be spent on repurchasing and destroying ZRO tokens, which could decrease the number in circulation and affect the token’s economy. The total amount of ZRO held by users on Ethereum, Optimism, Base, Polygon, Avalanche, BNB Chain, and Arbitrum are combined to determine each holder’s voting influence. This consolidation is effortlessly achieved through LayerZero’s lzRead function.

The voting period for the referendum will extend over a span of seven days, wrapping up on December 27, 2024. For the results to be considered valid, at least 60% of the currently circulating supply must participate; if this participation rate is not achieved, the decision defaults to “No.” If the referendum is successful, the protocol fee will become active instantaneously, which could significantly alter how developers and users handle cross-chain interactions.

This governing system will be repeated every six months. However, if the necessary number of participants (quorum) isn’t met, the required percentage for quorum will decrease by 5% each time, with a lowest possible limit of 20%.

At press time, Bitcoin traded at $104,748.

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2024-12-16 13:17