DC just dropped a series of signals that could reshape the 2026 market outlook, so we’ll break that down, plus we’ve got:
- New crypto ETFs live for trading this week
- Amazon’s latest big move in the AI chip race
- A major crypto exemption coming from the SEC
- An under-the-radar AI stock to keep tabs on
Chart of the Day
Is the stock market–or even the entire economy–overly reliant on the success of its major tech giants, and relatedly, is AI in dot-com style bubble territory?
For a hint at the answers to those questions, we can look at this chart posted by Wall St Engine. It shows earnings estimates for the Mag 7 compared to the rest of the S&P 500, and you can see how Mag 7 earnings have rocketed to the upside, while the S&P 500 overall is fairly flat, and the 493 companies outside the Mag 7 have declined.
So, yes, the Mag 7 are carrying the index, and perhaps by extension the broader economy. But also–since Mag 7 earnings are on the increase–it seems that AI isn’t a full-blown dot-com style bubble: it’s funded by profitable companies coupled with real demand, indicating a tech transition rather than empty hype, although that’s not to say there won’t be corrections along the way.
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Trade of the Day
HYPE recently broke below a triangle pattern and plunged deeply under the 20-day EMA, but price looks to have found support and formed a potential double bottom structure. Also, the recent boost from the Sonnet DAT news (see below for more on that) helped stabilize the chart.
Momentum has now started to improve, with the MACD curling up, so if HYPE can reclaim the 20-day EMA and flip it into support, then the long side opens up again with room to move towards the $40 to $45 range. But if it rejects from the moving average and heads back towards $30, then there’s the potential for a breakdown below that.
Keep in mind though, when weighing the bullish case, that HYPE isn’t vaporware junk: Hyperliquid built the breakout product of the cycle.
Want more real-time setups and trade calls? Join our Inner Circle community.
Alpha Leaks
- Kraken announced that it is to acquire Backed Finance, which is the issuer of xStocks tokenized equities. Kraken stated that this will “accelerate xStocks’ expansion”, and explained that there will be 24/5 trading on Kraken, and 24/7 trading onchain.
- Major neobank Revolut, which has 65 million users, has integrated support for Solana payments and transfers using SOL, USDC and USDT, and also supports SOL staking.
- In guidance that takes effect from January 5th, Bank of America is now recommending its wealth management clients to give their portfolios up to a 4% crypto allocation through crypto ETFs.
- The Grayscale Chainlink Trust ETF (GLNK) is live for trading with 0% fees, and Franklin Templeton’s Franklin Solana ETF (SOEZ) launched this week.
- Sonnet Biotherepeutics shareholders have approved a merger with Rorschach LLC, meaning the company can proceed with plans to form a HYPE DAT called Hyperliquid Strategies, which plans to hold $583 million worth of the HYPE token, along with $305 million in cash (coming to a total of $888 million).
- MetaMask has introduced Transaction Shield, a subscription service that covers losses of up to $10,000 a month, across up to 100 transactions a month, on transactions that MetaMask categorizes as safe, while also offering 24/7 priority support. For all the details, check the official release.
- AI contender Anthropic, creator of the Claude LLM, is reportedly–according to the Financial TImes–preparing for an IPO in 2026, at a valuation in the $300 billion to $350 billion range.
News Roundup
A Dovish Fed, Big Tax Refunds, and a Robotics Boom?
When it comes to predicting where the markets go next, there’s plenty going on in DC that we need to take note of.
First off, President Trump came about as close as possible to announcing the next Fed Chair, without actually announcing the next Fed Chair, hinting very strongly (as you can see in this video) that Kevin Hassett is in line to replace Jerome Powell next May.
The TLDR on Hassett is that he’s an ultra-dovish former Coinbase advisor, is closely aligned with Trump, and is likely to favor deep rate cuts and lower rates over the long term, all of which sounds bullish for risk-on assets. Polymarket odds on Hassett taking over are currently at 75% after spiking to 85%.
Then we have Scott Bessent stating that “in 2026, we’ll see very substantial tax refunds in the first quarter”, while Trump has been discussing the idea of scrapping income tax, both of which, again, sound positive for markets.
And finally, after the US government’s recent announcement of its Genesis Mission–a substantial initiative to supercharge US tech and science development–a Politico report indicates that besides AI, the White House wants to accelerate robotics development, with Commerce Secretary Howard Lutnick meeting CEOs in the robotics sector, and the potential for a robotics-related Executive Order and working group in 2026.
Amazon’s New AI Chip Play
Amazon got a boost after the company unveiled its new in-house AI hardware, positioning the company to take a swing at Nvidia and Google, especially when it comes to cost and ease-of-integration.
The Trainium 3 UltraServer, rolling out this week, is a rack holding up to 144 chips and delivering around four times the compute of the previous Trainium generation, while achieving the same or even a better level of energy efficiency. According to Amazon, this equates to faster training and lower costs, along with improved AWS integration.
Additionally, connected clusters can scale up to as many as one million chips, although power availability remains the primary bottleneck for Amazon and every other hyperscaler.
If Amazon can reliably undercut Nvidia on large-scale training and deployment costs, the narrative may tilt in Amazon’s favor, and at the moment, this kind of intense competition is adding to the sense of urgency around AI and its energy needs.
SEC Prepares Crypto Exemption
The SEC has plans for a sweeping crypto innovation exemption, lined up to roll out “in a month or so” after delays caused by the recent government shutdown. That’s according to SEC Chair Paul Atkins, speaking on CNBC, and the measure aims to ease regulatory barriers and let crypto firms launch new on-chain products more easily.
The exemption marks another pivot away from the enforcement-heavy stance that used to chill US crypto innovation, and should be marked down as a long-term tailwind for the industry. It may not make an immediate impact on the market, but–regardless of where we currently are in the cycle–it reinforces crypto’s shift into the financial mainstream.
Degen Play of the Day
Zeta Global (ZETA) is shaping up as an under-the-radar AI winner hidden in marketing tech. It runs a platform called the AI Marketing Cloud that helps brands with customer acquisition and retention, and its numbers are starting to impress.
Over Thanksgiving to Cyber Monday, Zeta’s platform use jumped 153% year-on-year, AI agent activity ran 25x higher, and uptime stayed at 100%, while clients using Zeta’s AI agents saw 87% time savings, which is a real ROI hook for enterprises.
Additionally, Zeta just printed its 17th straight beat and raise quarter, with Q3 revenue up 26% year-on-year, and free cash flow up 83%, while it last month increased both its 2025 and 2026 guidance, all of which makes Zeta look like a solid AI-related mid-cap play.
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Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
