Arca CIO Jeff Dorman calls the current market slide “one of the strangest crypto sell-offs ever,” arguing that price action is increasingly disconnected from both macro conditions and sector fundamentals.

Why The Crypto Sell-Off Is “Strange”

In a post on X, Dorman notes that traditional risk assets are behaving exactly as textbooks would suggest: “equity, credit and gold/silver markets are launching to ATHs every month because the Fed is cutting rates, QT is ending, consumer spending is strong, record earnings, AI demand still incredibly strong.” Yet crypto continues to grind lower, even as most of the usual bearish narratives have been invalidated. “MSTR isn’t selling, Tether isn’t insolvent, DATs aren’t selling, NVDA isn’t blowing up, the Fed isn’t turning hawkish, the tariff wars aren’t restarting,” he writes, before admitting: “I still have no idea why crypto is down.”

In his accompanying essay “The Selling Nobody Can Explain” (Dec. 1, 2025), Dorman details a market that has fallen in seven of the past eight weeks, with only a brief Thanksgiving rally before renewed selling as Japanese markets reopened. The first leg lower followed the October 10 exchange outages at Binance and others, weeks ahead of the FOMC meeting. Much of November’s weakness was retrospectively ascribed to Fed Chair Jerome Powell’s hawkish tone, which drove December rate-cut odds from “almost a 100% chance” to “as low as 30%.”

What makes the late-November continuation unusual, he argues, is that the macro backdrop has since turned supportive again. Core PPI printed at 2.6% versus 2.7% expected, early post-shutdown labor data point to a cooling jobs market, and December cut odds have rebounded to around 90%. Equities “staged a fierce rally to close November in positive territory,” and betting markets are effectively pricing in Kevin Hassett, a known policy dove, as the next Fed chair. Against that backdrop, Dorman asks, “why are digital assets still selling off on every piece of bad news but failing to rally with good news?” His answer is stark: “I have no idea.”

One working explanation is that the marginal seller is no longer crypto-native. Dorman cites Bill Ackman’s remark that his Fannie Mae and Freddie Mac positions are trading in sympathy with crypto, despite orthogonal fundamentals. The comment, he argues, reflects the growing overlap between TradFi, retail and digital-asset investors. What was “a pretty isolated industry” is now deeply integrated into multi-asset portfolios, and in those structures “investments in crypto seem to be the first to go.” The crypto ecosystem itself is highly transparent; by contrast, “TradFi remains more of a black box. And that black box is dominating flows and activity right now.”

Wall Street Is Coming

Dorman revisits Arca’s framework that token value is a mix of financial, utility and social components. With sentiment at cycle lows, it is no surprise that assets whose value is mostly social – Bitcoin, L1s, NFTs, memecoins – are under pressure. The surprise is that tokens with stronger financial or utility anchors have not consistently outperformed. “While some do (BNB), most do not (DeFi tokens, PUMP). So that’s a bit odd.” Equally unusual, he says, is the absence of “cavalry” buyers; instead, more players are “piling into the weakness, expecting more weakness,” leaning on momentum rather than fundamentals.

On MicroStrategy, Dorman reiterates that the firm “will never be forced sellers,” despite recurring headlines. On Tether, he pushes back against a rapid narrative shift from mega-valuation to supposed insolvency. With USDT roughly 70% backed by cash and equivalents and 30% by gold, bitcoin and loans, he argues that “any questions about their liquidity are just silly,” given the implausibility of 70% same-day redemptions. Solvency risks would require large losses across that 30% sleeve, which he sees as manageable given the parent company’s profitability.

Ultimately, Dorman reduces the puzzle to flows and market structure. “There are no buyers within the crypto walls today,” he writes. Crypto-native investors are “exhausted,” and the Wall Street firms that are “coming” into the asset class “aren’t here today.” Until crypto assets can be purchased seamlessly within existing mandates and systems at institutions like Vanguard, State Street, BNY, JPMorgan, Morgan Stanley and Goldman Sachs, “they just won’t do it.” For now, he concludes, the persistent weakness “certainly has us scratching our heads.”

At press time, the total crypto market cap was at $2.9 trillion.

Following the launch of the historic XRP Spot ETFs, the community has been buzzing with excitement, triggering notable success for the funds over the next few days. As the exchange funds continue to attract significant inflows, a crypto expert has outlined the development that is unfolding behind the initiative.

What’s Happening Behind The XRP Spot ETFs

The Spot XRP ETFs are seeing robust growth, but what is happening behind the scenes is quite interesting and demands attention. Pumpius, a crypto expert and investor, has uncovered a subtle play among institutions that is not being shared with the general crowd.

According to the expert, ETF fund managers are legally forbidden from purchasing XRP directly from payment firm Ripple or escrow. This is due to the court’s injunction that every single ETF must acquire the altcoin on the open market only, breaking the concept of shortcuts, backdoor deals, and wholesale buying.

Pumpius has declared this underlying trend at the institutional level to be the most bullish step for the altcoin. His reason hinges on the fact that Ripple will only release what is absolutely necessary from the monthly escrow holdings. 

Furthermore, the payment firm will avoid causing taxable events this way by keeping the escrow untouched. Such a move would imply that Ripple is drip-feeding just enough liquidity to avoid dislocation while ETFs are actively absorbing circulating supply.

The expert considers this pattern the calm before a structural supply shock, and not a sign of stagnation. When the shift happens, it will be seen as a balancing act, a pressure build-up, and a loading phase.

In the meantime, fund managers are already in discussion with Ripple, which means timing coordination is currently ongoing. At the same time, the expert has highlighted that supply dynamics are now being designed in real time.

Once the early balance period concludes and ETF demand continues to rise while escrow is strictly regulated, XRP will not move at a slow pace. Instead, the expert predicts that the altcoin will experience substantial movement, breaking upside resistance levels with violence.

A High Demand For The Exchange Funds

Spot XRP ETFs have become a serious mode of investment in the landscape since their launch. Franklin Templeton recently stunned the market by introducing the Franklin XRP ETF on NYSE Arca and referring to the token as “fundamental to the global settlement system.”

Other major firms such as Bitwise, Grayscale, and Canary Capital have all rolled out their own ETFs, which attracted millions in inflows from their first day. With the robust adoption and interest in the funds, the message is clear that the demand for regulated XRP exposure is bigger than anticipated.

Despite the significant demand, BlackRock, the world’s largest asset manager, has yet to jump into the funds, stating that customer demand is still primarily centered on Bitcoin and Ethereum for now. Furthermore, they believe that regulatory clarity is still not entirely certain despite repeated victories over the US SEC.

However, if the company eventually launches its own fund, it would spur billions of capital and new institutional money. Considering its status in the finance sector, “a BlackRock ETF would be the ultimate stamp of approval.”