Did Crypto Poke the Bear

Hi there, 

Welcome to FinSoar. Today I’m shocked at Crypto’s downfall, Amazon bullying the online retail competition, and trillion-dollar Christmas spending projections: 

Bitcoin hit an all-time high on October 6. Four days later, the crypto market faced its worst liquidation event in history.

The October 10 flash crash wiped out $19 billion in leveraged positions after Trump posted about imposing a 100% tariff on China. Bitcoin dropped below $100,000 this week for the first time since June. 

The total crypto market cap touched $4.4 trillion at its peak but has since declined 20%, erasing nearly all of 2025's gains.

The carnage exposed fragility across the ecosystem. Stream Finance, a yield fund managing $200 million, declared bankruptcy after its external fund manager lost $93 million. 

The collapse triggered panic withdrawals from similar high-leverage strategies throughout DeFi.

Seven major stablecoins lost their dollar pegs in 2025. 

Elixir's deUSD crashed to $0.02 within 48 hours. StablesLabs USDX plunged to $0.40 as borrowing costs spiked above 800%. Ethena's USDe briefly hit $0.65 during October's liquidation cascade.

The current selloff looks different from October's forced liquidations. Long-term Bitcoin holders have offloaded 400,000 coins worth roughly $45 billion over the past month. 

Markus Thielen at 10x Research warns the unwind could last into spring, potentially mirroring the 2021-2022 bear market when whales sold over one million Bitcoin across nearly a year.

Security concerns are mounting. Chainalysis CEO Jonathan Levin told the Financial Times that DeFi's $140 billion in locked assets faces serious vulnerabilities.

"When you're building a protocol in your mum's basement, you don't have a chief security officer from GCHQ," he said. More than $100 million was stolen from Balancer on Monday. Crypto hacks hit $2.2 billion in the first half of 2025.

Yet institutional money keeps flowing in. A survey of 122 hedge funds found 55% now hold crypto, up from 47% last year. They're allocating an average 7% of holdings to digital assets.

Most crypto analysts remain cautiously optimistic. Vitaliy Shtyrkin at B2BINPAY sees $100,000 as critical support, with consolidation more likely than a deeper correction. But with leverage still high and conviction fading, the next move remains uncertain.

Sources: Fortune, Financial Times, Business Insider, Bloomberg, CCN, Binance, 

Amazon is suing an AI startup it depends on. The retail giant filed suit against Perplexity AI over the startup's Comet browser, which lets users automate Amazon purchases through AI agents. 

The lawsuit accuses Perplexity of disguising automated activity as human browsing and covertly accessing customer accounts.

It’s pretty ironic to me because Perplexity is an Amazon Web Services customer with "hundreds of millions" in commitments. Jeff Bezos has invested in the startup. AWS even featured CEO Aravind Srinivas at its 2023 trade show.

Now they're enemies. Amazon wants Perplexity's agents to identify themselves. Perplexity argues that its AI acts on behalf of users and inherits their permissions. The startup called Amazon's move "bullying" in a blog post titled "Bullying is Not Innovation." 

“Easier shopping means more transactions and happier customers. But Amazon doesn’t care. They’re more interested in serving you ads, sponsored results, and influencing your purchasing decisions with upsells and confusing offers.”

The real battle is over control. Amazon CEO Andy Jassy told investors the customer experience for AI shopping agents was "not good." 

Translation: if bots shop for customers, Amazon loses its ability to serve ads and push sponsored products.

When agents make purchases, the primary relationship shifts from Customer to Amazon to Customer to Agent. One small step from there, and the agent suggests buying elsewhere.

Perplexity's timing couldn't be worse. Reddit sued the company in October for data scraping, claiming citations to Reddit increased "forty-fold" after being told to stop. News Corp, Encyclopedia Britannica, and Merriam-Webster have also filed suits.

Yet investors remain bullish. Bloomberg pegged Perplexity's valuation at $20 billion. Snap just announced a $400 million deal to integrate Perplexity's search into Snapchat. Intriguingly enough, Getty Images shares fell after signing a licensing agreement with the startup.

Amazon's legal high ground looks shaky for now. In case you forgot, the company just settled with the FTC for $2.5 billion over using "dark patterns" to trick customers into Prime subscriptions. 

Harder to claim customer protection when you're paying out for customer deception…

As Forbes notes, this is the first major legal test of autonomous AI agents in commerce. The winner defines how we'll shop for the next decade. 

Sources: Business Insider, The Guardian, Perplexity, Forbes, CNET, Bloomberg, CNBC, Reuters

Holiday sales will top $1 trillion for the first time this year. That's the headline from the National Retail Federation, which forecast November and December sales rising between 3.7% and 4.2% to as much as $1.02 trillion. 

Last year delivered 4.3% growth to $976.1 billion.

The forecast excludes auto dealers, gas stations, and restaurants. Deloitte projected even higher numbers, expecting $1.6 trillion from November through January.

However, the trillion-dollar milestone isn’t an indicator of strength as one might infer. At the low end, this would be the weakest year-over-year growth in six years, according to Axios. 

Consumer confidence sits near a half-century low. NRF chief economist Mark Mathews said you'd have to go back 50 years to find sentiment this consistently depressed.

Spending is also divided: Higher-income consumers are powering the economy while lower-income households devote more of their budgets to necessities. A PwC report found 84% of consumers expect to cut back on spending over the next four months.

Retailers see the shift. Walmart CEO Doug McMillon offered an upbeat outlook, but Target planned cautiously, given "continued uncertainty and volatility." Kohl's and Academy Sports noted customers trading down. Off-price retailers like TJX, Burlington, and Ross are positioned to benefit.

Shoppers plan to spend an average $890.49 per person, the second-highest in 23 years of NRF tracking. Yet 183.4 million people plan to shop from Thanksgiving through Cyber Monday, barely up from 182 million in 2023.

Hiring is another tale entirely. Retailers and hospitality groups are hiring the smallest number of seasonal workers in over a decade. ZipRecruiter shows holiday job postings down 8.4% year over year. NRF expects seasonal hiring between 265,000 and 365,000 workers, down from 442,000 last year.

Target declined to provide a hiring number, a stark change from announcing 100,000 workers last year. Amazon kept hiring flat at 250,000. Korn Ferry clients report 10% to 20% reductions in seasonal workforces.

NRF CEO Matthew Shay acknowledged forecasting difficulty amid the government shutdown, data gaps, and tariff uncertainty, but also: "We don't think we're driving in the fog," he said. "We think we have good clarity on holiday season."

The market disagrees. Persistent inflation, Trump's tariffs, and the longest government shutdown in history create genuine uncertainty. Lower-income consumers are shifting toward essentials, cutting non-essentials like recreation and travel. A trillion-dollar Christmas might arrive, but it won't feel like one.

Sources: Reuters, Axios, Financial Times, The New York Times