The cryptocurrency ecosystem is on the verge of another significant week, signaled by several major developments occurring across various networks. The focus of this week is Bitcoin, Fantom, Avalanche, Stacks, and LayerZero, each coin facing a significant milestone. The broader macro context is also crucial, especially the Federal Open Market Committee's (FOMC) interest rate decision on December 18 in the United States.

#1. Bitcoin and cryptocurrencies await the FOMC decision

Bitcoin traders and investors are watching the Federal Reserve's policy meeting set to occur on Wednesday, December 18, at 2:00 PM Eastern Time, followed by a press conference from Fed Chair Jerome Powell at 2:30 PM Eastern Time. Saxo Bank wrote in their latest investor note that, 'The Federal Reserve is expected to cut the interest rate by 25 basis points (bps) this week, lowering the target range for the federal funds rate to 4.25-4.50%.

According to futures data, there is a 95% chance of this move occurring, following a similar cut in November. While the rate cut appears to be priced in, the market will closely scrutinize the Fed's Summary of Economic Projections (SEP) and its 'dot plot', indicating the anticipated path of policy rates for 2025 and beyond.

Any signals indicating that the Federal Reserve may limit the pace of future cuts—especially if they adjust the dot plot from four rate cuts in 2025 down to three or even two—could affect risk assets like Bitcoin and cryptocurrencies. Many analysts point to the labor market, which is weakening, and easing shelter inflation, evidenced by slowing rent increases, as major reasons for further rate cuts.

However, the Fed may convey a more cautious stance and emphasize the so-called 'Trump inflation' risks, referring to the possibility of reinstating trade tariffs under the upcoming Trump administration that could push inflation higher. If such inflation risks remain persistent, the Fed may pause or slow the pace of cuts in 2025, which would be seen as a hawkish turning point.

The new dot plot for 2025 now expects to show about 3.625%—the baseline assumption for three rate cuts next year—but the market has speculated that this number could rise to 3.875% if the Fed becomes more cautious. Bitcoin's immediate reaction is likely to depend on the tone of the meeting, with a less dovish Fed likely causing volatility for BTC price action.

#2. Fantom (FTM)

Fantom is entering a new era with the upcoming Sonic L1 mainnet launch, a transformative upgrade that will significantly improve network throughput and cost efficiency. Developers behind Fantom have emphasized that Sonic is capable of processing around 10,000 transactions per second, with near-instant finality—a significant leap over current network capabilities.

Planned amendments are also set to reduce operational costs, with a reported 66% reduction in validator node costs and minimized storage requirements. Another crucial detail is Fantom's decision to maintain compatibility with the Ethereum Virtual Machine, enabling EVM-based applications to easily migrate to the upgraded chain without needing to modify their core code.

Sonic will also launch a new token, symbolized as S, which will replace the current FTM token on a one-for-one basis.

Cryptocurrency trader Jacob Canfield stated via X, 'I shared this setup x subs last week, but FTM is close to a price discovery breakout. We need to clear the bearish momentum base and close a 4-hour candle, and we might see rapid price discovery. The chart aligns well with the SONIC launch.'

#3. Avalanche (AVAX)

Avalanche will be another focus in the cryptocurrency industry, as the Avalanche9000 upgrade will officially launch on the mainnet today, December 16. This event follows the testnet launch on the 'Fuji' test network on November 25.

This much-anticipated mainnet launch is described by Avalanche's core developers as the most significant upgrade in the chain's history. Adding to the excitement is Avalanche's announcement on December 12 about a $250 million private token sale led by Galaxy Digital, Dragonfly, and ParaFi Capital, with over 40 other organizations participating.

According to official statements, this funding round will bolster Avalanche's treasury, which has been valued at around $3 billion in AVAX tokens and follows a previous $230 million token sale in 2021.

Avalanche9000 combines the Etna Upgrade and key community proposals ACP-77 and ACP-125, completely reimagining how Avalanche's subnets operate—now referred to as layer 1. In doing so, Avalanche transitions from a costly validation system requiring 2,000 AVAX per deployment to a more subscription-like model, charging 1.33 AVAX per month. The upgrade also focuses on cross-chain connectivity, enabling more complex inter-chain communication within the broader Avalanche ecosystem.

#4. Stacks (STX)

Stacks is another name to watch as it prepares to launch sBTC on Tuesday, December 17, at 11:00 AM Eastern Time. This new asset supported by BTC is designed to bring Bitcoin liquidity directly into the DeFi space on Stacks, offering a notable rewards program with no staking requirements.

According to the project's official announcement, the sBTC rewards program offers an annual Bitcoin reward of 5%, paid in bi-weekly installments, with distributions made in actual Bitcoin, not third-party tokens. The first phase of the program, starting on December 17, will focus on the functionality of depositing and accruing immediate rewards for sBTC holders. The second phase, currently planned for March 2025, is expected to incorporate more advanced DeFi capabilities and reward structures, thereby expanding the utility of sBTC.

#5. LayerZero (ZRO)

LayerZero completes the watchlist of the week with a governance milestone. On December 20, 2024, at 00:00 UTC, ZRO token holders will participate in a referendum on the network's first fee transition, a vote that could trigger protocol fees on all LayerZero messages.

The referendum is quite simple, posing just one question: 'Turn on the fee switch?' If the majority vote 'Yes', assuming the required quorum is met, a fee corresponding to the basic DVN and Executor costs for each message will be enacted, essentially doubling the costs for each cross-chain transfer.

The fees collected will then be used to buy back and burn ZRO, potentially reducing the circulating supply and impacting the token's economics. The ZRO balance on Ethereum, Optimism, Base, Polygon, Avalanche, BNB Chain, and Arbitrum will all count towards each holder's voting rights, seamlessly aggregated through LayerZero's lzRead feature.

The referendum will last seven days and conclude on December 27, 2024. A 60% quorum of the votes in circulation is needed for the vote to be valid; if this threshold is not met, the result will default to 'No'. If the referendum is passed, protocol fees will be activated immediately, potentially changing the dynamics of how developers and users manage cross-chain communication.

This governance mechanism is set to repeat every six months, although the quorum requirement will decrease by 5% each time if not met, down to a minimum of 20%.

At the time of reporting, Bitcoin was trading at $104,748.