25 January

“Cryptocurrencies are starting to stabilize after declining sharply over the past week. Some indicators show investor sentiment at extremely bearish levels, which typically precede periods of buying activity. Bitcoin returned to above $35,000 and was up 3% over the past 24 hours, versus a 5% decline in SOL and roughly flat performance in ETH over the same period.

Long-term bitcoin holders appear unfazed. The proportion of long-term holder supply has actually returned to a modest uptrend, which indicates a general unwillingness for this cohort to liquidate.’ Inflows into digital-asset funds last week – after five straight weeks of outflows – suggest investors were taking advantage of the price dip.

I think the determination of a bull/bear market is not as clear as previous cycles, due to the structure of the market changing drastically with institutions entering the space. Now, it is apparent that bitcoin is in a ranging environment (between $29,000 to $69,000 approximately) rather than a trending environment.”

See Also: Near Record Foreign Demand For Stellar 2Y Auction Suggests Fed Tightening Panic Is Over
See Also: Bitcoin ‘enters value zone’ as BTC price floor metric goes green again
See Also: Analysts say Bitcoin’s bounce at $36K means ‘it’s time to start thinking about a bottom’

All Eyes on FOMC

No matter which way the Fed goes, the game theory calls for more capital moving into crypto.

  • Fed backs down: Currency devalues. Everything Bubble back on. Bitcoin up.
  • Fed hikes and normalizes: Global bond bubble implodes. Debt collapse. Capital flees, at least some of it into Bitcoin.
  • Central banks issue CBDCs: Yield curve control, no more cash, social credit (no jab = can’t spend). Capital flight to cryptos.

So while the nocoiner NPCs suffering from monetary Stockholm Syndrome gleefully celebrate Just Another Crypto Correction, remember to zoom out and keep the big picture in mind. We aren’t dealing with an asset bubble in Bitcoin, we’re dealing in a collapse of the global monetary regime, the decentralized revolution and the obsolescence of the nation state.”

Bankless: Inflation, The Fed, & Macro Markets

The Biden administration is readying an executive order for release as early as next month that will outline a comprehensive government strategy on cryptocurrencies and ask federal agencies to determine their risks and opportunities.

The directive would place the White House in a central role overseeing efforts to set policies and regulate digital assets. Biden Administration senior officials have met multiple times to discuss the directive, which will be presented to the president in the next few weeks.”

“A U.S. central bank digital currency (CBDC) would differ from the digital money currently available to the public because it would be a liability of the U.S. Federal Reserve, not a commercial bank, and so would have no credit or liquidity risk, Bank of America said in a report.

Preserving the dollar’s status as the world’s reserve currency, improving cross-border payments and increasing financial inclusion are all seen as benefits of a U.S. digital currency, analysts led by Alkesh Shah, wrote in the note Monday.

Bank of America said key considerations before issuing a CBDC are the need for it to be privacy-protected, intermediated, transferable and identity-verified. Stablecoins are likely to see an increase in usage in the absence of CBDCs, the bank noted.

See Also: Uniswap founder’s bank account shut down by JP Morgan Chase, shadow-debanking allegations surface

“Decentralized predictions platform Polymarket has launched new information markets just three weeks after being fined $1.4 million by regulators. However, U.S. residents will not be able to trade on the site.

Earlier this month, Polymarket launched a market called Airdrop Futures that allows speculators to follow and trade on the likelihood of airdrops.”

“A Saturday post by Telegram founder Pavel Durov stated that the proposed ban on crypto would ‘destroy a number of sectors of the high-tech economy.’

These technologies improve the efficiency and safety of many human activities, from finance to the arts. Such a ban is unlikely to stop unscrupulous players, but it will put an end to legal Russian projects in this area.”