Weekend Developments in Crypto and Geopolitics

Good evening, crypto enthusiasts. I hope you had a good weekend. This weekend was marked by geopolitical tensions, as the US and Israel reportedly attacked Iran, or at least the Iranian government. Despite this, the crypto market seems to be holding steady. Bitcoin is up by 5% today, experiencing some fluctuations but ultimately rising. Some altcoins have also increased, with NEAR up by 16%, although most of the top 50 aren’t performing better than Bitcoin.

Institutional Adoption and Community Concerns

The question on everyone’s mind is whether the crypto community is overreacting to the topic of institutional adoption. There’s a narrative suggesting that as crypto enters the realm of big institutions, governments, and banks, the original vision for the “money of the little people” is at risk. However, some argue that this perspective might be exaggerated, and that institutional adoption could still benefit individual holders.

Kathy Wood’s Perspective on Bitcoin and Stable Coins

Kathy Wood offers an interesting counterpoint, suggesting that some holders are losing perspective as traditional finance enters the crypto space. She emphasizes that Bitcoin is the first global digital monetary system without government oversight, which is a significant innovation. However, stable coins have started to take on roles many thought Bitcoin would fill, especially in emerging markets where people prefer the stability of dollar-backed assets.

This preference for stable coins over Bitcoin is noteworthy. While Bitcoin’s scarcity is often highlighted, the reality is that the cryptocurrency market is vast, with numerous coins gaining significant followings. As Bitcoin becomes more expensive, the market can expand, allowing for investment in a variety of cryptocurrencies. This diversification challenges the notion that Bitcoin’s scarcity is its ultimate advantage.

The Role of Stable Coins and Tokenization

Stable coins allow people to hold dollars in a digital form, representing a form of tokenization. This development means that soon, people will be able to purchase anything on the blockchain without intermediaries like brokers or banks. Once money is in the crypto network, users have the freedom to hold any asset they choose, representing a significant shift in financial autonomy.

Gold, Bitcoin, and Market Correlations

Wood also discusses the recent performance of gold compared to Bitcoin. Despite Bitcoin being considered “digital gold,” its correlation with gold has been low, especially since 2019, as more traditional investors have entered the space. The correlation stands at 0.14, indicating almost no correlation. Historically, gold has often led Bitcoin’s performance, acting as a leading indicator in recent cycles.

Early Bitcoin Adopters Selling

We’re observing a trend where many original Bitcoin adopters, often referred to as OGs, are selling their holdings. The reason behind this, according to some, is that Bitcoin has deviated from its original purpose. They believe that too many traditional financial players are now involved. However, from our perspective, and in collaboration with Dr. Arthur Lafer, known for the Laffer Curve, the integration of Bitcoin into the traditional financial ecosystem strengthens our conviction that it is becoming the new global monetary system. Our confidence in Bitcoin has actually increased as its price has decreased.

Some early adopters are selling because they feel Bitcoin is no longer what it once was. But why sell when institutional adoption is just beginning and the price is expected to rise? It doesn’t make much sense unless you’re taking profits after making life-changing money. Selling a portion for financial security is understandable, but selling at $60,000 when it recently reached $120,000 seems premature. We shouldn’t be overly concerned about institutions taking over. Instead, we should aim to front-run these institutions by buying before they do. It’s crucial to invest in assets that are being adopted and implemented by banks and other institutions.

Adoption of Bitcoin and Altcoins

Bitcoin is being adopted by countries and is considered for reserves, but it’s not yet functionally used. It’s more about accumulation. In contrast, altcoins like Solana (SOL), XRP, and Chainlink are being integrated into systems and are likely to increase in value. It’s wise to continue front-running institutions and invest while prices are low. Always remember to dollar-cost average (DCA) because the crypto market is highly volatile.

Brian Armstrong’s Experience with US Government

We have a video of Brian Armstrong discussing his experiences with the US government, particularly with Elizabeth Warren, who is known to be anti-crypto. She has significant influence over banks and, when crypto emerged as a new system, she reportedly asked Gary Gensler to take a hard stance against it in the US. This led to what Armstrong describes as “lawfare.” Despite meeting with the SEC around 30 times after Coinbase became a public company, they received no guidance on regulations. Instead, they faced enforcement actions without clear explanations of any legal violations. Armstrong’s account suggests that the previous administration, influenced by Warren, was not supportive of crypto, leading to regulatory challenges for companies like Coinbase.

Challenges Faced by Crypto Companies

Crypto companies often found themselves in legal trouble without clear guidance on what they were doing wrong. They would be sued and left wondering about their mistakes, with no one explaining that they needed to stop selling certain coins or cease specific activities. The lack of regulation seemed designed to disadvantage these companies. It’s crucial that the new administration doesn’t follow this pattern.

Current Trends in Crypto and AI

Simon Dedic noted that VVV, a blockchain, quietly achieved a 7x increase over the last three months. He expects this trend to continue, as the combination of crypto and AI is becoming a compelling case for growth and the future of the industry. However, distinguishing valuable projects amid the noise is challenging. Identifying projects that are building something solid and fundamentally valuable at this intersection is key to finding the winners.

Market Dynamics and Investment Strategies

Over the past year, a particular cryptocurrency has been on the rise, currently valued at around 334 million. Initially, it crashed after its launch but has since been climbing. Predicting which projects will succeed is difficult, as many factors, including marketing, influence their performance. While some projects with strong fundamentals don’t see significant growth, others unexpectedly take off. The safest strategy is to invest in reputable coins, aiming for returns like 3x, 4x, or 5x, while making small, calculated bets on other projects.

Crypto’s Relative Value and Long-Term Investment

Dan Morehead from Panta Capital highlighted that crypto is currently showing one of its strongest relative value signals in years, trading 50% below its long-term trend. It’s near the 7th percentile of its 8-year valuation range, meaning it has historically been higher 93% of the time. This makes crypto appear cheap, especially compared to AI stocks, which are trading about 20% above trend. Morehead also emphasized Bitcoin’s long-term profitability, noting that every investor who has held BTC for four years has historically been profitable. Patience and a long-term hold strategy are recommended.

Market Manipulation and MEV

An interesting incident involved a trader who swapped 220,000 USDC to USDT and only received 5,000 due to being “MEV’d” or sandwiched. Maximal Extractable Value (MEV) refers to the profit that validators or bots can extract by reordering, inserting, or censoring transactions within a block. This often affects users trading on decentralized exchanges (DEXs) like Uniswap, SushiSwap, and PancakeSwap. When using a DEX, traders select the coin they want to trade and the payment method, always considering slippage. High slippage can result in significant financial loss.

Understanding the Sandwich Attack

The sandwich attack unfolds in three steps. First, your $220,000 swap appears in the public mempool before confirmation. An attacker then front-runs the transaction by using a bot to submit a transaction before yours, buying USDT and pushing the price up. It’s puzzling how they can inflate the price of USDT so significantly. As a result, your trade executes at a worse price due to this artificial inflation, leading to a heavily distorted rate. If your slippage tolerance is high, the trade will still execute, even at a terrible price. Therefore, it’s crucial to ensure that slippage is set low. The bot then sells back the USDT immediately after your trade, capturing the price difference as profit, leaving you with a loss. If slippage was set between 50% to 90%, it could explain losing so much money. This situation might occur if you swapped through a small liquidity pair, a malicious pool, or a misrouted path. Such occurrences are not normal, and caution is advised when swapping large amounts on platforms like Pancake Swap. For significant transactions, using a reliable exchange like Binance is preferable. Sometimes, unexpected issues arise during blockchain trades, leading to potential losses, so vigilance is necessary.

Crypto Accumulation Strategy

Crypto coach advises, “I don’t pray for bull markets. I accumulate in silence. Predators don’t celebrate their position.” The strategy is simple: keep buying and stacking without discussing it. Some of the wealthiest individuals in crypto started early and consistently bought more as prices dipped. They focused on accumulating good coins or Bitcoin over time, leading to substantial wealth over five to seven years.

Market Predictions and Opinions

Crown, a trader seen on LEO trades, predicts that BTC in March 2026 will likely not fall below $53,852 or rise above $76,139 this month. He expects the market to remain range-bound and uneventful. This could be due to the anticipation of the Clarity Act, which might be causing distractions. Investors might be waiting for its approval before making significant moves.

Market Sentiments and Humor

Jim Kramer warns that American Bitcoin investors could potentially lose everything. However, following the reverse Kramer theory, this might indicate positive outcomes. Lastly, Krypto Tony shares a meme depicting a chaotic scene with everything going wrong, yet everything is going as planned. It’s a humorous take on the unpredictable nature of the market.