The Wolf Den #1113 - Nations Will Buy Bitcoin
Fidelity Said It!
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In This Issue:
Nations Will Buy Bitcoin
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
The Ethereum Foundation Is Taking Profits?
Exodus Is Live On The NYSE
Coinbase Scores A Win Over The SEC
The Virtuals Protocol Discord Server Was Hacked
Bitcoin Frenzy: Why Everyone Is Rushing to Buy NOW
Nations Will Buy Bitcoin
News remains slow, especially with prices stuck in limbo, struggling to find stability.
The big story yesterday was Fidelity’s “2025 Look Ahead: Is it ‘too late’ to enter digital assets?” which set Twitter ablaze with everyone quoting a single line:
“This is to say, we anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in bitcoin.”
The problem? That headline alone doesn’t capture the depth or nuance of Fidelity’s analysis. It’s a snippet taken out of context, leaving much of the bigger picture unexplored.
I know I’ve been on a streak sharing these reports lately—partly because they only drop once a year and partly because the crypto news cycle has been slow—but bear with me as I dive into one more.
At the very least, these reports provide a refreshing distraction from falling prices and keep the focus on the long-term vision—the primary goal of this newsletter. Plus, with direct access to Fidelity’s report this time, I can share key quotes and visuals that stand out.
Without further ado, let’s tackle the question: “Is it ‘too late’ to enter digital assets?”
The opening segment, “Are We Too Late?” tackles a question on everyone’s mind, so I’ll share my own perspective before diving into Fidelity’s.
Are we too late for the end of this cycle? I don’t think so. We haven’t seen a true frenzy yet, and there’s still plenty on the near-term horizon for Bitcoin. Are we too late for the bulk of the gains this cycle? Probably—Bitcoin’s rise from a low of $15,700 to over $100,000 means much of the easy upside has been realized. Are we too late for where Bitcoin will be in 2030? Absolutely not. The answer to “are we too late?” depends entirely on your time horizon.
Here’s my promise: when it’s truly too late, I’ll either stop writing this newsletter or find something else to talk about. Until then, there’s still plenty to discuss.
Fidelity’s answer is thoughtful:
“Therefore, it may be too late for the speculators that want another frenzy. However, we believe we are still incredibly early in terms of this new era of sustainable adoption, diffusion, and integration.”
I couldn’t agree more.
The report includes a table comparing the adoption of the internet to that of digital assets. This comparison underscores the difficulty of pinpointing where the industry stands in terms of growth and development. Fidelity adds:
“This process is not linear and can vary significantly depending on the technology, its potential impact, and the regulatory and societal response. Some technologies may remain on the fringes due to persistent ethical or legal concerns, while others may rapidly transition into mainstream use.”
It’s a powerful reminder that while progress may not always follow a straight line, the trajectory for Bitcoin and digital assets remains one of immense potential.
I’d argue that certain parts of the crypto industry—like Bitcoin, Bitcoin ETFs, and recognizable companies such as Coinbase—have undeniably entered the mainstream. However, beyond that, even Ethereum hasn’t quite reached the same level of mainstream acceptance, let alone the vast ecosystem built on or adjacent to it.
The color scheme on the chart below might be misleading at first glance, but this description offers clarity:
“It appears this did happen as both gold and bitcoin moved together in the first part of the year, then gold continued its climb while bitcoin remained flat in the middle of the year. Bitcoin has since regained its ascension, outpacing gold again.”
Here’s my take: Bitcoin is going to obliterate gold over the next five years—gold bugs, consider yourselves warned.
Let’s skip ahead to some real drama…
I appreciate Fidelity’s balanced approach to comparing ETH and SOL. From here on out, the performance of Solana and Ethereum will likely play out like an intricate, highly performative dance—a push and pull with no definitive winner. Ethereum offers returns that are less dependent on speculation, while Solana “appears to have more short-term tailwinds than ether.”
For the more technically inclined Ethereum investors following the roadmap:
On another note, Fidelity confirms the unfortunate truth that Ordinals and Runes were in fact a fad. Maybe Trump cards can save Ordinals.
Fidelity gives a brief nod to AI Agents:
Now for the segment everyone has been waiting for:
“The approval and launch of spot bitcoin ETPs earlier in 2024 led to substantial demand for exposure to bitcoin from institutional and retail investors alike. This regulated, familiar, and accessible vehicle has made allocating to bitcoin more streamlined than ever before, leading to several pensions and at least one endowment making allocations to bitcoin through these products.34, 35, 36 While we expect to see this trend accelerate throughout 2025, one might wonder who the next significant investor might be to add bitcoin to their portfolios.
Enter nation-states and governments. The largest government holders of bitcoin currently are the U.S., China, United Kingdom, Ukraine, Bhutan, and El Salvador.”
It’s not widely known that the United States holds a significant amount of Bitcoin. Most people are surprised to learn this—and even more so when they find out that other major countries, like China and the U.K., do as well. What’s less discussed is that Trump is pro-Bitcoin and has plans for the U.S. to dominate this industry. That fact alone could fundamentally change the way the average person views Bitcoin’s role on the global stage.
Below is the exact quote everyone shared on X yesterday:
“We anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in bitcoin. Some may take notice of the playbook employed by Bhutan and El Salvador.”
Now, imagine the ripple effect if the U.S. steps up to the plate and makes a significant move to buy Bitcoin this year. The geopolitical and financial implications would be monumental.
Fidelity gives a good reason as to why the developments around the SBR aren’t clear:
I’ve heard the argument that it’s irrelevant whether the U.S. decides to buy Bitcoin at $100,000, $150,000, or $200,000 since the difference is negligible for a buyer of the United States’ scale. However, Trump is shrewd. If he’s planning a move, I could see him wanting to keep it under wraps, preferring to see Bitcoin’s price surge while he’s in office rather than allowing Biden to reap any credit. That said, let’s be honest—nobody is attributing any positive Bitcoin price appreciation to Biden.
Here’s a solid high-level overview of where we currently stand with crypto ETFs:
As it stands, ETH’s ETF AUM is roughly 1/10th of BTC’s ETF AUM. I expect this gap to narrow, with ETH’s AUM growing to represent closer to 20% of BTC’s by 2025. That said, this won’t happen overnight, as a significant portion of investors are boomers who will naturally take longer to acclimate to ETH. Still, the gap should reach at least 15% by 2025, better reflecting the proportional differences in their total market caps.
Fidelity argues that tokenization is the “Killer App of 2025.”
Institutions have a particular affinity for tokenization. It’s less disruptive and speculative than the intersection of AI and crypto, making it a concept they can both understand and directly benefit from—provided they’re willing to adapt. Once a few major stories surface, this narrative is likely to regain the spotlight in a big way.
And with that, I’ve covered everything worth discussing here:
Investors considering Trump's potential impact on Bitcoin should focus on a four-year timeline rather than just the immediate effects of day one or the first 100 days. Trump is acutely aware of how Bitcoin’s price and the stock market reflect his presidency, as these are key metrics he’ll likely use to measure his success. If the U.S. were to purchase Bitcoin under his leadership, it wouldn’t be surprising to see Trump claim credit when other major nations inevitably follow suit.
Now, for the full Trump effect—read this in his voice:
“Let me tell you, folks, no one has ever done what we’re doing with Bitcoin—no one. When the United States steps in, everyone follows. China, Europe, you name it, they’re all going to say, 'Thank you, Mr. Trump, for leading the way.' Believe me, they’ll never admit it, but we’re setting the standard, and it’s going to be tremendous for America.
And let me be clear—when we buy, we’re not selling. The United States will hold its Bitcoin stronger than anyone else. Unlike the previous administration with their terrible decisions, we’re not here to destroy what’s been built. We’re here to win. We’ve removed the bad actors—Gensler, Yellen, all of them. They didn’t know what they were doing, folks, and now the market is booming because of it. Since we made the move, Bitcoin’s price has already skyrocketed by 100%, and it’s only going up from here. People are calling it the Trump Pump—it’s incredible, just incredible.”
Does this not feel entirely plausible?
To answer Fidelity’s question one last time: we are not too late. We may not be early in this cycle, but Bitcoin is on a path toward $1 million in the long term. Right now, you have a chance to buy it at less than 10% of that target. This won’t happen overnight, but Bitcoin’s upside far exceeds the potential gains of major indexes or even top-performing stocks like NVIDIA, TSLA, MSFT, or AMZN.
If you’re new here and missed the run-up to $100,000, forget that and set your sights on a new mission: $1 million. Sure, it sounds crazy now, but $100,000 felt just as impossible when Bitcoin was trading under $10,000. Bitcoin is better than gold and barely owned by nations—that’s all you need to know.
When those two conditions are met, I’ll honestly reassess whether we’re too late. Until then, my answer remains the same: we’re not.
Bitcoin Thoughts And Analysis
Bitcoin’s daily chart is showing further signs of weakness after losing the 50-day moving average, currently at $97,700, as support. The price continues to trend lower, approaching the significant support zone between $88,800 and $90,600. This range could act as a key level to watch if the selling pressure persists.
A potential head-and-shoulders pattern is emerging, with a neckline currently around $91,300. While this pattern is traditionally bearish, it’s essential to emphasize that it is only a possibility at this stage. For the pattern to confirm, Bitcoin would need to decisively break below the neckline with increased volume, which hasn’t occurred yet. Until that happens, this is simply a scenario to monitor rather than react to immediately.
On the 4-hour time frame, RSI has yet to reach oversold territory, indicating that there could still be room for additional short-term downside. However, I’ll be watching closely for bullish divergence in RSI, which could signal a potential bottom. The loss of the 50-day moving average is a notable concern, and reclaiming it, along with a break above $99,860, would be critical for Bitcoin to regain strength. Failure to hold the $91,300 neckline or the broader support zone below it could accelerate downside momentum.
Altcoin Charts
Altcoins are experiencing significant sell-offs, with many now reaching oversold conditions on lower time frames. On the 4-hour charts, assets like SOL, FTM, and NEAR are displaying bullish divergences on RSI, where price makes lower lows while RSI forms higher lows. This type of divergence often indicates weakening bearish momentum and the possibility of a short-term bounce. Additionally, some of these charts show extended downward wicks, suggesting demand at current levels.
However, it’s important to note that daily RSI levels for these assets remain elevated enough to allow further downside. While these conditions on lower time frames could set the stage for relief rallies, especially after such an intense sell-off, the broader trend remains cautious. Short-term traders may find opportunities, but long-term confirmations are still absent. Always manage risk accordingly.
Legacy Markets
US Treasuries rebounded on Thursday, ending a four-day selloff as strong demand for bonds globally encouraged investors to return. Ten-year Treasury yields dipped two basis points to 4.66%, retreating from near the critical 5% level. A robust Japanese auction of 30-year bonds and strong interest in a similar US Treasury sale highlighted investor appetite for higher yields. Analysts, including Standard Chartered’s Manpreet Gill, suggested these levels offer attractive income opportunities, with room for further declines in yields.
In contrast, UK assets continued their slide. Concerns over persistent inflation and weak growth pressured gilts, pushing 10-year yields up five basis points to 4.84%, the highest since 2008. The pound dropped 0.6% to its lowest level since 2023, while the FTSE 250 extended its decline for a third day. BNP Paribas warned that weaker UK growth has yet to be fully priced in, adding to the gloomy outlook for British markets.
Global equities faced headwinds, with US futures slipping and Europe’s Stoxx 600 remaining flat after weak Asian trading. In currencies, the dollar gained slightly, while the yen strengthened amid signs of wage growth in Japan. Looking ahead, the US employment report on Friday is expected to shed light on the economy’s strength and the Federal Reserve’s monetary policy trajectory. Fed officials project a slow path to rate cuts, with Boston Fed President Susan Collins emphasizing that while inflation progress is expected, the journey will be uneven.
Key events this week:
US state funeral and national day of mourning for former President Jimmy Carter is a federal holiday, Thursday
Japan household spending, leading index, Friday
US jobs report, consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 6:43 a.m. New York time
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 was little changed
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.2% to $1.0300
The British pound fell 0.6% to $1.2292
The Japanese yen rose 0.3% to 157.86 per dollar
Cryptocurrencies
Bitcoin fell 1.2% to $93,315.57
Ether was little changed at $3,299.2
Bonds
The yield on 10-year Treasuries declined two basis points to 4.66%
Germany’s 10-year yield advanced one basis point to 2.56%
Britain’s 10-year yield advanced five basis points to 4.84%
Commodities
West Texas Intermediate crude rose 0.2% to $73.50 a barrel
Spot gold rose 0.3% to $2,669.06 an ounce
The Ethereum Foundation Is Taking Profits?
I admit, the title of this segment was a bit clickbaity. The Ethereum Foundation selling 100 ETH for 329,463 DAI is barely a drop in the bucket. For context, the Foundation holds 269,600 ETH, valued at just under $900 million.
Last year, the organization sold 4,466 ETH for $12.61 million at an average price of $2,823 per ETH. There’s nothing unusual about this behavior and no reason to sound any alarms. If the Foundation were offloading 10% to 20% of its holdings annually, that would be cause for concern. But selling 1% to 2% is negligible—especially when you consider ETH’s consistent growth year over year.
Exodus Is Live On The NYSE
Popular crypto wallet company Exodus has become the first crypto self-custody company to be publicly listed on the NYSE American, the New York Stock Exchange's sibling market, trading under the ticker $EXOD. True to crypto market tradition, the stock celebrated its debut by dropping 15% in the morning—because why not—but later recovered to a 7% loss on the day.
What you may not know is that you can also purchase EXOD tokens, digital representations of Exodus Movement, Inc.'s Class A common stock, on the Algorand blockchain. Equity tokenization is already here, though it’s flying under the radar. It’ll likely take a big player, like Coinbase, to ignite the narrative fully. Still, Exodus taking this step is a significant milestone in itself.
Coinbase Scores A Win Over The SEC
Coinbase scored a minor legal victory in its ongoing battle with the SEC as Judge Katherine Failla approved an interlocutory appeal, temporarily pausing the case. This decision allows the Second Circuit Court of Appeals to review her earlier ruling, which denied Coinbase's motion to dismiss the case.
At the core of this appeal are conflicting interpretations of what constitutes a security under U.S. law, with references to recent cases involving Terraform Labs and Ripple Labs. For example, the Ripple ruling found that XRP was not a security in certain contexts—a decision that has fueled ongoing debates.
The SEC has accused Coinbase of operating as an unregistered securities exchange since 2019, arguing that some crypto transactions meet the criteria of the Howey test. The outcome of this appeal could offer critical clarity on the application of securities laws to crypto, potentially reshaping the regulatory landscape for Coinbase and the broader market.
The Virtuals Protocol Discord Server Was Hacked
Virtuals Protocol experienced a hack on its Discord server on Jan. 8, caused by a private key breach of a moderator, resulting in fraudulent links being shared with users. While the breach has been resolved, additional phishing scams surfaced on Google Search, impersonating the platform's official website.
Cybersecurity firm Scam Sniffer identified three malicious links and urged users to double-check official sources before engaging. These incidents underscore the increasing sophistication of phishing scams aimed at crypto users, posing significant risks to their funds.
I don’t know the full extent of the funds lost in this breach, but it’s likely that wallets connecting to the fraudulent links during the hack may have lost some or all of their funds. This incident isn’t necessarily an indictment of DeFi itself—aside from the inherent risk of connecting wallets online—but rather a stark reminder of how hacks are becoming more sophisticated and nearly impossible to detect in their early stages.
Bitcoin Frenzy: Why Everyone Is Rushing to Buy NOW
Alice Liu, the Research Lead at CoinMarketCap, joins me today to discuss what's going on with crypto and provide her own unique perspective on the markets. Chris Inks will join us in the second part to share some interesting trades in crypto and beyond.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.