VaultCraft launches V2, TVL skyrockets above $100M

VaultCraft launches V2, partners with Safe, and secures $100M+ in Bitcoin

• Matrixport, Asia’s leading crypto providers, commits $100M+ in Bitcoin

• OKX Web3 to launch Safe Smart Vaults with $250K+ in rewards

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Ah, 2025. The year all of your dreams come true. You will buy the exact bottom of every downswing. You will sell at the exact peak in October 2025.

At least, the anonymous Twitter accounts will. You and I will take the market as it comes.

Raoul Pal’s followers suspect the crypto market will reach its peak after June 2025. Almost 61% said so.

I posted the same poll below. Let’s see when your fellow readers suspect the cycle will top!

On an aside, it’s funny how Twitter highlighted the minority response, “Before June 2025,” because it got more votes than the other choices. You might conclude that most of his followers expect the market will top before June 2025.

Social media is like that. So are a lot of charts.

Likewise for cycle theories and data models. Read my commentary on each major model/theory in a series of Medium articles for Data Driven Investor, Bitcoin Cycles and Models: A Realist’s Perspective. 

When I finish publishing all articles, I will wrap the whole series into a special free report for premium newsletter subscribers. If you don’t want to wait, you can get a Medium subscription by visiting the link above.

Make sure you caught my market updates from December 27, 2024 and January 3, 2025.

Both updates look at short- and long-term patterns and trends that should play out in the coming weeks.

Scroll down for that poll and some content you may enjoy.

You can reply to this email to contact me directly. Or, use this button to leave a comment at the bottom of any post.

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Chart of the Week

Infinite Money Glitch: Michael Saylor’s Convex Payoff Model — Turning Bitcoin Volatility into Strategic Advantage

In a recent article for The Capital, ab1sh3k explains how MicroStrategy’s Bitcoin approach is more than genius financial engineering. It’s a four-pronged strategy for debt financing, equity programs, yield generation, and market timing.

When Bitcoin’s prices soars, MicroStrategy’s stock rises. Bondholders convert debt to equity.

All the while, MicroStrategy sells shares to raise cash and leverages its Bitcoin holdings for yield and credit.

When Bitcoin’s price drops, the company has the option to buy more from its corporate holdings (the only time MicroStrategy will use its own money rather than speculators’ cash).

If Bitcoin fails, MicroStrategy pays out bondholders and goes out of business. Saylor and his crew keep their money.

That sure beats the hell out of running a profitable business. Read the article for more.

What does this mean for $MSTR stock?

I don't know, but as long as Bitcoin’s price goes up faster than shareholders get diluted, investors should win (with volatility along the way).

I think it says more about the so-called “intrinsic value” of the stock market than the intrinsic value of Bitcoin. For my thoughts, my Hackernoon article, How MicroStrategy Exposes the Absurdity of the Stock Market.

Poll

JP Morgan poo-poos crypto

Bottom line: Supposedly, JP Morgan’s Global Markets Strategists observed that 28% of 2024’s record capital inflow into crypto markets was MicroStrategy’s buying of BTC. In other words, MicroStrategy makes up 25% of the buying pressure.

My take: Since screencaps usually match the content they quote, I’ll assume this is correct.

No doubt, Saylor is a big driver of Bitcoin’s gains. The circular flows will continue as long as enough speculators think MSTR can keep it going.

But it seems hard to believe that $78 billion caused Bitcoin’s market cap to double by $1 trillion, even with a generous multiplier. I suspect they are looking at inflows from institutional buyers and other large entities that would capture JP Morgan’s attention, not retail investors like you and me. Various data sources put retail participation into the hundreds of billions of dollars.

(We don’t need $1 trillion of inflows to push Bitcoin’s market cap $1 trillion higher. On any given day, all buyers and sellers exchange $20-40 billion on average. As a result, you could theoretically double Bitcoin’s price with a $40 billion inflow, assuming nobody sells—or send Bitcoin’s price to $0 with a $40 billion sale, assuming nobody buys. In reality, this will never happen because you will always have people on the other side of the deal, but you get the idea.)

Why you should care: You appreciate how much MicroStrategy’s actions sway the market but don’t blow it out of proportion.