6th February 2026 > > Ouch!

tl;dr

Ouch says it all.

Market Snap

Market Wrap

This has been a painful week dropping from the low-80s to nearly breaching $60k to the downside. Tech stocks have been taking a battering too, but not quite to the same degree – an ETF for the software sector is down 30% since October highs compared to BTC’s near 50% drop – driven by the mutually incompatible fears of either an A.I. bubble, or an A.I. destruction of large swathes of jobs held by white-collar workers. Truly a difficult situation to be in.

The almost daily bleed out of the spot BTC ETFs provides a constant need for the APs to hedge by selling futures, putting further downward pressure on the real price of BTC. With MSTR now trading at a discount to its NAV it won’t be able to step in to add to its stash without diluting current shareholders in terms of BTC yield, which is not a viable option for the long-term credibility of MSTR.

Much more of this and the psychologically important level of $50k will appear on the horizon. If – as seems increasingly likely – the four-year cycle is intact, we should expect a test of $50k soon followed by sideways movement for the rest of 2026, which is all going to get a little dull if so.

Occasional Series – I think this might be true

“Americans spend more on OnlyFans than they do on OpenAI and The New York Times combined.”

The Breakdown, 01/02/26

Curious Cryptos’ meme corner

An oldie, but a goodie.

Curious Cryptos’ Commentary – Sri Lanka

Our search for a second overseas office is already starting to look promising:

Curious Cryptos’ Commentary – Brazil

The Brazilian government has put forward legislation that all countries need to emulate – the banning of stablecoins that are not backed with cash or cash-like equivalents collateralised at greater than 100%. It is true that in the US the GENIUS Act gives regulatory approval to fully collateralised stablecoins, but it does not go as far as banning the alternatives.

The LUNA/Terra collapse in 2022 in response to the broader crypto crash was triggered by the impossibility of any algorithmic stablecoin to be designed effectively for all situations. Of the four largest stablecoins, only USDC is fully backed:

USDT     $190bn

USDC    $60bn

Dai         $5bn

USDe     $5bn

Tether has long played fast and loose with the collateral backing its stablecoin USDT. Today I read that it has taken a stake in crypto bank Anchorage, and in Gold.com to boost tokenised gold distribution. Clearly both investments are highly correlated to the overall health of the crypto market – Tether is acting extremely irresponsibly. If the company got into financial trouble, that really would be a problem for the crypto markets.

Dai relies solely on an algo which will break one day. USDe uses the old cash-and-carry trade which has frequently taken out leveraged players during every downturn in every financial cycle. My advice is never contemplate getting involved in either ecosystem.

…

So, well done Brazil. Who’s going to follow?

Curious Cryptos’ Commentary – Gemini

Gemini, a centralised cryptocurrency exchange, is ceasing its operations in the UK from 6^th April 2026 with all UK accounts put into withdrawal mode only from 5^th March 2026.

If you have crypto assets at Gemini, you should move them as soon as you can to either another exchange (Coinbase probably) or to a self-custody wallet (Ledger Nano Flex).

Beware of phone calls from someone claiming to be from Gemini to help you move your assets – the caller is a feral scammer. Call them out, tell them to die slowly and painfully as their loved ones laugh in their face, then calmly put the phone down.