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Hey there, Crypto Patriots!

You’re reading the Hodl Report, where we make crypto great again - one insight and one meme at a time…it’s gonna be yuge! 🔥💡

Today’s lineup:

• Making sense of the market’s mood swings 🎢

• Our game plan for short-term trades 📈

• The $10T market cap dream and what it means for your bags 🚀

• Key news you don’t want to miss 📰

• A dash of crypto humor to keep things light 😂

If the crypto market had a Facebook status right now, it would read:

“It’s complicated.” 🤷

Last week, the market threw a tantrum over jobs data and prices dipped. 📉

This week, prices are vibing off inflation data. 📈

And next week? Trump takes office.

Hodl onto your portfolio folks, it’s going to get spicy! 🌶️

Let’s unpack the short-term chaos of this tug-of-war market:

What’s Got Us Worried?

1. Historical Trend: Liquidity vs. Bitcoin Price

Historical patterns between M2 money supply (basically the market’s liquidity fuel) and Bitcoin’s price hint at a short-term dip ahead.

This chart reveals Bitcoin’s sneaky habit of trailing the M2 money supply by about 10 weeks. Liquidity goes up or down, and like clockwork, Bitcoin follows 10 weeks later.

More liquidity means more money looking for a home, and some of it inevitably flows into crypto, pumping prices.

2. Macro Indicators: Inflation & Interest Rates

These macro indicators crank up or tighten liquidity, which means more or less cash flowing into crypto.

Sure, the market cheered inflation data this week, but let’s not party too hard, we’re still way below the Fed’s target.

As a result, a lot of folks have done a 180 on their expectations for interest rate cuts.

With inflation steady and unemployment low, the Fed has basically hit the snooze button on rate cuts, which means no new liquidity for now. Less liquidity = fewer moonshots. Sad. 😢

3. PTSD: Sell the News

We’ve seen this movie before, back in 2017, when every crypto project teased “a big announcement.” Prices would moon on the hype of the announcement of the announcement, only to crash right after, even if the announcement was actually game-changing.

Trump’s inauguration on Monday is the latest hype train, but our crypto PTSD has our spidey senses tingling.

This Bitcoin price chart shows the recent down-trend being broken on the lead up to inauguration day.

The question is do we retrace or break out of this channel?

What’s Keeping Us Reassured?

1. Trump’s Crypto Promises

Rumor has it Trump’s Day 1 executive orders could include repealing SAB 121, clearing the way for banks to finally make crypto custody a thing.

Day 1 will also reveal if he’s serious about his crypto campaign promises. Will Ross Ulbricht finally get his sentence commuted as promised numerous times by Trump?

It’s no small task, given that Ross is in prison for running a dark web marketplace (Silk Road) where anything from drugs to hit jobs could be bought with Bitcoin

A move like this could send a yuge pro-crypto signal, solidifying the Trump administration’s pro-crypto intentions.

2. Market Resilience

The market has been showing its strength lately. The dips are smaller, rebounds are quicker, and buyers are scooping them up in no time.

It’s got all the vibes of a strong crypto market right now and it feels like we are gearing up for something big.

3. Crypto in the Spotlight

With the pro-crypto administration stepping in on Monday, crypto’s about to hog the spotlight like never before. More media coverage means more eyeballs, more curiosity, and, yep, more demand.

Add to this the powerhouse TradFi players that have been talking up Bitcoin, and we have the kind of hype train we’re all ready to board. 🚀

How We’re Playing This

Short-term, we’re bracing for some turbulence. Without more rate cuts or liquidity boosts, the market might stumble before it sprints. Starting now, we are taking a 3 pronged approach:

• Trim the Fat: We’re selling off some speculative altcoin positions and shifting into large-cap and stablecoins.

• Buy the Fear: Keeping reserves ready to scoop up altcoin bargains on extreme dips.

• Wait for Clarity: Staying nimble until we see more concrete action from Trump’s administration.

We’re also checking in with our trusted oracle, Scottie Pippen, who’s had another vision: we’re only at the bear trap stage of this bull run adventure.

Zooming out, the mid-to-long-term horizon looks brighter than Saylor’s BTC stash.

Predictions for a $10T market cap in 2025 are everywhere, and we dive deeper into how that translates for prices below. 👇

The Road to $10 Trillion 🛣️

It’s 2025.

The world’s still arguing whether Bitcoin is digital gold (spoiler: it is), Peter Schiff is still wrong.

Many predict that crypto will be knocking on the door of a $10 trillion market cap.

But how do we get there? And what does that market cap mean for your bags?

Let’s break it down into three scenarios: Bear 🐻, Base 📊, and Bull 🐂.

First, some we-are-still-early perspective:

• Gold’s market cap sits at a massive $18.5 trillion.

• Bitcoin? A "mere" $2 trillion.

If Bitcoin’s the digital gold, then we’re still absurdly early. Sure, Peter Schiff will fight us on this until his final tweet, but it’s clear we’re watching the dawn of a new asset class.

What Needs to Happen to Hit $10T?

The road to $10 trillion isn’t a straight line. Interest rates, liquidity cycles, and regulatory moves will all play a part in furthering the adoption of crypto.

In 2025, the big movers will be institutions and pension funds finally dipping their toes (or diving headfirst) into crypto. Nation-states getting involved would be a sweet bonus, but let’s not bank on it being a major driver just yet.

Meanwhile, some gold bugs are bound to wake up and shift some of their allocation to crypto, chipping away at gold’s massive market cap like a relentless pickaxe. ⛏️

The Scenarios: Bear, Base, and Bull

At the time of this writing, this is where things stand.

🐻 Bear Case: $5 Trillion Market Cap

• Bitcoin Dominance: 52%

• Altcoins: Suffering, but some solid projects survive.
  In this world, Bitcoin dominates, liquidity is meh, and altcoins are getting a bit of a boost from an underwhelming cycle.

📊 Base Case: $7 Trillion Market Cap

• Bitcoin Dominance: 48%

• Altcoins: Picking up steam.
  Steady growth, regulatory clarity, and institutions dabbling in the crypto pool drive a reasonable bull run.

🐂 Bull Case: $10 Trillion Market Cap

• Bitcoin Dominance: 45%

• Altcoins: Thriving - altseason is in full swing.
  The stars align: liquidity flows, strategic Bitcoin reserves become a thing, and institutions jump in headfirst.

1. Trump’s SEC to Revamp Crypto Policies: Reports suggest Trump’s SEC is planning a major shift in crypto regulation, possibly pausing enforcement actions. This could mark a friendlier era for crypto markets.

2. Tether Founders Move to El Salvador: Tether and its founders are finalizing their relocation to El Salvador, solidifying the nation’s reputation as a global crypto hub. Expect the move to further boost El Salvador’s Bitcoin-centric economy.

3. AI Agent Market Sees Huge Wipeout: The AI agent crypto market has taken a major hit, with significant losses across the sector. The dip highlights growing concerns about overhyped narratives in the space.

4. Coinbase Introduces Bitcoin Loans: Coinbase now offers Bitcoin-backed loans for U.S. users, allowing them to borrow up to $100,000 without selling their BTC. This move adds a new dimension to Bitcoin’s utility for American investors.

5. SEC Loses Motion in Coinbase Case: A U.S. court denied the SEC’s motion in its ongoing battle with Coinbase, marking another legal victory for the crypto exchange. This decision could set a precedent for clearer crypto regulations.

6. Strategic Bitcoin Reserve Bills Proposed: New Hampshire and North Dakota are considering bills to establish state-level strategic Bitcoin reserves. If passed, these initiatives could position the states as leaders in Bitcoin adoption.

7. Sony’s Blockchain Launch Sparks Controversy: Sony’s Soneium blockchain launch is facing backlash over its lack of decentralization. Critics argue that the platform undermines core blockchain principles.

8. Thailand Eyes First Bitcoin ETF: Thailand is considering approving its first Bitcoin ETF to attract more investment in the sector. The move could position the country as a regional crypto leader.

Big thanks for making it to the end of this week’s Hodl Report! 👊

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Happy Friday!

Disclaimer: The content from Hodl Report should not be taken as trading, investment or financial advice or solicitation to buy or sell any assets. This newsletter is for informational and educational purposes only. Please be careful out there and DYOR (do your own research).