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GM to all of you nutcases. It’s Crypto Nutshell #809 settin’ the tempo… 🥁🥜

We’re the crypto newsletter that’s more volatile than a city built on dreams slowly eating itself alive… 🌴💥

What we’ve cooked up for you today…

What’s in the Crypto Nutshell Portfolio?

BREAKING: Bitcoin briefly falls near $74,000 as thin liquidity keeps traders on edge

Brutal…

Bitcoin just crashed through $75,000 as panic selling spread across every major asset class.

BTC dropped as low as $74,000 before bouncing slightly.

It now trades around $75,003 - down nearly 5% in 24 hours and over 40% from October's peak of $126,000.

Over $5 billion in leveraged positions have been liquidated since Thursday.

Sunday alone saw $2.56 billion wiped out - the largest single-day liquidation event in over three months. Nearly 200,000 traders had their accounts blown out. (Let this be another lesson to stay away from leverage)

IBIT investors now underwater

Here's a stat that tells the story: the average dollar invested in BlackRock's flagship Bitcoin ETF is now in the red.

According to Bob Elliott at Unlimited Funds, dollar-weighted returns for IBIT have turned negative.

Early investors may still be up, but heavy inflows at higher prices have pulled aggregate returns below zero. Cumulative gains since launch - erased.

In October, IBIT's dollar-weighted returns peaked at $35 billion. Now they're gone.

What's driving the sell-off

It's not just one thing. It's everything at once.

Reports of a sharp U.S.-Iran military escalation hit Saturday. Trump posted about a "massive armada" heading to Iran.

Investors fled to safety - and Bitcoin took the hit as the most liquid asset.

Gold crashed 5.5%. Silver dropped 8%. Natural gas fell 15.5%. Even traditional safe havens got sold. The Kobeissi Letter called it "historic volatility in commodities."

Add the ongoing government shutdown (More on this in the next section), rising Japanese bond yields, and Kevin Warsh's nomination to lead the Fed - which sent the dollar surging - and risk appetite collapsed.

Strategy's cost basis breached

At the time of writing, Bitcoin has fallen below Strategy's average purchase price of $76,037.

Panic spread that Michael Saylor might be forced to sell.

CoinDesk debunked that - none of his Bitcoin is pledged as collateral.

But the damage was psychological. If Saylor can't raise cheap capital to buy more, a key source of demand dries up.

The longer view

We know it’s been tough for the last few months…

Sentiment has never been this low…

So we’re going to close out this section with a piece of much needed hopium.

The Kobeissi Letter put it simply: "There is one common denominator with every crypto crash in history. They always seem like the 'end of crypto' and they always become rounding errors in the long run."

They expect the same for 2025-2026. 🚀

It’s not just a saying - it’s the golden rule of crypto.

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Crypto just had its worst weekend of 2026.

Bitcoin plunged below $78,000, Ethereum tumbled under $2,300, and sentiment feels like it’s in free fall.

And according to macroeconomic expert Raoul Pal? It’s going to get worse.

What happened?

A partial U.S. government shutdown began on Saturday, triggered by a standoff over Department of Homeland Security (DHS) funding.

This shutdown has effectively frozen the Treasury General Account (TGA), halting government spending and draining liquidity from the system.

If you recall, this is exactly what started a free fall in crypto prices, late last year.

Raoul Pal highlighted this liquidity squeeze, noting that during a shutdown, taxes continue to flow in, but spending halts, leading to a net liquidity drain.

He emphasized that once the shutdown ends, the Treasury is expected to inject $250–$350 billion into the economy, potentially ending quantitative tightening and expanding the balance sheet.

Pal's perspective is that the current pain is temporary and that a significant liquidity influx is on the horizon.

In the meantime, expect continued volatility.

As Pal succinctly put it:

Sometimes, macro factors take time to resolve.

But when liquidity returns, it often does so swiftly.

Until then, brace for more turbulence. ✈️

Let’s kick off the week with a look at the Bitcoin HODL Waves - one of the clearest snapshots of market conviction.

Each coloured band represents the percentage of Bitcoin that last moved within a specific time frame.

The warmer the colour, the younger the coins - with red showing Bitcoin that has been held for less than one day.

Today, we’re focusing on short-term holders (STHs) - defined as coins held for less than six months.

Here’s how the Bitcoin supply breakdown looks today:

TL;DR: 30.81% of all Bitcoin is in the hands of short-term holders. 🔒

That's down from 31.28% two weeks ago.

The youngest cohort (<1 day) ticked up as some fresh buying came in. The 1 day to 1 week band contracted sharply as those coins aged out.

The 1 week to 1 month band absorbed that supply, jumping 0.78%. Meanwhile, both the 1-3 month and 3-6 month ranges shed supply as coins matured into the long-term holder base.

Short-term holders are still more reactive - prone to panic on headlines, quick to flush on volatility.

But the overall share keeps shrinking.

If these coins survive the chop and age into the 6+ month bands, this will look like what it usually is: a transfer from weak hands to patient ones. 💎

Visa and Mastercard aren’t buying the stablecoin hype for everyday payments. Despite crypto’s promise of faster, cheaper transactions, the payments giants aren’t buying the stablecoin pitch, at least not in developed markets.

What next as bitcoin drops to $78,000 and Saylor’s bet faces pressure. Bitcoin sank to its lowest levels since April as profit-taking by early holders collided with thinning liquidity and a sharp drop-off in fresh capital.

BitMine Faces $6B Unrealized Ether Loss as Crypto Sell-Off Deepens. BitMine Immersion Technologies is carrying more than $6 billion in unrealized Ether losses after the recent sell-off, underscoring balance-sheet risks for crypto treasuries.

UAE Sheikh secretly acquired 49% of Trump's World Liberty Financial days before inauguration. The Sheikh has pushed to buy high-powered AI chips from the U.S. for a startup that he owns, and secured the chips months after acquiring the stake.

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Because what would the crypto world be without its share of memes?

Trivia Answer: 9 pages 🥳

The Bitcoin whitepaper titled "Bitcoin: A Peer-to-Peer Electronic Cash System" is exactly 9 pages long, including references. Published on October 31, 2008, it's one of the most influential documents in financial technology history.

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