GM to all of you nutcases. Crypto Nutshell #779 steppin’ into Santa mode… 🎅🥜

We’re the crypto newsletter that’s more desperate than survivors trying to outrun a virus that wiped out the world… 🧟‍♂️🌆

What we’ve cooked up for you today…

What’s in the Crypto Nutshell Portfolio?

BREAKING: BlackRock's Bitcoin ETF racks up $25 billion in yearly inflows despite BTC price slump

BlackRock's Bitcoin ETF just closed one of the strangest years in ETF history.

IBIT ranked sixth in U.S. ETF inflows for 2025, pulling in $25.4 billion.

It's the only fund in the top 25 posting a negative return for the year - down 9.6%.

Gold's SPDR ETF ranked eighth with $20.8 billion in flows. But GLD is up 65% on the year…

Bitcoin has dropped roughly 30% from its October high of $126,000 and now trades near $88,000.

Normally, negative returns trigger outflows.

But IBIT's $25 billion in inflows during a drawdown signals something different: institutional buyers are accumulating during the pullback, not selling.

Bloomberg ETF analyst Eric Balchunas called it a "HODL clinic."

James Thorne, Chief Market Strategist at Wellington-Altus, argues the flows validate Bitcoin's "financialization". The asset now behaves less like a speculative tech stock and more like a mature macro commodity.

But here's the question: why hasn't $25 billion in institutional buying pushed Bitcoin higher?

Balchunas suggests the market is maturing. Early holders are taking profits. Others are deploying income strategies like selling covered calls.

And Bitcoin already ran 120% in 2024. Expecting continuous gains was unrealistic in his opinion.

IBIT absorbed more capital than nearly every major equity and bond ETF, outpaced only by the largest S&P 500 trackers.

It beat gold. It beat tech. And it did it while losing money.

IBIT's 2025 performance proves the Bitcoin ETF survived its first real stress test. Flows stayed strong even as price collapsed.

And if $25 billion came in during a "bad year," the flow potential in a recovery could be massive. 🚀

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This week, Fred Krueger pointed out one mistake that he believes will cost people the most money in crypto.

For newer readers, Fred is a mathematician, serial entrepreneur, and a probability-first thinker who has made tens of millions of dollars from being right early.

Here’s what he said this week:

That’s a strong statement - and a deliberate one.

Fred’s point isn’t that cycles don’t exist. It’s that anchoring your entire strategy to a rigid calendar is dangerous.

If you believe the 4-year cycle is law, you’ll sell when everyone else tells you to sell.

And Fred believes you’ll likely spend 2026 watching prices move without you.

This cycle isn’t being driven by a clock.

It’s being driven by liquidity, structure, and adoption.

Choose wisely. ⚖️

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: 35.08% of all Bitcoin is in the hands of short-term holders 🔒

The youngest cohort (<1 day) ticked higher as fresh buying absorbed coins from recent sellers. The 1 day to 1 week band contracted slightly as those coins aged out.

But the real story is in the 1-3 month range, which jumped over a full percentage point. That's where recent dip buyers now sit.

Short-term holders are more sensitive to headlines, more likely to panic, more prone to flush on volatility.

But here's the key...

As long as the long-term base stays dominant - and it does at 65% - this isn't a structural problem.

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

Crypto activity in Brazil rises 43% with average investment surpassing $1,000. Crypto transaction volumes in Brazil rose 43% in 2025 as average investment per user surpassed $1,000, with stablecoins and low-risk products gaining traction.

Bipartisan House lawmakers unveil crypto tax framework with stablecoin safe harbor, staking deferral. A Democrat and a Republican on the House Ways and Means Committee have unveiled a draft bill to bring clarity to crypto taxation in the United States.

Tom Lee responds to controversy surrounding Fundstrat’s differing bitcoin outlooks. Tom Lee weighed in after X users questioned whether Fundstrat analysts were contradicting each other on bitcoin.

'Bitcoin Senator' Cynthia Lummis Will Not Run for Reelection. Senator Lummis, one of crypto’s most powerful allies in Washington, has been instrumental in fights to pass industry-favored legislation.

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Trivia Answer: Around 50% 🥳

GBTC hit a nearly 50% discount to NAV in late 2022, meaning investors could buy Bitcoin exposure at half price through the trust. This created massive arbitrage pressure that only resolved when GBTC converted to a spot ETF in January 2024, eliminating the discount entirely.

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DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.