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GM to all of you nutcases. It’s Crypto Nutshell #825 pullin’ on threads… 🧵🥜

We're the crypto newsletter that's more calculated than a con so deep even the players don't know who's getting played… 🃏🪞

What we’ve cooked up for you today…

What’s in the Crypto Nutshell Portfolio?

BREAKING: Crypto.com just got one step closer to becoming a federally regulated bank - while the rest of the market bleeds.

While crypto prices are getting hammered again, one of the biggest exchanges in the world just hit a major milestone.

Crypto.com has secured conditional approval from the Office of the Comptroller of the Currency to establish a national trust bank.

The planned entity - Foris Dax National Trust Bank - would operate as a federally regulated custodian offering digital asset custody, staking, and trade settlement under OCC oversight.

It won't take deposits or issue loans.

But for ETF issuers, asset managers, and institutional clients, a nationally chartered custodian is a big deal.

One federal framework instead of a patchwork of state regulators.

And Crypto.com isn't alone…

Circle, Ripple, BitGo, Paxos, Fidelity Digital Assets, and Bridge have all received similar conditional approvals in recent months.

Coinbase has also applied - along with World Liberty Financial, the Trump family-backed crypto company.

But that last one has drawn some heat…

Senator Elizabeth Warren said she has "no confidence" the OCC would fairly assess the application given its political ties. House Democrats have raised national security concerns.

Still, the broader trend is clear. The OCC has been opening the door for crypto firms to operate under federal banking standards - a major shift from just a couple of years ago.

But the market isn't celebrating.

US stocks erased nearly $800 billion in market cap on Monday after Anthropic announced that its Claude AI platform can automate COBOL modernization.

The stock dropped 11%. The S&P 500, Dow, and Nasdaq all fell over 1%.

And crypto followed. With Bitcoin sliding 4% to $64,000.

ETH and SOL dropped similarly. Coinbase, Strategy, Circle, and Galaxy Digital all fell between 4% and 7%.

The only green in the sector?

Bitcoin miners running AI infrastructure - IREN, Cipher Mining, CleanSpark, and Hut 8 all finished higher.

Regulation is moving forward. But right now, the macro is moving faster. 🚀

You've probably spent hours securing your crypto. Hardware wallets, seed phrase backups, the works.

But here's the blind spot most people miss: your home address is sitting on hundreds of data broker websites right now, available to anyone willing to pay. And criminals are using it.

There's been a surge in violent home invasions targeting crypto holders. Armed robberies. Kidnappings. And it doesn’t help that data brokers are selling your personal information legally.

DeleteMe helps close that gap:

We focus so much on digital security in this space. Physical security deserves the same attention.

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Nobody wants to hear this right now. But Matt Hougan just said it anyway.

Hougan is the Chief Investment Officer at Bitwise, one of the largest crypto asset managers in the world. He's not a perma-bear. He's not trying to spread fear. He's one of the most consistently bullish institutional voices in the space.

And yet he doesn't think we've hit bottom yet.

On the Blockspace podcast, Hougan was blunt. So far the February crash to ~$60,000 has been shocking, but in his view, it isn’t the final shakeout.

He thinks there's likely 1 or 2 more big flushes ahead before this cycle finds its floor.

But here's the part most people will miss:

Hougan also pointed out that this crypto winter didn't start in October when everyone thinks it did.

Outside of Bitcoin and Ethereum, everything else in crypto got crushed starting with the Trump inauguration in January 2025. Solana, Aptos, Avalanche - all down 70%+ before Bitcoin even flinched.

Institutions were slow to catch on. When they finally sold, it triggered the $19 billion liquidation event in October that confirmed the bear market and dragged BTC and ETH down with it.

So where's the silver lining?

Hougan believes this cycle's drawdown will be shallower than past ones. The old playbook was 80-90% crashes. With institutional adoption now in the mix, he sees the floor closer to 50–60%.

When one group sells, the other buys.

He also made one thing crystal clear: we're getting out of this in 2026.

The pain may not be over over. But neither is the cycle. 🔄

Digital asset funds just saw their fifth consecutive week of outflows, with $288 million exiting.

That brings the five-week total to $4 billion pulled from digital asset funds globally.

Surprisingly, this is still well below the $6 billion in outflows recorded over the same period last year.

Let’s break it down.

Bitcoin took the biggest hit again, losing $215.3 million last week.

Ethereum followed with $36.5 million in outflows.

Whilst XRP and Solana saw inflows of $3.5 million and $3.3 million respectively.

Regionally, the U.S. saw substantial outflows with $346.7 million exiting.

Meanwhile Switzerland, Canada, and Germany went the other way - adding $19.5 million, $16.8 million, and $16.2 million respectively.

After several weeks of record setting trading volumes, activity fell sharply this week to $17 billion.

CoinShares notes that is the lowest level since July 2025, a clear sign of growing investor apathy.

Trump-Backed Stablecoin Briefly Slips as World Liberty Claims 'Coordinated Attack'. The company’s native token, WLFI, also fell 7% around the same time that its stablecoin, USD1, briefly fell below a dollar peg.

Saylor Says Quantum Risk to Bitcoin is distant and Manageable. Michael Saylor says any quantum computing threat to Bitcoin is likely more than a decade away and would prompt coordinated global software upgrades, as Ethereum accelerates post-quantum preparations.

Mystery Hong Kong investor in BlackRock's bitcoin ETF breaks silence — only to spark more questions. Laurore Ltd.’s $436 Million BlackRock IBIT stake reflects “personal investment conviction,” a spokesperson said, as Hong Kong filings link it to Zhang Hui.

Bitmine ups Ethereum treasury stake to 4.42 million ETH, now holds 3.66% of supply. Bitmine increased holdings to 4.42 million ETH, controlling 3.66% of supply and generating $171 million staking revenue.

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On January 12, 2009, Hal Finney received 10 BTC from Satoshi Nakamoto in Bitcoin's first-ever peer-to-peer transaction (block 170).

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