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- 🥜 Why Crypto's crashing
🥜 Why Crypto's crashing
PLUS: Trump's message
Today’s edition is brought to you by RAREMINTS
GM to all 95,602 of you. Crypto Nutshell #542 not freakin’ out… 🧉🥜
We're the crypto newsletter that's more suspenseful than being stranded on a deserted island with only a volleyball for company... 🏝️🏐
What we’ve cooked up for you today…
🏦 Rough start
🇺🇸 Trump’s message to Bitcoiners
💪 Up we go
💰 And more…
Prices as at 5:05am ET
ROUGH START 🏦
BREAKING: Bitcoin Falls Below $100K as Crypto Market Sees Major Losses
What a rough start to the week…
Bitcoin is once again below $100,000. 😥
And with this crash, the crypto market has experienced over $860 million in liquidations in the last 24 hours:
So what just happened?
Why did the entire crypto market just crash? 🤔
Well there’s 2 clear reasons.
Firstly, the market strongly believes that we’ll see no rate cuts from the Fed’s FOMC meeting on January 29.
According to CME FedWatch, there’s only a 0.5% chance of a rate cut on Wednesday.
The second (and largest) reason was the shock emergence of DeepSeek.
For some background, DeepSeek is a Chinese AI startup that literally came out of nowhere.
It’s a direct competitor to OpenAI’s ChatGPT and cost less that $10 million to develop.
(It was also developed with chips that are considered FAR less advanced than those used by US based AI companies)
Putting these numbers into a little context…
OpenAI has raised ~$17.9 billion over the last 10 rounds and was valued at ~$157 billion in October 2024.
Whilst DeepSeek is ~96% cheaper compared to ChatGPT:
OpenAI o1: $60 per 1 million output tokens
DeepSeek R1: $2.19 per 1 million output tokens
But it gets even crazier…
DeepSeek R1 is completely open source, meaning that the source code is publicly accessible.
DeepSeek is a complete game changer and has US tech investors worried.
Over the last 2 years, the stock market has largely been driven by the AI narrative…
But now questions are being asked whether US tech companies have been massively overvalued? (DeepSeek was developed on the fraction of the cost of ChatGPT)
Making matters a little worse…
This comes only days after Trump announced a $500 billion investment in US based AI companies.
But if DeepSeek can develop comparable AI at less than 1% of the cost, is the $500 billion even needed?
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TRUMP’S MESSAGE TO BITCOINERS 🇺🇸
Bitcoin and the broader crypto market took a hit today, dropping at least 10% across the board.
It’s pretty ugly.
But fret not, President Trump had a message for Bitcoiners:
We’re sending Bitcoin to much greater heights.
David Bailey is the owner of Bitcoin Magazine and was the conference organiser of Bitcoin 2024 in Nashville.
He’s the one who secured Donald Trump as a speaker.
Today, he shared that, for the first time since Trump became president, he finally had the opportunity to have a conversation with him.
Here’s what was said:
That’s exactly what you want to hear out the President of the United States:
“We’re going to send Bitcoin much greater heights, and we’re going to outcompete China and other countries that want to take it from us.”
Days like today, when the market is down across the board, are rough.
However, there has truly never been a more favorable environment for Bitcoin and the entire crypto space.
In times like this, when crypto corrects, we refer back to a fantastic quote from Michael Saylor:
“The volatility is the price you pay for the outperformance.”
UP WE GO 💪
Let’s kick off the week with a checkin on the Bitcoin HODL waves! 🌊
Each coloured band shows the percentage of Bitcoin that last moved within that time period.
As the colours get cooler, the age bands get older (purple being the oldest, representing coins last moved more than 10 years ago).
As always, we’ll be focusing on long-term holders today. (coins held for more than 6 months)
Here’s the current breakdown compared to two weeks ago:
6m - 12m: 9.65% (up from 9.60%)
1y - 2y: 8.82% (down from 8.84%)
2y - 3y: 8.00% (down from 8.04%)
3y - 5y: 14.61% (down from 14.73%)
5y - 7y: 6.16% (down from 6.48%)
7y - 10y: 7.41% (up from 6.27%)
>10y: 16.93% (up from 16.89%)
In total, that’s means that ~71.58% of the Bitcoin supply has NOT moved in over 6 months.
(That’s also an increase of 0.73% compared to two weeks ago)
The interesting thing is that the bulk of this increase came from Bitcoin held for more than 7 years.
Whilst all other age bands experienced minor decreases. (Except the 6m - 12m age band)
What we’ve been saying for the past few weeks remains true…
Ultra long-term holders STILL aren’t ready to let go of their coins yet.
They are clearly holding out for higher prices…
CRACKING CRYPTO 🥜
How stablecoins are dollarizing Brazil's economy. Stablecoins have exploded in popularity in recent years along with the wider digital asset market.
Ethereum devs and L2 leaders go all in on based and native rollups. Some Ethereum layer 2s would be forgoing hundreds of millions of dollars obtained from fees to make Ethereum more connected at the base layer.
Bitcoin May Be 'Double Topping' for a Price Slide to $75K. BTC looks to be forming a double top bearish reversal pattern on the daily chart.
Jupiter spikes 40% as founder says 50% of fees will go to token buybacks. The announcement caps off Jupiter’s inaugural ‘Catstanbul 2025’ event, which also saw the platform announce an acquisition of a majority stake in memecoin launchpad Moonshot
WHAT WE’RE READING 📚
Want to get even smarter? Check these out.
p.s. all completely FREE (one click subscribe link)
Raremints (link) - Daily crypto news
Bitcoin Breakdown (link) - Daily Bitcoin news
Techpresso (link) - Daily tech news and insights
The Hustle (link) - Get Smarter on Business and Tech
Your Next Breakthrough (link) - Personal growth with Mark Manson
The Neuron (link) - AI trends and tools to keep you ahead
CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
Which of the following coins/tokens was released first? |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: C) XRP 🥳
XRP was released in June 2012
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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.
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