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What happened today?

Crypto traders woke up to a rough market this morning, seemingly due to a combination of nervous sentiment to start the year off and a significant correction in the traditional stock market. The good news on that front is not only has every dip in the S&P 500 been a buying opportunity since it launched, but drops in crypto prices attributed to weak stock market performance tend to be short term. When given the backdrop of Trump taking office in a week, I think this is likely the case once again. With US CPI coming out this week however, there’s a chance we see a further decline in TradFi which would almost certainly lead to a correlated decline in crypto markets.

One major point of contention that we’ve seen resurface over the last few weeks is what the crypto community has dubbed “Operation Chokepoint 2.0” – with politicians like Cynthia Lummis now championing the investigation into allegedly illegal anti-crypto initiatives pushed by other politicians, hopefully we finally have some clarity on what really went down here. If you want to read more about Operation Chokepoint, check out Nic Carter’s thread here. What was once written off as wild conspiracy now has real evidence to back it up — we can only hope it results in repercussions for those responsible.

Biggest Headlines

The Beluga intern has been hard at work gathering all the most important crypto news stories so you have them in one place!

The Majors

• These six non-crypto firms are copying MicroStrategy and gobbling up Bitcoin

• Bitcoin hits lowest price since November as Dogecoin, XRP and Solana fall

Alt Coins and Stocks

• XRP demand builds on ETF ‘Optimism’ as Ethereum funds bleed $255 million

• Stablecoin issuer Tether relocates to Bitcoin-Friendly El Salvador

Regulatory

• Trump day-one crypto executive order likely first of many

• Coinbase scores another win against ‘arbitrary and capricious’ SEC order

New Launches

• Azuki-linked ANIME token launching on Ethereum this month

Trading Talk

Last week we talked about how we were seeing higher-mcap alt-coins getting dumped, yet were still seeing strong volumes and price action across the AI agent sector. That changed over the weekend, however, as we saw the leaders of the sector $AI16Z and $VIRTUAL get absolutely eviscerated. Virtual currently sits about 50% off of its ATH which was reached only 2 weeks ago, representing hundreds of millions in market cap lost. The interesting thing about the Virtual ecosystem is that all agent coins launched on the platform have their liquidity pools denominated in $VIRTUAL – this means that when the price is going up, all coins within the ecosystem benefit… however the opposite is true when its price goes down.

We don’t yet own any $VIRTUAL in the Beluga wallet however this is an ecosystem I’ve personally been trading within since the early days, and I think we are likely entering the bid zone at current prices (~$2.50 at time of writing). AI still dominates mindshare and given the up-only price action Virtuals saw for the last couple months, it was probably due for a correction. Admittedly this is stronger than I thought it would be, but assuming the market doesn’t die before Trump is in office this is likely where we see buyers step in.

Tweet of the Day

Tradfi guys are still calling BTC to $250k and you’re bearish?

The content on this site is for informational purposes only and should not be construed as investment advice. While Beluga strives to ensure the accuracy and timeliness of information, there may be discrepancies when comparing our data to that of financial institutions, service providers, or specific product websites. Always consult with a professional before making any financial decisions.

Will McKinnon is the Head of Content for Beluga and has spent every day for many years trading coins. For that reason there are too many to name, however his largest holdings by a significant margin are Ethereum and Bitcoin. NFA DYOR