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Weekly Snapshot
BTC: US $78,976 (-12.8%)
ETH: US $2,449 (-20.9%)
Crypto Market Cap: US $2.64T (-12.8%)
Gold: US $4,888/oz (-3.9%) Silver: US $85.32 (-21.2%)
S&P 500: 6,949 (-0.1%)
ASX 200: 8,360 (+2.0%)
Executive Summary
- Trump nominates Kevin Warsh as next Federal Reserve Chairman, triggering sharp sell-offs in gold, silver and digital assets as markets anticipate a stronger dollar and potentially more hawkish monetary policy despite his recent rate-cutting rhetoric.
- BitMine, the largest Ethereum treasury company, faces over US $6 billion in unrealised losses as Ethereum plunges to its lowest level since April 2025, highlighting the acute risks facing corporate crypto treasury strategies during periods of extreme deleveraging.
- Large bitcoin holders accumulating 1,000+ BTC emerge as strong buyers amidst the broader sell-off, whilst most other investors capitulate, creating a stark divergence that historically precedes either major bottoms or further downside.
Key Stories this Week
Warsh Nomination Sparks Multi-Asset Rout
President Donald Trump on Friday 30 January nominated Kevin Warsh, a former Federal Reserve governor who served during the 2008 financial crisis, to succeed Jerome Powell as Fed Chairman when Powell’s term expires in May 2026.
The surprise announcement came amid an unprecedented campaign of public pressure on the central bank, including a Department of Justice criminal investigation into Powell regarding cost overruns at the Fed’s Washington headquarters renovation project.
Warsh, 55, is known for historically hawkish views on monetary policy, though he has recently called for lower interest rates and criticised current Fed leadership for “regime change” failures, creating uncertainty about his actual policy stance if confirmed by the Senate.
Below is an interview from 6 months ago so you can get an idea of the new Fed Chair's view on the market.
Start the video around 1m 16s. We think that while 'hawkish', the new Fed Chair is actually bullish on the US economy. We interpret his rhetoric as being dovish, (lower rates) in order to stimular US economic growth. Kevin appears to be leaning more towards lower interest rate policy and we also suspect that Trump wouldn't have elected him unless they had spoken prior and agreed prior to his nomination.
Despite this, the market interpreted the nomination differently. Warsh's nomination triggered an extraordinary market reaction, with gold plunging over 9% on Friday to US $4,888 per ounce from record highs above US $5,600 earlier in the week, whilst silver collapsed 35% in what became the largest liquidation event across crypto markets, surpassing even bitcoin’s US $82 million in forced position closures.
Digital assets sold off sharply, with bitcoin falling below US $78,000 (down 13.8% for the week) and ethereum collapsing 28.4% as the market interpreted Warsh’s selection as potentially hawkish despite his recent dovish rhetoric, fuelling expectations for a stronger dollar and tighter financial conditions.
For digital asset investors, the episode reveals three critical dynamics: first, crypto remains highly sensitive to dollar strength and Federal Reserve policy expectations, trading more like a high-beta macro asset than a true inflation hedge; second, the market is pricing in the possibility that Warsh may pivot back to his historically hawkish stance once installed, regardless of recent public statements designed to appease Trump; and third, the synchronised collapse across gold, silver and crypto suggests investors are de-risking alternative assets in favour of traditional haven plays like Treasury bonds, which saw yields fall as prices rose.
The uncertainty surrounding Warsh’s actual policy intentions once confirmed, combined with the politicisation of Fed independence through Trump’s pressure campaign, introduces a new regime of volatility that crypto investors must now navigate, as markets will likely react violently to any signals about his true monetary policy preferences before his May installation.
BitMine’s US $6 Billion Ethereum Losses Expose Treasury Strategy Risks
BitMine Immersion Technologies, the largest publicly traded Ethereum treasury company with ties to investor Tom Lee, is nursing unrealised losses exceeding US $6 billion following ethereum’s sharp decline toward US $2,300, marking the asset’s lowest level since July 2025.
After acquiring an additional 40,302 ETH last week, BitMine’s total holdings now exceed 4.24 million ETH, valued at approximately US $10.25 billion at current prices, down from a peak valuation of roughly US $13.9 billion in October 2025. The losses mounted as ethereum experienced severe deleveraging, with market commentator The Kobeissi Letter attributing the decline to fragile liquidity conditions where “sustained levels of extreme leverage are resulting in ‘air pockets’ in price” amplified by “herd-like” positioning amongst traders.
BitMine’s situation crystallises the profound risks inherent in corporate crypto treasury strategies during periods of extreme market stress, challenging the narrative that accumulating large positions in digital assets represents a prudent balance sheet innovation.
Despite ethereum’s decline, BitMine faces no immediate solvency crisis since its holdings remain unencumbered by debt covenants or forced liquidation triggers, yet the scale of paper losses, equivalent to nearly two-thirds of the portfolio’s peak value, demonstrates how quickly concentrated exposure can erode shareholder wealth when liquidity evaporates.
For digital asset investors, this serves as a stark reminder that corporate treasury strategies, whilst creating buying pressure during accumulation phases, can become trapped during downturns since these entities typically cannot sell without triggering shareholder revolts and destroying the investment thesis that justified the strategy initially. The contrarian perspective here is that BitMine’s commitment to holding through this drawdown, assuming it maintains that stance, could actually signal conviction that becomes self-fulfilling if enough corporate treasuries refuse to capitulate, creating a floor for ethereum prices as weak-handed retail participants exit.
However, the more troubling interpretation is that corporate treasury strategies effectively create “zombie holders” who cannot sell regardless of fundamentals, meaning their presence provides less genuine price support than bulls might hope, since their bids are permanently removed from the market. Investors should monitor whether BitMine or similar entities are forced to raise external capital at dilutive terms to shore up balance sheets or fund operations, as such moves would signal that paper losses are beginning to create real corporate stress despite technically solvent positions.
Bitcoin Whales Accumulate as Retail Capitulates in Historic Divergence
Over the last 3 months, large bitcoin holders controlling 1,000+ BTC as well as Shrimps holding < 1 BTC have emerged as the strong net buyers of bitcoin during the current sell-off, according to BGeometrics data.
The data suggests that sophisticated players are actively buying into the correction from the October all-time high of US $126,000. In stark contrast, all middle cohorts, particularly holders with 1-100 BTC, have been in persistent distribution for over a month.
Despite the negative price action, large bitcoin holder accumulation is one of the few positive takeaways for investors during this bear market. Despite the calls that the 4-year cycle in digital assets being a relic of the past, it would appear that it once again predicted the timing of the top and subsequent decline in price (black verticle lines) very accurately.
In our view, the current market is oversold but could well test lower levels of support. The prior 4-year cycle high is US $69,000 which we think would be a max pain low point if we get there. For now, let's see if the US 78,000 holds.
Until next week,
James
James Brannan
Managing Director
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