Cryptocurrency Investing

Crypto derivative exchanges exist in regulatory limbo. A bit like Schrödinger's cat—neither fully regulated nor unregulated. This ambiguity is being exploited in dangerous ways. By the way, I am not referring to the actual buying and selling of Cryptocurrency. The first risk with unregulated platforms is, of course, that there's nothing you can do if something goes wrong. The other big problem with crypto F&O is that you have no idea who's on the other side of your order. In many cases, the platform itself can be the counterparty to all trades, like dabba trading or CFDs. If the platform is the house, the incentives are distorted. It's good for the platform if the customer loses money because every customer win is the platform's loss. To make matters worse, these platforms offer 100 to 200x leverage. At that level, even a small move is enough to make you go bust. Considering the volatile nature of crypto, this is all but guaranteed. The lack of regulatory clarity on crypto derivatives is not a good thing in the long run for anyone and has to be fixed.

Mining buyers will ghost you for months. Because no one wants to be the first to try. They’ll take the meeting. They’ll nod, ask smart questions, and tell you they’re “very interested.” Then? Silence. Emails unread. Calls dodged. You follow up. They say, “Still a priority. Let’s revisit next quarter.” This is mining. A slow-moving beast that avoids risk more than inefficiency. Everyone wants the second to use your tech. Meanwhile, you’re burning cash on features and expensive events. So, what are the biggest mistakes that will kill your tech startup? 1. Chasing the big fish too early. You think selling to a Tier 1 miner will validate your tech? No. It will bury you in bureaucracy for two years before telling you, “Not a priority.” A small mid-tier miner will trial your tech next month and roll it out to their sites before a major miner finishes its third meeting. 2. Waiting too long to ask for money. Mining companies love free trials. They’ll ask for endless features, “explore possibilities,” and tell you how promising it is. But will they actually pay for it? Only one way to find out: Charge them something—anything—early. A Letter of Intent. A pilot fee. A commitment to buy if KPIs are met. If they hesitate? They were never serious to begin with. 3. Pitching CapEx when they’ll only sign off on Opex. Mines aren’t just slow. They’re budget-constrained in ways that can kill your deal. A six-figure CapEx request can take a year to approve. But a $10K/month Opex subscription? Signed off in weeks. Know where the budget sits before you pitch. Otherwise, you’ll spend months selling to someone who literally cannot buy. 4. Relying on one champion inside the mine. Your contact loves your product. But procurement? IT? The mine manager? They have other plans. Mining sales are complex. It’s never just one decision-maker. If you’re not talking to multiple stakeholders, your deal will die the second your champion leaves. 5. Thinking one proof-of-concept is enough. A mine trials your product. It works. They’re happy. They still won’t buy. Why? Because one trial isn’t adoption—it’s just a test. If you want them to actually roll it out across sites, you need internal champions, external validation, and—ideally—other mines already using it. So how do you actually market to mining to sell faster? ✅ Find the right customer first. Forget the giants. Smaller mid-tiers (not just juniors) innovators make decisions faster. Find the names on any successful tech startup website. ✅ Lock in a financial commitment early. If they’re serious, they’ll pay for something. If they’re not, walk away. ✅ Get creative with pricing. If CapEx is a blocker, pivot to Opex. If Opex is tight, offer a limited-scope contract. ✅ Leverage peer pressure. Mining moves in herds. Get one company to adopt, and their competitors will follow. Ghosting isn’t personal. It’s just how mining works. Your job is to make them remember you when they’re finally ready to move.

Crypto #payments are gradually but steadily gaining popularity and inevitably becoming part of a multi-polar payments’ landscape. Let’s take a look. Among all the discussions around blockchain #innovation, it often gets forgotten that payments were the first use case, famously documented in the exchange of 10,000 Bitcoins for 2 Papa John’s pizzas in 2010. Since then, thousands of cryptocurrencies have been created but one thing remains unchanged: a cryptocurrency is, by definition, a payment method, created as a digital alternative to traditional #money. A few reasons stand behind #crypto payments’ potential: —    The absence of trusted third parties like banks or card networks —    Increased efficiency resulting in reduced transaction costs   —    Transparency combined with enhanced privacyy   —    A global network almost not limited by borders   Most popular use cases: —  Remittances & money transfer —  Payroll & social benefits —  Cross-border payments for SMEs —  Merchant acceptance When we talk about crypto payments becoming mainstream the latter is by far at the tip of the spear, with developments across 3 main levels: 1.    Merchants and big brands (i.e. Newegg, Starbucks, Twitch) accepting crypto as a means of payment.   2.    Payment providers (i.e. Shopify, Paypal) integrating crypto payments into their platforms. Stripe’s move to bring back crypto payments after a pause of 6 years citing "real utility" has made big headlines.   3.    Visa and Mastercard crypto card offerings (credit, debit, prepaid) that not only allow customers to pay for goods and services, but also permit to convert crypto to fiat and withdraw funds in fiat. At the same time regulation is catching up with various initiatives around the globe, building exactly on the above momentum as an explicit sign of crypto’s evolutionary path. The best example is the EU’s MiCA (Markets in Crypto-assets) regulation that wants to not only build a clear legal framework for crypto assets but also to address issues such as customer & investor protection, financial crime, market manipulation and fair competition. One pattern comes out as a clear outcome from these developments: the strong interconnection between crypto and traditional finance. Unlike what many believe, crypto’s success is being built – step by step – as a reliable enhancement to existing financial infrastructure. Which, in turn, has created the need for companies that act as efficient crypto-to-fiat gateways, bridging the gap between the two worlds. Estonian-licensed CryptoProcessing.com by CoinsPaid is a good example of such a crypto ecosystem provider. In an increasingly versatile digital payments arena, the offering of cryptocurrencies has become a tool of choice and diversification rather than one of endorsement. And with around 1% crypto penetration in the real economy, we are just beginning to scratch the surface of crypto payments’ potential. Opinions: my own, Graphic source: CoinsPaid

Coinbase released its 2025 Crypto Market Outlook report. It's 87 pages long, so here are the 10 key takeaways: 1/ Institutional Adoption Growth • Institutional players like BlackRock and Fidelity entered crypto • Approval of spot Bitcoin and Ether ETFs brought $30.7B in net inflows within 11 months 2/ Stablecoins Expansion • Stablecoin market cap rose 48% in 2024, reaching $193B • Expected to hit $3T in five years, driven by increased adoption for payments and remittances 3/ Tokenization Revolution • Tokenized real-world assets (excluding stablecoins) grew by 60%, reaching $13.5B in 2024 • Projected to potentially hit $2T-$30T over the next five years, transforming financial markets 4/ DeFi Resurgence • Regulatory clarity and integration with TradFi are key growth drivers • Decentralized exchanges now account for 14% of centralized exchange volumes 5/ Regulatory Clarity • 2024 set the stage for U.S. regulatory advancements with bipartisan support for pro-crypto measures • Europe’s MiCA regulation and frameworks in the UAE, Hong Kong, and Singapore are enhancing global competitiveness 6/ Layer-2 Scaling Success • Ethereum’s rollups reduced costs by 90%, boosting activity 10x across Layer-2s • Challenges like fragmented liquidity and user onboarding persist but are actively being addressed 7/ Multichain Future • New L1s like Sui, Aptos, and Sei compete with Ethereum for differentiation • A multichain ecosystem is emerging, allowing specialization for different use cases 8/ Bitcoin Ecosystem Expansion • Institutional investment in Bitcoin ETFs continues to grow • Bitcoin dominance rose to over 60%, with infrastructure innovations like L2s and staking protocols gaining traction 9/ User Experience Improvements • Integrated wallets and paymasters reduce complexity for end-users • Focus on simplifying wallets and onboarding with technologies like account abstraction 10/ AI and Crypto Synergies • AI agents with crypto wallets are gaining attention • Long-term value accrual mechanisms for AI-crypto integration remain unclear P.S. What do you think will be the top narratives of 2025? Follow 👉 Aram Mughalyan & share ♻️ this post if you like it.

🔴 Stablecoins are not a threat but an opportunity for short-term funding markets: papers from the Banque de France & the ECB👇 This article published in the Journal of International Money and Finance was authored by Jean Barthelemy from the Banque de France, together with Paul Gardin and Benoit Nguyen from the European Central Bank. 👉 They analyze the impact of the exponential growth of stablecoins on the financial assets backing their reserves, namely the short-term funding market. 🎯 Why does this matter? Because it touches directly on economic stability, raising a central question: could stablecoins destabilize the short-term funding available to corporates and financial institutions… …and, in turn, the very structure of the money market? 1️⃣ First finding: their growth did not affect market rates Between 2020 and 2022, the market capitalization of USD-denominated stablecoins grew from $5 billion to $150 billion, driven primarily by Tether and Circle. At that time, interest rates were very low, which pushed issuers to hold commercial paper (CP) as part of their reserves → By June 2021, Tether alone is estimated to have held over $31 billion in CP. 👉 According to the authors, addressing a common concern among regulators, these massive purchases did not affect CP market rates → Spreads remained unchanged despite the sudden and substantial increase in demand. Why? Because token mint/burn activity (i.e., circulating supply) is publicly observable onchain. This real-time transparency allows CP issuers to anticipate stablecoin-related demand and adjust their issuance accordingly. The paper shows empirically that the supply of CP (and later T-bills) adjusts smoothly and fully to stablecoin purchases, at least up to 2% of the total outstanding USD short-term asset market. 👉 This finding contradicts a recent BIS paper, which argues that stablecoins cannot adjust elastically because they must acquire reserve assets in order to issue new tokens, and therefore cannot function as an “elastic” form of money. According to the authors, these conclusions also apply to the T-bill market, which now makes up the vast majority of stablecoin issuers’ reserves, driven by safety considerations, rising interest rates, and emerging regulatory frameworks (GENIUS, MiCA, etc.). 2️⃣ Stablecoins are no longer just crypto instruments 👉 The paper describes issuers as full-fledged participants in short-term funding markets, and as such, they should be viewed as potential strategic investors. They are no longer just crypto curiosities, they are the first actors enabling researchers to study the convergence between the digital-assets universe and traditional finance. 👉 Link to the paper in the comments below At Blockstories, we’ll be following this closely 👀 — You can subscribe in the comments as well👇

Warren Buffett once said, “You only learn who has been swimming naked when the tide goes out.” The next place that tide may go out is private credit. At roughly $2 trillion and growing, private credit has become a critical financing channel for large parts of the economy. But a meaningful portion of that lending is tied to software companies whose economics are now being repriced in real time by AI. That is where the macro story becomes more interesting. Bitcoin sits at a unique intersection in markets. It tends to trade as a hybrid of software beta and liquidity beta. Part of its behavior reflects the growth dynamics investors associate with software and technology. The other part reflects its sensitivity to global liquidity conditions. Right now, both forces are moving against it. AI is forcing investors to reassess traditional software economics, while tighter liquidity is putting pressure on risk assets more broadly. That combination helps explain why Bitcoin has struggled to rally even as adoption and stablecoin activity continue to grow. But history suggests the sequence rarely ends there. When liquidity shocks hit, whether during the 2020 dash for cash or the 2023 regional-bank stress, Bitcoin often falls alongside other liquid assets in the first phase. Then, as policymakers respond and liquidity returns to the system, Bitcoin has historically been one of the fastest assets to reprice that shift. In other words: Bitcoin rarely front-runs the panic. It front-runs the rescue. And while macro liquidity cycles still dominate Bitcoin’s short-term behavior, something structural is happening underneath the surface. As AI agents begin interacting with digital financial rails, the network effects of crypto are quietly expanding. Programmable money, always-on settlement, and machine-native transactions make crypto systems increasingly compatible with an AI-driven economy. That combination, macro liquidity reflexes above and AI-driven network effects below, is why the long-term story continues to strengthen even during periods of stress. I explore this dynamic in my latest piece. https://lnkd.in/ehc44yRm

The ETH ETF now has more AUM than any other ETF in the market besides the S&P 500 and Nasdaq products. But it's still only 11.5% of BTC's AUM! Here's a quick update on the crypto ETF products: 1. AUM: BTC dominates with over $105b today compared to just $12.1b for ETH. 2. Net Flows: BTC has $33.3 billion vs $3.07 billion for ETH. However, the trend favors ETH as it's added over $3b since the election. BTC has added $11.1b. 3. ETF holdings as a % of circulating supply: BTC = 5.68%, ETH = 3.02%. Given that ETH is currently 21.6% of Bitcoin's market cap, it would be reasonable to anticipate that ETH flows will continue to catch up to BTC in '25. Not to mention. ETH has yield. But the ETH ETF issuers aren't able to pass it back to holders yet. That's going to change at some point. And the anticipation of that change could be a catalyst for more ETH flows this year as BTC has no such yield. Speculation around a BTC Strategic Reserve could be a catalyst for BTC flows this year. ----- P.S. I'm sharing a data-driven update on my views on "altseason" with 8k readers of The DeFi Report tomorrow. It includes our framework for the macro setup for 2025 as well. If you'd like to have it hit your inbox when it's published, see the link below 👇 Data: powered by Glassnode

Looking at Visa analytics across 6 crypto cards, the growth is hard to ignore: spend volume increased from $14M at the start of 2025 to $91M by December 2025. That’s a +550% jump in just one year 🤯 This isn’t just about user adoption. It highlights how central crypto and stablecoins are becoming within Visa’s global payments ecosystem. The rising transaction volumes make one thing clear: crypto has moved beyond experimentation and is now being used as a real, everyday payment method.

Portfolio diversification is top of mind for investors right now – and bitcoin’s potential as a portfolio diversifier is driving investor interest in the cryptoasset. Bitcoin investors are deeply focused on several of its key attributes: the uncorrelated nature of bitcoin and its interplay with geopolitics. But what about risk? Is bitcoin a “risk on” or “risk off” asset? Our answer: it’s not that simple. We explore this issue in our latest insight as part of our commitment to help educate investors about this new asset class. What we’ve found is that, in short, bitcoin can be a unique portfolio diversifier. We believe its nature makes it unsuitable for the risk on/risk off framework, and most other traditional finance frameworks. On a standalone basis, bitcoin is a risky asset. But we believe that bitcoin is an asset with risk and return drivers that are distinct from traditional asset classes and that, over the longer-term, its fundamental drivers have been starkly different, and in many cases inverted, versus most traditional investment assets. And yes, we maintain this conviction even as short-term market trading behavior diverges from what bitcoin’s fundamentals would suggest. We recognize that bitcoin is in the early stages of its journey. I encourage you to read our latest insight to better understand the very unique nuances of this new asset class. https://1blk.co/3TAErHS