Crypto Weekly Digest | Bitcoin Tests Strategy' s Cost Basis as CLARITY Act Advances

This week, global assets experienced significant volatility driven by a confluence of factors: rising tensions in the Middle East, renewed alarms over a U.S. government shutdown, tariff shocks, and delays regarding the CLARITY Act.

While safe-haven assets like gold saw sharp fluctuations, the crypto market was not spared, suffering consecutive days of decline. On Thursday, Bitcoin briefly fell below $76,000, hitting its lowest point since late April of last year.

At the time of publication, the Fear & Greed Index sits at 17, entering the "Extreme Fear" zone. This marks another emotional low point for the market following the crash on October 11 last year.

This week, Bitcoin’s price retraced to near $78,000, a fluctuation that has drawn widespread market attention.

Public data shows that MicroStrategy’s total Bitcoin holdings have exceeded 710,000 coins, with an average cost basis hovering exactly around $76,000. In financial markets, the cost line of major institutions often possesses a strong support effect.

When market prices approach this level, large capital usually exhibits a stronger reluctance to sell or a willingness to defend the price, making the current level a highly valuable observation window.

Despite the gloomy market sentiment, MicroStrategy Executive Chairman Michael Saylor posted an image with the text "More Orange" on the social media platform X on Sunday, implying continued accumulation.

MSTR holds over 700,000 BTC, accounting for more than 3% of the total Bitcoin supply. MSTR's entry price is widely projected by the market as a support level. Acquiring chips at a "lower cost basis than institutions" may become a prevailing market trading strategy.

On January 30, the Crypto Market Structure Act (CLARITY Act) passed the Senate Agriculture Committee on Thursday. However, the partisan divide between Democrats and Republicans has deepened.

The final vote was 12-11, split strictly along party lines, with all Democrats voting against it. The disagreement focuses on Donald Trump and his family's interest links to cryptocurrencies. The CLARITY Act will next move to the Senate Banking Committee for hearings and deliberation.

The bill's progress in the Banking Committee has been slow due to more controversial provisions involving stablecoin yields. The White House is scheduled to hold a meeting on Monday with executives from the banking and crypto industries to coordinate positions among the industry, banks, both parties, and the administration.

Hosted by the White House Crypto Council, the meeting will invite executives from multiple industry associations. Sources indicate the discussion will focus on how the bill treats interest and other yields that crypto companies can offer customers for dollar-pegged tokens (stablecoins).

This meeting may help facilitate a compromise between the two industries currently in a standoff over the bill, highlighting the Trump administration's urgent desire to pass this legislation.

The Senate Agriculture and Banking Committees are seen as the most critical bottlenecks. Subsequent Senate floor votes and the Presidential signature are considered relatively easier steps. The passage by the Agriculture Committee represents a key breakthrough for the Clarity Act.

According to the *Financial Times*, Tether, the world's largest stablecoin company, has seen its gold holdings appreciate by over $5 billion as gold prices hit record highs. Based on Jefferies' estimates using Tether's disclosed data, Tether held approximately 116 tons of gold as of the end of September, valued at about $14.4 billion at the time.

At the end of last September, gold traded at $3,858 per ounce. Driven by rising geopolitical uncertainty and investors flocking to safe-haven assets, gold has since surged to over $5,200. This implies Tether has realized over $5 billion in appreciation on these holdings.

Tether stated this week that it purchased an additional 27 tons of gold bars in Q4 last year to back its gold-pegged stablecoin. This new portion alone has appreciated by at least $700 million this year. Tether's total gold holdings are now valued at approximately $24 billion, making it one of the biggest beneficiaries of the current gold rally.

According to the World Gold Council, Tether has become one of the world's largest holders of gold, with reserves comparable to the Central Bank of Qatar (for context, the UK's gold reserves are 310 tons). Jefferies analysts wrote in a November report: "Tether is the largest gold holder outside of central banks, with a position size comparable to the central banks of South Korea, Hungary, and Greece."

Diversified asset allocation and a surplus exceeding $5 billion have greatly enhanced Tether's risk resistance, providing sustained momentum for the future of the stablecoin industry.

The crypto market downturn cannot be separated from the Federal Reserve. At the January FOMC meeting, the Fed maintained the benchmark interest rate in the 3.50% - 3.75% range, emphasizing in its statement that unemployment has stabilized while inflation remains elevated.

While the statement itself was not significantly outside market expectations, it completed a "closure of expectations" on an emotional level—the market's vague fantasies of short-term rate cuts or a policy pivot were officially compressed or cleared.

For risk assets, such moments often do not appear as "new bad news," but rather as "good news can no longer be overdrafted." The Bitcoin pullbacks following multiple FOMC meetings in 2025 are a repetition of this mechanism: it is not that policy suddenly turned hawkish, but that the market had to admit liquidity would not arrive as early as expected.

When positions are crowded and leverage is high, this confirmation of the "other shoe dropping" is enough to trigger risk release—it is not the first push of the dominoes, but rather the removal of support for a structure that was already teetering.

Notably, Kevin Warsh has been nominated as the next Fed Chair. Previously, Deutsche Bank predicted that a 'Rate Cut + QT (Quantitative Tightening)' combination might become the new normal.

The market faces a conflict of expectations: while there are hopes that Warsh will loosen rates to support growth, his historical hawkishness on financial stability suggests he may maintain strict liquidity management.

This personnel change forces the market to recalculate the risk premium for the future macro environment.

With ETFs and DATs becoming the primary forms of Bitcoin holding, Wall Street now holds over 2 million Bitcoins, making the Federal Reserve one of the core barometers for cryptocurrency.

On January 29, the U.S. SEC issued new guidance clarifying that tokenized securities (including tokenized stocks) are not exempt from current securities regulations simply due to a change in technical form. Whether securities are issued or registered on-chain or off-chain, federal securities laws regarding registration, disclosure, reporting, and anti-fraud still apply.

The SEC emphasized that the nature of the security takes precedence over its technical form; tokenization is merely a change in the method of issuance and recording.

This statement provides clearer compliance expectations for issuers and asset managers, potentially encouraging more traditional financial institutions to experiment with security tokenization. The guidance categorizes tokenized securities into two types:

1. Those directly supported and issued by the original issuer.

2. Those issued and backed by third-party institutions. Even if third-party tokens do not grant holders equity, voting rights, or information rights, they must comply with securities laws if they involve securities attributes.

However, the SEC has not yet provided a clear regulatory path for secondary market trading of tokenized securities. Currently, some tokenized stocks have launched outside the U.S., such as Robinhood launching over 2,000 US stock tokens in Europe under the MiCA framework.

The industry believes this guidance helps reduce compliance uncertainty, but large-scale adoption in the U.S. still depends on legislative progress like the *CLARITY Act*, which was recently delayed again due to industry disagreements.

Pure cryptocurrencies are viewed as digital commodities, while wrapped cryptocurrencies are viewed as securities. With the law now clear, various crypto assets can be issued in an orderly manner in the future.

SEC Chair Paul Atkins and CFTC Chair Mike Selig stated in a CNBC interview that the current top priority is establishing clear, sensible regulatory rules ("rules of the road").

They believe that with a comprehensive framework ensuring market transparency and investor protection, crypto assets can become a legitimate investment class.

Paul Atkins is inclined to support investors having more choices, including the right to allocate Private Assets and cryptocurrencies in retirement accounts like 401(k)s.

On January 29, while the $USD Index (USDindex.FX) fell 10% over the past year, Bitcoin did not rise as it usually does with a weaker dollar, falling 13% over the same period.

JP Morgan Private Bank strategists stated that the current dollar weakness is driven mainly by short-term capital flows and sentiment rather than changes in growth or monetary policy expectations.

Interest rate differentials have actually favored the dollar since the start of the year, causing Bitcoin to fail as a typical dollar hedge.

Analysts believe that because the market does not view the current dollar decline as a durable macro shift, Bitcoin is still treated as a liquidity-sensitive risk asset rather than a reliable store of value. In contrast, gold and emerging market assets have been more direct beneficiaries of dollar diversification.

On January 29, Yi Lihua, founder of Liquid Capital (formerly LD Capital), posted that some bears are using the "Four Year Cycle" as their main logic, believing 2025 has entered a bear market phase similar to 2019-2020, expecting long-term sideways movement or extreme washouts.

He noted that Trend Research successfully accumulated Ethereum at lows and cleared positions at high-range oscillations in previous cycles, operations validated on-chain.

Yi emphasized that the team will not alter its established strategy due to sentiment or short-term noise. The core objective is to grasp the main trend within the crypto macro cycle, avoiding missing out on bull market opportunities to achieve long-term returns.

In its weekly report, Glassnode explicitly warned that the $83.4k level was the market's "Last Line of Defence" against preventing a repeat of the "2022-2023 Bear Market Structure."

The report noted that failure to hold this support would not only open the door to a deeper correction but could also trigger "mechanically adding to downside momentum" by dealers (market makers) and "renewed loss realization from long-term holders."

With Bitcoin falling below $76,000 today, these downside risks have unfortunately materialized, and the market focus has shifted entirely from "defense" to finding a new liquidity bottom.

The round added $45 million in funding, with investors including Sony Innovation Fund, IMC, QCP, and Karatage, alongside existing backers a16z crypto, BNY, and Fidelity.

Talos provides full-lifecycle trading infrastructure for hundreds of institutional clients globally, with a combined AUM of approximately $21 trillion.

This financing highlights sustained institutional demand for crypto infrastructure and reflects Robinhood's accelerated expansion into blockchain and crypto-native finance, including building its Arbitrum ecosystem blockchain, tokenized stock trading, and diverse crypto products.

Crypto custody provider Copper is in preliminary talks regarding a potential public listing. Sources revealed that Goldman Sachs, Citi, and Deutsche Bank may participate in the listing, with the final decision depending on the company's near-term revenue performance.

Copper provides institutional-grade crypto infrastructure based on Multi-Party Computation (MPC) technology, including custody, settlement, and prime brokerage services, aiming to reduce counterparty risk for banks and trading firms.

CEO Sam Tabar stated in a shareholder letter that as the market changes, mining is no longer the most capital-efficient choice.

The company will concentrate its digital asset exposure on Ethereum and strengthen its AI infrastructure layout through the acquisition of WhiteFiber to achieve operational, monetizable, and compoundable long-term growth.

According to *The Block*, Coinbase has expanded its prediction market business to all 50 U.S. states through a partnership with CFTC-regulated platform Kalshi.

Previously a limited pilot, the service is now fully rolled out, allowing users to trade on outcomes of real-world events such as politics, sports, entertainment, culture, and economic indicators.

Coinbase users can manage their crypto, stock, and cash balances within a single interface, with prediction market contract trading thresholds as low as $1 (supporting USD or USDC).

This full launch comes as prediction market volumes hit all-time highs, with platforms like Polymarket and Kalshi reaching tens of billions in trading volume.

However, due to Bitcoin's price falling from approximately $114,000 to $88,000 in the fourth quarter of last year, Tesla recorded an after-tax impairment loss of approximately $239 million. Based on Bitcoin's current price, the company's holdings are worth approximately $1 billion.

Tesla first disclosed a holding of 43,200 Bitcoins in February 2021, worth about $1.7 billion at the time. It subsequently sold about 75% of its position near the bottom of the 2022 bear market and has held relatively steady since.

In terms of financials, Tesla reported revenue of $24.9 billion, slightly missing the expected $25.1 billion, but adjusted earnings per share of $0.50 beat market expectations of $0.45.