Digital Wealth Alpha Of The Week #16

Good morning Digital Asset investor,

Market continues whipsawing left and right but a new sun rises seems to be rising on the horizon. Are we entering a new season? Let’s dive in!

1. Market Snapshot - Week #16
   

   

   
   
   Bitcoin closed the week right under $85,000 showing stability on a slow uptrend. Markets indicate that the extreme risk of a downward trade spiral has diminished, with indexes recovering and volatility decreasing yet traders keep speculating on the timing of the FED’s rate cuts. While all this is narrative, in the long run this could signal the beginning of new dynamics where trade, national security, and monetary policy converge.
   

   Despite all this, there are encouraging signs: Bitcoin continues to signal equity decoupling and global liquidity is on the rise. While equities have fluctuated wildly due to tariff and geopolitical news, Bitcoin has followed a different trajectory, remaining relatively stable during the broader market downturn reigniting debates about Bitcoin’s potential as a macro hedge rather than a tech-correlated asset.

2. “Crypto Is Going Mainstream” —Powell
   

   FED Chair, Jerome Powell, spoke at the Economic Club of Chicago on April 16, acknowledging crypto's mainstream traction and advocating for a legal framework for stablecoins, reflecting their growing role in finance.

   Stablecoins have surpassed Visa in transaction volume, with their market cap doubling to $232 billion and volumes tripling in the past year, highlighting their rise as a foundational payment infrastructure.

   Powell's comments on loosening bank rules for crypto mark a departure from his 2021 stance, where he favored a Fed digital currency to reduce the need for stablecoins, indicating a pragmatic response to crypto's evolving landscape and regulatory pressures like the bipartisan GENIUS Act.

3. Coinbase Institutional Warns Crypto Winter Is Coming

   
   Coinbase Institutional's warning of a "crypto winter," a prolonged bear market, driven by a 41% drop in altcoin market cap since December 2024 (from $1.6 trillion to $950 billion) and a 50-60% decline in venture capital funding compared to 2021-2022 peaks.

   
   Coinbase's analysis, led by Head of Research David Duong, points to Bitcoin and the COIN50 index falling below their 200-day moving averages, a technical indicator of long-term bearish trends, exacerbated by macroeconomic pressures like fiscal tightening and Trump-era tariff policies impacting global risk sentiment. Despite the bearish outlook, Duong predicts a potential market floor in mid-to-late Q2 2025, with recovery possible in Q3 if global economic conditions improve
   
   A crypto winter refers to a prolonged period of decline in the cryptocurrency market, characterized by significant price drops, reduced trading activity, and low investor confidence. It’s akin to a bear market in traditional finance but often more severe due to the volatile nature of cryptocurrencies.

4. VanEck Proposes “BitBonds” to Refinance $14 Trillion Debt
   

   VanEck’s BitBonds proposal combines 90% U.S. Treasury bonds with 10% Bitcoin to refinance $14 trillion in U.S. debt, aiming to lower borrowing costs for the government while offering investors Bitcoin’s potential upside up to a 4.5% return, with excess profits split equally with the Treasury.

   
   The strategy, presented at the Strategic Bitcoin Reserve Summit, reflects growing institutional interest in crypto-finance hybrids, but critics highlight risks like Bitcoin’s volatility and the Treasury needing to issue more debt to cover the 10% Bitcoin allocation. Historical data shows Bitcoin’s median compound annual growth rate at 53% (Bitcoin Policy Institute), suggesting potential for significant returns.

5. Binance Advising Countries on National Strategic Bitcoin Reserves

   
   Binance, the world’s largest crypto exchange, is advising several countries on establishing national Bitcoin reserves, as reported by the Financial Times on April 17, signaling a shift in global financial strategies toward cryptocurrency adoption.

   
   Countries like El Salvador and Bhutan already hold Bitcoin—El Salvador with $550 million as of March 2025, and Bhutan using it to double civil servant salaries amid economic challenges—while others, like Brazil, are exploring similar moves despite Bitcoin’s volatility. The trend reflects growing governmental interest in Bitcoin as a strategic asset, with the U.S. establishing a Strategic Bitcoin Reserve in March 2025.

6. Russia Eyes Own Stablecoin After $USDT Freeze

   
   A new freeze of $30M in USDT linked to Russian wallets by Tether, following a prior $27M freeze on the sanctioned Garantex exchange in March 2025, reflecting intensified global sanctions on Russia amid its ongoing conflict with Ukraine and the EU's 16th sanctions package in February 2025.

   
   Russia's exploration of a state-backed stablecoin tied to foreign currencies aligns with its broader "de-dollarization" strategy, a trend accelerated since 2022 with allies like Iran and China, aiming to reduce reliance on the US dollar in international trade, which still dominates despite a 12% value surge in 2022.

   
   The Kremlin continues its pivot to crypto for cross-border payments driven by sanctions and the need for alternative financial systems, a policy shift enabled by a 2022 agreement between the Bank of Russia and the Finance Ministry, despite earlier bans on crypto payments in 2020.

Meme of the week:

Follow this space to receive the latest Digital Assets intelligence updates as this trends accelerate.

-DWI

Disclaimer: This content is for information and education purposes only and it is not intended to serve as investment, financial, tax or legal advice. Do your own research before investing.