January 2026 - Monthly Market Update
/Monthly Update || January 2026
“For some reason, because of the way investor psychology works, people switch from only seeing the good to seeing only the bad.”
Opening Remarks
Greetings from Ikigai Asset Management¹. We welcome the opportunity to bring to you our eighty-eighth Monthly Update and hope these are helpful in better understanding some of what we’re doing and what we’re seeing. We have the privilege of deploying capital on behalf of our investors into a new technology and asset class that has tremendous potential to make the world a better place and create trillions of dollars of value in the process.
We believe we are obligated to be shepherds of this technology – to do our part to push crypto towards fulfilling its potential. We strive to be an objective, reasonable, well-intentioned voice of truth amongst a chorus of biased, fallacious, pernicious opportunists. It’s an honor that we take seriously.
To that end, happy New Year! Welcome to 2026! I wish you the best in the coming year. 2025 was a disappointing year for crypto prices, even as crypto enjoyed a slew of seemingly positive headlines and unprecedented political support at the highest levels and all the way down.
Two years ago, on 1/1/24, I said-
“I am not optimistic about crypto use cases gaining mass adoption in 2024. I wish I saw it differently. It’s certainly not a barren wasteland, but I don’t think we’re on the precipice of finally nailing the product-market fit problem that has ailed crypto for as long as I’ve been in it (stablecoins aside, which are the most successful products in crypto history and are the closest thing we have to mass adoption).”
A year ago, on 1/1/25, I said in my list of predictions for 2025-
“Crypto use cases will continue to struggle to find product market fit in providing solutions to real world problems that lead to significant mass adoption.”
Both of those turned out to be utterly correct.
But in 2025, unlike years past, the market finally kinda called crypto on its BS. In 2025, the market decided it was no longer smoking what crypto was rolling. All the hand-waving and dream-peddling that crypto had been serving up for years was finally turned away in 2025. The market realized this stuff doesn’t have product-market-fit. The market realized there is not a clear path to PMF. And the market realized this stuff is significantly overvalued. So market participants left crypto in droves. Outside of BTC and stables, there are many, many less crypto market participants today than there were a year ago, two years ago, four years ago, five years ago…
Thus, crypto prices badly underperformed the rest of the market in 2025. Gold was +64%, QQQ was +20%. And BTC was -6%. ETH was -11%. Total3 was -15%. SOL was -35%. OTHERS was -43%. Big underperformance from crypto in an otherwise strong year for financial markets.
And so now I gotta show up here again on 1/1/26 and hit you with another broken record. But to the extent people like reading these letters, I get the sense it’s because I call it like I see it.
So here we are again, for the third consecutive start to the new year-
Crypto still does not have PMF outside of BTC and stables. And now we have the quantum risk to deal with for BTC, which brings its long-term PMF back into question. Stables proliferated in 2025 and will likely continue to do so in 2026. But the valuations of the L1s and L2s that shuttle those stables are in question- whether that’s $350bn for ETH, $75bn for SOL, $30bn for TRX or any of the others.
There has been much noise made about the “tokenization” of financial assets. The crypto industry has been dreaming about this since before I got into it, but there was real progress made on the tokenization front in 2025. Check the Monthly Highlights below and the highlights from months past. Wall Street and tech companies are actually making real moves towards blockchain. That is not a mirage. Stables are leading in this regard, but stocks and debt and commodities and repo and money market funds and all sorts of other traditional financial instruments are heading that way as well.
Unfortunately, a lot of that is not necessarily going to occur on public, permissionless blockchains that have an existing tradeable token. It is not clear that ETH or SOL or TRX or any of the L2s are going to end up being the home for the majority of this future incremental tokenization growth. RobinHood is putting stocks “on the blockchain”, but they forked a permissioned version of Arbitrum. Stripe is putting payments “on the blockchain” but they’re rolling their own private, permissioned blockchain with Paradigm. The DTCC is going to settle financial transactions “on the blockchain”, but it will be done on Canton Network, the private, permissioned network owned by Wall Street…Many such cases.
It does seem like this tokenization trend will be front and center for crypto in 2026, if for no other reason than a lack of much else worthwhile to talk about. To be clear, this is a notable improvement over the scams, grifts, solutions-looking-for-problems, vaporware and memecoins that have dominated the Alt landscape over the last couple years. But it remains to be seen how much of this value that’s created by tokenization will end up accruing to ETH, SOL, ARB, etc. You’ll never believe this, but the Wall St and tech companies that are actually implementing tokenization appear to be doing so in a manner where the value created through tokenization accrues back to them, not to crypto traders. Imagine that.
So 2026 is set to be another sort of transitionary year for this ecosystem to which I have dedicated the last eight years of my life. Every year has been a transitionary year for crypto in a sense. But 2025 was a different sort of transitionary year. 2025 was a year where the market collectively realized that crypto is “the inferior casino”. 2026 is set to be a continuation of this realization, which may end up being kinda boring and generally not great for prices. But perhaps a year from now I won’t have to repeat myself for the fourth time about a lack of PMF coupled with insane overvaluations.
I will provide some 2026 predictions in the Closing Remarks, but first I want to make sure not to end this opener on a sour note.
2025 was the best year of my life, primarily because of the birth of my daughter 14 months ago. She has brought a joy to my life that is totally unrivaled by anything else I have ever experienced. Watching my wife bring her into this world and be her mother over the last year is the greatest blessing I have ever received, by far. I thank God every day for that blessing. Watching my daughter become a toddler is far and away what I am looking forward to most in 2026.
Speaking of God, that’s the other main reason 2025 was such a great year for me. In June, I launched Things Hidden, a podcast and blog that explores the intersection of Faith and six factors that surround Faith: Religion, Physics, Evolution, Consciousness, Philosophy and Technological Innovation. I started working on Things Hidden privately in the summer of 2022, and it’s been a big part of my life ever since. But with the public launch of Things Hidden, it took on an even bigger part of my life, and it has been tremendously rewarding. I published >70,000 words for Things Hidden in 2025, and that process has brought additional clarity to my faith that I am deeply grateful for. I am closer to God and closer to Jesus Christ today than I was a year ago, and I am deeply grateful for that. I have had the privilege of speaking to many people that have been positively impacted by Things Hidden this year and I am deeply grateful for that. Things Hidden is the thing I am looking second most forward to in 2026.
December Highlights
US OCC Grants Conditional Trust Bank Charters For Ripple, BitGo, Fidelity Digital, Paxos and Circle
DTCC Receives No-Action Letter From SEC To Allow Tokenization of Custodied Assets
DTCC Partners With Canton Network To Bring Custodied Assets On-Chain
SEC Chair Paul Atkins Makes Strongly Supportive Statements For Immediate Asset Tokenization
SEC Chair Atkins Confirms January Launch For SEC’s Crypto “Innovation Exemption”
SEC Says Broker Dealers Must Maintain Private Keys For Crypto Securities That They Hold For Customers
Senate Confirms Michael Selig As CFTC Chair
CFTC Says Spot Crypto Now Tradeable On Registered Exchanges
CFTC Launches Pilot Program To Allow BTC, ETH and USDC As Collateral
Coinbase Launches Stock Trading and Prediction Markets For US Customers
MSTR Buys ~$2bn of BTC in Four Tranches
BMNR Buys ~$1.2bn of ETH in Weekly Tranches
Interactive Brokers Allows Brokerage Accounts To Be Funded With Stablecoins
OCC Allows Traditional Banks To Act As Intermediaries In “Riskless Principal” Transactions
MSTR Raises $2.2bn In Cash Through ATM Sales Specifically For Future Dividend and Interest Payments On Prefs and Debt, Gives ~2.5 years of Runway
Visa Offers Stablecoin Settlement For US Banks Using USDC
JPMorgan To Launch First Tokenized Money Market Fund on ETH
SoFi Launches SoFiUSD Stablecoin on ETH
ETH DAT “ETHZilla” Sells $75mm of ETH to Pay Down Debt
Palmer Luckey-Backed Crypto Bank “Erebor” Raises $350mm at $4bn Valuation
Polymarket Officially Begins Rolling Out to US Customers
Kraken Acquires “Backed Finance”, Creator of xStocks, Amid Tokenization Push
Do Kwon Sentenced To 15 Years In Prison For Fraud
Binance Names Changpeng Zhao’s Baby’s Mother Yi He As Co-CEO With Richard Teng
Solana Engages With Blockchain Research Firm “Project Eleven” To Begin Work on Quantum Resistant Signatures
Changpeng Zhao-backed YZiLabs Launches Boardroom Coup at BNB DAT $BNC
| Asset Class | Dec | Nov | Oct | Q4-25 | Q3-25 | Q2-25 | Q1-25 | YTD | 2024 | 2023 | Instrument |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Bitcoin | -3% | -17% | -4% | -23% | 6% | 30% | -12% | -6% | 121% | 155% | BTC |
| NASDAQ | -1% | -2% | 5% | 2% | 9% | 18% | -8% | 20% | 25% | 54% | QQQ |
| S&P 500 | 0% | 0% | 2% | 2% | 8% | 11% | -5% | 16% | 23% | 24% | SPX |
| Total World Equities | 0% | 0% | 2% | 2% | 8% | 10% | -1% | 20% | 14% | 19% | VT |
| Emerging Market Equity | 1% | -2% | 4% | 2% | 11% | 10% | 4% | 31% | 4% | 6% | EEM |
| Gold | 2% | 5% | 4% | 11% | 16% | 6% | 19% | 64% | 27% | 13% | GLD |
| High Yield | 0% | 0% | 0% | -1% | 0% | 3% | 0% | 3% | 2% | 5% | HYG |
| Emerging Market Debt | 0% | 0% | 2% | 1% | 3% | 2% | 2% | 8% | 0% | 5% | EMB |
| Bank Debt | 0% | 0% | 0% | 0% | 0% | 1% | -2% | 0% | -1% | 3% | BKLN |
| Industrial Metals | 4% | 0% | 7% | 12% | 4% | 3% | 2% | 22% | 3% | -6% | DBB |
| USD | -1% | 0% | 2% | 0% | 1% | -7% | -4% | -9% | 7% | -2% | DXY |
| Volatility Index | -9% | -6% | 7% | -8% | -4% | -24% | 28% | -14% | 39% | -43% | VIX |
| Oil | -3% | -2% | -2% | -6% | 1% | -5% | 2% | -8% | 13% | -5% | USO |
SOURCE: TRADING VIEW. AS OF 12/31/25.
| Dec | Nov | Oct | Q4-25 | Q3-25 | Q2-25 | Q1-25 | 2025 | 2024 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| BTC | -3% | -17% | -4% | -23% | 6% | 30% | -12% | -6% | 121% | 155% |
| ETH | -1% | -22% | -7% | -28% | 67% | 36% | -45% | -11% | 46% | 91% |
| XRP | -15% | -14% | -12% | -35% | 27% | 7% | 0% | -12% | 238% | 81% |
| BCH* | 10% | 1% | -4% | 6% | 10% | 59% | -31% | 27% | 36% | 157% |
| EOS | -19% | -26% | -32% | -60% | -31% | -8% | -20% | -80% | -8% | -2% |
| BNB | -2% | -19% | 8% | -14% | 53% | 9% | -14% | 23% | 124% | 27% |
| XTZ | 2% | -16% | -13% | -26% | 24% | -18% | -49% | -61% | 28% | 39% |
| XLM | -19% | -18% | -15% | -44% | 51% | -10% | -20% | -39% | 157% | 81% |
| LTC | -7% | -14% | -11% | -28% | 24% | 4% | -19% | -26% | 42% | 4% |
| TRX | 1% | -5% | -11% | -15% | 19% | 17% | -6% | 12% | 136% | 98% |
| Aggregate Mkt Cap | -3% | -16% | -5% | -24% | 16% | 24% | -19% | -11% | 96% | 119% |
| Aggregate DeFi* | -11% | -25% | -6% | -37% | 40% | 20% | -19% | -15% | 50% | 132% |
| Aggr Alts Mkt Cap | -2% | -9% | -15% | -24% | 34% | 25% | -34% | -16% | 72% | 90% |
SOURCE: COINMARKETCAP AND COINGECKO. AS OF 12/31/25. BCH INCLUDES SV.
A Look Back At 2025
For the past six Januarys, I’ve written re-caps of some of my calls during the prior year, with the benefit of hindsight. You can read them here, here, here, here, here, and here. In keeping with that tradition, what follows is one Good Call, Bad Call, Interesting Call and TBD Call from each month in 2025.
[Good Call] “Bitcoin’s largest peak-to-trough drawdown in 2025 will be ~35%”
[Bad Call] “The AI Agent aggregate market cap will reach $40bn in 1H-25 (as measured by sentient.market, currently $12bn)”
[Interesting Call] “Crypto in 2025 will likely be defined by a MUCH more favorable regulatory environment and political backdrop. This will be THE headline factor in 2025 and many of the current events will stem from this in one way or another.”
[TBD Call] N/A
[Good Call] “Pump.Fun is a poison – they launch ~50,000 new tokens A DAY… They’ve extracted >$500mm of fees in less than a year… The user stats are truly atrocious [60% lost money; 3.5% of wallets made >$1,000].
[Bad Call] “We could range a bit longer, but I’m not worried about some larger topping occurring right here, right now. It could happen soon, but I think it will be from higher prices. I would be surprised if we don’t make new ATH’s in Feb.”
[Interesting Call] “Crypto has garnered few new entrants, and most of the new ones are the worst kind – Everyone that’s been around a few cycles feels this. 2025 is supposed to be 2021 and 2017 and we’re WAAAAY short on fresh blood today than we were at this point in the prior two cycles. The new entrants we have picked up? They came straight over from 5-leg parlays and they still do a lot of that too. We’re fighting 5-leg parlays for degen dollars. That’s our community growth this cycle.”
[TBD Call] “The bright spot can be found in putting on a longer-term hat. Put yourself in the shoes of a normie tradfi allocator. Perhaps on the investment committee of a large pension. From that perspective, the Executive Order was a hugely positive step towards the investability of crypto and sets the stage for having the asset class properly regulated so that deep pockets like yours can get exposure to the asset class. From that perspective, January was hugely positive, the epic Trump memecoin grift notwithstanding.”
[Good Call] “Nearly 4 months since the election, what is now crystal clear is that there is not significant, sustained inflows into Alts broadly. We had a big pump in the wake of the election – Alts did about a double in a month. But that Alt pump was broadly over the first week of December and has now retraced more than half of that up move (and looks to likely be heading lower). SOL is currently ~10% below its election day price. So what we now know with a few months of hindsight is that a Trump win, and all the positivity for crypto associated with it, was not sufficient to bring a lot of new capital into Alts. And all those Alts still have bagholders and a lot of them have unlocks and VC token holders that got in early that need to return capital to LPs.
Why didn’t a Trump win and all the positivity for crypto associated with it drive significant inflows into Alts broadly? Why has the market been such strong sellers for months now, even with a backdrop of tremendous support from the US government? Because of “a lack of pretense that any of this shit does anything or will ever do anything” – a topic that’s been discussed here consistently for over a year and incrementally updated over that time as well.”
[Bad Call] N/A
[Interesting Call] “To that end, February was a pretty shit month. Also just a weird month. Bybit got hacked by North Korea to the tune of $1.4bn in ETH. Apparently that’s the largest heist of any sort in human history. Whoah. The Central African Republic launched and immediately collapsed a memecoin. Dave Portnoy launched and immediately collapsed MULTIPLE memecoins. Changpeng Zhao launched a memecoin about his dog that immediately collapsed. And then the crescendo (God willing) of this absurdity - Javier Milei launched a memecoin with some autistic crypto scammer no one’s ever heard of. That memecoin also collapsed in hours, the scammer made off with $100mm (and then did an interview talking about his crimes) and tons of people lost money. Milei is under investigation in Argentina for it. Kanye West thought hard about running the same memecoin playbook but backed out ON MORAL GROUNDS. Let that sink in.”
[TBD Call] “This situation is actually exciting to me. I’m excited right now because I can feel crypto maybe capitulating in a way that can POTENTIALLY lead to more positive things down the road. Milei may have been a crescendo moment, and we are currently in the immediate wake of that crescendo – the market letting go of all the memecoin insanity and the vaporware grift. Crawling out of the malaise that we’ve been stuck in. Painful now, but this is a good thing longer term. We can begin to move on to the next thing and hopefully that will be more positive. TBD on how long that takes.”
[Good Call] “The TLDR here is that BTC moves with a lag to global liquidity. So you can look at what’s been happening with M2 and directionally approximate what BTC is going to do a bit later on. This would have BTC bottoming in April and heading to new ATH’s in a straight line over the summer.
I def agree global liquidity matters for BTC and crypto broadly. But as previously mentioned, there’s a ton of macro uncertainty right now around the Trump administration, and that seems to have a grip on asset prices. Is there a path where that uncertainty alleviates over the next 2-6 weeks for one reason or another? Yes there is. Would I expect risk to in turn trade better? Yes I would. So yes, there is certainly a path where BTC bottoms in April and heads to new ATH, but I think that path is more dependent on the market getting more comfortable around the Trump uncertainty. If Trump uncertainty stays high, causing macro to stay stressed, my guess is this correlation breaks because BTC will keep chopping or even break down. If Trump uncertainty alleviates, risk in general will probably get lifted and this chart will magically come to fruition. In either case, I think the causality will be around Trump uncertainty, not a (relatively minor) expansion of global M2.”
[Bad Call] “I think it makes sense to me why markets like the NASDAQ would be skittish right now. You’re not even 15% off the top after doubling in two years. It’s a chart that could easily consolidate for six months or longer.”
[Interesting Call] “So, I might as well let the cat out of the bag now. I’m launching a podcast, blog and online community in May. This will be in addition to continuing to operate Ikigai. It’s been three years in the making and it’s called Things Hidden. Things Hidden is an exploration of the intersection of Faith and Science. More specifically, it’s an exploration of Faith and six surrounding factors: Religion, Physics, Evolution, Philosophy, Consciousness and Technological Innovation.”
[TBD Call] ““If you’re reading this, you also probably own Bitcoin or are at least Bitcoin-curious. So as a Bitcoiner, this tough medicine concept has been front and center for the Bitcoin investment case. The entire ethos of Bitcoin is that government spending is reckless – “chancellor on brink of second bailout for banks”. And therefore, inflation will destroy your purchasing power, and the dollar is rekt, and all other fiat currencies are more rekt. So buy Bitcoin… And Trump is actually trying to (pardon my language but it's the right descriptor) unf**k that whole situation. He's trying to unf**k a bunch of other ones that also matter a lot, but he's ACTUALLY willing to step in and do the hard thing and not kick the can and try and fix it now. Honestly I wouldn't have believed any politician would do it, including Trump. Seriously, I didn't think he had it in him. Too much vanity and too easy to kick the can.
I’ve been talking about politicians kicking the can in this monthly letter for SIX YEARS. And Trump is actually saying – “no, we’re not going to kick the can we’re going to try and fix it”. That is remarkable. It takes courage. The magnitude of the unf**king that Trump is attempting is awe-inspiring. I don’t know if he's gonna pull it all off. He might fail. But the attempt is noble and I'm hopeful.”
[Good Call] “Overall, my guess is BTC punches $100K in May, and if we get a couple trade deal headlines coming through, we should probably close the month over $100k.”
[Bad Call] “It would not be my base case stocks make a lower low, but I don’t think they necessarily rocket to new ATHs from here either.”
[Interesting Call] “BTC was down 10% MTD in April at the lows before Trump announced the tariff pause that ripped the entire market. It is noteworthy that at those lows, QQQ was -14% MTD. At those early April lows both QQQ and BTC were -20% YTD. So folks were pointing to this as outperformance for BTC and I do think that’s valid. If you told me Q’s would puke 14% in the first 7 days of April and then ask me how BTC would be trading, I would have said down more than 14% for sure. Then once everything bounced. BTC bounced harder than tradfi. BTC ended April +14% with QQQ +1% - traded better on the way down and on the way up.
If I were to explain that, I would point to Gold having another very strong month, +5%, on top of a very strong year, +25% YTD. I would point to the DXY, -4% in April and -8% YTD. I would characterize the tariff wars as directionally destabilizing for global dollar hegemony, and that has the potential to increase the perceived attractiveness of an alternative emerging store of value like Bitcoin. Finally I would point to Saylor buying – he got off $2.3bn of BTC buys in three tranches in April. So I think overall that explains BTC vs macro.”
[TBD Call] “If SOL’s investment case of “own the casino” is now in doubt, I do think that calls into question SOL’s ability to say double, or triple from here.”
[Good Call] “The fact that this financial engineering is what is dominating crypto market activities is indicative of how little is going on fundamentally with crypto. The landscape of actual use cases for crypto is so barren that the only thing left to do is financial engineering.”
[Bad Call] “The big knock on HYPE is its valuation - $11bn market cap (#10 ranking, excluding stables) and $33bn FDV. Lots of people like the product. Lots of people also like the token. I struggle with the valuation.”
[Interesting Call] “Even with ETH’s monster May, it still trails BTC by 37% YTD. Many Alts have fared even worse than ETH YTD. 2025 was supposed to be 2021 in terms of “crypto cycles” but it is now crystal clear that isn’t happening. There is no Alt season because there are no inflows into Alts. There are no inflows into Alts because no one is using them. No one is using them because they don’t do anything.
In 2017 you could sell the dream (also all this stuff was 3% the market cap it is now). In 2021 you had some real usage in DeFi and NFTs and a bit of gaming and also you had a shitload of “reckless lending intertwined with fraud used to heavily lever long to speculate on vaporware”. This time around, in 2025, you have the curtain pulled back. You also extracted billions of dollars of maximum risk-seeking capital with Pumpfun and the memecoin mania. This capital was the ingredients of an “Alt Season”, and the degens gave it all away to Pumpfun equity investors and a memecoin cabal that’s probably 300 people deep. Everyone else loses.
And all the eyeballs (there are many) with all the capital (there is a lot) that’s on the sidelines peering into the Alt landscape…they’re not convinced. At all. Neither should they be. So that’s how you get the Alt price action we’ve had thus far. And I don’t see a single thing on the horizon that’s going to change that near-term (this year). Hate to be a Debbie Downer, but gotta call a spade a spade.“
[TBD Call] “Sigh…Don’t get me wrong, Gary Gensler sucks and Maxine Waters does too. But like, is this what we really want? Trump held a dinner this month for the top 220 holders of his TRUMP memecoin. If you were top 25, you got a private VIP meet and greet. It appears WLFI and TRUMP are basically the grift vehicles for the Trump family. Maybe if the CCP buys enough TRUMP, he’ll give them a nice deal on tariffs?
The GENIUS stablecoin bill is making progress in the Senate and will likely get passed this year. Once that’s done, Congress will turn to getting a market structure bill passed (FIT21 already passed the House). These are both good and necessary things. But I HATE the open season grift backdrop this is occurring in. What does it mean for the future of crypto? Fast forward a year from now, and we have stablecoin regulation and market structure regulation mandated by legislation. By that point, what other bad actors will have curried favor with greatest country in human history by enriching the family of the President of said country? Where will we be on crypto adoption? Where will we be on viable crypto use cases, outside of BTC and stablecoins?”
[Good Call] “CRCL, at current prices, is nowhere in the ballpark of “cheap” by any sort of fundamental metric. CRCL’s 2024 revenue and EBITDA were $1.68bn and $285mm, respectively. So CRCL is trading at 34x revenue and 203x 2024 EBITDA. NVDA trades at 63x and 111x 2024 revenue and EBITDA, respectively – but with a significantly higher revenue and EBITDA growth trajectory than CRCL. So CRCL is, uhh, quite pricey up here.’
[Bad Call] ”Largest 1H decline in the DXY since 1973. Whoah…That’s been a one-way train since the start of the year. Trump wants it lower. My guess is he’ll get it.”
[Interesting Call] “The main driver of my view that we will see increased socialist experiments in America is that it really seems like wealth inequality is set to continue increasing in America. AI and robotics, which will likely dominate economic growth in the years to come, are strong drivers of wealth inequality. Most of the value created from these technologies will accrue to about a dozen companies. These companies will need increasingly fewer humans to run their business, as AI and robotics take those jobs for humans. And so the trillions of dollars of value created from these technologies will flow to less and less people. NVDA is the perfect example. The average net worth of an NVDA employee is estimated to be $5-8mm. Think of that example as a blanket concept for how wealth will accrue in the coming years.
I am a fan of Democracy and a fan of free-market capitalism, but it is obvious to me that the level of wealth inequality we have in the US is untenable. And to the extent wealth inequality gets worse (which I think it will), then the situation will get increasingly more untenable. Something eventually has to give. I think the endgame has to be UBI. I’ve felt this way for years. I realize that “every technological innovation in history has created more jobs than it destroyed”, but I do think this time is different with AI and robotics. But what is the path from where we are today to that eventual UBI outcome? How much social unrest do we get between now and then? And what is the ideal version of UBI to eventually implement?
My main struggle in this line of thinking is the undeniable fact that governments are basically the worst at everything they try. The amount of waste and inefficiency and inefficacy of government is sky high. We have to have government, but they are the definition of a necessary evil. I couple this with the fact that American politics and The Swamp have become so disgusting, that the best and the brightest, the people you’d actually WANT to run for office, overwhelmingly have NO desire to do so. And the people that ARE attracted to running for office, by and large are NOT the people you want doing the job.
So the idea that you’re going to take increasingly more money out of the pockets of America and give it to the government, which is often made up of people you really don’t want to be charge, and then put them in charge of the redistribution of that money for the betterment of all Americans – that strikes as an idea with a lot of holes in it.
But if no one comes up with a better idea in the interim, it looks like that will be the playbook that gets implemented. NYC may be about to do a test run for it. Should be a boon for the Miami real estate market.”
[TBD Call] “Which brings me to my next point. Stablecoins have product-market-fit. USDT has a $157bn market cap and USDC has a $62bn market cap. Stablecoins move more value than Visa. All of that BEFORE we even got proper regulation on them in the US. It’s a pretty safe bet that stablecoin proliferation is set to continue on the back of the GENIUS bill passing.
BTC has product-market-fit. You give tradfi access to that via the ETFs, and you get the hottest ETF launches ever, by far. Stables have PMF. You give tradfi access to that via CRCL, you get the hottest IPO since 1980. You give tradfi access to crypto stuff that has PMF, and apparently they will eat it up… TBD on what that next crypto use case to get PMF will be.”
[Good Call] “So there was some reason a guy that had been holding BTC untouched since 2011 decided to puke the whole thing right now. Who knows? Maybe the $9bn puke of 2011-era BTC had nothing to do with The DAT Attack. Could have been coincidence...
The point I’m trying to make here is that this feels like end of cycle type stuff to me. Feels like we’ve really run out of stuff to do if this is what the industry is focused on. It is financial engineering in its purest form. There is no value created from these deals. These vehicles don’t provide access to assets that isn’t available elsewhere. DATs are an exploitation of a capital markets glitch.
Granted, it is a glitch that has worked tremendously well for MSTR and Saylor and the price of BTC. So in a way, you can hardly blame others for trying. But it still strikes me as really stretching to find the last incremental dollar we can figure out how to get shoved into crypto to pump our bags. Frankly, it feels desperate.”
[Bad Call] N/A
[Interesting Call] “It is noteworthy that even now, BTC is leaking lower and in danger of giving back that early July pump, to go retest $108k again as support. The lack of strong follow-through after a decisive break to a new ATH is a new type of behavior from BTC. This is not the BTC price action of prior cycles. BTC really is acting MUCH more like a macro asset. And it can handle size like a macro asset too. On the buy side, as previously mentioned, there were ~$7bn of buys just from DATs. The ETFs did another ~$6bn of buys. That is THIRTEEN BILLION DOLLARS of publicly announced buying in the month of June. And price was +8%. On the sell side, an OG whale single handedly puked $9bn of 2011 era BTC…and price was +8%. So this is just a huge asset that we’re dealing with now – just a hair smaller than Google. And it’s kinda starting to move like Google.”
[TBD Call] “It’s a bit surreal. We have a president and an administration that are huge crypto bulls. Trump’s publicly traded DJT owns over $2bn of BTC. We have massive support from the US government to a degree that would have been completely unimaginable just a couple years ago.
TBD on what exactly we’ll do with. In July, we did DATs.”
[Good Call] “Gold has been consolidating for four months after going on a total heater. This does not strike me as a chart that is about to break down.”
[Bad Call] “ETHUSD is at the tippy top of a very broad 4+ year range. If the ETH DATs + ETF flows do another $10bn month in September, price will almost certainly break out of this range next month.”
[Interesting Call] “And then one of the weirdest aspects of this whole setup is the juxtaposition against how bullish this presidential admin is on crypto. And how much airtime crypto gets. Trump and his entire family are BALLS long crypto. Despite ALL our ails I mentioned above, crypto is front and center in the news nearly every day at the highest levels. And we have massive support from nearly every corner of the US government. That part is just…weird. I never could have imagined all this stuff would be worth $4 trillion (on paper) and we would have SO much support from the US government and yet have SO little to show for ourselves outside of BTC and stables. Crypto has come so far, while accomplishing so little. From that perspective, DATs fit in perfectly.”
[TBD Call] “I don’t have a strong sense of whether they can keep hammering the equity markets in these penny stocks-turned-DATs. It seems like there is a decent chance BMNR could make it to Valhalla – aka the MSTR of ETH.”
This letter was about the martyrdom of Charlie Kirk. I got a lot of positive feedback on it. I would invite you to read the whole thing.
[Good Call] “Additionally, as of October we are now starting to see the ugly side of DATs. Two DAT’s sold portions of their crypto holdings to start buying back their stocks, which have traded very poorly. This was a risk that has been discussed for months, and it has the potential to spook the market. So far, the dollar amounts of DAT crypto selling have been relatively small. But if more broken DATs trading <1 mNAV join in the selling, it could have a negative impact on price. The DAT trend always seemed pretty ill-advised to me. I’ve said as much in previous letters earlier this year. It didn’t take long to see how true that ended up being.”
[Bad Call] “Zcash was up more than 600% in October. I wish I could tell you I had a logical fundamental explanation for this. But I don’t. I doubt it keeps going.”
[Interesting Call] “Finally, Trump pardoned Binance founder Changpeng Zhao. There is every indication to believe that Changpeng effectively bribed his way into a pardon. Early this year Changpeng hired “lobbyist” Ches McDowell, who is hunting buddies with Don Jr., to try and get a pardon out of Trump. Then, in May, when Binance accepted a $2bn investment from Abu Dhabi’s sovereign wealth fund, that investment was funded entirely in USD1, the stablecoin of the Trump family’s crypto project World Liberty Financial. Abu Dhabi had to fund dollars into World Liberty to create those $2bn of USD1 stablecoins. World Liberty then in turn would take those dollars and invest them in Treasuries yielding ~3.75%. 3.75% of $2bn is $75mm. $75mm/year in interest income to Trump’s World Liberty on the $2bn they got so Abu Dhabi could fund their investment in Binance. Five months later, Changpeng was pardoned.
So, yeah. That shit is gross. But if you’re looking at the pattern of behavior from the Trump family, it is certainly not surprising.”
[TBD Call] “On October 10th, the crypto market had a short-lived but extremely violent crash. On October 9th, China announced they were imposing approval requirements for the export of rare Earth metals, including to the US. The next day on the afternoon of the 10th, Trump tweeted he would be increasing tariffs on China to 100% starting November 1st in response to China’s rare earth restrictions. This caused a crash in all assets – with the SPX declining 3% in a few hours.
The first weird thing about this event as it relates to crypto is that a newly created account on Hyperliquid placed a $700mm BTC short and a $350mm ETH short 30 minutes before Trump’s tweet. The market crashed hard immediately thereafter, and the account closed the shorts at the bottom of the crash, realizing $192mm in profit in a couple hours. Coincidence? Ehh, maybe. Maybe not. I doubt we’ll ever find out.”
[Good Call] “What explains this relative underperformance of BTC vs QQQ and Gold, considering all the good things that have happened to BTC (eg, ETFs, Trump win)? In my opinion the #1 reason for this underperformance is the proliferation of cash-settled BTC derivatives. These instruments remove the inherent scarcity in spot BTC, and that scarcity is a huge driver of BTC’s reflexivity. The “paper” Bitcoin extinguishes this upward reflexivity. In particular, covered call writers are harvesting upside volatility. I think this impact has been particularly noticeable around new ATH breakouts this year, which have been consistently faded, likely through the aggressive selling of covered calls.”
[Bad Call] N/A
[Interesting Call] “The outperformance of QQQ can be explained with two letters – AI. The AI narrative fully encompassed dozens of stocks in 2025 and drove several trillion of aggregate market cap gains. Additionally, Emerging Tech sectors like quantum, space, data centers and semis exploded higher in 2025, with many tickers up hundreds of percent YTD. There was indeed an Alt Szn in 2025 – it was just in Emerging Tech stocks.
And so, crypto is wrapping up the year in the tough position of being an “inferior casino”.”
[TBD Call] “I also think the quantum fear put at least some damper on BTC’s price performance this year. I will save a full analysis of the quantum risk for another time but suffice it to say I think this is now firmly on people’s radar. And I don’t think BTC will be able to move a lot higher (say $175k+) until this risk gets alleviated or the market gets VERY comfortable that the quantum risk is a decade or more away. So that dragged on BTC some this year.”
Closing Remarks
And now for some 2026 predictions (NFA. I am wrong often) –
2026 for crypto will primarily be defined by the adoption of blockchain by Wall Street and tech companies, but in a way that will not greatly benefit crypto prices. That will be the primary theme for crypto in 2026.
BTC will trade $75k.
BTC will not trade $48k.
BTC will trade $120k.
BTC will not trade $145k.
BTC will underperform QQQ by at least 5% in 2026.
The quantum fears for BTC will remain a headline talking point, but will not be the direct primary cause of a BTC price crash.
ETH will trade $2,000.
ETH will not trade $4,500.
Aggregate stablecoin market cap will exceed $500bn (currently $312bn)
OTHERS will trade $120bn and will not trade $300bn (currently $200bn)
QQQ will draw down >18% at least once.
At least 15 Emerging Tech stocks will outperform TOTAL by >100%.
A crypto market structure bill will be passed into law in 2025.
Crypto VC’s will raise (raise, not deploy) <$4bn (from ~$7bn in 2025).
We will see DAT M&A.
We will look back on 2026 as a year where crypto lost more market participants than it gained.
Thanks for taking the time out of your month to read these. I wish you a great 2026!
“See others' faults and correct your own.”
-Japanese Proverb
Travis Kling
Founder & Chief Investment Officer
Ikigai Asset Management
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