26 Jan 26' Trader perspective - Silver and Gold erasing $1.7T market cap and bitcoin unbothered

Trader thoughts on todays market information

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Last week was aggressively bearish for crypto ETFs; we saw more than $1.33b worth of outflows. New tensions emerged, especially with Canada and Cuba. I get the feeling that it has been too easy to short Bitcoin and go long metals when geopolitical tension happens in the sphere. Just because Bitcoin moves down and metals move up when new geopolitical tensions emerge, that doesn’t mean it is a fundamental trade. I’m thinking it has been a short-term trade that is working out; traders are hedging metals with Bitcoin, where there is no trading rationale for shorting naked BTC. Believing this, I don’t reject Bitcoin being mentioned as a geopolitical safe haven somewhere in the future. Saylor keeps absorbing the sell pressure, with over $264m in BTC purchases during the previous week. Where would Bitcoin be without Strategy?

Parabolic moves tend to mean we are in the late stage of the cycle, not the start. So far, metals are ripping because the move has been reflexive; high prices give higher prices.

I’m monitoring the performance of metals closely, miners moves and government act enforcements, especially on silver, as it is more retail-oriented and widely more speculative than gold. Bitcoin has been trading with a negative correlation to silver. This was proven true when today we saw the late market dump on silver and gold prices, erasing $1.7T of market cap in 90 minutes, one of the largest reversals in history. As that was happening, Bitcoin moved up. This matches the thesis I wrote in recent daily notes: as soon as silver collapses, Bitcoin will moon. No tension will stop the parabolic move at that time. That’s the current framework I am personally tracking.

I mentioned in previous daily notes that governments have an incentive to control metal prices. Thailand TFEX made the first move to control retail euphoria and speculation by suspending silver futures trading after prices hit an all-time high of $110 per ounce.

Cuba accused the US of international piracy. The US moved to choke off Venezuelan oil supplies and effectively imposed a “marine siege” on Cuba, openly blocking fuel shipments in the Caribbean Sea. This raised alarms regarding a common question mentioned in previous notes: What is the legitimacy of the US acting as the international court? Why should they control the Caribbean, and why should they control the shipment? This act massively increases international concerns, and it shows acts similar to the European colonization period. Latin America is in trouble as the US started on Venezuela, went to Cuba, and will probably move further if no one stops it.

Canada appears closer to China, alarming Trump that tariffs are going to hit Canada if they allow China to do transshipment through Canada in a free trade environment.

US and Europe conflict calmed down last week, and today we keep having calm tides - Europe delayed the decision on moving ahead with the US trade agreement until Feb 4. At the same time, Europe is making new allies, closing deals with India with better trade agreements.

Iran is the concerning area; we all remember the aggressive warning from the Iran chiefs last week after the announcement from Trump that the ‘armada’ was on the move to Iran. Today, the ‘armada’ arrived in Iran. This fear, in Trump’s words, forces them to make a deal, seeking negotiations over their nuclear program: “They understand the strong US military presence nearby and defended US-backed Israeli strikes on Iranian nuclear sites.” All eyes are on this escalation; it can ignite a bigger war and oil problem than in any other area. This is hurting Middle East growth extremely and risking a war in the Middle East area. The UAE already reaffirmed their commitment to not allowing its airspace, territory, or waters to be used in any military actions against Iran. The UAE is the one that probably stands to lose the most; it could harm the growth of more than 5% achieved during the last 5 years.

As more tensions emerge, along with more deficit spending, the dollar depreciates and the 10-year yield rising is a concern, mentioned citigroup analysts. New alternative investments soared on the investors’ radar. Capital is moving out of the US into metals and emerging markets, like Brazil.

If you are living in Europe or the US, you are feeling the cold storm. This is not just a cold spell; this storm turned offline more than 12% of total natural gas production, and the price is up 40% in a single day, causing direct harm to people and companies.

Nothing stops Nvidia, not even a cooler. Nvidia announced an investment in CoreWeave public equity worth $2b at $87.20. For CoreWeave to scale data center production, CRWV jumped 9% on this move. Data center construction jumped 18.5% YoY in October 2025 to a record $42b annualized rate. This is only $3b below the $45b spent on office buildings. The massive AI spending is redefining the US economy.

The market is already understanding the risk; quantum risk can trouble blockchains. Ethereum is pushing for the post-quantum era. EF management has officially declared PQ security a top strategic priority.

DeFi vaults are becoming one of the biggest products to achieve product-market fit; they promote easier ways to aggregate and scale capital in a seamless, frictionless way. Attaching to lending and borrowing markets can create good yields for depositors. Kraken unlocked DeFi Earn, and USDC vaults are connecting with Aave, Morpho, Sky, and Tydro. Bitwise announced they are going to be a vault curator on Morpho, targeting a 6% yield on USDC stablecoin by deploying to lending markets on Morpho.

Apparent debanking is happening in the UK, similar to what happened in the US during the Biden administration. More than 40% of all transactions destined for digital asset exchanges got obstructed. There was more than $1.2b in declined transactions over the past year due to bank-side rejections. 80% of exchanges reported a sharp increase in customer payment issues.

Michael Burry is back with his GameStop long position.