Crypto is disconnected; Banks too

Retail buys $1.8B of SPY while Bitcoin sees massive outflows.

This is your daily market analysis for 22 Jan 2026! The author writes from curiosity to curious people. View this as a thought exercise with real time information that measure direct impacts on economics, stocks, crypto and commodity prices. Industries, narratives and wealths!

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The biggest threats on Greenland are gone with US not use military force to acquire the territory; however, a deal has not yet been carried on. This negotiation is now in a critical phase, with the Greenland prime minister warning that they have strict red lines and their sovereignty must be respected. Vladimir Putin has stoked these tensions, recalling that the Russian empire sold resource-rich Alaska for $7.2m in 1863 and suggesting a $1b price tag for Greenland. A Russian acquisition of Greenland could have ramifications, adding to their already strong Arctic presence.

Personally, I dislike Putin’s message and the attempt to place a price tag on Greenland. Any price paid by a sovereign nation only denigrates the deal, which is likely Putin’s intent (I believe). This agreement is far larger than any monetary figure; it concerns sovereignty, property, and a population. We are not playing Monopoly. If a price tag is attached, conflicts will spark among populations opposed to “capitalism,” reinforcing the view that “the world is all about money.” Consequently, any agreement between Greenland, NATO, and Europe must be cashless, focusing instead on national and international security. Putin also mentioned, Russia sold Alaska to US in 1863, mentioning the past highlights something that will create future events, I believe.

While tensions between Europe and the US have cooled over the last week, the potential sell-off of US assets by European nations remains a flashpoint. Trump has alarmed investors by threatening retaliation if Europe sells assets like bonds. Northern European investors and pension chiefs are increasingly worried about holding US assets due to geopolitical tensions, foreign policy uncertainty, and debt levels. There is a non-zero probability that some pensions will begin diluting their exposure to the US market, which would spike tensions once again.

Christine Lagarde views the recent friction as a wakeup call, arguing that Europe needs a “plan b” to strengthen itself in case normal relations are not restored. Larry Fink agrees, identifying the lack of capital markets as Europe’s greatest weakness. While there is a positive sentiment regarding Europe becoming more responsible to itself and NATO, execution remains the challenge. Historically, Europe suffers from a lag in execution—they talk too much and act too late and too little—though I sense a shift happening. Those are the vibes, at least.

Crypto ETFs are erasing last week’s gains. Yesterday saw $985m in outflows from ETFs abroad, including $708m from bitcoin and $287m from ETH, while SOL and XRP surprisingly saw positive flows. These outflows and poor crypto performance are occurring even when gold rips and US markets perform well. The US GDP growth QoQ beat expectations at +4.4%, and Core PCE MoM sat at 0.2%. Hedge funds recorded a massive $116b in inflows last year, and retail investors bought the dip yesterday with a net $1.8b of SPY—the largest single day since October. With YTD retail buying exceeding +$1b daily and global institutional cash allocation down to 3.2% (the lowest since the 1990s), the appetite for risk is incredibly high. And crypto still performed poorly.

Trump intends to cap interest rates at 10%, a move Jamie Dimon warns could cause a collapse. While I previously noted a solution where Trump enforces credit provision, competitor banks are already adapting; BAC and Citigroup are launching credit cards with a 10% rate cap to match the new policy.

Trump is aggressively targeting banks in multiple areas: the Stablecoin genius act threatens their lending business by squeezing spreads, and the credit card cap attacks their most profitable sector. Trump also sued JP Morgan. Trump’s hostility is evident as he attempts to dismantle traditional banking dominance. With competition growing from Fintech and crypto companies, banks face squeezed margins and slammed products. The shift of power is happening in real time.

With Davos finally over, we should expect less volatility. The last few days brought a spike in both volatility and volume, with DEX volumes producing over $10b during the last two days compared to the $5b daily average (round number). Derivative exchange volumes appear to have reached an inflection point. Ethereum active users and addresses have doubled since December. With contracts deployed emerging and transaction numbers moving.

However, the short-term performance keeps being uncertainty. Bitcoin is evidently being used to trade geopolitical events, and with correlations between bitcoin and altcoins above 0.95, the majority of the market is essentially trading as bitcoin beta.