Dopamine is high. It was all they up.
25 Feb 26', Wednesday
[Brief in podcast format]
The market just ripped. Bitcoin is up more than 7%, while Ethereum and Solana have surged 12% and 14.5%, respectively. It is unclear if this move was sparked by the Goldman Sachs report or the latest Kobeissi Letter, which articulated exactly where the Citrini research paper went wrong by underestimating the demand side—making a significant mistake in assuming that demand was static. These are great articles that essentially make the case for other AI scenarios, specifically interpreting the “AI Bull” scenario (mentioned in other papers) as a lower-probability outcome. Or perhaps the market is simply moving because today’s software earnings reports turned positive; of course, NVDA expectations pushed the entire market up all day and continue to do so after confirming another quarter beating Street expectations. AI business economies is not that bad, wall street over reacted?
This resurgence is particularly interesting when you consider that, until October 10th, everything seemed to fade for no reason. During that period, Bitcoin was widely correlated with NVDA. Based on today’s reaction, it looks as though Bitcoin could be restarting its correlation to NVDA—a trend that is a long-term net negative but a short-term positive—just as NVDA breaks through its last resistance and points higher.
It is almost certain that Bitcoin’s primary pain is behind us. While more than half of all tokens remain underwater, we should assume that bottoms need time to form.
Today’s reaction is quite positive, but it doesn’t quite consolidate the bull thesis yet. I need more: more from price action and more from the fundamentals. Even as ETF sellers become exhausted, I am expecting today’s inflows to be aggressive, but we must see sustained momentum. We need a consistent wave of inflows to fully support the BTC bull case.
While we wait for that Bitcoin momentum, the rest of the crypto market—specifically DeFi and lending—is already ripping. AAVE continues to face challenges within its DAO, which is serving as a massive catalyst for Morpho. Lending markets on DeFi rails represent a huge sector; when traders want exposure while AAVE is dealing with its DAO pivot from Aave Labs, Morpho wins by default. I will be releasing a separate, more detailed letter explaining why I’m so bullish on governance tokens for 2026 and beyond, but in the meantime, it is worth noting that Aave crossed the $1T mark in lending volume today. It is impressive to see that this “niche” is no longer a niche.
This intersection of finance and tech keeps AI at the forefront of my mind, especially with Cursor launching new updates and Agentic Commerce moving into crypto. As I work to understand the nuances of Agentic commerce, trade, and investment, I’m also trying to identify the preferred protocols for these agents. Agents will eventually force humans to act on what they like by leveraging the power of knowledge and trust. When an AI agent trader recommends a protocol to a young person, that person will follow the advice without hesitation. This is catalyzing a new way of performing research: asking agents what they think and developing strategies through multiple prompts to determine the most probable protocol selection.
Ultimately, the synergy between AI and crypto is changing the world for the better. The doomers who disagree likely don’t trade or use the tech. I am bullish on the world, even while recognizing that an “economic holocaust” for Western civilization is emerging: internal conflicts, weakening currencies, deficit spending, and new mechanics to control populations through social media and enforceable privacy actions. With capital markets underperforming alternative assets and reserve assets in Eastern and Latin economies, the signs of a shift are everywhere. On top of this, there is an energy crisis across the West. Many analysts focus on Europe’s problems, but the US is nothing without its European allies. If the East were to gain control over Europe, it would disrupt the US’s ability to protect its land and put national security at risk. Without debt buyers, policy supporters, or security pacts, there is no West.
This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.
I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.
Thanks, Joao