Is the Blowout in Silver Signaling A Crypto Bottom?

Our warning at the beginning of 2026 appears to be playing out. Back then, Fundstrat’s Head of Digital Asset Strategy Sean Farrell told Coinage why he thought Bitcoin could drop to $60,000 in the first quarter.

This week, the crypto market took it on the chin as Bitcoin briefly traded below $75,000 to complete about a 40% drawdown since the all-time high last year.

And yet, as painful as crypto’s run may be, it pales in comparison to the volatility we are seeing in metals. Friday notched one of the most volatile days for silver in its 275-year history. Take it from the trader who has been ahead of everyone on the trade:

That’s 275 years of silver daily returns. Friday’s move is one of the largest single-day drops in the entire history of the metal. We’re talking about a move that rivals the end of bimetallism, the Hunt Brothers collapse, and March 2020 - except this one came out of nowhere on a random Friday in January.

The vol surface going into Friday was pricing maybe a 3-sigma move as a tail event. We got something like 6-sigma. The kind of thing that’s not supposed to happen based on the historical distribution, which of course is exactly what happens when everyone’s positioned the same way and liquidity disappears.

This, of course, followed a 130% move over the last two months. So wild moves on the way up — and now, wild moves on the way down.

But if you believe Ethereum bull and Fundstrat Head of Research Tom Lee (which we admit is getting harder and harder as his price targets continue to fail) the rotation out of metals could be putting in a floor here for crypto.

As he says, onchain metrics improving — like active addresses and transactions notching an all-time high — are signs that buck the trends of prior crypto winters. So if the pendulum of risk swings back to crypto’s favor, it’s well poised for a rally.

That said, what does Tom’s (more accurate to-date) research counterpart Sean Farrell have to say? Well, he seems to be somewhat aligned, noting that the worst of the bottoming process may be over.

In a new note out Monday, Farrell noted Bitcoin’s underperformance relative to gold has fallen to historic lows:

“All else equal, the levels reached over the weekend and the degree of capitulation observed create a more attractive near-term risk/reward,” he said. “As such, I view this as a reasonable opportunity to deploy a modest amount of dry powder (~10%) within portfolios, while acknowledging that we are still trending lower and there is still an ample amount of positioning risk in traditional markets that could adversely affect crypto markets.”

Trump’s (Other) Corruption Scandal

It’s become incredibly difficult to stay up to speed on every scandal coming out of the White House these days, but the Wall Street Journal added one huge update to a story Coinage first raised last year with Trump’s World Liberty Financial.

As we documented then, the Trump family was raking in millions of dollars with their stablecoin project. Their stablecoin USD1 became the fastest-growing stablecoin in history — and as you might expect, a large part of that was tied to other deals that led to favorable outcomes for those opting to use the Trump stablecoin over others.

Weeks after we speculated on why Binance may have used it to complete a $2 billion deal with Abu Dhabi fund MGX, Binance’s co-founder CZ was pardoned by President Trump. But this weekend, the Journal dropped an even bigger piece to the puzzle. The parent fund to that same Abu Dhabi investment firm had invested $500 million into the Trump crypto company days before President Trump officially took office. Then, weeks later, the UAE firm was able to finally unlock access to AI chips that for years had been blocked on national security concerns.

The full story is for sure worth the read, and as it blew up in the mainstream, many noted it leaves very little room for debate on just how apparent these quid-pro-quo deals have become.

A Trader’s Year in Crypto?

If there is one thing that is increasingly clear, crypto may finally be approaching the year in which projects start to uncouple.

That is, it’s not unusual to see most of crypto suffer together in downturns. But this year, it’s been interesting to see some projects break from the field. HYPE, for example, is up more than 22% this year. Canton, a newer chain backed by the biggest names in TradFi, is also up more than 20% year-to-date.

We launched our Crypto Project of the Year series to spotlight the most promising crypto ecosystems in more detail — and that seems to be worth it now as both Canton and Hyperliquid have advanced to the semifinals.

Check those interviews out and get ready to have your voice heard by voting in the next round!

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