Is Bitcoin Bottoming as Strategy Doom Loop Fears Ease?

The fourth quarter has not been kind to crypto. But it has been less kind to Strategy, as MSTR shares have cratered almost 50% since October.

The company, led by Bitcoin bull Michael Saylor, made waves on Monday after announcing it was raising a $1.4 billion cushion to ensure it had funds to make good on dividend payments. On the call, Saylor finally mentioned that the company could, at least in theory, sell its Bitcoin to cover its debt and dividend payments.

"Yes, we could sell the Bitcoin," Saylor said on the call. "We could also sell Bitcoin derivatives."

And as he said that, it seemingly triggered fear in the market as the man famous for saying "never sell your Bitcoin" admitted the obvious. But in the 24 hours since, not only has MSTR rallied by about 20% it seems like most of the market has woken up to the fact that Strategy's buffer is quite robust. As hilarious as the illustration on the call explaining that was (via a dual-engine spaceship metaphor) it seems like most people are buying that Strategy committing to stashing a cash reserve buffer of $1.4 billion is actually a good thing.

As Saylor explained, that cash reserve is now the turbine-charged battery to the $59 billion or so the company holds in volatile Bitcoin, and it's size-able enough to pay out dividends for 1.75 years by itself.

"It's very, very common to turn a turbine and to charge a battery. So we think of the USD reserve as our battery in order to provide very, very smooth dividends that are decoupled from the volatility of the capital markets," he said.

As those fears stabilize, Bitcoin found its footing on Tuesday, rebounding north of $91,000 as Ethereum also topped $3,000.

Ethereum Prepares for Its Fusaka Upgrade

Speaking of Ethererum, the blockchain is preparing for its Fusaka upgrade to hit tomorrow. The planned improvement will allow for efficiencies, including increased capacity and speeds to enhance scalability in the Ethereum ecosystem.

We recently chatted with Tomasz Stańczak, co-Executive Director at the Ethereum Foundation, for his thoughts on the excitement.

"I think the problem was — and perception of many people [was] — that L1 stopped scaling almost," he said. "We got so excited about the scaling of L2 that we forgot that L1 [Ethereum] should continue just to provide this very credible scaling commitment."

Historically, Ethereum upgrades have been fairly bullish for price performance, though it's difficult to tell exactly how much of this is driven by other external factors. ETH rallied 30%, for example, after its Pectra upgrade back in May — though that followed a substantial recovery from Trump's tariffs.

Crypto Advocates Turning on Trump?

A Gallup poll out on Monday showed Trump's approval rating falling to a new low in his second term. His approval rating fell five percentage points to 36%, while disapproval has risen to 60%.

That mark is the second worst for any president in history at this point in his second term, trailing only Richard Nixon. Perhaps more concerning, however, is how some in the crypto camp have soured on President Trump. Bruce Fenton, founder of the influential Satoshi Roundtable, cited the disapproval numbers in calling out Trump's squandered crypto mandate as Trump's family introduced their own plans for personal enrichment.

"He supported sovereign money and Bitcoin only to pivot to family crypto grift," Fenton tweeted.

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