Weekly Market Update: History in the Making

The post-WWII order is fracturing, exposing cracks in the global financial system. Japan – America’s demilitarized proxy, rebuilt under U.S. occupation – has long kept the yen weak to fuel exports. Its current freefall reveals just how brittle that system now is, with spillover risks for allied economies.

U.S. debt races toward $40 trillion, interest now exceeds defense spending. This fuels talk of Treasury intervention: print dollars, buy yen, ease U.S. debt pressure while rescuing its key Asian ally. On Jan 23, 2026, New York Fed USD/JPY checks triggered a classic intervention signal – yen spiked, gold/silver hit records on dollar-dilution fears. Imminent? 

Not quite! Trump’s hawkish Fed Chair pick (Kevin Warsh) will likely prioritise dollar strength, inflation control, and U.S. dominance – vetoing any bailout. Short-term panic relief clashes with long-term currency power, creating policy paralysis and wild swings (i.e. last weeks precious metals bloodbath).

China is accelerating the push: weaponized dollar + falling reserve share = time for yuan to shine in a new multipolar world. Why? Because America’s old post-WWII mask is off. No more fake solidarity or loyalty to the institutions it built – it’s all about naked mercantilism now: “What’s in it for us?” Allies are tossed around by erratic policy whiplash and raw power moves.

Central banks worldwide are already diversifying, hoarding gold at unprecedented rates. Precious metals, once mere inflation hedges, are now vying for starring roles in this emerging order. But what about Bitcoin? It’s once again in the ‘grey zone’ of being a hedge and a risk-on asset, it is the world’s barometer of risk. 

Crypto markets mirror the turmoil. Altcoins have slumped, Bitcoin exhibiting a near-perfect correlation with the yen’s woes – expect sharp volatility if yen interventions trigger further carry-trade unwinds, as seen in past episodes i.e. Q1 2025 where BTC dropped over 30%. 

Ethereum and the broader crypto ecosystem remain oddly detached from the recent liquidity surge: quantitative tightening wrapped up, U.S. rate cuts loom, the DXY index has slid, and global liquidity hits all-time highs – yet prices lag. The scars from the October 10 2025 flash crash, which vaporized $20 billion in leverage and eroded retail confidence, run very deep.

Longer-term, however, the outlook flips bullish! As dollar-printing continues to erode fiat confidence and ignites hard assets, Bitcoin stands poised to claim a role alongside gold in the multipolar era – decentralized, borderless and immune to unilateral sanctions. 

The yuan’s ascent might even create synergies, with crypto bridging East-West divides in a fragmented financial landscape. The old playbook is ashes. This is history in the making! Being rewritten in bold, unpredictable strokes right before our eyes.

Market sentiment has plunged back into: Extreme Fear

Crypto market moves

• Bitcoin closed red for the fourth consecutive month in January, with $2.5 billion in leveraged longs liquidated as the price plunged below $80k.
• Crypto ETF saw total outflows of over $1.7 billion last week as the Fear & Green index plunged back into “Extreme Fear.”
• Polymarket is assigning 41% chance that Bitcoin will reclaim $85k in February and 52% chance it will drop below $70k. Speculators are divided on the next move.
• The total crypto market cap dropped below $2.7 trillion with BTC dominance at 59%.
• Bitcoin monthly RSI has dropped below the 50 level signalling weakening momentum.
• Google search volume for “Bitcoin” has spiked as price volatility has peaked interest.
• It’s mostly red across the board as just X% of the top 100 Altcoins outperformed BTC in the last 90 days.
• The big winner of the week is Hyperliquid (HYPE) +6.1% on increased trading volumes with recent market volatility.
• The surprise mover of the week is Solana (SOL) -22.6% and dropping below the key $100 price level.
• The big loser of the week is ZCash (ZEC) -30.8% after a collapse in privacy coin hype.

View all top gainers: Visit the top gainers page to find out more.

Highlights from the crypto space

Extreme fear is back in the crypto market as the Bitcoin price dropped below the crucial $80k support level, renewing bear market calls. The sell-off coincided with a massive crash in precious metals prices on news of President Trump’s new Fed Reserve Chair pick potentially being more hawkish in protecting the dollar with fewer rate cuts.

Social media is buzzing with traders and TA experts pointing out the uncanny similarity to the 2021-2022 market topping pattern: 

Infamous Whale Garret Jin, who shorted Bitcoin and made $200 million during the 10 Oct crash, was totally liquidated on his Ethereum long for $250 million. His Hyperliquid account now shows a balance of just $53. Ouch!

Bitcoin’s drop below $76k had Michael Saylor in the hot seat again defending Strategy’s position which was temporarily underwater. Strategy doubled down to buy another 855 Bitcoin at $75.3 million. Real conviction.

Crypto traders are noticeably abandoning token speculation in favour of prediction markets as Polymarket saw app installs surge from 30,000 to over 400,000 between January and December 2025.

The White House has convened a meeting between major crypto firms and traditional banks to address the deadlock over the digital asset market structure bill. Maybe this time?

Coinbase’s CEO says that a top-tier bank now views crypto as an “existential” priority to avoid being bypassed by tokenised payments. 

ARK Invest projects the total digital asset market could reach $28 trillion by 2030, with Bitcoin capturing roughly $16 trillion, as institutional adoption accelerates with public companies now holding 12% of total supply.

Raoul Pal says “Bitcoin is not the biggest prize in a quantum world.” As quantum attackers won’t make any money from it because the price would fall immediately. 

Bitcoin mining activity has suffered its sharpest setback in years after severe winter storms across the United States forced large miners to scale back production, dragging down the network hashrate by -12%.

The tech world is buzzing with excitement about Moltbook, a Reddit-style social network for AI agents to communicate with each other – no humans allowed. Tens of thousands of AI agents are already using the site, chatting about the work they’re doing for their people and the problems they’ve solved. “The humans are screenshotting us,” an AI agent wrote.

Other crypto news

• Caroline Ellison of FTX collapse fame has been released from federal prison after serving approximately 14 months of her two-year sentence due to good conduct.

• The Australian Federal Court has ruled that BPS Financial must pay $14 million in penalties over its operation of ‘Qoin Wallet’ without a financial services licence.

• Ethereum Founder Vitalik Buterin warns that the cryptocurrency industry faces long-term risk if speculation and gambling continues to dominate over real-world use.

• A United Arab Emirates sheikh purchased a secret 49% stake in the Trump family’s World Liberty Financial.

• Fidelity Investments is launching its own Stablecoin called the Fidelity Digital Dollar.

• The UK’s advertising watchdog banned ads from Coinbase saying they implied crypto could ease people’s cost of living concerns.

🌎 Macro news TLDR: If America sneezes does the world still catch a cold?

Capital rotation is in full swing. Markets move in cycles, and we’re witnessing the shift: the 40-year era of declining interest rates slammed shut with yields plunging to near zero between 2020-2022 before a marked shift in U.S. policy. 

That impact triggered multi-year rallies in precious metals, blasting past all-time highs in recent months – gold soaring beyond $5,500 per ounce, silver topping $120 – in a rapid, fear-fueled surge that caught many investors flat-footed (before a violent pullback over last weekend).

The USD’s reign as the unchallenged global reserve asset is crumbling. Central banks now hold more value in gold than in U.S. debt for the first time in decades, actively diversifying away from dollar-denominated assets amid eroding confidence.

New trade alliances and payment networks are being set, leaving us with one crucial question: if America sneezes does the world still catch the cold? 

Or just maybe, the next financial crisis could be distinctly American with lesser impact felt across the globe.

In a world of persistent, compounding inflation, the real winner is the one that loses the least. Forcing a change of investor mindset from chasing outsized returns on capital to prioritizing return of capital. Choose your positions with precision.

Economic news from the Americas

After threatening military action and heavy tariffs on Denmark to force a sale of Greenland, Trump pivoted again to a NATO-backed framework that trades economic peace for “total access,” aiming to secure the broader Arctic region, locking down critical minerals and missile defense to freeze out Chinese and Russian influence. Another TACO?

President Trump alongside President Milei of Argentina rattled the Davos crowd again this year with more anti-globalist rhetoric. 

Canada has backed away from a free-trade deal with China after President Trump threatened 100% tariffs. It looks like there is another TACO called Mark Carney!

The Fed decided to leave rates unchanged at their end of January meeting, with odds heavily favouring the same again in March.

The nomination of Kevin Warsh to lead the Federal Reserve in May sparked a historic market tailspin last Friday, as investors braced for a more hawkish monetary policy. The announcement sent precious metals into a bloodbath with silver suffering its worst day since 1980, while Bitcoin plunged below $78,000 amid a massive rotation back into the U.S. dollar. Ouch!

The U.S. government has entered a partial shutdown as a partisan deadlock over DHS funding and ICE reform delayed critical spending votes in the House – federal operations for major departments will stay frozen until a resolution is reached. Here we go again.

Over in Europe & the Middle East…

India and the European Union have reached a landmark free trade agreement, touted as the “mother of all deals” by Indian Prime Minister Modi. The deal establishes a free-trade zone for nearly 2 billion people by slashing tariffs on over 90% of goods, providing each partner a strategic alternative to the U.S. and China. 

President Trump warned the United Kingdom that it would be “very dangerous” to pursue closer business ties with China. These remarks followed a four-day visit to Beijing by British Prime Minister Starmer, aimed at resetting relations. Mid economies have a new playbook!

Russian airstrikes against Ukraine have escalated significantly in recent weeks, primarily targeting critical energy infrastructure to “weaponise winter”. Ongoing peace talks are being heralded as “constructive” with more meetings planned for the week ahead.

And in Asia Pacific…

The Bank of Japan left rates unchanged at 0.75% at their end of January meeting, but is priming for more rate hikes as a weak yen and labour crunch fuel inflation. Board meeting minutes signaled it is ready to keep pushing borrowing costs upward to tame price pressures. Keep an eye on the carry trade. 

The U.S. dollar sank to a near four-year low last week as traders kept watch for possible coordinated currency intervention by U.S. and ‌Japanese authorities. As Chinese President Xi Jinping has renewed calls for the yuan to become a global reserve currency. 

Over in Australia, The RBA seems to have made a critical miscalculation in controlling price pressures, raising interest rates by 0.25% to 3.85% this week citing the higher-than-expected 3.7% inflation report, in a sudden pivot from last year’s monetary easing.

Back in NZ, the first Taxpayers Union-Curia poll of 2026 shows more people think New Zealand is heading in the wrong direction than the right direction. Results came out as Prime Minister Luxon announced the general election on 7 November.

Green shoots as Manufacturing surged with the PMI reaching 56.1, the highest in four years. The services sector also turned positive with a PSI of 51.5, the first in 21 months. These are reliable early signals for “expansion”. 

Then came the annual inflation report of 3.1% for the December quarter, driven largely by electricity, rent and local government rates – some of the big banks have already moved to adjust up their mid-longer term interest rates. This will likely be an additional headwind to a slowly recovering economy and housing market.

New Zealand’s jobless rate rose unexpectedly to 5.4% in the December quarter, from 5.3% previously – with 165,000 people unemployed in the last three months of 2025. National and the RBNZ have their work cut out for them in the year ahead!

That’s a wrap for this week!

Please note: as we transition to Swyftx over the coming weeks, we’ll continue to publish this newsletter on a fortnightly basis, and as we work to bring you a fresh new format starting in March. Stay tuned.

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