Podcast Notes| What does U.S. strategic reserves mean for the crypto industry and retail investors?

“Trump’s influence on the market cannot be underestimated. I learned from his first term: Don’t act against Trump’s tweets and remarks.”

Compiled and compiled: Deep Trend TechFlow

Guests:Jonah Van Bourg, crude oil crypto traders; Avi Felman，1000x Podcast host

Podcast source:1000x Podcast

Original title: What A U.S. Strategic Reserve Means For Crypto?

Broadcast date: March 4, 2025

Summary of key points

This podcast mainly discusses the following points:

1. Market shocks and U.S. crypto strategic reserves

• Bitcoin prices experienced large fluctuations, falling nearly 20% in a short period of time before rebounding 18-19%

• Trump announced the establishment of U.S. crypto strategic reserves, triggering a short-term market rebound

• Reserves will include multiple cryptocurrencies such as Bitcoin, Ethereum, XRP and Cardano

• If the strategic reserve is only US$500 million, the price of Bitcoin may quickly fall back to the 80K range.

2. Market technical analysis and trading strategy

• Bitcoin tends to fall after high sideways trading

• Capital inflows suggest that the rebound was mainly driven by spot rather than leverage

• Hedging strategies (long certain altcoins while shorting BTC) are performing well in the current market environment

• Bitcoin below 80K is considered an extreme value area, while value consensus has not yet been established in the 95K area.

3. Trump’s Impact on Markets

• Trump has historically significantly influenced markets through tweets and remarks

• "The impact of the Trump Effect on the crypto market is gradually weakening

• Friday’s crypto summit could become a key factor in the short-term market direction

• Government purchases of cryptocurrencies may require congressional approval, and the legislative process will be key

4. Ethereum performs poorly

• ETH/BTC ratio continues to fall, and Ethereum performs far less than Bitcoin

• Ethereum faces greater selling pressure and lacks buyer support

• Major sellers include the Ethereum Foundation and investors entering the market in 2021

5. future market expectations

• Short-term markets may continue to be chaotic and are not suitable for short-term trading

• Long-term optimism about Bitcoin may reach US$150,000 – 200,000 within the year

• The legislative process in Congress will be a key factor affecting the market

• Democrats are softening their attitude towards crypto, recognizing they missed opportunities to embrace the crypto industry

Impact of strategic reserves on the market

Avi：

The market has been really crazy recently,Bitcoin fell for four consecutive days after a one-day pause, then plunged 10% on the fifth day, and is now up another 15%. It’s up about 18-19% from the low to now, but we’re still only around 93K., did not even return to the previous interval. This is a crazy trend.

Jonah：

What happened? Is there any big news?

Avi：

As I said last week, it is rare for Bitcoin to not break after a high sideways move. I didn’t think there would be a 20% straight drop for four consecutive days. I thought it would be more volatile. I turned bullish at the mid-low 80K, and then we saw the last flush to 78K, which was actually a good thing for Bitcoin.Many investors waiting below 80K to enter suddenly gained a lot of trading volume, and then prices reversed quickly, so that those waiting to enter did not even have time to enter.。

And those who sell are likely to be panicked investors,They still want to hold Bitcoin, just afraid that the price will continue to fall into the 60K range。From a technical perspective, our market situation is pretty good, not to mention the news of the president’s just-announced crypto strategic reserve. What the hell is going on?

Jonah：

I didn’t move my position throughout the decline, just sat on the sidelines and tweeted a little less, maybe a little panicked, but not too worried because I didn’t think it would collapse.This was not exactly what I expected. I expected the market to rise steadily as the regulatory environment improved.

I don’t think this cryptocurrency news will really lead to a new bull marketIt is unlikely that we will only increase in the next six months. I think it may be sold for a while, then hit bottom, and then we will continue to rise. There will also be another crypto summit on March 7.

Avi：

I think this private summit is a bit like other catalysts around Trump. When he spoke at the Bitcoin conference, we first rose sharply and then sold off. Many people are excited about the idea of strategic reserves. I must say,This is really big news, especially for Solana, XRP and Cardano, because Trump mentioned them directly. The mention of Cardano is surprising.。

Jonah：

It’s not that weird. If you go to CoinGecko and look at the top non-stablecoins, you’ll find: Bitcoin, Ethereum, XRP (whether you like it or not, the air project has a market value of nearly US$300 billion), then the stablecoin Tether, then BNB (but that’s China currency, Trump doesn’t like China), then Solana, USDC, and finally Cardano, with a market value of 50 billion. Then there’s Doge and a bunch of other projects.To be honest, isn’t this the top cryptocurrency other than China coins?？

Avi：

You have a point, but I do think that if governments are going to buy cryptocurrencies, they should probably focus on projects that are truly useful and have real potential. This is a strange argument for me,Because we should take a step back and think: Why should governments buy useless projects that have no real users, no real future, or real value?Don’t they do any homework?

Jonah：

I certainly agree with you, Avi. Cardano represents everything that makes us both want to leave the realm of encryption. If Trump wants to get what he means correctly, he should have said that we will build a strategic crypto reserve, mainly Bitcoin, and put in some Ethereum and Solana because they have traction. Then you can include XRP and Cardano because of their high market capitalization.

But if you cut funding for U.S. scientific institutions and say the country is about to go bankrupt, while at the same time saying that you want to use taxpayer money to buy Cardano, it’s really hard to justify.

Avi：

There are two paths that can drive prices up. Unless we announce at Friday’s Crypto Summit that the United States will allocate tens of billions of dollars to Bitcoin, we will not rise. Here’s the threshold: Will we get more details in the next seven days that the United States will allocate tens of billions of dollars?If the crypto strategic reserve is only US$500 million, we will soon return to the 80K range.

Jonah：

If they announce this, it will make their transaction price worse. That’s crazy, and I wonder if they’re really that stupid. Information delivery is so bad that the answer may be yes, they are so stupid.

Bitcoin: Value and momentum

Jonah：

Last Friday, S & P 500 futures fell sharply, the largest decline since 2025. Although the stock market has experienced similar sharp fluctuations in 2024, overall, the market has become more unstable. In contrast, Bitcoin did not collapse like the S & P 500, but performed relatively steadily.

Avi： I have always used The value momentum framework.& Currently, we need investors to regain the value of Bitcoin, and I think that has been achieved. The market generally regards below 80K as an extreme value area for Bitcoin, which is why we haven’t stayed below 80K for long. The small trading range around 95K is not considered a value area, so there is not enough incentive to attract buying.

Momentum is mainly generated through news catalysts。If Trump announces that the United States will buy a large amount of bitcoin, it will immediately generate upward momentum; otherwise we will have to rely on value to support it.How to establish a perception of value? It is trading within a specific price range for a long enough time.

Right now, 85K is not considered a very attractive value range because we have just traded in that position. But if we trade steadily above 90K for two months and then pull back to 85K, then this price will suddenly become a discount price, which will greatly increase its appeal to investors.

Currently, the clear value area is below 80K and you can safely buy Bitcoin below 80K, and I believe you will be satisfied with this decision in a year. Of course, this also means that you probably won’t wait for this opportunity. But I also think 95K is not a value area. So in the absence of major positive news, I expect we could fluctuate between 85K and 95K for at least a month.

Jonah：

I agree with some of your points, but disagree with others. I agree that traders will anchor the asset’s price in a sideways position for long periods of time.If we trade around 100,000 for three months, then participants will anchor themselves in that position. Then if the transaction is at 80,000 yuan, it looks cheap; if it is at 120,000 yuan, someone will take a profit.

However, while I agree with the statement that cryptocurrencies rarely follow high sideways movements without selling off, it feels a bit misleading. Because basically you are saying: Cryptocurrencies rise, then stop rising, and then either continue to rise or fall. If it does not continue to rise, it will fall. This is obvious to some extent.

The Trump Effect: Policy Announcements and Market Reactions

Avi：

I remember we discussed before that Trump’s impact on Bitcoin would be the same as Musk’s impact on Doge. Everyone bought Doge at first because Musk might say something on Twitter and the price might go up.The same is true now that Trump has made Bitcoin his pet project。This model is already well developed, so now we enter the next phase of the recession,Every time he mentions cryptocurrency, its influence wanes.。He needs to take practical action.

It’s worth noting that we knew on February 28 that there would be the first White House Crypto Summit next week, when the crypto market was collapsing. I wish I had thought:There is a good chance that Trump will do something to make this summit not look like a complete failure。It’s worth looking at the White House calendar now. Every time you make a transaction on any asset, you should probably look at the White House calendar and think about whether Trump has any motivation to help or not to help with the transaction.

Jonah：

You make a good point comparing the impact of Musk and Trump on the market. I learned one profound lesson from Trump’s trading experience in his first term:Never act against Trump’s tweets and remarks。

Trump had a huge impact on markets during his first term. During the COVID-19 epidemic, when oil prices were low, he caused oil prices to surge by 30-40% in one day by claiming that he would force OPEC to cut production. This is an extremely rare surge for a non-cryptocurrency commodity. When prices were high, he publicly pressed OPEC every day to stop cutting production, and he did. He wants oil prices to be within a range, so he makes bearish remarks at the top of the range and bullish remarks at the bottom. Regarding the stock market, he will tweet it higher every opportunity, setting a record high, and it will be higher. We need to introduce more Trump tax cuts, Trump effects, etc.

You saw a sharp rebound in the cryptocurrency after he posted a tweet about crypto strategic reserves. All I would say is that this rise has already happened, and I don’t think he’s going to release some new super-good news on Friday, get us up another $10,000 and so on.Because such a tweet was only one time, and it was already sent today

I am still very bullish on cryptocurrencies, and I think we can easily reach $150,000, maybe $200,000 by the end of the year. If I were a short-term trader, I might sell Bitcoin here and buy it back until it returns to 87K, but that’s not my trading style.

Democratic Party and Crypto Policy

Avi：

The Democratic Party is beginning to awaken to cryptocurrencies. At least two people in the Democratic Party I know contacted me about possibly writing a review about how the Democratic Party blew cryptocurrency because they all realized thatCryptocurrency was largely born out of the Occupy Wall Street movement, and that was a movement entirely supported by the Democratic Party.

Fifteen years ago, the idea of boycotting big banks was entirely the exclusive preserve of Democrats。The way of thinking that distrusts financial institutions, Goldman Sachs, and JPMorgan Chase belonged entirely to the Democratic camp at that time. So they had a real chance. This is why if you look back at the origins of Ethereum, you will find that many of the major players are, even today, Democratic supporters. I think Bitcoin may have been more liberal, but if the Democrats had just followed the trend rather than tried to kill it, they could have achieved great results in the crypto space.

I think they’re starting to realize that now.。So I think they will soften their stance because it’s not a favorable political issue for them at all.

Ethereum performs poorly

Avi：

Ethereum’s performance is really terrible. ETH is now trading at only $2430, which is simply unacceptable.

Jonah：

That’s right, I won’t touch Ethereum again in the short term.

Avi：

To be honest, I recently tried a strategy: long altcoins and short BTC. This strategy actually works well. Many altcoins have hit bottom relative to Bitcoin, especially some AI coins in which I have heavy positions, such as ARC, Virtuals, AI16 and AIXBT. These currencies have performed well against Bitcoin recently. I also established a large long position in SOL, also hedging BTC. But basically all ETH/BTC parts of my portfolio had to be cleared.

Jonah：

ETH/BTC, the performance has been terrible, what’s going on?

Avi：

Man, I really had to clear it out. I kept all other positions, but this one was cut 24 hours after I opened it because ETH was completely unable to perform even when the market was volatile. The most surprising thing is that surprisingly few people are willing to buy this asset. I thought the sellers had run out, and I may be right on that, but I completely misjudged——This asset is practically zero buyers。

Jonah：

Not only that, but there are also a large number of sellers, including the Ethereum Foundation, and everyone who entered the crypto market in 2021 but have only now checked their portfolios. Ethereum has always been trading heavily.

Observations about Cardano

Avi：

What’s interesting about Cardano is that it’s actually held by the most ordinary people. Trump may be trying to reach the general public and he wants to make ordinary Americans who hold cryptocurrencies rich. Many Americans do own Cardano. Today, I talked to a person and he said: Do you know something about this cryptocurrency? I’ve owned some Bitcoin and Cardano for four years, what do you think I should do? quot; I told him he should definitely sell Cardano and exchange it for something else because today is a good day to sell Cardano. But ordinary people do own Cardano.

Analysis of market capital structure

Avi：

One particularly good thing is that this rally has basically no increase in open interest (OI). If you look at futures, one of the reversing signals of the highest hit rate is that a large number of people use leverage to enter the market. The rally appears to be spot-driven, and it looks like people are participating in the rally with cash, not just a group of speculators buying with leverage, which is a good signal for Bitcoin.

Jonah：

There is another explanation, which could be cash, which could explain that OI did not increase, or it could be a large number of trading between market makers, no real positions were established, but high-frequency trading that hit each other due to volatility.

Avi：

Looking at the funding rate, it does seem that there are a considerable number of short sellers entering the market on Saturday. One of the biggest skills in life is to stay focused on the weekend. I think it’s easy to focus on these things during the week and then not at all on the weekend, but if you observe on the weekend, you get a huge advantage. Over the past year, many important events in this market have occurred on weekends.

Future market outlook

Jonah：

I think this market will continue to be chaotic for some time,I don’t think this is a good market for short-term traders with a 2-7-day horizon。I feel unprecedented uncertainty about the short term, unprecedented certainty about the long term, and 6-8 points of confidence in the medium term (6 months later) that we may be in a higher position.

Except for some tactical opportunities, such as news coming out and the currency price hasn’t moved yet, you can trade news and some slow-responding assets, but other than that, I don’t think this is a market where you want to trade in large quantities.Once we gain a clearer understanding of the Trump administration’s cryptocurrency policies, the market will enter a healthier and more stable trading environment.

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