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Even though the markets have crashed, something pretty big happened last week.
On Friday, Trump signed an executive order that established the Bitcoin Strategic Reserve and Digital Assets Stockpile.
Here’s what it does:
- All BTC seized by US Gov will now go into the strategic reserve.
- The US Treasury can accumulate more BTC without spending taxpayer money.
- The Digital Stockpile will hold all other seized crypto.
This is massive. More nation-states will accumulate BTC. Brazil already approved something similar. There are even rumors of a Chinese Bitcoin strategy.
So why aren’t the markets moving? Maybe it was priced in, or people were expecting the U.S. to use taxpayer money to buy BTC.
Something else to remember is that EVERYTHING’s down right now, not just Crypto. So it could just be the sentiment.
Here’s what we got today:
- Bull run indicators. How to know when we’re back?
- Stacks Deep Dive. Make your BTC productive.
- Around the web. Compound’s controversial partnership with Morpho, $COIN stock is onchain, World chat from Worldcoin, and more.
Today’s email is brought to you by Stacks — the leading BTC L2.
Here’s your Edge 
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Markets
When’s the bull run coming back?
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We thought we were getting Lambos this bull run, but instead we’re all thinking a nice 9 to 5 job is pretty comfy.
So everyone’s wondering… “When’s the bull coming back?“
No one knows for sure. All we can do is monitor indicators to see where the market is going. There are several ones that can tell you when things are turning bullish.
#1. Onchain data
Blockchain data is public. You can see if people are actually using it or if they’ve moved on to the next shiny object.
But be careful—some metrics, like active addresses and total transactions, can be faked. Here are some more reliable metrics.
- DEX volume is great for tracking trading interest in crypto.
- Fees and revenue. This is the best onchain signal cuz it’s really hard to fake. (But not impossible.)
- Real DeFi yields. Real yields come from genuine economic activity. If you can get high yields
- The total Stablecoin market cap and Total Value Locked across all chains are also great.
DefiLlama is my go-to platform for all the above data. Artemis is a decent option as well.
#2. CEX Metrics
Like it or not, price discovery still happens on CEXes.
That makes exchange-related metrics useful in predicting market trends. Here are some heuristics.
- The higher the total trading volume is, the better it usually is.
- A decreasing balance of crypto assets in exchange is bullish. It means people are taking those to personal wallets instead of a hot market.
- Funding rates are payments between perpetual traders. Consistently positive funding rates may indicate bullish sentiment, while negative rates could be bearish.
The Block, Cryptoquant, Coinglass, and Glassnode are all good sources for these data.
#3. ETF Flows
Exchange-Traded Funds are TradFi’s door into crypto.
And at Bitcoin’s trillion-dollar market cap, you need institutional buyers to push prices higher. Tracking ETF flows is great for gauging institutional interest in crypto.
For simple tabular data, Farside data is fine.
If you want some good charts and graphs to understand the data, Coinglass is better.
#4. Sentiment
If every hyped coin is a scam, people will get burned and exit the market. Conversely, when people feel good about crypto, they’ll buy crypto.
So market sentiment is important for the bull market. Good vibes = bullish & bad vibes = bearish.
Here’s how you can monitor them.
- Kaito uses AI to monitor market sentiment. But it’s pricey.
- Social Blade lets you monitor YouTube views of top crypto channels. Views up = good.
- You can look at the popularity of crypto-related terms on Google Trends. Wenbullrun.com has a curated section on Google data.
- If you’re active on X, you can see the vibes there. Generally, I can tell by the type of posts and jokes people are making what the general feeling is.
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#5. Macro indicators
The global liquidity is the biggest factor in crypto prices. More fiat supply = higher crypto prices.
- So you want the central bank interest rates to be low. It’ll pump money into the market.
- You want govt programs like COVID stimulus cheques that put a lot of cash into consumers.
Stuff like interest rates are in turn dependent on macroeconomic factors like inflation rate, jobs report, etc.
But unless you are an expert, Macroeconomics is really difficult. People can take any metric and explain it however they want. You need experience for proper analysis.
So personally, I depend a lot on the macro analysis of experts. Arthur Hayes is someone who regularly writes about the intersection of Macro and Crypto.
#6. Bitcoin Dominance
Bitcoin dominance (aka BTC.D) measures how much of the total crypto market cap is made up of Bitcoin.
Bitcoin is the safest asset in crypto. When uncertain, people either go to stables on BTC. So, BTC.D generally goes up during a bear market (and the very early part of a cycle).
If we see the Bitcoin dominance reducing consistently, we’ll be in the bull market. Even better, we might even be in an altcoin season. (Not where every token pumps tho. Those alt seasons are dead.)
Above are the indicators that I use to track market conditions. However, they aren’t comprehensive by any means. There are more if you want.
- No. of downloads for crypto apps on App Store and Play Store.
- Technical analysis might also help. For some people moving averages and RSIs work.
- Wenbullrun.com has more metrics you can track, like the fear & greed index. Here’s a guide on how to interpret them as well.
But ultimately, even these indicators have limitations. It cannot account for the full context properly.
For an extreme example, even if the indicators scream bullish, a sudden regulatory crackdown on crypto can turn everything bearish.
I don’t think the cycle is over yet. Stay ahead of the market by using the above metrics.
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sBTC: an Easy Way to Make Your Bitcoin Work for You
Bitcoin should be a part of any healthy portfolio.
But there’s a problem: it just kinda sits there. You can earn yield on most major tokens, but Bitcoin is a design from a different era.
There’s a solution.
Enter Stacks. It’s a Bitcoin Layer 2 that launched back in 2021.
It keeps Bitcoin as the settlement layer while solving many of its drawbacks.
- Provides massive throughput.
- Compared to BTC’s 10-minute block time, it is super fast.
- It adds programmability, enabling applications like DEX.
But the real game-changer? sBTC (StacksBTC). It lets you stay exposed to BTC while unlocking DeFi opportunities. It’s kinda like Bitcoin getting upgraded with superpowers.
What is sBTC? It’s a token on the Stacks blockchain that is 1:1 pegged to $BTC.
- You can mint sBTC on Stacks by sending BTC to a specific Bitcoin address.
- Conversely, you can get BTC on Bitcoin by burning sBTC on the Stacks chain. This can be done through a Stacks wallet or dapp.
There’s a reliable tech backing this process. It’ll take 3 Bitcoin blocks (<1 hr) for deposit and 6 blocks (~2 hr) for withdrawal.
Additionally, the sBTC peg wallet is managed by sBTC signers. You can see the signers here. The end goal is a fully decentralized, open, permissionless Signer set.
You can learn the technical details here.
This architecture makes sBTC the best option for onchain users.
- 100% backing. sBTC is always backed by BTC 1:1. (After March), you can always redeem your BTC on L1.
- Bitcoin Finality. All Stacks transactions, including sBTC txns, settle on Bitcoin. So they benefit from 100% Bitcoin finality.
- Trust-assumptions. You don’t have to trust any centralized group or exchange. (You do have to trust the Bitcoin network, Stacks chain, &sBTC signers tho.)
- Security partnerships. Top-tier security experts like ImmuneFi and Asymmetric Research are working with Stacks. There are 3rd party audits as well.
- Onchain utility. Since Stacks is programmable, there are a lot of applications you can use sBTC in.
And don’t worry if all this sounds too technical. For users, Stacks has a web application that offers a user-friendly interface. You can mint or burn sBTC very easily.
What can you do with sBTC?
Unlike regular BTC, sBTC is productive. It earns yield.
sBTC Rewards Program from Stacks is basically a free way to earn yield.
- Easy. You just have to enroll BTC in the program here.
- Solid yield. The rewards will be given in BTC up to 5%.
- No opportunity cost. You can still continue to use sBTC in Stacks DeFi.
If you’re a good onchain citizen, whenever you see a yield, you should ask where the yield is from. We’ve seen too many protocols giving insane yields and rugging people.
But sBTC rewards have a real source.
Stacks chain is run by Stackers, they’re like validators in PoS chains. In return, Stackers receive BTC. A group of Stackers are contributing their BTC rewards to the program. If you want more details, click here.
Stacks also have a diverse DeFi ecosystem. You’ll find many opportunities there. Here are some examples. (The yield is variable, the APRs here aren’t final.)
- 10-30% APY on BitFlow.
- Up to 25% APY on Arkadiko.
- Alex offers up to 40% to provide sBTC liquidity.
- Up to 15% APY on Velar from sBTC Liquidity Pools.
- Up to 12.5% APY for supplying sBTC on Zest Protocol.
- If you borrow USDh against sBTC and stake on Hermetica, you’ll get up to 25% APY.
And that’s not all. There are also points programs and other incentives. Note: As with any DeFi project, smart contract risks exist. Always DYOR.
How to get sBTC?
If you already have funds on the Stacks chain, you can swap into sBTC. Bitflow and Velar are good options.
If you have BTC on L1, then you can directly mint sBTC on Stacks.
- Step #1. Get a wallet that supports Stacks. Xverse and Leather are the leading options.
- Step #2. Make sure that you have some $BTC in your account.
- Step #3. Enter the BTC amount to convert and Stacks address to receive the sBTC.
- Step #2. Sign the transaction and wait for the deposit to be confirmed.
- Step #2. Hurray! You now have sBTC on the Stacks chain.
If you have any questions, check out their FAQ page.
They’re rolling out sBTC in phases.
sBTC minting is closed for now. Thankfully, it’ll open in sBTC deposits in March. They’ll enable withdrawals as well.
But you have to be fast. There’s an insane demand for sBTC. When they last opened sBTC minting, they had an initial cap of 3,000 BTC (>$250M). It was filled up within a single day. Even big players like Jump Crypto are holding crypto.
If you want to mint sBTC, sign up to get notified when they open. You can deposit any amount BTC and get equivalent sBTC in return.
DeFi Catalysts
Compound is discussing a partnership with Morpho. While some see this as a win-win deal, many see this as Compound giving up to Morpho.
Pendle listed the first asset that was fully deployed externally, aka by the community as opposed to the team. The community listing process is here.
Backed, a protocol that brings stocks and ETFs to onchain rails, issued Coinbase’s $COIN on Base. Users can now buy $COIN onchain.
Uniswap Foundation has requested $165 million from the DAO to grow Uniswap V4 and Unichain.
Aave is discussing creating a savings product for its stablecoin $GHO. It also introduced an “Aave Savings Rate”.
Monarch announced Monarch Vault. It’s a fully autonomous vault managed by AI. And it’s built on top of Morpho.
Dinero has released orbETH on Arbitrum. You can now earn yield from their LST product on Arbitrum One and select Orbit chains.
Euler Finance added mEDGE and mMEV to the Euler Yield. Both are delta-neutral DeFi yields from MidasRWA.
Ondo Finance is deploying its OUSG to the XRP Ledger. This deployment is set to go live within the next six months.
Scroll released its 2025 roadmap. Top targets include becoming the first stage-1 zk Rollup in April, support >10k TPS, and more.
Worldcoin introduced World Chat. It is a private chat application that leverages Worldcoin’s features such as WorldID.
Industry News
President Trump signed the executive order establishing a Strategic Bitcoin Reserve and Digital Asset Stockpile.
Coinbase hired the team behind IronFish, an L1 chain focused on privacy. They’ll be building privacy primitives on Base.
Ethereum Foundation introduced Zknox. It’s a cryptography research organization backed by a grant from the Ethereum Foundation.
Airdrop Alpha
Taiko Takeoff x YieldNest Airdrop is canceled. We shared the opportunity when Taiko announced it so we wanted to keep you guys in the loop.
Meme