Hey, it’s Marc & the 51 team.
What a week, folks – and only in crypto. We have a packed newsletter for you today to untangle everything that happened.
In case you missed it: Bitcoin crashed 30% in 7 days below $60K (is not already back at $70K) amid a brutal market-wide crash that wiped over $1T in value and lead $5B+ in liquidations.
Strategy and Bitmine are sitting on billions in unrealized losses, choosing not to sell and instead continuing to buy more, with Strategy adding 855 BTC this week. BlackRock's IBIT posted record-setting redemptions.
And the FUD machine is running full speed:
Epstein files just revealed he tried to steer Bitcoin's early development, funded Bitcoin Core devs through MIT, invested $3M in Coinbase in 2014, and Blockstream's CEO is facing calls to resign over island visit emails.
Traders are hunting for a hidden blowup. Pantera's Franklin Bi says the seller looks like a large Asia-based player with limited crypto-native counterparties.
Mining capitulation is accelerating. Hash rate economics are breaking down at these prices.
That’s what we can tell you here. A lot more is going on that we’ll tell you in our upcoming PRO briefing.
Now what? One thing to remember: the people building have never been more serious. Even if the people trading have never been more scared.
On top of that, we have major highlights this week:
Xi Jinping pushing Yuan to global reserve
Hong Kong crypto institutional capture
Tether $100M Investment in Anchorage
Fidelity FIDD stablecoin launch
Vitalik Buterin said that Ethereum L2 don’t scale
Polymarket hit with a nationwide class action
Let’s jump in 👇
Top Boardroom Reads
State of prediction markets (Pantera)
State of Fintech 2025 Report (CB Insights)
2026 Stablecoin Momentum Report (Zerohash)
European Banks Are Embracing Stablecoins (S&P Global)
From the Unbanked to the Unbrokered (Coinbase)
Top Signals This Week
Xi Jinping pushing Yuan to global reserve
On February 1, 2026, President Xi Jinping made internationalizing the yuan a top national priority. He issued a directive in the Communist Party journal Qiushi to create a “powerful currency” for global reserve status. This move, described as monetary reform, is in line with the People’s Bank of China (PBoC) starting a multi-year effort to accumulate large amounts of gold. The bank officially holds over 2,300 tons of gold, but some estimates put the actual amount much higher. [RELEASE]
Why this matters: This directly challenges the US dollar’s reserve status and boosts de-dollarization through BRICS trade. This strategy indicates a shift toward a hard-asset-backed currency system. The discussion highlights the need to review investments in gold, Bitcoin, or hard assets as geopolitical changes aim to avoid the US dollar’s debt-based valuation.
📩 Work with us. We take 3 sponsors slots per quarter. Two are filled. We're selective because our readers are 35,000+ executives (75% C-level or founder). If you have a product that actually solves a problem for institutional crypto, [let's talk →]. If you're looking for cheap impressions, we're not the right fit.
Hong Kong crypto institutional capture
Hong Kong has shifted from “New Money” speculation to “Old Money” stability. Officials enforced strict bank-grade rules, pushing out major retail exchanges like OKX and Bybit. In their place, traditional giants like HSBC and state-linked Chinese firms are creating a regulated settlement layer. Through “Project Ensemble,” the city is now testing tokenizing real-world assets like bonds and shipping bills.
Why this matters: Hong Kong has deliberately moved crypto away from retail speculation and towards institutional infrastructure. Now, only large state-linked funds dominate Bitcoin and Ethereum ETFs, creating trusted channels for future investment from mainland China. The main goal is tokenization: if banks and funds transfer trillions of dollars in assets to this platform, Hong Kong will become Asia’s key settlement hub, but for now, liquidity remains limited.
🚨 Want more intelligence and understand what this means for your institution? Subscribe to PRO below:
Tether $100M investment in Anchorage
On February 5, 2026, Tether invested $100 million in Anchorage Digital, the federally chartered U.S. crypto bank and the issuer of its new compliant USA₮ stablecoin. The move tightens an already close partnership and gives Tether equity in the regulated infrastructure it now relies on for institutional growth in US. [RELEASE]
Why this matters: For years, U.S. institutions preferred USDC over USDT due to Tether’s offshore and opaque nature. Now, with USA₮ being fully federally regulated and this $100M investment in its U.S. chartered issuer, Tether gains the regulatory trust that institutions require. It maintains its massive liquidity advantage while shedding its old baggage, putting it in a favorable position for the next wave of serious institutional demand.
DAT death spirals as markets crash
As Bitcoin drops below $65K, the biggest DATs face billions in unrealized PnL. The industry now splits into two paths: firms turning treasuries into financial franchises and those in liquidity and valuation death spirals. Some large DATs keep buying—Strategy added 855 BTC this week. Smaller DATs struggle, making 2026 a key year for consolidation. [RELEASE]
Why this matters: In 2026, DATs will consolidate. The largest and best-capitalized ones, like Strategy and Bitmine, will survive. DATs that actively manage assets for yield, such as Bitmine with $374M in annual staking rewards, will also thrive. Smaller treasuries that can’t raise capital or generate yield will have to sell, either by merging or closing.
Read our full analysis below:
Fidelity FIDD stablecoin launch
On February 4, 2026, Fidelity Investments officially launched its USD-pegged stablecoin, the Fidelity Digital Dollar (FIDD), issued by Fidelity Digital Assets on the Ethereum blockchain. Backed 1:1 by cash, cash equivalents, and short-term U.S. Treasuries, FIDD complies with the recent GENIUS Act framework. The token went live for both retail and institutional clients via Fidelity’s platforms, with an initial market cap exceeding $59M. [RELEASE]
Why this matters: Fidelity leveraged the most underestimated advantage in financing existing customer relationships by skipping the distribution model that forces Circle, Tether to work with exchanges, giving Fidelity 100% margin retention, while maintaining the regulatory legitimacy Tether lacks through its OCC-supervised national trust bank charter and direct access to 50M retail accounts plus $17.5 trillion in institutional assets.
Shift in Ethereum L2 strategy
On February 3, 2026, Vitalik Buterin, co-founder of Ethereum, made a post that sparked a lot of discussion. He said that most current L2s stopped short and therefore don’t function as true scalability extensions of Ethereum, even though L2 technology itself remains essential and here to stay. Buterin now suggests we see Layer 2s as specialized chains. Each has its own unique features, like privacy and app-specific tools. [POST]
“L1 itself is scaling, fees are very low, and gas limits are projected to increase greatly in 2026. Original vision of L2s and their role in Ethereum no longer makes sense, and we need a new path.”
Why this matters: With L1 scaling improvements, not every institutional L2 has to use the same general-purpose model. Major general-purpose L2s like Coinbase’s Base, OKX’s X Layer, and Kraken’s Ink need to rethink their strategies, while institutions will focus on specialized L2s for regulatory compliance, performance or privacy. Example: Hyperliquid. It cuts costs, speeds up innovation, and better meets customer needs while securely linking to Ethereum.
News Flash
Polymarket hit with a nationwide class action lawsuit in the SDNY. Link
Gemini to exit U.K., EU and Australia, and focus on U.S. Link
Tether launches open-source MiningOS to challenge Bitcoin mining giants. Link
Hong Kong to start granting stablecoin issuer licenses in March 2026. Link
Wall Street giant CME Group is exploring issuing its own ‘CME Coin’. Link
ARK Invest goes on $19M buying spree as crypto stocks nurse losses. Link
Ripple Prime adds support for Hyperliquid for institutional access. Link
U.S. crypto policy shows hints of progress with bipartisan regulatory. Link
That’s all for now, folks.
PRO Readers: Read our alpha insights below!
– Marc & Team
