Monthly Update || February 2025

Opening Remarks

Note: I wrote an article on X – “The 5 Min Investment Case for Bitcoin”. I think it’s a good resource to send to people asking questions about BTC. Hopefully it helps!

Greetings from Ikigai Asset Management¹. We welcome the opportunity to bring to you our seventy-seventh Monthly Update and hope these are helpful in better understanding some of what we’re doing and what we’re seeing. We have the privilege of deploying capital on behalf of our investors into a new technology and asset class that has tremendous potential to make the world a better place and create trillions of dollars of value in the process. 

We believe we are obligated to be shepherds of this technology – to do our part to push crypto towards fulfilling its potential. We strive to be an objective, reasonable, well-intentioned voice of truth amongst a chorus of biased, fallacious, pernicious opportunists. It’s an honor that we take seriously. 

To that end, 2025 kicked off with a banger of a month as Trump was sworn in and unleashed a torrent of executive orders leading to tangible action across a host of key areas from illegal immigration to D.O.G.E. As expected, crypto was right in the middle of it – namely with an Executive Order (here) signed January 23rd related to crypto that lays out a bunch of different priorities and planned actions for our industry –

Despite this being undoubtedly one of the most bullish events in crypto history, price action was muted around this announcement, essentially unchanged. How could this be?

Couldn’t have said it better myself! In fact, I think you could argue the actual announcement was a bit bearish relative to expectations, at least for BTC specifically. A lot of the EO, most of it, was in line with expectations. Perhaps the most significant surprise was the usage of the term “digital asset stockpile” instead of Bitcoin Strategic Reserve, and the fact that no stockpile or reserve was actually established at all - only assigning the working group the task of “evaluating the creation of the stockpile in the next 180 days”. The market was expecting just BTC, and the market was expecting more firm language than “a working group taking six months to evaluate”. The word “Bitcoin” wasn’t even in the EO. Regardless, the results were approximately what the market was expecting, so as of time of writing, BTC price is about the same price as it was right before and right after the EO. 

The 180-day timeframe helps us start to set expectations on timing as it relates to regulatory and legislative action for crypto in 2025. That’s not to say nothing can happen between now and then – I don’t think that’s true. The SEC has established a crypto task force and is currently evaluating pending actions against crypto projects. You could see movement on this front in <6 months and I think you will. We saw filings on other spot crypto ETFs in January and should have CME futures for SOL and XRP trading mid-Feb. Although it’s too early to say for sure, we could have multiple spot crypto ETFs approved in 1H-25. 

I don’t have a high conviction view on what will come of the evaluation of a digital asset stockpile. My base case is the working group will announce that the government will never sell any of the crypto it has already seized or will seize in the future. Their current portfolio looks like this-

Shown above, it’s notable that the US government does hold numerous digital assets other than BTC, but BTC is certainly the lion’s share of the value there. Does it matter if the US government keeps its BTC plus all its other crypto versus just keeping its BTC? IDK TBH. It probably matters for the vibe (a topic I’ll get into shortly), but I don’t think it matters much for price – BTC or otherwise. What would matter a LOT for price is if the working group run by David Sacks decided to actually buy a bunch of BTC or BTC and other digital assets. But I don’t think they’ll do that. I would put it at a 20% probability. The working group will likely punt it to Congress.

Which brings us to the Lummis bill. She certainly made plenty of noise on Twitter this month, although it ended up being pretty confusing/a letdown. Lummis will be working her BSR bill through committee and potentially to a vote on the floor in 2025. Not sure how to weight the likelihood that bill makes it to the president’s desk – 30% or less I think. There has been real movement on BSR’s at the state level –

At least some of these states I would guess get a BSR executed in some relatively small amount of size. And not to take anything away from that, it will end up as an impressive accomplishment. But that’s pretty different than the US Treasury TWAPing 200,000 BTC a year for five years, as the Lummis bill lays out. I don’t think that will happen, at least not in the next couple years. But it might!   

Overall, all of the excitement in crypto over Trump’s inauguration and public support was significantly overshadowed by the launching of the TRUMP memecoin and then two days later, the MELANIA memecoin. This happened the weekend before Trump was sworn in. This event managed to annoy/piss off about 99.99% of crypto participants, which is impressive. Undoubtedly, 99.999% of non-crypto observers were also some mix of embarrassed, frustrated and pissed off by it. The below tweet sums it up nicely-

Call a spade a spade - the memecoin launches and subsequent immediate collapses weigh heavy on the hearts (and wallets!) of many in crypto. It just sucks.

The bright spot can be found in putting on a longer-term hat. Put yourself in the shoes of a normie tradfi allocator. Perhaps on the investment committee of a large pension. From that perspective, the Executive Order was a hugely positive step towards the investability of crypto and sets the stage for having the asset class properly regulated so that deep pockets like yours can get exposure to the asset class. From that perspective, January was hugely positive, the epic Trump memecoin grift notwithstanding.

January Highlights

• Trump Camp Launches TRUMP Memecoin, Runs to ~$75bn FDV in Two Days, Collapses to $27bn

• Trump Camp Launches MELANIA Memecoin Two Days After TRUMP, Runs to $9bn FDV in A Few Hours, Collapses to $2bn

• Trump Signs Executive Order Establishing Crypto Working Group, Headed by David Sacks, Tasked with Numerous Goals Including Evaluating Digital Asset Stockpile, Creating Legislative Framework, Ensuring Banking Access, Promoting Stablecoins, et al 

• Trump Defi Project World Liberty Financial Purchases >$350mm in Crypto, Including ETH, WBTC, TRX, LINK, AAVE, ENA, et al

• MSTR Purchases 24.7k BTC in Four Tranches, Totaling $2.5bn

• SEC Rescinds SAB 121

• Silk Road Founder Ross Ulbricht Pardoned by Trump on Day 2 of Administration

• Through Leaked CME Website, SOL and XRP Futures Rumored to Begin Trading on CME February 10th

• SEC Launches Crypto Task Force

• SEC Said to Be Reviewing Pending Crypto Enforcement Cases

• Senate Banking Chair Tim Scott Releases List of Priorities for 119th Congress, Includes Digital Asset Framework

• Numerous States Introduce State Legislature for Bitcoin Strategic Reserve, Now Totaling 15 States with Pending BSR’s

• DOJ Cleared to Sell $6.5bn of Seized Silk Road BTC, Likely Did Not Sell

• US Government States 120,000 BTC Seized in Bitfinex Hack Should Be Returned to Bitfinex

• Court Lifts OFAC Sanctions on Tornado Cash

• Cynthia Lummis Named Chair of Digital Assets Subcommittee

• SEC Acknowledges Canary Spot LTC ETF 19b-4 Filing

• Bitwise Files for Spot DOGE ETF

• Kraken Reinstitutes Staking for US Customers

• Phantom Wallet Raises $150mm at $3bn Valuation from Sequoia, Paradigm, a16z, Variant

• Trump Media Group Launches Fintech “TruthFi”, Will Deploy $250mm in SMAs, ETFs, Bitcoin and Other Crypto Investments

• SEC Charges DCG For Misleading Investors Over Genesis Collapse, to Pay $38mm

• SEC Sanctions Former Genesis CEO Mike Moro Over Genesis Collapse

• Crypto.com Delists Tether

• Tether Moving Headquarters to El Salvador

• Kucoin Pleads Guilty to Unlicensed Money Transmission, Founders Enter Plea Agreement

• Chainalysis Acquires AI-powered Fraud Detection Solution Alterya for $150mm

• Moonpay Acquires Blockchain Payment Processor Helio for $175mm

• Moonshot Partners with Robinhood to Enable Direction Transfers

• Ripple Receives Money Transmitter Licenses in New York and Texas

• IBIT Files for In-Kind Redemptions

• Coinbase Launches Bitcoin-based USD Loans

• Italy’s Largest Bank Intesa Sanpaolo Buys $1mm of BTC

• Former SEC Chair Gensler Returns to MIT to Teach

SOURCE: TRADING VIEW. AS OF 1/31/25.

Hilariously Shitty Vibes For BTC $100k

Welp, this one resonated-

So let’s unpack it. We’ll do it in descending order of contribution towards the shitty vibes-

TRUMP/MELANIA – This is the #1 reason for the shitty vibes IMO. Managed to annoy/piss off 99.99% of crypto. Very, very few actually made money in any decent size. The charts look like this, LOL -

Most actually lost money - they lost money because the entire crypto sector went down while TRUMP was pumping as the event sucked liquidity from everywhere, especially memecoins and onchain trading. Many lost money two different ways – their portfolio went down and then they bought TRUMP (and/or MELANIA) and lost money there too. Even if you’re just a BTC maxi and your portfolio was unaffected, you’re pissed off at the level of grift from the leader of the free world. It was a gross, gross grift –

The Executive Order – No BSR. Not keeping seized BTC and def not buying additional BTC. Didn’t even say the word Bitcoin. Behind the scenes there’s chatter it’s because Ripple and other shitcoin enthusiasts bought their way into influencing Trump. I mean, it’s David Sacks that’s basically going to make the call here. Bitcoiners are pissed about the BSR. It appears that maybe not much is going to happen with crypto and the government until six months from now. Might as well be a 1,000 years in crypto terms.

Memes have been crushed – since mid-December, BTC is flat at ~$105k. The very large majority of memes have underperformed by a lot.

AI Agents have been crushed – BTC was +10% in Jan. AI Agents were down 60% on average. The market appears to now be forcing the sector to produce something noteworthy before it’s willing to assign much higher market caps to names. Four months into the meta, it may be “put up or shut up” time. This is healthy for the space as a whole but painful if you’ve been long.

Pump.Fun is a poison – they launch ~50,000 new tokens A DAY.

They’ve extracted >$500mm of fees in less than a year –

The user stats are truly atrocious –

Binance has been destroying tokens with listings – Nothing kills the mood like delivering DownOnly over and over and over and over and over again. Once thought of as the most bullish possible outcome, Binance listings are now a kiss of death.

ETH and most alts are lagging BTC – many are lagging badly. Alts are 15% below prior cycle ATH. BTC is 50% above it. Nuff said. Unless you’re a maxi you probably feel like you’ve been underexposed to BTC over the last two years. And unless you’ve just been balls long SOL, you’ve probably underperformed because of it.

People are uninspired by crypto – this is a rampant feeling. There are no compelling internal catalysts. AI Agents were supposed to be that sector, but there’s a question mark there at the moment. Everything else is even less inspiring, less believable, less exciting. It’s a feeling shared by many throughout the ecosystem, including some of the most financially successful investors in the whole space. 

Alts are not getting sufficient sustained inflows post-Election – we’re nearly three months on from the election now. Alts had a big initial pop, ~125% in the month after the election, and have been consolidating since. Could Alts be poised to breakout in the next month? Maybe. But also, maybe they’re not going to get another broad leg up because there aren’t enough buyers because people don’t believe the stories, and the speculative premium is being removed from “traditional” Alts and applied to memes and AI Agents.    

Crypto has garnered few new entrants, and most of the new ones are the worst kind – Everyone that’s been around a few cycles feels this. 2025 is supposed to be 2021 and 2017 and we’re WAAAAY short on fresh blood today than we were at this point in the prior two cycles. The new entrants we have picked up? They came straight over from 5-leg parlays and they still do a lot of that too. We’re fighting 5-leg parlays for degen dollars. That’s our community growth this cycle.  

Leadership vacuum still obvious - Ansem passed the torch to…Threadguy. It’s like a super soft Zoomer Mad Max dystopia. Su Zhu still hanging around because people are too morally bankrupt to stop giving him a platform. Embarrassing and incredibly uninspiring.  

So What?

BTC will be fine. It’s in a class to itself. It’s tremendously well-supported at the highest levels of the US government. They’re probably not going to buy any themselves, but they’ll make everyone else want to buy it anyway. BTC will just keep doing its thing. Higher this year. Prob not $200k, but higher.

Crypto is currently mired in a lack of compelling internal catalysts and it’s leading to some hugely extractive behavior – namely memecoin mania and Pump.fun poison. This has the potential to set crypto back years – years away from the goal of producing products that actually make the world a better place.

That said, few are actually on the verge of leaving crypto right now. If you’re still here at this point, you’re going to ride it out at least another year - to see what we get from the government and what the knock-on effects of that are. But don’t expect people to be happy about it!

Market Update - Liquid Crypto Asset Investing

SOURCE: COINMARKETCAP AND COINGECKO. AS OF 1/31/25. BCH INCLUDES SV.

BTC was up nicely to start the year, +10%. January brought a very brief spike up to new ATH’s by a couple hundred bucks on inauguration day, before retracing the move and closing the month around $103k. 

BTC price has now been in a 15% range since mid-November. There were two distinct tops right around $108k. I think after the failure at $108k the second time, you might’ve been a bit nervous about the potential for a double top. But price recovered quickly and is hanging out just underneath ATH. That’s not really how double tops act. We could range a bit longer, but I’m not worried about some larger topping occurring right here, right now. It could happen soon, but I think it will be from higher prices. I would be surprised if we don’t make new ATH’s in Feb.

Now that the inauguration and the crypto Executive Order have come and gone, we can pretty safely lower the short-term, top-end price target for BTC. There was some chance, however unlikely, that Trump could have signed the EO in week one written by BitcoinPolicy.org that would have had him use the Exchange Stabilization Fund to sell $21bn of gold to buy $21bn of BTC. There were a bunch of goofballs making noise on Twitter trying to act like that might happen, and even Lummis participated in the rumormongering. That was the path to MUCH higher BTC prices VERY quickly - $250k by Easter type of stuff. That is now effectively off the table. As mentioned previously, it remains to be seen exactly what’s to come of the “digital asset stockpile”, but it is likely ~6 months away and I think it’s unlikely to include actually buying BTC or any other digital assets. The Lummis bill will likely move even slower than that and it is not my base case it has the support needed to get out of the Senate and the House (although I could be wrong). 

That puts my 2025 price target in the $120-$170k range for BTC. I’m not expecting any particularly aggressive drawdowns this year. Last year’s peak-to-trough BTC drawdown was ~30%. I would expect this year’s largest drawdown to be around there, or even a bit less. I think there’s a ton of capital waiting for a BTC dip to buy and they start buying at a down 20% or so and that’s what puts bottoms in. Something major in macro would need to happen to remove those dip-buying bids, and I don’t think that will happen this year.

Below is an updated version of a chart I’ve shown here last year. The punchline is that prior cycles have peaked at the 0.618 – 0.786 Fib Extensions from the prior cycle’s low. That would put this cycle’s peak at $100-$167k. Makes sense to me.

ETH continues to underperform, down 1% in Jan. ETHBTC is now down 7% since the election, and that’s on the back of atrocious performance before that. ETHBTC has had negative monthly performance 20 of the last 27 months. Brutal. I took to Twitter to mine for some ETHBTC investment theses-

You can read the responses here, but to summarize them, you could be bullish on ETHBTC from here because –  

1.     The Pectra upgrade in March

2.     Staking in ETH ETFs (yield generating)

3.     TradFi branching out from “digital gold” thesis, want more “juice” than BTC

4.     BlackRock just buys more in their ETF, markets ETH more, put RWAs on ETH

5.     Blobs reach capacity and start generating meaningful mainchain fees

6.     The burn picks up and ETH goes strongly deflationary

7.     TradFi adopts L2 rails and that value accrues to ETH

8.     Trump’s WLFI is buying more ETH than anything else

9.     Base does an airdrop to ETH holders at a future date 

So how do we feel about that list? I mean, it’s better than nothing. And given how destroyed this chart is –

I don’t have a strong view on Pectra driving upside. The merge was supposed to do that too and it was quite literally down only. I could imagine staking ETFs driving some outperformance for ETHBTC, at least for a short amount of time. Whether you get more follow through than that, based on some combination of the list I laid out above, I’m less certain of. We’ll just have to see.

Alts were a mixed bag in Jan with wide price dispersion-

A few Alts kept up with or outperformed BTC. Most did not. As it relates to Alts, we are getting to the point in the cycle where these names are SUPPOSED to start outperforming BTC massively. This chart shows that crystal clear (note that ticker “OTHERS” is Total Crypto outside of top 10) –

There is strong memetic reflexivity underlying this chart – Alts will rip because now is the time that Alts rip. In an asset class almost entirely divorced from fundamentals, this sort of thing matters a lot. You could argue it matters more than anything else.

Here’s another way of looking at it – OTHERS vs BTC seasonality. Note the performance of 2017 and 2021 –

So does that mean it happens, starting right now? Well, I don’t think so. The first thing I would note is that January 2025 is now over, and OTHERSBTC was -9% on the month. So you’re already bucking the trend relative to 2017 and 2021. Do I think OTHERS will outperform BTC by some amount over the next few months? I do. It would be my base case. But I think it will be meaningfully less pronounced than in 2017 or 2021. I just don’t see the setup being there fundamentally to drive a huge market cap expansion for Alts vs BTC.

SOL briefly made new ATH’s in January as price spiked at the peak of the TRUMP memecoin mania before pulling back –

As soon as Trump won, the market began assuming the SEC would be approving more spot ETFs and SOL would be near the top of that list. But we got a significant update on that front with CME futures apparently launching February 10th for SOL and XRP. Additionally, you had SOL ETF deadlines in January that came and went, and then all the 19b-4 filings were pulled and refiled -

These are the sorts of things you would expect preceding an SEC approval, which we could get in the next few months (although it could take longer). That would be very bullish for SOL I think, specifically as it relates to the 11.2mm units of SOL unlocking on March 1st that previously belonged to the FTX estate. That’s $2.6bn at current prices – a very real number and something that has had me cautious on SOL price performance for months now. An ETF approval coming down the pipe soon after that unlock should make the price action around the event much more palatable. My guess is there is real appetite from Tradfi to get SOL exposure via spot ETFs, potentially greater demand than what we’ve seen for ETH, and SOL is 28% the market cap of ETH. Worth watching closely.

Lastly we’ll touch on AI Agents – which I wrote about here in detail on Nov 1st and Dec 1st. The sector’s price performance was brutal in January, down ~60% on average. Let’s run through some charts.

GOAT is -85% since mid-Nov –

Ai16z, the marquee project in the sector, was -75% since Jan 2nd, when Binance announced a perp listing (which put a violent top into the entire sector) -

VIRTUAL, the pride of the Base ecosystem, is -60%

ZEREBRO, which had quite a lot of hype but marginal substance down 88% -

I had the below tweet about the sector on Jan 8th -

This was shortly after the major top put in by the Binance perp listings (they listed ZEREBRO and GRIFFAIN alongside ai16z) but before the TRUMP/MELANIA debacle on Jan 18th that also smoked this entire sector which was already down ~40% MTD. The price action was extremely painful for a meaningful portion of the crypto ecosystem because a lot of guys were long these names, some were long a lot of it. The price action really spooked folks because the names were incredibly thin when everyone was one-way wanting to sell them en masse. It really did crush the vibes.   

So by my estimation, what happened in January related to the tweet above was that you pulled forward the “show me” moment. For the sector to break out to new aggregate ATHs, I think you need one or more of these agents to actually do something somewhat noteworthy. I don’t know how to weight the likelihood that happens or over what timeframe. It’s all super risky, brand new, unknown stuff. But I’m paying attention.

Closing Remarks

I’ve really had a large dose of Trump, his administration and politics in general over the last month. Saw a lot of announcements leading up to inauguration; then the TRUMP/MELANIA debacle; then the whole inauguration process; Elon’s “heil Hitler”; the 36 (36!) Executive Orders; Trump’s speech to WEF (you should watch it, seriously); the crypto EO; all the deportation stuff; all the D.O.G.E. stuff; the congressional hearings for Bessent, Hegseth, RFK Jr, Kash, Tulsi; the new Press Secretary; the tariff tweets; the list goes on.

It was a very full month. It was pretty exhausting but also exciting. As you can tell, I’m really disappointed in Trump’s memecoin grift, but I can’t help but be enormously hopeful about the direction this country is headed with its new leadership. It’s not an exaggeration to say Trump’s administration came out like a cannonball – the movement in the first 10 days has been incredibly impressive. I strongly believe we are at the dawn of a new day and there is tremendous potential to get the United States of America, which is the greatest civilization in human history, onto a path that can lead to many more decades of great success. “Potential” does not mean it’s a sure thing – betting on being disappointed by politics has been a really good bet. But I am very hopeful.

We need American leadership today as much as ever, as we sit in the waiting room for Artificial Superintelligence. Do you feel how quickly AI is moving? The pace of the progress there? DeepSeek this month was another example of that – by all accounts it was a step change in AI modeling throughput capacity. We are barreling towards AI completely revolutionizing many aspects of our lives – it’s not decades anymore. It’s years. Maybe a few years. If you have a young child today, it’s a fair assumption that their young adult life will be almost unrecognizable to yours in many respects. Most groundbreaking technologies come with risks, but the risk around AI feels especially significant because the power of AI is so obvious. I’m glad America is at the forefront of this…and crypto!

"Itadakimasu - receiving from you with gratitude."

-Japanese Proverb

Travis Kling

Founder & Chief Investment Officer

Ikigai Asset Management

P.S.

Included below is an incomplete list of memorable tweets from the last month. Twitter is not investment advice and my views could easily be wrong. That being said, like it or not, Twitter matters for crypto. I have no interest in being a talking head for a living and babbling about on Twitter is a long way away from being a good steward of investor capital. However, this is a community with open-source software in its DNA, and participants want to crowd-source the truth. We are shepherds of this technology. Answers to fundamental questions about this asset class are not currently clear, so having a public platform to share your views with the community is important. After all, you’re helping shape the future :)

1. Ikigai Asset Management is the trade name for a collection of advisory and consulting businesses operated by Travis Kling, Anthony Emtman, and their team.

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