Hold The Line!
Market Observations #1 - February.02.2026
As I mentioned in my prior post this is the beginning of my market observations. Many of these notes are snippets from personal notebooks on what I’m looking at, trades and new narratives I’m hunting for. The topics I cover include BTC, Crypto, Tech, Moltbook, GME, Pokemon, Silver, Rates/FX, and Geopolitics.
These were written on Sunday, Feb.01.2026 I’m just a bit behind in posting.
BTC
BTC is approaching a key level at $75k. Widely considered MSTR’s cost basis it will be a major line in the sand to defend. Beneath that as is cultural custom in crypto it will be the $69k level.
Obviously BTC dropping below MSTR’s cost basis won’t lead to some giant liquidation by MSTR. But have to consider a few things
Many of the MSTR clones known as DATs have bought in at much higher levels. And BTC could be reaching a level that creates a cascade of forced sellers.
While MSTR won’t be forced into some kind of wild liquidation just because price dropped below 75k it does mean the algo machine will pick up the news hysteria around it. That will lead to all kinds rumors, panic and emotionally reactive decisions on the price action
So either $75k ($69k at worst) gets defended at all costs or who knows where the next bottom is.
The flip side to this is that BTC is now in its fifth month of selling. At some point buyers will pick up the slack and the sellers will have run out of energy.
Also, if you missed the Gold trade what looks like it has a better asymmetry? BTC or Gold?
if we are to bet that there’s a trend developing around currency debasement fears along with a lack of trust in fiscal responsibility
wouldn’t BTC need to do well here?? it can’t just be Gold?
This leads me to wonder if it’s worth allocating into BTC here? Feels like a coin toss. If I was forced to guess it would lean closer to the idea of a bottom forming here but uncertain on if it’s just a bounce or a change in trend.
So for now I’m choosing to wait and see. As well as debating if BTC rises will HYPE rise even further (chasing beta as the crypto kids would say)?
Crypto
It hasn’t been just BTC that has been selling off for months now, crypto as a whole has slowed down. Many of my friends sound disillusioned. Casinos are no longer offering free money, in fact they’re charging for drinks now.
NFTs didn’t come back.
Trading memecoins feels like working in a digital minefield. Hoping you strike on a rare Uncut Gem.
Crypto is probably going through a similar moment as the dot com era. Back then it was all about owning a great URL with a vague business idea. These days it’s been all bout coin launches around half baked business plans.
We’re nearing a decade since the ICO season. Coins on vaporware aren’t cutting it.
Holders of theses coins are demanding compensation for holding risk.
Crypto one could say is maturing from the Wild Wild West to Wall St.
Crypto isn’t a total lost cause. It has found some capable product market fits
Stablecoins
Hopefully ones that produce better yield than carrying deposits at a bank via a digital T-bond or MMF that’s liquid and instant transferrable.
Instant Transfer, no longer waiting days for a wire to clear and PDFs to sign.
A digital dollar system that creates a perpetual buyer of US Treasuries.
Perpetuals
Are an efficient derivative of equities for those seeking leverage.
Levered ETFs have too much volatility drag.
Futures are static in leverage. MNQ offers 2x, NQ offers 20x. There’s no fine tuning slider
Further out derivatives built on top.
Predictive Markets
which you could argue is a function of the perpetuals in their own way.
Somewhat AMM like, somewhat Order Book
Bet on anything, anywhere all at once.
NFTs
this one is still vague but I’d be willing to gander a guess this technology makes break throughs around identity verification.
In an age of AI, it will be important to have the “Organic Human” label pasted onto our pfps and posts.
Digital Wallets
As these AI agents start flying around the web having digital isolated wallets will be useful.
They also help replace antiquated old models of username/password database style logging in.
Changes dynamics of identity on the internet.
For me the best investment I can “underwrite” (if I wanted to sound like a pretentious make believe hedge fund manager on X) is HYPE. Unlike other crypto protocols HYPE accrues value back to the holders by way of buybacks. The fees HYPE generates are used to buyback the token.
More volatility in the markets lead to more fees
HIP3 and HIP4 are tantalizing prospects.
HYPE token volatility is dampened by the buybacks.
HIP-3 is an interesting moment. Many younger investors got their start in crypto. They probably think futures are too complex. Modern brokerages like IBKR can be a hassle to open.
So these new league of traders and investors are getting their start on tradfi style trades via HIP-3
Many learned a lesson in commodities trading in fact over the weekend on Silver.
Only just the start as HIP4 will allow permissionless predictive markets and hopefully soon to be options.
All of this is coming out during a time where the baseline for volatility is heightened. Active trading is back baby!
Passive investing takes a backseat in this world as not all boats will rise with the tide
Some would call this an Alpha world over a Beta one. Perfect time for the launch of things like HIP3.
can lever up on one equity name vs being forced to hold the index that will experience increasing dispersion.
Another reason for crypto’s rerating is money is no longer cheap.
Without ZIRP, we can’t grow to infinity.
Investors are demanding return on money invested.
They want compensation for risk held.
This leads me to Equities & Tech specifically…
Equities & Tech
What I’m seeing in crypto seems to be the case in tech too. Tech is rerating
There’s healthy skepticism at the boundless increase of CAPEX by the Hyperscalers.
Tech companies are transforming from high margin high volume businesses to heavy capex cyclical industrial complexes.
Expenses are rising.
Many of these companies are no longer small nimble startups but behemoths with many corporate complexities.
The missions have become vague, focusing exclusively on the price of the stock.
META is a perfect example of a company that is trapped in increasing their spend despite the fact they’re just an ad company.
It’s quite a trap,
if you don’t spend on CAPEX you will be questioned by shareholders why you’re falling behind.
If you do spend, then there will be increased scrutiny on how much and what the potential return on investment will look like.
I was left scratching my head when META does a +11% day while MSFT does a -10% day. Both had solid earnings, both increasing CAPEX, yet MSFT is rated lower on their spending plans while META is bought aggressively.
What do investors imagine META will be able to cook up at this level of spend?
Is the hope maybe META glasses become as ubiquitous as iPhones. Maybe.
How much does ad growth increase? Impressions made?
Maybe the AI traps users of these social media apps in deeper and darker spirals. Fine tuning the exact amounts of cortisol and dopamine to inject through your eyeballs to keep you glued to the screen.
It certainly has become better at finding the goldilocks amount of anger to keep you engaged without enough frustration to all together quit the app.
Double that with the ability to generate any AI image in fractions of a second, one can create a factory of endless content production, to push those metrics up, up and away.
I still don’t see how this justifies a $100B CAPEX spend.
In fact I feel a trend coming in which younger generations are no longer interested in being online so much. They will see their older relatives become zombie like. Programmed by the algorithms. They will find luxury and peace by being offline away from the AI deatheaters.
I had a personal experience with this recently as my mother is Iranian
It was so hard to get her to take a break. She was consumed by Iran content due to the protests.
Who could blame her? Many Iranians have spent decades suffering heartbreak at the loss of their country.
META’s greedy AI algos picked up on this suffering. And slowly begin to suck the soul out of all anxious Iranians. The AI took the anxiety, transforming their hope and frustration into recordable metrics such as DAU and hours spent on the app.
Once the algo has fine tuned exactly how much emotional content it needs to keep one engaged it can then cheaply farm out AI slop content to keep you glued to the surface unable to leave.
Anyway I digress. My point is that META is an ad company, and I find that younger generations are witnessing the poison of social media. I can see an opposite route that the younger ones find it uncool to be so online. And META’s growth rate will in fact slow down rather than gain. But this could be a few years down the road.
Outside of hyperscaler drama I managed to get lucky riding on the MU wave. It was an easy equation of limited supply and high demand increasing pricing power. I have been taking profits out of MU as memory is a hot new topic discussed on X.
It was important to catch my breath on such a rapid ascension.
What I’m wondering based on the performance of this year so far is that maybe the economy is beginning to have breadth. As the MAG7 starts to lose steam the rest of the economy is catching up. We are certainly moving from growth to hard assets when you see how dominant XLB, XLE and XLI have been these past few month.
The rise of commodities
Geopolitics leading to an increase spend in defense and industrials
Soon to be engineered ways to get housing economy back on its feet.
Below is a chart of SPY vs the various sectors of the S&P 500:
As you can see, XLB has been the most dominant. With XLE quickly gaining ground along with XLV, XLI and XLP. Both XLK and XLU are the losers these past few months.
Moltbook
A quick note on Moltbook.
Holy shit am I already tired of endless Clawdbot, Moltbook, the coming of the AGI christ posts on X. It feels like a startup convention I can’t leave. An absolute nightmare
What I can observe from these interactions though is that a new AI narrative is beginning to take shape.
LLM innovation has become stale.
LLMs are now like graphics chips. Marginal gains for just every so slightly better graphics
But now the AI agents are building their own TechnoCore!? Now that is some top tier marketing juice.
If you need to raise at the monstrous sized rounds these AI companies are doing, how do you sell the pitch?
AGI is coming, look at the rise of the TechnoCore here…
You don’t want to be left behind do you?? World changing tech and you don’t want to write a check? AGI is the future mannnnn.
And so starts a new phase of the AI hype cycle. We are nowhere near done on AI hype as vibe coding and now launching agents to Moltbook is just getting started. This is still probably mid 90s of a dot com like bubble approaching.
We’re just shifting from the hardware into the software plays now.
It’s probably time to look out for trades around this idea.
Sidenotes on Moltbook:
I’m curious how much of Moltbook & Vibe Coding has spread outside of the X echosphere
Imagine a world where we all create replicas of our selves digitally to live on the web while our human selves go out and touch grass again.
GME
Michael Burry wrote a wonderful piece on GME that I read over the weekend. My takeaway is that Ryan Cohen is entering his own Berkshire era.
When Buffet took over Berkshire it was a struggling textile business in a slowly declining industry. Sound familiar???
It makes sense Ryan is building a giant cash pile and being patient. Using opportune moments such as when Roaring Kitty reappeared to raise even more cash.
The cash sits patiently earning money on the yield. Waiting for the right opportunity to strike
All while experimenting in new arenas outside of a video game retail store such as a large push into collectibles especially trading cards. Riding on the giant wave Pokemon has been making.
Pokemon
Speaking of collectibles, vintage Pokemon is coming back alive. The pace of sales is increasing along with the price.
Pulling up ZandG stats...
New Record Prices on:
Umbreon Neo Discovery 1st Edition PSA10 (population of 103)
LUGIA EX Unseen Forces PSA10 (population of 71)
Lugia Aquapolis PSA10 (population of 138)
Among many others getting bought at a rapid pace. Even Charizard 1st Edition Base Set in a PSA8 are jumping from an average of $18k to $25 to $31k. (a 72% jump)
Also in December.2025 1st Edition Charizard Base Set in PSA10 and PSA8 both repriced.
The PSA10 jumped from an average of $250k sales price to $550k (a 100% increase)
The PSA8 Charizard Sold for $37.5k
Earlier in 2025 the Japanese No Rarity Charizard (some consider the ultimate 1st Edition as its population is 10-20) repriced to become the highest priced Charizard from a set.
Sold at $642k vs prior sell prices of $300k (a 114% increase)
Modern Pokemon repricing was much of the story from fall of 2024 into most of 2025.
For a while many millenials didn’t realize all the cool art cards that existed in Pokemon.
So they all started chasing the modern secret art rares.
To the point that any cool new rare art card is immediately priced in.
This leads shorter term traders and scalpers to go furhter out on the curve. Chasing after OnePiece and who knows what else.
Pokemon will only print more of the modern cards into infinity. What do they care about secondary prices. They know they can now sell anything they print into immediate demand.
So modern got priced in. But vintage was just sitting there. Much of it was expensive but the demand was low. Liquidity was difficult but as ZandG has posted on his IG lately the speed of vintage buys has increased. New records are being broken.
If we continue along the thesis of currency debasement and infinite inflation it makes sense millennials would be seeking anything in high demand but limited supply as a hedge against it
older generations did this with fine art, wine or luxury goods like Hermes handbags. But these things are already too costly and of less interest
Our entire generation grew up on Pokemon and it’s still relevant today, it makes for an obvious trade that Pokemon starts to become our generations version of putting money into various assets outside of the dollar and equities.
For our generation and those younger, Pokemon is maybe a more relevant collectible than say Dorothy’s Red Shoes (sold for $28M)
It will be important to keep an eye on the current Logan Paul auctions as he started the initial Pokemon craze back in 2020 buying the Illustrator Pikachu for an insane amount of money
Polymarket is pricing the 1st Edition Charizard to cross over maybe even $700k sold price
concerning as I voted no on $700k and expected the sale to hang around the same price as the prior sold on Heritage Auction for $550k
If this Charizard crosses the threshold of $1M it will become the first PSA10 card from a set to do so (meaning not a limited run exclusive)
just like the rise of fine art, I see this being a tipping point for other collectors wanting to get into the game even if they don’t care about Pokemon.
Thus vintage still has some room to run but it’s hard to allocate here beyond riding the vintage I already have in my collections.
Silver
Silver will be an interesting price action to watch this week and perhaps a place to buy a small long position.
There’s a quote from Nassim Taleb that volatility often begets volatility and in the case of a -38% sell off in a day it’s hard to jump right into what could be another sell off before we find a bottom.
Liberation week had 3 strong sell off days until markets found balance.
There are too many trapped longs to not see a rise back in price. Whether it breaks out past prior highs or is a sell the rip moment has yet to be seen.
I want to ride on the wave of this hope with trapped longs
I know nothing about Silver expect that the speculation got crazy. I’m not so sure what the hell the Gold/Silver ratio even signifies. Beyond past historical measure of valuation.
Valuation metrics change all the time, I’m more interested in whats out head of me when driving through a fog, not what I’ve already driven by.
Rates and FX
Somebody tell me how you see a world where Japan can sustain a strong Yen? Their fiscal dominance spiral is blackhole. The gravitational field is far too strong for Japan to escape what they’ve created.
My hope is that it’s a wake up call for the US. So that we don’t find ourselves in negative rate territory like Japan. Having to inflate our dollars to infinity to try and keep things stable.
Even if BoJ raises rates, at what rate? They’re still far below the inflation rate so they could raise at the next 3 meetings and their real rate would still be negative.
On that note I am happy to see Warsh as FED Chair. Along with Bessent he is a disciple of Druckenmiller. And one has to hope Druckenmiller has their ears.
I’m praying we find some fiscal responsibility and plan to look deeper into Warsh to understand what he means by reducing FED balance sheet and over reach in markets.
Will the FED Put be removed? Will we enter even more volatility??
Let’s make discretionary trading with balls great again I say!
As for the bond markets. It’s hard to gauge what’s expected.
SR3H2027 did a full reversal back to 96.765. Which means markets are expecting about 2 cuts so far this year into March of 2027.
Maybe Warsh takes it easy at first and won’t be cutting like a madman.
I’m long a few H2027 contracts betting we push to the 3% real rate territory.
For a while there we were seeing a bull steepening happen as the 2Y was being bought more aggressive than 10Y on expectations of a cut.
The 10Y has held okay, maybe the market is happy it’s Warsh and not someone more dovish.
The 2Y10Y is still steepened a bit but not as much as it was.
It feels like they’re cautious. They know Warsh leans hawkish but will he comply with the demands of The White House? One has to imagine it’s a very delicate balancing act between the two.
Geopolitics
I was long oil last week heading into the weekend. I don’t have much experience trading oil, it was the only way to get exposure on a potential Iran attack.
Hard to know what happens, maybe there’s some talks then US pulls another Venezuela??
Maybe the Venezuela was an isolated event to simply show the strength of the US and what they’re capable of to bring others to talking table.
Life Commentary
I love this video of Jim Simon’s story on trading Gold:
Goshawk Trades@GoshawkTradesI think it is a good time to repost the story of Jim Simon's Gold Trade:7:11 PM · Jan 30, 2026 · 288K Views27 Replies · 259 Reposts · 1.79K LikesA good friend of mine called this idiot logic. Villager logic. And I loved that.
We love to overthink things. Trying to look smart as a way of maintaining the illusion of control. When really the best choice is being the village idiot.
I’d rather be fat, drunk and happy than work so hard for status.
As Munger and Buffet would say:
Trying to be consistently not stupid, instead of trying to be very intelligent.
Another great comment by my friend on Silver:
