| gm Bankless Nation,
As Trump looks to put the Federal Reserve governors under his thumb, investors are looking toward hard money. Today's Issue ⬇️ - ☀️ Need to Know: Monero's Breakout
XMR breaks through 8 years later. - 🗣️ Analysis: J-Pow and Hard Money
BTC and gold have had an interesting week.
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. . . NEED TO KNOW Monero's Breakout - 🤐 Monero's XMR Token Surpasses $700. Monero surged past $700 on Wednesday, as XMR overtakes ZEC as the premier privacy coin play following internal strife at Zcash.
- ⚛️ Post-Quantum Crypto Startup 'Project Eleven' Raises at $120M Valuation. The $20M Series A round was led by Castle Island Ventures.
- 🦅 SEC Concludes Zcash Foundation Investigation with No Charges. There will be no enforcement actions brought against the Zcash Foundation.
📸 Daily Market Snapshot: ETH and BTC rose to 8-week highs on Wednesday as crypto markets outpaced stocks despite negative early reactions to the draft Senate crypto market structure bill. | Prices as of 5pm ET | 24hr | 7d |  | Crypto $3.29T | ↗ 1.3% | ↗ 6.5% |  | BTC $97,006 | ↗ 1.7% | ↗ 6.6% |  | ETH $3,349 | ↗ 0.6% | ↗ 6.3% | . . . ANALYSIS Jerome Powell & A Hard Money Moment We spend a lot of time thinking about hard money at Bankless, and this week’s dramatic escalation between Trump and the Fed has given us a lot to chew on. Powell's weekend video calling out Trump for pressuring him to cut rates and subsequently trying to saddle him with criminal charges is only the latest episode in a pattern of domestic dysfunction — one that includes the longest government shutdown in U.S. history — continuing to undermine trust in the U.S. and, as a result, the dollar's stability. Episodes like this latest one do little to inspire faith in the dollar and a lot to make hard money more attractive. The rub is that this domestic dysfunction accompanies a gangbusters U.S. stock market bolstered by tech exuberance that Trump is very much throwing all of the administration's weight behind. Do you bet on an America smashing the buy button – future institutional independence and trust be damned – or do you watch from the sidelines silently judging the money alongside a chorus of EU politicians. It doesn't seem like investors are reacting to a politicized Fed by selling off equities, but there has been some interesting action for gold and Bitcoin in the days that have followed, which merits a closer look. Analog Gold vs. Digital GoldSince Powell's video dropped Saturday — garnering over 87M impressions — gold surged nearly 3% to yet another all-time high above $4,600. Bitcoin's path doesn't map as cleanly to the weekend's events, but the asset has climbed 7% since Sunday though it's still 23% off its all-time high set in October. Gold and "digital gold" are both pumping but the investment thesis behind gold's euphoria is feeling quite different right now. Gold is crushing it, and behaving like an asset that has a clear picture of its own value. Central bank demand remains strong (as of the latest November report by the World Gold Council), with the pace increasing during the final months of last year. Overall, the buying looks structural, not narrative-driven. In my piece last October, I mentioned how gold was increasingly replacing U.S. Treasuries as the "riskless" asset in global portfolios. At the time, holdings of the two assets by central banks were already reaching parity, and as more central banks rotate reserves into gold to hedge against dollar dominance, demand becomes increasingly positively reinforced. Ongoing tensions between the U.S. and major powers like China, not to mention the recent military action in Venezuela and whatever's going on with Greenland, coupled with domestic dysfunction in Washington, have created an environment where gold thrives. It doesn't carry counterparty risk. It can't be weaponized through sanctions or devalued by central bank decisions. Gold's thesis — hedge against geopolitical instability, reserve diversification away from USD — is being confirmed by the very institutions whose job it is to manage systemic risk. There's no adoption narrative required or administration needing to champion it. Gold rallies on instability regardless of who's causing it. Bitcoin looks pretty different. The administration that's done the most to advance Bitcoin's institutional story — ETF approvals, regulatory clarity, strategic reserve rhetoric — is also the source of the instability that should, in theory, benefit hard money assets. Gold remains firmly independent of any particular regime. Bitcoin — despite being heralded as a sovereign, digitally-native store of value — seems quite dependent on the current one. That puts it fundamentally at odds with itself. What makes this even stranger is that Bitcoin has every catalyst it could ask for right now. The Fed is cutting rates. Just two weeks ago, the Fed started QE, growing its balance sheet by $40B per month. Inflation has dropped below 2% for the first time in five years. M2 global money supply is growing 10% per year — as fast as the mid-2020 at the peak of COVID. These are major supports for liquidity and Bitcoin. The asset has no excuse not to be showing outperformance in this environment. Yet it isn't. And the data suggests this confusion is registering with holders. Per Capriole's recent market outlook, long-term holders are selling 0.07% of BTC's market cap per day — well above the ~0.02% baseline needed for a rally to materialize — with institutions being net sellers as well. That's not what you see when an asset's thesis is being validated. That's what you see when confidence is fracturing.  “OG Whales Dumping” chat from Capriole, data delayed by three weeks for public feed To be fair, given the outlandish, life-changing returns many of these holders have likely received, this selling could simply be profit-taking. But on the surface, the believers in Bitcoin as sovereign, independent money appear to be exiting. The appreciation now depends on institutional flows that aren't flowing. Background concerns around quantum computing vulnerabilities add another layer of uncertainty — one gold doesn't share. To be clear, while I'm framing this around Powell's speech, Bitcoin and gold have been acting this way for over a year. Gold is trading like an independent asset. Bitcoin is trading like a dependent one — tied to the very political and institutional forces it was designed to circumvent. If Bitcoin is what its believers say it is — a hedge against fiscal irresponsibility, a sovereign store of value — this seems like a moment for it to prove that. Until it does, the analog original may very well keep outpacing its digital successor when the chaos hits. | 
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