21 Bits Newsletter - February 2026

TL ; DR

• Turbulent start to 2026: While Gold rallies amidst geopolitical turbulence because of safe haven demand, the only scarce and finite asset — Bitcoin — awaits its turn.
• Macro: Trump nominates Bitcoin-friendly Federal Reserve chair.
• Major Wall Street Shift: Bank of America green-lights crypto allocations while Morgan Stanley files for Bitcoin & Crypto ETFs.
• Market setup: Bitcoin currently is in a downtrend.

THOUGHTS

January 2026 has been marked by significant geopolitical turbulence. In early January, the United States launched a military operation in Venezuela, capturing President Nicolás Maduro and his wife amid allegations of narco-terrorism. President Donald Trump has also expressed strong interest in acquiring Greenland, threatening tariffs on several European nations and issuing warnings to countries including Cuba and Mexico. Additionally, he has imposed or threatened broad tariffs on various trading partners. Meanwhile, Iran has faced widespread protests against the regime since late 2025, escalating into violent crackdowns, economic collapse, and heightened regional tensions with U.S. warnings and military positioning raising the specter of potential confrontation.

These developments have amplified global uncertainty, driving demand for safe-haven assets. The ongoing rally in Gold, which has surged to record highs above $5,500 per ounce, clearly reflects this flight to safety, alongside diminishing confidence in the U.S. dollar amid fiscal pressures and policy unpredictability. As central banks continue expansive monetary policies that fuel inflation, and as economies in nations like Iran face severe strain or collapse, individuals and institutions increasingly seek durable stores of value to preserve wealth outside traditional fiat systems.

Bitcoin stands out as a compelling option in this environment. With its strictly fixed supply of 21 million coins, it offers scarcity in an era of unchecked money printing and eroding purchasing power. Its purely digital nature further enhances its appeal: Bitcoin enables seamless, low-cost global transfers without intermediaries, remains highly portable, and provides transparent, verifiable ownership through the blockchain.

In times of geopolitical instability when capital controls, banking restrictions, or physical asset seizures become risks, Bitcoin’s censorship resistance and borderless accessibility make it particularly valuable for safeguarding wealth. While volatile in the short term, its fundamental properties position it as a long-term hedge against inflation, monetary debasement, and centralized financial vulnerabilities, complementing traditional safe havens like Gold in a rapidly changing world.

TOP STORIES

Trump nominates bitcoin-friendly Kevin Warsh as next Federal Reserve Chair

On January 30, 2026, President Donald Trump nominated former Federal Reserve Governor Kevin Warsh to replace Jerome Powell as Fed Chair, with the change set to take effect after Powell's term ends in May (pending Senate confirmation). Warsh, who served on the Fed Board from 2006-2011, is viewed as relatively bitcoin-friendly compared to Powell. He has described Bitcoin as a sustainable store of value, like Gold. This pick signals a potential shift toward more openness to digital assets at the U.S. central bank, boosting optimism in crypto markets.

Tether launches federally regulated USAT Stablecoin

Tether launched a new dollar-backed stablecoin called USAT on January 27, 2026. Unlike USDT, which is global and has faced regulatory questions, USAT is specifically designed for the U.S. market and is federally regulated under the new GENIUS Act framework. It’s issued by Anchorage Digital Bank fully backed by dollars, and aims to offer a compliant, “Made in America” option for American users and institutions, competing directly with rivals like Circle’s USDC while integrating more smoothly into traditional U.S. finance. In simple terms, it’s Tether’s push to go fully legit and expand in the regulated U.S. crypto space.

Morgan Stanley filed to launch Bitcoin and Crypto ETFs

Morgan Stanley, a major U.S. investment bank, filed with the SEC on January 6, 2026, to launch its own spot Bitcoin ETF(called Morgan Stanley Bitcoin Trust) and a Solana ETF (Morgan Stanley Solana Trust). This marks the first time a traditional US banking giant has moved to create its own crypto ETFs, showing growing mainstream Wall Street interest in digital assets. The filings are still pending SEC approval, so the products aren't live yet.

Bank of America starts allowing its wealth advisors to recommend crypto allocation to clients

Bank of America has started allowing its wealth advisors (across Merrill, Merrill Edge, and Bank of America Private Bank) to proactively recommend crypto allocations to clients, effective January 5, 2026. Previously, advisors could only discuss or execute crypto trades if clients brought it up first. Now, they can suggest spot Bitcoin ETFs as part of regular portfolio advice, with the bank's chief investment office recommending a modest 1% to 4% allocation for clients comfortable with volatility.

CLARITY Act gets delayed

In mid-January 2026, the Senate Banking Committee suddenly canceled its planned markup session on the CLARITY Act due to strong pushback from crypto leaders like Coinbase CEO Brian Armstrong, who said the draft needed big changes, especially around rules on stablecoin yields and other issues. This postponement, with no new date set yet, keeps regulatory uncertainty hanging over the crypto sector as negotiations continue into early 2026.

BITCOIN ANALYSIS

Bitcoin is currently in a downtrend. This move has been characterised by lower highs and lower lows. As of February 5, 2026, Bitcoin is trading near $70,720, having dipped below $72,000 yesterday and continuing to probe lower supports. The support at 71,400 level is currently being tested. The next support sits around 67,600.

CRYPTO MARKET PERFORMANCE

JANUARY 2026

PRODUCT PERFORMANCE

JANUARY 2026

January 2026 was a volatile reset for crypto markets, and BitSave products responded in line with their design.

• Bitcoin Product: Down 6.48%, broadly mirroring Bitcoin’s month-end pullback as early gains faded. Despite the decline, it remained more resilient than broader altcoin-heavy exposures.
• Crypto & Gold Product: Down 1.91%, with Gold once again acting as a stabiliser. The allocation helped cushion portfolio swings and significantly reduced downside compared to pure crypto strategies.
• Crypto Index Product: Down 15.6%, reflecting sharper corrections across altcoins, which tend to amplify moves—both up and down—during risk-off phases.

Overall, the month reinforced two realities of this asset class: volatility is structural, and portfolio construction matters. Bitcoin proved relatively defensive within crypto, Gold helped dampen drawdowns, and diversified crypto exposure carried higher risk during market stress.

BLOOMBERG GALAXY CRYPTO INDEX (BGCI)

FEBRUARY 2026

BITSAVE HIGHLIGHTS

1. Meet & Greet held on January 16, 2026 at Mumbai.

Launched #GetOffZero campaign to raise awareness about Bitcoin allocation in modern portfolios.

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