21 Bits Newsletter - January 2026

TL;DR

• 2026 macro: Digital assets are quietly becoming part of mainstream financial infrastructure.
• 2025 in review: No fireworks, but real progress in tokenisation, on-chain money, and U.S. regulation.
• Gold vs Bitcoin: Precious metals outperformed in 2025 on supply-demand and central-bank flows.
• Institutions moving: Vanguard, the UK, India, Harvard, and JPMorgan all made meaningful crypto-positive moves.
• Market setup: Bitcoin remains range-bound, with a breakout likely if liquidity conditions ease.

THOUGHTS

Crypto’s end-of-year did not come with explosive rallies or dramatic headlines. Crypto did not have an end of year rally like Silver or Gold. So what did Crypto do this year?

Crypto made solid, consistent progress! Advancements in tokenisation, on-chain money, and savings vaults were all quiet yet significant. The year also featured major regulatory progress in the United States, including the passage and enactment of the GENIUS Act and the advancement of the CLARITY Act in the House of Representatives.

A few questions stood out among the investors at the end of 2025 — Why did Silver and Gold outperform Bitcoin? And what does the future look like for Bitcoin and crypto?

Silver’s Surge

Silver saw a supply shortage of near 100 million ounces this year. Key drivers included robust industrial consumption (accounting for 50-60% of total demand), particularly in solar photovoltaics (20-30% of demand), electric vehicles, electronics, and AI data centers. Elevated premiums in Asian markets, such as Shanghai ($6-8 premium), reflected strong physical demand and price discovery in the region. Additional factors encompassed investment and safe-haven buying, speculative positioning, and reduced liquidity during holiday periods.

Gold’s Strength

We have seen Central Banks around the world, like Poland, Kazakhstan, Azerbaijan, India, China, etc. buying Gold (634-800 tonnes~30% of demand) as part of de-dollarisation efforts, to diversify from USD and for geopolitical insulation. Gold is seen as a safe haven asset during geopolitical tensions like the middle east crisis, US-Venezuela tensions, etc. Federal rate cuts mean less carrying cost for gold and a weaker USD also strengthens the allocation into Gold. There were also significant ETF inflows (~700+ tonnes in 2025 amounting ~25% of demand) into Gold which provided further support. Tether was also a major buyer of Gold in the past year (~116 tonnes at the end of Q3).

The superior performance of silver and gold was driven primarily by physical supply-demand dynamics and traditional macroeconomic factors, largely independent of those influencing Bitcoin — with the exception of shared benefits from Federal Reserve rate cuts.

Now what are the macro conditions for Bitcoin going into 2026?

By year-end 2025, the Federal Reserve had lowered its target range to 3.5–3.75%. Additionally, the US Federal Reserve is injecting $40 Billion per month into buying US Treasury Bills which in turn will reduce short term bond yields and as a result investors flee to risk assets to generate better returns. All this signals to a loose monetary policy, which would expect money to flow into crypto and other markets.

This is unlike other cycles in crypto we have had previously as this time around there is better regulatory clarity, institution led adoption and relatively loose monetary policy.

Outlook for 2026: Normalisation and Mainstream Integration

Looking to 2026, the dominant theme is normalisation — digital assets are now being treated as part of mainstream finance, not an exception. Innovation expands with clearer regulations worldwide. The year ahead will feature quiet restructuring around blockchains and non-sovereign assets, driven by macro liquidity, hybrid traditional-digital finance models, platform competition, and long-term structural shifts.

TOP STORIES

J.P. Morgan Explores Institutional Crypto Trading

JPMorganChase is considering offering crypto trading services to its institutional clients. This includes possible spot trading and derivatives for assets like Bitcoin. The plans are still in early stages and depend on client demand and regulatory factors. The move shows growing interest from big banks in digital assets amid clearer rules.

Harvard allocates Bitcoin 2-to-1 Over Gold

Harvard University’s endowment increased its Bitcoin holdings from $117 million to about $443 million through BlackRock’s Bitcoin ETF in the third quarter of 2025. At the same time, it raised gold ETF investments from $102 million to $235 million. This means Harvard allocated roughly twice as much to Bitcoin as to gold. The move shows growing confidence in Bitcoin as a way to protect against currency weakening. The University’s Bitcoin investment is also its largest holding, standing at 21% of its portfolio.

India Parliament Committee Discusses Crypto Future

India’s Parliamentary Standing Committee on Finance is studying virtual digital assets like crypto and NFTs. The committee held a meeting on the topic “A Study on Virtual Digital Assets (VDAs) and Way Forward” on December 3, 2025 with various stakeholders. A key follow-up session is set for January 8, 2026, with officials from tax and anti-money laundering bodies.

UK Recognises Digital Assets as Property

A new UK law, the Property(Digital Assets etc) Act 2025, came into force on December 2, 2025 after receiving Royal Assent. It confirms that digital assets like crypto-tokens, stablecoins, and NFTs can be treated as personal property. This creates a third category of property, separate from physical items or legal rights. The change gives owners better protection in cases of theft, fraud, or disputes, boosting confidence in the UK’s digital economy.

Vanguard Flips Pro-Bitcoin, Enables ETF Access

Vanguard, managing $11 trillion in assets, has reversed its longstanding anti-crypto stance and will now permit clients to trade select Bitcoin and other crypto ETFs through its brokerage platform. This policy shift allows access to funds holding assets like Bitcoin, Ether, XRP, and Solana, aligning Vanguard with growing investor demand for digital assets.

TECHNICAL ANALYSIS: BITCOIN (03.01.2026)

The price is currently moving sideways inside a symmetric triangle pattern. This happens when the highs keep dropping lower and the lows keep rising higher, forming two trend lines that squeeze closer together toward a point and signal an impending breakout in either an upward or downward direction. This setup, as depicted in the chart, typically reflects a period of market indecision with balanced buying and selling pressure. Complementing this, the Average Directional Index (ADX) stands at 17, a level that indicates weak overall trend strength and underscores the ongoing range-bound behaviour.

CRYPTO MARKET PERFORMANCE
DECEMBER 2025

BITSAVE PRODUCT PERFORMANCE
DECEMBER 2025

December 2025 was a defensive month across markets, and BitSave products behaved exactly as designed.

• Bitcoin Product: Down 2.7%, broadly tracking Bitcoin’s pullback and preserving capital relative to broader crypto moves.
• Crypto & Gold Product: Down 0.8%, with gold cushioning volatility and doing its job as a stabiliser.
• Crypto Index Product: Down 6.2%, reflecting sharper drawdowns in altcoins during the month.

Overall, diversification mattered, Bitcoin held up better than most assets, and gold meaningfully reduced downside.

BLOOMBERG GALAXY CRYPTO INDEX (BGCI)
JANUARY 2026

BITSAVE HIGHLIGHTS

Meet & Greet held on December 20, 2025 at Bengaluru.

WATCH RECOMMENDATIONS

1. Legality of Crypto Investing in India.

The role of Bitcoin in the Modern Portfolio.