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The U.K. wants to kneecap stablecoins just as crypto’s three most telling signals are flashing. If that sounds like a weirdly specific kind of chaos—it is. In today’s Hodl Report, we’re cutting through the noise with 3 indicators that matter (spoiler: it's not your cousin’s TA TikToks) and unpacking why the Brits suddenly care about digital dollars. Let’s get into it.
Editors Corner
Cycles and Signals: The 3 Indicators That Actually Matter
Crypto has no shortage of “must-watch” metrics. Every cycle, analysts whip out 50 on-chain charts, half a dozen sentiment gauges, and some arcane liquidity models that look like they were drawn up by NASA engineers. The reality? Most of it is noise. The market runs on narratives, liquidity, and psychology—and only a handful of indicators consistently cut through the chaos.
Here are the three worth paying attention to:
1. MVRV (Market Value to Realized Value)
Think of MVRV as a heat map for investor behavior. It compares the market cap of Bitcoin (or ETH) to the “realized cap,” which measures coins at the price they last moved.
Why it matters: When MVRV climbs above 3.5, it usually means everyone’s euphoric—and you’re probably closer to the top than you’d like to admit. When it sinks below 1, despair sets in and generational buying opportunities appear.
In practice: MVRV has nailed tops in 2011, 2013, 2017, and 2021. It doesn’t tell you the exact day to sell, but it does tell you when the air’s getting thin.
2. Funding Rates + Open Interest
Derivatives are where the action is, and perpetual futures funding rates are the canary in the coal mine.
Why it matters: Positive funding (longs paying shorts) shows froth, while negative funding (shorts paying longs) usually signals fear. Pair this with open interest—how much leverage is sitting in the system—and you can see when the spring is coiled.
In practice: Extended periods of high positive funding + rising open interest are often precursors to liquidation cascades. The opposite—negative funding + wiped-out OI—is often the moment to fade the fear.
3. Stablecoin Supply Growth
Follow the stablecoins, follow the money. When USDT and USDC supplies expand, it’s usually because fresh capital is entering the system. When they contract, liquidity is drying up.
Why it matters: Stablecoin flows act as crypto’s “broad money supply.” They’re the dry powder for every pump.
In practice: The 2020–2021 bull run was fueled by explosive stablecoin issuance. The 2022 bear saw contraction. Watching this is like monitoring the Fed’s balance sheet—except it’s tethered to crypto’s veins.
The Takeaway
Markets are noisy, and crypto even more so. You’ll see 100 indicators passed around Twitter, but most are either lagging or designed to look smart in hindsight. If you’re an investor, boil it down:
MVRV tells you where you are in the cycle.
Funding + OI tell you how stretched the market is short-term.
Stablecoin supply tells you whether liquidity is fueling or draining the fire.
Everything else? Fun for charts, not much for returns. In a market that thrives on hype, sticking to the signals that consistently work is the closest thing you’ll get to an edge.
Today’s Report
U.K. Aims to Cripple Stablecoins
Our Report
The Bank of England is floating rules that would cap how much stablecoin individuals and companies can hold—about £10,000–£20,000 per person and £10 million per business—if those coins are deemed “systemic,” i.e. widely used for payments or expected to be. Crypto industry groups (including Coinbase and U.K. trade bodies) are pushing back hard, calling the caps unworkable, likely to drive firms overseas, and unfair compared to how cash or bank accounts are regulated. The BoE argues the limits are needed to prevent risks to financial stability—especially mass stablecoin redemptions pulling deposits out of banks. Meanwhile, critics point out the U.S. and EU have avoided such caps, favoring oversight, reserve rules, and governance instead.
Key Points
The proposed individual cap is £10,000–20,000 (~$13,600–27,200), business cap ~£10 million for stablecoins classified as systemic.
Key objections: enforcement complexity, risk of pushing stablecoin business away from the U.K., and the asymmetry of regulating stablecoins when cash and bank deposits face no similar caps.
The BoE believes these caps will curb risks from sudden outflows, deposit drain, and reduce vulnerabilities tied to systemic payment infrastructures.
In contrast, the U.S.’s GENIUS Act and the EU’s MiCA regime do not impose caps on stablecoin holdings but instead focus on licensing, reserve requirements, and governance oversight.
Relevance
This debate isn’t just about numbers—it’s about the U.K.’s competitive stance in crypto finance. If enforced, stablecoin caps could put the U.K. out of sync with other major markets. That risks capital flight and stifles innovation in payments and digital finance. Regulators are trying to safeguard stability (a valid concern in light of past stablecoin runs), but heavy-handed limits may lead to worse outcomes: firms bypassing U.K. rules, or users finding workarounds that erode oversight.
From your perspective as an investor or market watcher, the signal is clear: regulation is tightening, but the shape it takes is up for grabs. Keep an eye on how the BoE defines “systemic stablecoin,” how enforcement could realistically work (digital IDs? new monitoring infrastructure?), and whether trade bodies succeed in pushing the government to adopt a more flexible model. The path the U.K. chooses could become a template—or a cautionary tale—for stablecoin regulation worldwide.
Today’s Top News
HEADLINES
Ripple’s XRP rockets back into top 100 global assets — Can XRP hit $5 as Bitcoin faces headwinds? — XRP has climbed back into the world’s top 100 assets by market cap. Optimism is building around a potential rally toward $5. However, regulatory clarity and competitive pressures remain key risks.
Market down slightly, sentiment mixed as macro factors loom — Global crypto market cap dipped 0.4% today, with mixed performance among top coins. Traders remain cautious ahead of the Fed’s upcoming decision. Volatility is expected until macro clarity emerges.
France threatens to block crypto licence ‘passporting’ in EU regulatory fight — France is challenging firms exploiting the EU’s MiCA passporting rules to avoid stricter oversight. It wants large crypto firms regulated by EU-level bodies instead of national authorities. This could create more friction for companies operating across Europe.
Crypto groups hit out at Bank of England plan to limit stablecoin ownership — The Bank of England is proposing limits on how much stablecoin individuals and businesses can hold. Industry leaders say the caps could hurt innovation and push firms elsewhere. The plan is already sparking strong opposition from crypto trade groups.
Market Trendline
PRICE ACTION
The crypto market is locked in chop mode ahead of this week’s Fed decision, with traders unwilling to pick a direction. Bitcoin is holding above $114K but barely moving, while ETH and most alts are slipping lower. Volumes are muted, conviction is low, and macro is calling the shots.
Market Overview
Bitcoin is essentially flat, trading sideways as institutional ETF flows keep it buoyant—but not bullish. Ethereum continues to underperform, and altcoins are getting clipped across the board. The entire market feels like it’s waiting for Powell to flip the switch.
Notable Movers
Bitcoin (BTC): Still the relative safe haven. Spot ETF inflows remain strong, but buyers are playing defense. Every rally is getting sold into.
Ethereum (ETH): Down ~2.5%, under pressure from both macro jitters and a rotation back into BTC. ETH/BTC ratio continues to bleed.
Solana (SOL) & Cardano (ADA): Down 4–6% on the day. High beta alts are being used as liquidity exits amid broader risk aversion.
PEPE & meme tokens: Unwinding fast. Whatever froth remained from last week’s bounce is now gone.
Macro View
All eyes are on the Fed. Rate cut odds are softening, yields are firming, and the risk-on trade is fading. Crypto is taking cues directly from Treasuries. Until rate expectations break lower, expect continued rotation into BTC and pain for everything else.
Bottom Line
The market’s in limbo. BTC is steady but stuck, ETH is leaking, and alts are getting rinsed. Without a dovish surprise from the Fed, it’s more likely we grind lower than break higher.
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Today’s Top Meme
MEME GOD
Today’s Top Tweet
TWITTER NEVER SLEEPS
Yes, @base is exploring a network token, but has no definitive plans.
We’re exploring how a network token could help us accelerate our joint mission.
— #Coinbase 🛡️ (#@coinbase)
2:51 PM • Sep 15, 2025
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.