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Good morning and welcome to the Hodl Report

Turns out the U.S. government can time the market — they just need 127,000 BTC and a “strategic reserve” excuse. Meanwhile, the rest of us are perfecting the ancient crypto art of staring at the charts, doing nothing, and pretending that’s a strategy. Today’s Hodl Report dives into pig-butchering scams turned federal asset hauls, and why sitting on your hands might be the smartest move in a panic-selling world.

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Editors Corner

The Art of Doing Nothing (While Everyone Panic sells)

I’ll be honest — the last couple weeks have been brutal. My portfolio looks like it just got back from a cage match with Mike Tyson. Every time I open my trading app, it feels like checking an ex’s Instagram: I know it’s going to hurt, but I do it anyway.

But here’s the thing I’ve learned — again — the hard way: doing nothing is a position.

When markets nuke like this, your lizard brain starts screaming “SELL BEFORE IT’S ZERO!” Meanwhile, your rational brain quietly whispers, “Bro, this is literally what markets do.” Guess which one most people listen to?

We’ve all been there — selling at the bottom, watching it rebound two days later, then convincing ourselves we’ll “buy back in lower” (we don’t). The problem isn’t the volatility; it’s the need to react to volatility.

The best traders — and the happiest investors — have one thing in common: they’ve mastered the art of sitting on their hands. They zoom out, breathe, and remember that every past crash has eventually turned into a dip someone wishes they bought.

So if you’re feeling the panic right now, take it from someone who’s definitely panic-sold before:
Don’t.
Do.
Anything.

Drink some water. Go outside. Touch some non-tokenized grass. The market will still be there when you get back — and you might even like the prices better.

Crypto Trivia: The FTX Vanishing Act

In November 2022, FTX — once the world’s second-largest crypto exchange — imploded after it was revealed that customer deposits were secretly funneled to its trading arm, Alameda Research. The scandal wiped out billions in user funds and confidence in cen

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Today’s Report

Pig-Butchering Pays Off — U.S. Seizes 127K BTC for ‘Strategic Reserve’

Our Report
The U.S. government is planning to funnel roughly 127,271 BTC (about $14.2 billion) seized from a large-scale Chinese‑led “pig‑butchering” crypto scam into its newly‑minted “Strategic Bitcoin Reserve.” This isn’t a casual seizure — it’s the spoils from a cross‑border fraud ring led by Chen Zhi that mixed crypto‑investment scams, human trafficking, and political corruption. The plan hinges on an executive order that states the reserve “will be capitalized with bitcoin owned by the Department of Treasury that was forfeited…” But paperwork and a government shutdown may throw a wrench in the works.

Key Points

  • The seized stash: ~127,271 BTC (≈$14.2 b at current value) tied to Chen Zhi’s network.

  • The criminal enterprise: Operated in Cambodia (among other places), with compounds, forced labour, and scam victims — described in court filings.

  • The executive order: Signed earlier this year, it explicitly instructs that forfeited bitcoin can seed the “Strategic Bitcoin Reserve” via the U.S. Treasury.

  • Regulatory/scheduling snag: While the conceptual framework is set, the formal rules, especially around custody, valuation and disposal, remain underdeveloped — and the U.S. government’s shutdown looms as a timing risk.

  • Broader enforcement action: In tandem with the seizure, the U.S. (with the UK’s FCDO) sanctioned 146 individuals/entities tied to the criminal group and designated key financial conduits under the Patriot Act.

Relevance
From a market‑narrative vantage, this development checks a few boxes:

  1. Institutional velocity for BTC – The fact that seized bitcoin is going into a governmental reserve rather than being sold off is tone‑setting. It signals the U.S. sees bitcoin not just as a criminal spillover but as a strategic financial asset. That’s a psychological win for the asset class.

  2. Supply discipline – While 127k BTC is a large number, its conversion into a non‑circulating reserve means it’s effectively removed from traditional market liquidity. That tightens supply a bit — helpful in bull‑leaning environments.

  3. Risk signalling – The coup‑de‑grâce: this isn’t your average exchange hack. Human trafficking, global coordination, mass fraud. The U.S. is stuck in a narrative where crypto is either freedom fighter or criminal money‑laundering rocket fuel. That complicates regulatory expectations and feeds into volatility.

  4. Operational caution for traders – The timing issue and nascent policy mean that until formal rules land around how the government handles and eventually sells (or holds) these reserves, there’s a cloud. Could the Treasury decide to sell? Might it hold long term? The lack of clarity is a latency risk for mit‑investors.

  5. Macro posture check – If sovereigns begin treating bitcoin more like a reserve asset (even opportunistically via seizures), then the “store‑of‐value” thesis gets a bit more texture. Yet it also raises questions: if the government holds, what happens when/if they decide to liquidate? The flip side is supply shock is limited since these assets don’t come directly into the open market now.

In short: this isn’t a game‑changer for short‑term traders looking for patterns in the order book, but it is a meaningful tactical shift in how governments view crypto assets. For holders and strategic investors, the news adds another layer to the structural story: less floating supply, more government custody, and deeper regulatory theater. Keep your eyes on how the Treasury defines “reserve,” what it does with the BTC, and whether other jurisdictions adopt similar logic.

Today’s Top News

HEADLINES

Market Trendline

PRICE ACTION

The crypto market woke up feeling a bit under the weather—total market cap is hovering near ~$4 trillion with little upside traction and signs of distribution creeping in. Fear metrics are creeping in too: fewer than 20 % of tokens are in the green over the past 24 h.

Market Overview

  • The dominant player, Bitcoin (BTC), has pulled back modestly, leaving its next meaningful resistance untested.

  • Meanwhile Ethereum (ETH) remains the relative standout in the majors, showing more resilience and rising interest.

  • Altcoins broadly are under pressure, with weak breadth confirming that selective strength is the name of the game—not blanket risk‑on.

  • Regulation, institutional positioning, and macro jitters (see flagged global oversight risks) are all dampening aggressive reflation plays.

Notable Movers

  • Ethereum (ETH) — While Bitcoin treads water, ETH is quietly carving out better structural positioning: inflows, staking narratives and alt/major ratio improvement are giving it an edge.

  • Bitcoin (BTC) — Holding its ground but exhibiting signs that the “easy money” may have been squeezed; consolidation tightens and volatility is shrinking, suggesting either a pause or set‑up.

  • Select Altcoins — Though names aren’t deep dived here, the handful of 24 h gainers are tiny‑cap or narrative‑driven plays, not major shift in the ecosystem.

Macro View
We’re still in the maturation phase: crypto is no longer purely speculative junk‑asset with zero institutional touchpoints. The regulatory spotlight intensifies globally; stablecoins and cross‑border flows – both liabilities and opportunities – are in focus. That matters because absence of clear global guardrails means risk premium stays elevated.
Adding to this: with interest‑rate expectations still sticky and traditional risk assets wobbling, crypto’s correlation to broader risk sentiment remains real.

Bottom Line
The market’s trading mood could best be described as strategic patience. ETH is looking increasingly interesting as a stronger major, while BTC is consolidating strength—or surrendering potential—depending on your lens. If you’re trading, now’s the time to favour selective conviction over broad speculative bets.

Today’s Top Tweet

TWITTER NEVER SLEEPS

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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.

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