After what I'm sure was an extremely romantic Valentine for all you digital currency enthusiasts, It's time to put down the rose petals and chocolate boxes, the markets are raging habibi!
From people yapping on twitter all day trying to farm engagements and earn digital points, to FTX customers getting their money back with 20% interest payed out on top, a lot of events which I didn't have on my 2025 bingo card are unfolding.
But at least, to bring back a sense of normalcy, Trump is back to starting trade wars and international tariff changes while picking political fights left and right. Thanks Donny, it's good to see some things never change. Anyways, let's get into it!
Every once in a while, a new product comes out that shifts the entire landscape in the crypto world. This past month, it was of course Kaito AI, which started a frenzy on twitter, with millions trying to get engagement, and earn "yaps". Okay hold on, whats Kaito AI?
Kaito AI is an AI-powered platform focused on Web3 and cryptocurrency research. It aggregates and analyzes data from thousands of sources, including social media, podcasts, forums, and research papers, using advanced AI and large language models to deliver structured, real-time insights for investors and traders. Think of it as a market sentiment gauge which bases it's thesis on live social cues.
For example, here is their current "Mindshare Leaderboard"
This is obviously very basic info, because it's free. The full version of Kaito AI starts at almost $900 a month, so clearly the aggregated data is valuable to consumers. This is all fueled from the 2 initial funding rounds Kaito had, totaling $10.8 Million in seeds investor funds from leading VCs such as DragonFly & Sequoia Capital.
So what are Yaps? Yaps are the points you collect from creating content, interacting, and gaining engagement on twitter. Content is what the AI feeds on, so big contributors earn points for giving the AI valuable data. These points will contribute to a leaderboard, and will later be what Kaito's token airdrop are based on.
Daily Yaps are capped at 25k, but how much could they be worth? This simple FDV / Supply estimation chart gives us a pretty good idea, and each yap could be worth around $20.
Kaito obviously didn't reveal how the yaps are distributed, but from what we've seen, the AI prioritizes quality over quantity, so if you are an avid twitter user, this might be a good trend to hop on. Leverage your social media account, and it seems you might be rewarded greatly. Yap on!
Ah FTX, a tale as old as time. Once a leading cryptocurrency exchange, FTX collapsed in November 2022 after a series of events triggered by financial mismanagement and our favorite Web3 activity; fraud.
It's been a while since all that unfolded, 2022 feels like 20 years ago in the crypto space, but best believe, the FTX customers didn't forget. When the entire business was filing for bankruptcy after mingling funds with Alameda research, every account got frozen, making withdrawals impossible.
But who cares about that now? Well, turns out the customers are getting their money back... With 20% of interest on top. How? Bullmarket baby.
So, when a company files for bankruptcy, it needs to file reports on all their assets, giving them an accurate valuation. Same thing for customer accounts; their terminal value was assessed on November 11th 2022. Those accounts obviously held a lot of crypto, and that crypto, went to the damn moon since. Meaning customer funds, in a way, have been retrieved.
So yeehaw partner, everyone got their money back right!? Well, magic internet money only goes so far. First of all, this repayment only includes accounts that were under $50k in value, but more importantly, people are being repaid in cash, not in the crypto they held.
Let's say you held 1 $BTC at the time of bankruptcy, you will be refunded $18k + some interest, and not the $100k that this Bitcoin would be worth today, which of course, is a slap in the face.
And this is true for any other currency including Solana, XRP, and Ethereum. (If it helps, at least the $ETH price hasn't changed too much since).
But hey, it's better than nothing. The repayments in the US will be taken through Kraken and BitGo, while Europe claims will be distributed through BackPack Exchange.
It will be interesting to see how that claimed money flows. Will FTX customers have PTSD from crypto and withdraw all their money, or will they jump back in for those sweet gains? We shall see. But until then, let's hope its the last time we are reminded of this guy.
Listen, we don't like getting political here, but it seems anything the orange man does, the orange coin reacts to, therefore it concerns us!
Trump is back at it again picking fights with his peers and playing with tariffs this time, throwing around ludicrous numbers at Canada, Mexico, and China.
Those claims obviously had a resounding effects on the markets, sending the S&P 500 down 3%, and sending crypto down checks notes a whopping 20% on average. The beauty of decentralized markets aye?
I wish I was joking when I say this, but the tariffs were literally the biggest liquidation event of all time. Bigger than MtGox, bigger than the WW3 threats last year, bigger than the FTX collapse. Tariffs wiped out $2.3 Billion in longs.
So why you may ask? Why did tariffs on copper and aluminum affect our magical internet coins which do NOT contain copper or aluminum? You see, it all comes back to macro economics.
Many have pointed out that tariffs could lead to increased inflation, which historically has been less favorable for cryptocurrencies. Higher inflation might prompt central banks to adjust interest rates to the upside, which we do not want to see.
The introduction of those policies also introduce a period of economic uncertainty, radical economic changes like tariffs threaten global trade stability. This uncertainty contributed to a global market downturn, with crypto reacting the same way.
Additionally, tariffs have shown to be an outdated way of doing business, with the USA having low tariffs and open trading borders for over half a century now. The US economy has been insanely robust and flourishing since, and tariffs being brought back could be a step in the wrong direction.
In addition, the tariffs have temporarily overshadowed the positive developments Trump's administration have made towards crypto, focusing investor attention on immediate economic impacts rather than long term regulatory progress.
At the end of the day, this could just be political tactics to intimidate others into compliance. The tariffs might not even come through at all, and end up being just used as bargaining chips in the political landscape.
Whatever happens, crypto's future is still extremely bright. Trump has nominated pro-crypto people to many major positions in the treasury, CFTC, and commerce administration. This shall be nothing but a little bump in the road.
Godspeed ladies & gentlemen!
[All topics are meant to be educational only. None of it is financial advice, please do your own research.]
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