Mad Hedge Bitcoin Letter
October 20, 2022
Fiat Lux
Featured Trade:
(LOOKING TO MAKE A DIFFERENCE)
(BTC), (NFT)
A non-fungible token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership.
Like cryptocurrencies, they are also digital tokens.
But compared to cryptocurrencies, which are fungible, or interchangeable, NFTs are singular and unique. Like cryptocurrencies, they exist on the blockchain as cryptographic assets.
The price direction of NFTs is a good way to take a barometer of a speculative technology market underpinning crypto.
I can tell you that the NFT marketplace is dead as a doornail, and like how the price of Bitcoin had been engulfed in a crypto winter during 2022–2023, it’s even worse in the NFT world. Bitcoin has recovered since then, but NFTs haven’t.
How bad?
Multimillion-dollar NFT purchases marked down to $100 kind of bad.
In times when the crypto industry is bullish, NFT prices benefit from being a second-derivative industry.
One might say that it’s just a 3X ETF of Bitcoin and for speculators, this can be either good or bad.
If you don’t believe me about the state of NFTs, let's roll through some of the data points.
In sectors from art to gaming, trading volume and prices collapsed more than 90% from their early-2022 peaks, and by 2024–2025 an estimated 96–98% of NFT collections saw virtually no trading activity at all.
By 2025, global NFT sales sit in the low single-digit billions per quarter, compared with tens of billions at the height of the 2021–2022 mania. Daily volume across major collections now totals only a few million dollars.
The NFT capitulation is solid proof that NFTs are not stores of wealth and definitely aren’t inflation hedges.
I can also say that Bitcoin pretty much failed every test of legitimacy during the 2022–2023 crypto winter.
NFTs and Bitcoin are speculative assets that only do well during a time of increasing liquidity. The reverse holds true as liquidity tightens.
Many of those art NFTs are being bought and sold on OpenSea, the most prominent peer-to-peer marketplace.
Daily trading volume on OpenSea peaked around $2.7 billion on May 1, 2022 and then fell by about 99% to under $10 million a day by late August 2022. By 2025, OpenSea’s annualized marketplace revenue is in the low tens of millions of dollars, a fraction of its peak activity.
Personally, I don’t believe in NFTs long term, I don’t get how a digital certificate will hold weight.
I rather have a real physical certificate that shows I own something like a real estate deed.
For those who might think NFTs could hold more utility in the future, then I am another hater you must convince.
Preaching to me about how long-term prospects are positive and investors should buy the dip is laughable.
Any serious asset doesn’t go down 95% in one year without a crisis and in the short-term survival of NFTs isn’t guaranteed. For most collections, prices remain more than 90% below their 2021–2022 highs even in 2025.
This was a fad that caught on and rode the hysteria of Bitcoin to relevance and now is being dumped faster than one can imagine.
Back in 2022, as markets braced for a Fed-induced recession that ultimately turned into a slowdown rather than a deep, official downturn, it was hard to believe Americans would be interested in buying an NFT when they worried about keeping their jobs - and even in 2025, high rates and lingering inflation shocks have left little appetite for ultra-speculative JPEGs.
Surveys show that roughly half of U.S. adults have heard at least a little about NFTs, while globally about 47% of consumers have never heard of them at all, only 7% say they know exactly what they are, and roughly 1% actually own one.
But most understand that securing shelter and food during unemployment is more important than throwing money down the toilet.
Avoid the NFT asset class, period.
“We're running the most dangerous experiment in history right now, which is to see how much carbon dioxide the atmosphere... can handle before there is an environmental catastrophe.” – Said Founder and CEO of Tesla Elon Musk
Mad Hedge Bitcoin Letter
October 18, 2022
Fiat Lux
Featured Trade:
(ANOTHER PATH GETS SHUT DOWN)
(BTC), (PORTUGAL)
The best-kept secret is that Portugal was one of the biggest beneficiaries of loose crypto restrictions for the past decade.
The bulk of the Mad Hedge Concierge client list is made up of numerous crypto investors that got into bitcoin at less than $100 to ride the wave up.
Yet, it is common knowledge that the United States treats digital currency as property and taxes it similarly to stocks or real estate.
Why have crypto holders been flocking to Portugal?
Crypto gains were not taxed at all for most of the 2010s and early 2020s.
It made sense for any crypto success to apply for Portuguese residence and take proceeds of the crypto in Portugal without losing a dime.
Over the past decade, Portugal has become an appealing destination for international residents, who have flocked to the country due to its more flexible visa and immigration options and overall affordability.
The weather and food are amazing.
Why do I suddenly bring up Portugal now if it is such a crypto tax haven?
The Portuguese government implemented a new cryptocurrency tax framework in its 2023 national budget, which has been in force since January 2023.
Within the nearly 450-page macroeconomic strategy and fiscal policy report, a small section established a 28% capital-gains tax on cryptocurrency gains made within one year.
However, gains realized after one year of holding the crypto assets remain exempt under the finalized law.
The Portuguese government also applies stamp duty (10%) on gratuitous transfers such as gifts and inheritances, and a 4% stamp-duty charge on crypto-service-provider commissions.
The framework was designed to treat crypto as equal to other industries and to establish a clear, standardized taxation environment. Twenty-eight percent is the standard capital-gains tax rate in the country.
If these new crypto taxes are implemented, it is nothing short of a disaster for crypto holders who trade short term even if the ones holding over one year are exempt.
Expect trading volume to plummet.
I can guarantee it will face a mass exodus, like India, as companies and investors flee to lower-tax nations.
At this point, it appears as if bad news is piling on top of bad news.
Governments around the world are strapped for cash as historical debt loads worry finance ministers.
There’s a massive hunt for the incremental tax dollar and crypto was the low-hanging fruit in Portugal.
I don’t recommend any Bitcoin investor to apply for Portuguese residence because it lost its tax-free advantage in 2023, even though long-term gains are still not taxed.
The interest in crypto is at a 10-year low with some of the biggest daily outflows occurring during the market stress events of 2022–2023; current long-term exchange flows in 2025 are more stable.
Moreover, large exchange outflows did occur during that 2022–2023 period, though current 2025 figures no longer match those extremes.
Investors have clearly lost interest in crypto which is why we are seeing sparse volatility.
Buyers and Sellers have both fled.
Now, cross Portugal off the list.
Moving forward, crypto investors must be nimble as the multiple crises around the world mean that governments will go after crypto dollars harder, giving fewer places to take proceeds for minimal or no tax.
These events are all highly negative for the price and health of Bitcoin.
"The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge," said the late Professor Stephen Hawking.
Mad Hedge Bitcoin Letter
October 13, 2022
Fiat Lux
Featured Trade:
(LOOKING FOR A SAVIOR)
(BTC), (ETH), (CPI)
Bitcoin slipped to around $95,000 this week after a delayed U.S. inflation print and hawkish Federal Reserve commentary raised doubts about a near-term rate cut.
The result means that another modest adjustment in interest rates is already priced into the markets; traders are now focused on whether further cuts or hikes will follow.
There was some fleeting hope back in 2022 that the Federal Reserve wouldn’t need to tighten further, but those ideas were dashed as inflation surged.
A similar dynamic persists in 2025: markets still swing whenever inflation surprises, even though today’s debate is about the timing of cuts rather than large hikes.
Let me remind readers that the US Central Bank employs over 10,000 Ivy League-trained economists earning well over $150,000, yet they are navigating a policy landscape still shaped by earlier missteps.
The longer the Fed allows persistent inflation to erode the health of the US economy, it could be argued that we might be living in an America with only rich and poor people in the future. While “hyperinflation” never arrived, multi-year price increases still stoke that concern.
How does this affect cryptocurrency?
In one word – devastating.
Crypto is reliant on low rates to fuel overperformance.
High liquidity is necessary too.
However, we diverged from those two pillars through 2023–2024, and only recently has easing begun to appear on the horizon.
Crypto, like physical gold, needs rates to be low to represent an attractive investment because of its speculative nature.
The uncertainty now centers on whether the Federal Reserve will delay rate cuts into early 2026.
So what did the price of Bitcoin do upon hearing this news?
In 2022, Bitcoin slid toward $18,000 on similar macro fears. Today, it fell toward $95,000 as traders reassessed the timing of future rate cuts rather than hikes.
Cryptocurrencies had been trading mostly sideways at times earlier in 2025, but Bitcoin’s consolidation ranges now span tens of thousands of dollars, not hundreds.
That’s been a key shift, and a clear move lower this year led to correction lows near $74,000 for Bitcoin. Ether’s mid-2025 lows were near $3,500.
Clearly, there is a lot to worry about for readers who are heavy crypto traders.
Moderating but sticky inflation still leaves the economy vulnerable to price spikes heading into winter.
My guess is that upcoming high inflation data will show up in the form of elevated utility bills, particularly in natural gas.
The sabotage and geopolitical tensions that disrupted energy supply in prior years still echo through markets, and OPEC’s decisions continue to have global effects.
The negative events are just piling on top of each other at this point.
I just don’t see how Bitcoin sustains itself above six-figure territory in the short term.
If it does surpass $120,000 because of a bear-market rally, traders will take profits yet again, rinse and repeat.
Although equity markets may rally through the day, this remains another reminder of the strategic fragility of this alternative asset that once offered so much hope.
Crypto has turned into nothing more than an ultra-speculative asset that, in times of tight liquidity, goes on life support.
It remains volatile, and although institutional adoption and ETFs have added legitimacy, its price still fails many traditional store-of-value tests.
Sell any rally over $120,000 because it won’t last there long.
“If the Starbucks secret is a smile when you get your latte... ours is that the Web site adapts to the individual's taste.” – Said Founder of Netflix Reed Hastings
Mad Hedge Bitcoin Letter
October 11, 2022
Fiat Lux
Featured Trade:
(KOWTOWS TO THE INSTITUTIONS)
(BTC), (ETH), (COIN), (GOOGL)
