Global Market Comments
January 27, 2026
Fiat Lux
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Periods of weakness in Bitcoin price action often reflect positioning and profit-taking rather than a breakdown in the asset’s underlying structure.
Bitcoin remains a volatile asset by design, and retracements have historically occurred even during sustained growth phases. Sharp pullbacks, while uncomfortable, have repeatedly functioned as resets rather than trend reversals.
From a structural perspective, Bitcoin’s price behavior continues to reflect cyclical volatility rather than instability.
Corrections are a feature, not a flaw.
Bitcoin does not move in a straight line, and expectations that it should do so tend to form near local extremes rather than durable inflection points.
What has been more notable during periods of Bitcoin consolidation is the behavior of the broader digital asset market.
Even when Bitcoin has struggled to make near-term progress, capital rotation into alternative crypto assets has often remained active, signaling broader participation rather than capital flight.
Assets such as Ethereum, Solana, and Cardano have each experienced phases of outsized growth across multiple market cycles, alongside many smaller projects that have captured speculative and developmental interest.
This breadth reflects a market that has expanded beyond a single-asset thesis.
Bitcoin has begun to exhibit characteristics of a more mature asset, even while remaining volatile by traditional standards.
At the same time, much of the altcoin market remains earlier in its development curve, where experimentation, speculation, and rapid growth are more common.
As a result, capital that once flowed almost exclusively into Bitcoin increasingly disperses across a wider set of digital assets, particularly those perceived to offer higher upside at earlier stages.
A few years ago, broad-based participation across dozens of crypto assets would have seemed implausible.
The expansion of liquidity beyond Bitcoin reflects both increased risk tolerance and a growing belief that multiple blockchain networks can coexist with differentiated use cases.
That dispersion does not weaken Bitcoin’s role, but it does change how capital cycles through the ecosystem.
Macro conditions also continue to influence crypto markets.
Strength in the US dollar and shifts in global liquidity have periodically pressured risk assets, including digital currencies. While Bitcoin is often framed as an alternative monetary asset, it still competes for capital within the same global financial system.
During periods of dollar strength or tightening financial conditions, it is common for investors to reduce exposure, lock in gains, or rebalance toward perceived safety.
Currency volatility in emerging and developed markets alike has reinforced this dynamic, reminding investors that crypto does not exist in isolation from global macro forces.
Another recurring source of market anxiety has been the distribution of long-dormant bitcoin holdings from early industry failures.
The long-running resolution of the Mt. Gox bankruptcy has periodically resurfaced as a sentiment overhang, driven by concerns that large distributions could temporarily pressure prices.
Historically, however, such events have tended to influence short-term behavior rather than long-term market structure.
Even when additional supply enters the market, it does not alter Bitcoin’s fixed issuance schedule or long-term scarcity.
If selling pressure emerges, it typically delays recovery rather than defining a new secular trend.
Despite these intermittent headwinds, the broader direction of crypto adoption has remained constructive.
Bitcoin continues to attract institutional interest, corporate balance-sheet allocation, and sovereign-level experimentation, while alternative networks push forward with development, scaling, and application design.
That combination has reinforced the idea that crypto markets are no longer driven by a single narrative or participant class.
Breadth across assets, use cases, and geographies has become one of the defining characteristics of the ecosystem.
Volatility remains, cycles persist, and corrections are unavoidable.
But the widening participation across digital assets suggests that crypto has moved beyond its earliest phase, even if it remains far from mature.
That breadth continues to be one of the strongest signals underpinning the asset class.
Like gold and gold miners, bitcoin miners are also a levered play on the price of bitcoin.
In layman’s terms, when the price of bitcoin goes up, the miners go up more.
The largest-scale Bitcoin miner in the US is Marathon Digital Holdings (MARA), and readers should take notice.
The stock is up over 1,100% in the past 365 days as the miner has ridden the elevator up with the price of Bitcoin.
Marathon has legs and doesn’t live in fear of them if you are a believer of Bitcoin like I am.
Deploying resources in this stock has some weight, especially after we received a 27% discount when the stock dropped after they announced a $650 million convertible senior notes offering to fund their purchases of additional Bitcoin miners.
Almost as important, they disclosed a Securities and Exchange Commission (SEC) subpoena that requested documents related to its data center contracts in Hardin, Montana.
Last year, Marathon reorganized itself as a Bitcoin mining company and placed a long-term order for more than 100,000 high-end ASIC miners from Bitmain.
At the end of 2020, Marathon only held 126 Bitcoins. But in March, it purchased an additional 4,813 Bitcoins for $150 million at an average price of $31,168.
This brilliant move in hindsight means they are playing with house money now.
Marathon operated 27,280 miners at the end of October, and it expects to expand its fleet to 133,000 miners by mid-2022.
But those miners cost more than $10,000 per unit each, and Marathon expects to remain unprofitable as it takes on more debt to fund those purchases.
Last year, Marathon only generated $4.4 million in revenue and posted a net loss of $10.4 million.
Marathon's $650 million senior convertible debt offering gives a chance for the company to grow out of its loss-making model.
It’s hard to run away from the exorbitant costs to expand its mining fleet, but once the scale is realized, it will be able to focus on earnings growth.
As for the SEC subpoena, it's related to Marathon's deals with Beowulf Energy and other parties to build a data center in Hardin last October.
In particular, the agency is investigating Marathon's issuance of six million shares of restricted common stock to fund those deals and might trigger problems for Marathon, since it relies on Beowulf's lower energy prices to mine Bitcoin at cost-efficient rates.
Even if something were to come from this, I doubt it will be a deal-breaker and maybe even a possible fine.
The silver lining is that Bitcoin must drop significantly for Marathon to become unprofitable.
They are doing everything they can to scale their business as fast as possible.
Taking on more leverage to corner the bitcoin miner supply market is scary for some people, but after the pandemic, much of this activity is normalized.
After factoring in energy and hosting costs, the breakeven rate on Bitcoin for Marathon is around $6,500.
Even though the company is levered, they are insulated by its unit economics.
Certainly, it’s expensive to scale in a fragmented market, and it’s not a guarantee that energy costs will be advantageous for Marathon in the long term.
As many have read, there are various breakdowns in the global energy market that could reverberate on Marathon’s balance sheet even if not yet.
The breakeven estimate serves as a reminder of how this is just a numbers game, and reducing the cost of energy makes it almost unfair to compete against.
Daily miner revenue is hovering near record highs, and Marathon has among the lowest mining costs per coin.
The stock has iron-clad support around $37, and I would be buying MARA stock incrementally all the way down to $37 if we ever get there.
I have a hunch that we will never dip below the low $40s.
Bitcoin operates with Taproot, a protocol upgrade that refined how transactions and spending conditions are expressed on the network.
At a technical level, the change is best understood as a structural improvement rather than a headline event, as protocol refinements tend to quietly enhance efficiency and transaction handling over time.
At the investor level, major upgrades often function as liquidity events. Market participants tend to accumulate bitcoin into periods of anticipation and rebalance positions once the change is fully absorbed, removing the speculative premium attached to the upgrade itself.
Removing that anticipation can weigh on short-term price behavior, but it does no damage to Bitcoin’s long-term value narrative.
Taproot’s core cryptographic improvement is the adoption of Schnorr signatures.
These signatures improve transaction security, efficiency, and data handling.
Most importantly, the upgrade expands Bitcoin’s ability to express more complex spending conditions directly on-chain.
A critical change enabled by Taproot is the broader use of conditional transaction logic that resembles smart contracts.
Smart contracts are digital agreements written in code and enforced by the blockchain.
They are essential in powering decentralized finance applications and tokenized digital assets on programmable blockchains.
Compared to Ethereum, Bitcoin has historically been far more constrained in accommodating smart contracts by design.
Taproot does not change that design philosophy, but it allows Bitcoin to support a wider range of constrained contract structures.
Taprooted Bitcoin also improves privacy by allowing multi-signature transactions, or transactions involving multiple conditions, to appear on-chain as standard single-signature transactions.
Multi-signature transactions are commonly used in custody arrangements, payment channels, and advanced contract constructions.
As a result, these transactions become indistinguishable from simple transfers, improving fungibility and reducing information leakage.
Schnorr signatures also limit the amount of data required for these transactions, which are more complex to process than standard ones.
With less data involved, transactions become more resource-efficient in both verification and block space usage.
Consequently, transactions can be processed more efficiently, supporting lower average fees during periods of normal network activity.
Taproot makes Bitcoin a more efficient and flexible settlement network while preserving its conservative security model.
The last major protocol upgrade cycle, beginning in 201,7 enabled layered scaling solutions that facilitate faster and cheaper payments without altering the base layer.
Those developments helped expand Bitcoin’s utility while maintaining its role as a secure settlement network.
Adoption of new protocol features occurs gradually, and Taproot’s practical usage has increased steadily rather than immediately.
At a broader level, Bitcoin remains in an evolutionary phase, but its development path has been consistent since its inception.
Making Bitcoin more accommodating for developers building constrained, security-focused applications clarifies its role alongside other blockchain ecosystems rather than positioning it as a direct replacement.
On the negative side of the ledger, the limitations of Taproot are primarily structural.
Taproot does not transform Bitcoin into a generalized application platform, and expectations that it would do so were misplaced.
It also remains uncertain how some higher-level application designs will mature, as adoption depends on wallet support, tooling, and layered infrastructure.
Not all upgrades are immediately reflected in user-facing changes, and some benefits take time to surface.
In a broader competitive landscape, digital assets continue to pursue different approaches to payments, settlement, and virtual economies.
Protocol upgrades like Taproot are necessary to ensure that foundational networks remain efficient, secure, and adaptable.
The ability to build layered applications on top of a stable monetary base remains central to Bitcoin’s long-term thesis.
That future continues to develop incrementally rather than dramatically.
Taproot represents another step in that direction, strengthening Bitcoin’s technical foundation while leaving its core identity unchanged.
