Bear market deepens
The Bitcoin price is under pressure, and with every step down, investor confidence also drops. The chart and the on-chain data point to a declining market. Precisely at such a moment, stories surface that underline the fundamental value of crypto: stories about countries where banks fail, while blockchain networks keep running. Find out more in this edition of the Market News.
Market update
In a bear market, prices fall and investors expect further declines. That may sound vague, but itās a surprisingly useful definition, especially if you make falling prices more specific by looking at the trend on the weekly chart. Do you see a series of lower lows and lower highs, with the price trading below the dominant moving average? Then you are in a bear market.
That said, nothing is certain in financial markets, and we always work with probabilities. A downward trend and negative investor expectations are just two of many pieces of evidence that need to be weighed.
Another signal comes from on-chain data. The MVRV tells us how far the market value (MV) has moved above the realized value (RV). Are investors willing to let their unrealized profit build up significantly? If so, that optimism is reflected in a high MVRV. This indicator is sometimes said to measure the temperature of the market, from cold to overheated.
The MVRV often runs slightly ahead of the price. It peaks earlier and also starts falling earlier. That is what we are seeing now. The MVRV is at its lowest level since October 2023, when the price was still $25,000. In previous bear markets, the MVRV fell below 1, meaning that investors were, on average, sitting on losses. If that were to happen again, the price would fall below $54,000.
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Crypto works where banks fail
Crypto is often associated with speculation, quick profits, and wild price movements. But sometimes it appears in places where returns are irrelevant, like in Afghanistan and Syria, where blockchain technology is used to distribute humanitarian aid.
This week, the New York Times described how an Afghan start-up, HesabPay, uses cryptocurrencies to deliver emergency aid directly to people who have little or no access to the banking system due to war and sanctions. In Syria, where cash is scarce and international transfers are expensive or impossible, farmers and families receive aid via a simple payment card. The underlying infrastructure runs on crypto.
HesabPay started as a local initiative but quickly grew into a platform that is now used by large aid organizations. The UN Refugee Agency supports more than 80,000 Afghan families through the system and has paid out almost 25 million dollars since the beginning of 2025. Over 650,000 wallets have been created in Afghanistan, around 50,000 of which are actively used. Approximately 60 million dollars flows through the system each month, largely in stablecoins.
Afghanistan has a repressive government and a weak financial system. Precisely that combination makes alternatives attractive. International banks barely operate in the country, sanctions block payment flows, and cash is difficult to obtain. Blockchain networks offer something traditional systems cannot: direct payments that are low-cost and fully traceable.
That transparency is crucial for aid organizations. Donors want to know where their money goes and how it is spent. HesabPay offers real-time insight into transactions and can automatically flag suspicious patterns. This reduces the risk of fraud and makes accountability easier than with cash or informal networks. In fragile states, that is a rare advantage.
There are, however, risks. Local stablecoins depend on trust in the underlying currency, and digital assets can, theoretically, be frozen. Crypto is not a perfect solution, but it is a practical one. In environments where banks fall away and cash fails, it simply works better than the alternatives.
The story of Afghanistan fits into a broader trend. Crypto has been used for years in countries with capital restrictions, unstable currencies, or political pressure. Precisely where the existing system breaks down, the technology truly comes into its own.
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In other news
- Fidelity launches its own dollar stablecoin on Ethereum. The asset manager will begin issuing the Fidelity Digital Dollar (FIDD) in early February. The coin has been designed in full compliance with the recently adopted American stablecoin law. Fidelity is targeting both institutional and private users. Institutions are expected to be attracted with the prospect of instant transaction settlement, while retail users are offered the convenience of frictionless, everyday payments.
- Bitcoin miners help Texas through the winter. A severe winter storm caused power outages in large parts of the US this week. To ease pressure on the grid, Bitcoin miners temporarily scaled back their electricity consumption. This was visible on the network: the hashrate dropped, and block production slowed slightly. Analysts see this not as a sign of weakness, but of maturity: miners are increasingly functioning as flexible consumers who scale down during peak demand and ramp up again later.
- Trump nominates Kevin Warsh as new Federal Chair. Widely seen as the successor to Jerome Powell, Warsh is known as a proponent of tight monetary policy and central balance-sheet reduction at the central bank; hardly the ideal climate for risky assets. At the same time, Warsh is not hostile to crypto: he has invested in crypto companies, calls Bitcoin ānew, cool software,ā and sees its growth as a signal of monetary failure. Expect no Bitcoin cheerleader, but also no crusade.
- The DAO returns with $220 million for Ethereum's continued development. The treasury consists of approximately 75,000 unclaimed Ether from the 2016 DAO hack. These funds will not be liquidated, but activated: staking proceeds will be used to pay developers and researchers working on the security of the Ethereum network. Vitalik Buterin is part of a six-person group that manages TheDAO Security Fund.
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Satoshi Radio: A special anniversary episode of Satoshi Radio reflects on the milestone of four hundred episodes. The news section focuses on the political influence of the crypto lobby on the upcoming US midterms. Stablecoins are a key issue there: initiatives from parties like Tether and BlackRock are discussed. Finally, as always, you get a market update: where is the bitcoin price headed?
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.