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Takaichi's landslide puts Japan's crypto push back in focus |
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Key points: |
Prime Minister Sanae Takaichi's election blowout delivered a two thirds supermajority, strengthening the government's ability to advance proposed crypto tax changes and Web3-related reforms. Japan's equity markets reacted sharply, while Bitcoin continued to move in line with broader risk conditions tied to global liquidity.
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News - Japan's ruling coalition secured a decisive win in the February 8 lower house election, with projections placing the Liberal Democrat Party-led bloc at 274 to 326 seats out of 465. The result handed the new administration a two thirds supermajority, giving it wide latitude to pursue an expansionary agenda that includes a $135 billion stimulus package alongside regulatory initiatives. |
Markets responded quickly. The Nikkei 225 rose 3.4%, breaking above 57,000 for the first time, while the yen weakened toward 157 per dollar before stabilizing amid intervention talk. Bitcoin also reacted during Asia trading hours, briefly climbing to $72,000 before pulling back and settling above $70,000, even as volatility across asset classes remained elevated. |
Tax reform is back on the table - Takaichi's platform includes a proposed overhaul of Japan's crypto tax framework. Measures under discussion include cutting the current 55% tax on crypto gains to a flat 20%, allowing loss carryforwards, and reclassifying major cryptocurrencies as financial products. The agenda has also referenced the possibility of crypto ETFs by 2028, signaling a push toward clearer regulatory treatment for digital assets. |
Stablecoins are splitting into two lanes - Payment pilots are already underway. A trial at Tokyo's Haneda Airport is testing USD stablecoin payments through mid-February, targeting international travelers. |
In parallel, Japan's first licensed stablecoin issuer, JPYC, is promoting yen-backed adoption through a January 20 memorandum to explore integration with LINE and a February 4 alliance with Asteria to connect stablecoin flows to accounting and payment software. JPYC received its license in August 2025, launched in October, and has issued more than ¥1 billion in tokens. |
Banks want in, but privacy concerns shape the rails - Japan's megabanks have outlined plans to explore a joint stablecoin project, while Japan's fifth-largest commercial bank, Resona, and Japanese credit card company JCB are targeting retail pilots with a practical rollout goal of 2027. |
At the same time, institutions remain cautious about public blockchain transparency under Japan's data protection framework, increasing interest in selective disclosure approaches for real-world deployments. |
U.S. Treasury Secretary Scott Bessent and President Donald Trump publicly congratulated Takaichi following the vote. Even so, analysts note Bitcoin's near-term direction remains closely tied to risk appetite, with portfolio rebalancing, weaker U.S. equities, and derivatives de-leveraging continuing to shape price action. |
Miner cuts exposure, treasuries buy as Bitcoin tests conviction |
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Key points: |
Bitcoin miner Cango cut exposure and sold reserves to reduce leverage and fund its planned shift into AI infrastructure as mining economics tightened. At the same time, Strategy and Binance added Bitcoin during market weakness, highlighting diverging responses to the downturn.
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News - Bitcoin's recent drawdown has highlighted contrasting approaches across the crypto sector. While one miner moved to shore up its balance sheet, some large holders continued to add exposure through the volatility. |
Bitcoin miner Cango sold 4,451 BTC over the weekend, raising roughly $305 million in proceeds. The company said the sale followed a review of current market conditions and was used to partially repay a Bitcoin-collateralized loan and reduce leverage. |
Cango now plans to redirect capital toward artificial intelligence (AI) and high-performance computing, deploying modular GPU units across more than 40 global sites to serve small and mid-sized businesses needing on-demand AI inference. |
The move comes as mining economics remain under pressure following the halving. Hashprice has fallen to multi-year lows while network difficulty sits near record highs, leaving many miners operating close to breakeven. Some firms have responded by reallocating power capacity and data center infrastructure toward AI workloads, a strategy analysts say carries meaningful execution and monetization risks. |
Accumulators step in during weakness - Elsewhere, some large Bitcoin holders added to positions during the pullback. |
Strategy disclosed the purchase of 1,142 BTC for $90 million last week at an average price near $78,800, bringing its total holdings to 714,644 BTC. The timing meant the firm missed Bitcoin's brief dip to around $60,000, with Bitcoin trading below $78,815 for much of the week and failing to reclaim the $72,000 level during that period. |
Binance has also been buying into the dip. The exchange added another 4,225 BTC worth roughly $300 million to its Secure Asset Fund for Users (SAFU), lifting the fund's Bitcoin holdings to more than $720 million. Binance has said it plans to convert the full $1 billion reserve into Bitcoin through phased purchases, even as investor sentiment remains fragile and short positioning continues to build. |
Together, the moves underscore a market adjusting under stress. Cango reduced exposure to preserve flexibility, while Strategy and Binance continued to build positions, reflecting sharply different priorities during the downturn. |
Hyperliquid backlash grows as critics, data, and price action collide |
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Key points: |
Kyle Samani's public attack on Hyperliquid triggered a wider debate around decentralization, governance, and motive, drawing pushback from traders and industry figures. Despite the controversy, Hyperliquid's market activity metrics, token performance, and institutional integrations have remained resilient.
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News - Crypto discourse around Hyperliquid intensified after Multicoin Capital co-founder Kyle Samani labeled the platform "everything wrong with crypto" in a post on X. Samani criticized Hyperliquid's closed-source architecture, permissioned validator design, and governance structure, arguing they run counter to crypto's decentralization ethos. |
The timing of the remarks raised eyebrows. Samani had stepped away from Multicoin shortly before the post, and on-chain data showed wallets linked to the firm accumulating more than $40 million worth of HYPE around the same period. While Samani distanced himself from those purchases, the overlap fueled speculation across Crypto Twitter. |
Community pushback and public challenges - The criticism drew swift responses. Ethereum educator Anthony Sassano accused Samani of selective standards, suggesting the attack stemmed from personal or portfolio-related grievances. |
Trader Cobie dismissed the remarks as "clownish behavior," while Arthur Hayes escalated the feud by proposing a $100,000 charity wager tied to HYPE's performance against any major altcoin through July 31, 2026. Samani has not publicly responded yet. |
Data scrutiny shifts the debate - At the same time, analytics firm Coinglass published a snapshot comparing perpetual DEX activity across Hyperliquid, Aster, and Lighter. |
Hyperliquid posted roughly $3.76 billion in volume, $4.05 billion in open interest, and $122.96 million in liquidations. Coinglass argued the internal consistency of these figures pointed to more credible trading activity than some rivals, though critics warned that conclusions drawn from a single-day snapshot can be misleading. |
Fundamentals hold as sentiment wavers - Away from social media, Hyperliquid's fundamentals have remained firm. The platform has generated more than $960 million in revenue and recently cut its monthly token unlock by 88%, sharply reducing sell-side pressure. Its HYPE token has climbed over 40% in the past two weeks despite broader market weakness. |
Ripple's decision to integrate Hyperliquid into its institutional prime brokerage platform added further momentum, even as prediction market odds for near-term upside softened. |
Together, the episode highlights a familiar crypto tension: loud ideological disputes unfolding alongside sustained trading activity, measurable derivatives volume, and growing institutional relevance. |
CoinShares downplays quantum fears, urges caution on Bitcoin changes |
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Key points: |
CoinShares argues quantum computing poses a long-term risk to Bitcoin, with only a tiny fraction of supply realistically vulnerable in the foreseeable future. Researchers warn that premature protocol changes could create more harm than protection, risking Bitcoin's neutrality and stability.
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News - Fears that quantum computing could soon undermine Bitcoin's cryptography are resurfacing, but new analysis from CoinShares suggests those fears remain overstated. In a recent report, the digital asset manager framed quantum risk as a distant engineering challenge rather than an imminent threat, arguing Bitcoin has ample time to adapt. |
According to CoinShares, Bitcoin's exposure is far narrower than often assumed. While roughly 1.6 million BTC, or about 8% of supply, sit in legacy Pay-to-Public-Key addresses where public keys are already visible, the number of coins that could realistically be targeted at scale is much smaller. |
The firm estimates that only around 10,000 BTC are concentrated enough for a quantum attack to cause meaningful market disruption, representing less than 0.1% of total supply. |
Most of the remaining potentially exposed Bitcoin is spread across more than 32,000 UTXOs, typically holding around 50 BTC each. CoinShares argues that even under highly optimistic assumptions, breaking these wallets one by one would be operationally slow and impractical for an attacker. |
Why the timeline matters - At the core of the debate is feasibility. CoinShares' research lead Christopher Bendiksen explained that breaking Bitcoin's elliptic-curve cryptography using Shor's algorithm would require quantum computers with millions of stable, fault-tolerant qubits, far beyond today's machines. |
The most advanced publicly known systems, such as Google's Willow, operate at just over 100 qubits, placing credible attack scenarios at least a decade away. |
Short-term attacks, such as exploiting unconfirmed transactions, would require near-instant computation, which researchers describe as infeasible outside very long time horizons. |
Change carries its own risks - While post-quantum cryptography is advancing, CoinShares cautioned against rushed or forced upgrades. Abrupt protocol changes could introduce software vulnerabilities, weaken decentralization, or rely on cryptographic schemes that have not yet faced real adversarial testing. Preserving Bitcoin's immutability and neutrality, the firm argued, may matter more than reacting early to a distant threat. |
Not all investors agree. Some institutions have begun factoring quantum risk into allocation decisions, while developers across Bitcoin and other networks continue early-stage preparation. Even so, CoinShares maintains that quantum computing remains a future problem, one best addressed through gradual, voluntary transitions rather than urgency-driven overhauls. |
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More stories from the crypto ecosystem |
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Did you know? |
Bitcoin ownership is widespread but extremely fractional: More than 106 million people worldwide now own Bitcoin, yet fewer than 1 million of those holders possess an entire BTC, highlighting broad participation but concentrated full-coin ownership. China reaffirmed its crypto ban while eyeing tokenization use cases: Despite maintaining a strict ban on crypto trading and issuance, China's central bank and related agencies now plan stricter vetting for tokens backed by onshore assets, signaling an unusual regulatory stance that tightens ban enforcement and acknowledges tokenization's potential. ETF money flipped hard, fast: U.S. spot Bitcoin ETFs logged a $561.8M net inflow on February 2, 2026, marking the biggest single-day intake since January 14, based on Farside's daily flow tracker.
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Top 3 coins of the day |
Axie Infinity (AXS) |
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Key points: |
AXS was last seen trading at $1.46, after recording a strong daily rebound from its recent pullback zone. Trading activity surged during the recovery attempt, while the Supertrend remains overhead, signaling that trend confirmation is still pending.
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What you should know: |
AXS posted a sharp rebound after stabilizing near the $1.20 to $1.30 support zone, following a steep corrective move from its January peak close to $2.90. The recent recovery candle suggested renewed buying interest after sellers lost momentum during the pullback phase. |
This move coincided with a notable spike in trading volume, pointing to concentrated speculative interest rather than a low-liquidity bounce. Volume expanded alongside the rebound, indicating that fresh capital entered the market as price defended its short-term base. However, overall participation remains below the levels seen during the earlier breakout. |
From an indicator standpoint, the Supertrend stays above price near the $1.70 to $1.80 region, keeping the broader trend bias cautious for now. Meanwhile, the Elliott Wave Oscillator has slipped back into negative territory, reflecting cooling momentum after the prior impulsive rally. |
For continuation, AXS needs to reclaim the $1.70 to $1.80 zone. Failure to hold above $1.20 keeps downside risk toward recent consolidation levels intact. |
World Liberty Financial (WLFI) |
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Key points: |
WLFI traded around $0.108 after rebounding from a sharp sell-off that briefly pushed price below the $0.10 mark. The recovery unfolded alongside elevated trading volume, while Bollinger Bands and Squeeze Momentum continued to reflect downside pressure.
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What you should know: |
WLFI attempted a short-term recovery after a steep decline from the $0.16 region, with price stabilizing just above the $0.10 psychological level. The bounce followed an aggressive downside move that saw candles stretch below the lower Bollinger Band, highlighting a burst of volatility rather than orderly selling. |
As price moved back inside the Bollinger Bands, the action pointed toward mean reversion instead of a confirmed trend shift. The middle band near the $0.14 to $0.15 zone now stands as a key area of overhead resistance, where prior advances stalled. |
Momentum conditions remained cautious. The Squeeze Momentum Indicator stayed in negative territory, signaling that bearish pressure has not fully eased despite the rebound. On the participation side, trading volume spiked sharply during the sell-off and stayed elevated during the bounce, suggesting liquidity-driven positioning rather than a news-led move. |
Holding above $0.10 is critical. A sustained push beyond $0.12 is needed to ease near-term downside risk. |
Monero (XMR) |
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Key points: |
XMR hovered near $327 after rebounding from a sharp breakdown that dragged price toward the $300 region. Buying interest surfaced alongside a volume pickup, though Supertrend and DMI still pointed to prevailing bearish control.
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What you should know: |
XMR staged a reactive bounce after a steep decline from the $420 to $460 area, with price briefly dipping into the $300 zone before buyers stepped in. The latest daily candle formed after a long downside move, suggesting that selling pressure eased as price approached a well-defended support pocket. |
This rebound was accompanied by a visible increase in trading volume, signaling dip-buying activity rather than a low-liquidity fluctuation. However, the broader structure remains cautious. The Supertrend has stayed above price since the breakdown, indicating that the dominant trend has not shifted yet. |
Directional Movement Index readings continued to favor sellers, with -DI holding above +DI, even as ADX began to cool from elevated levels. This combination suggested that downside momentum weakened but did not reverse. |
For now, $300 to $310 remains key support. Overhead, the $360 to $380 zone is the first area where sellers may re-emerge. |
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