Our favorite crypto chaos wizard, Jerome Powell, momentarily turned Bitcoin into a pumpkin, sending it tumbling below $96K briefly. 

Wall Street also caught the spook. Ethereum dropped 14.1%, Dogecoin tumbled a brutal 25.2%, and Solana slid 15.2% in the last week. But amidst the carnage, Hyperliquid ($HYPE) skyrocketed 66.1%, Movement ($MOVE) climbed 34.5%, and Bitget Token ($BGB) rose 29.6%.

Sound familiar? That’s because Powell’s got us all living in a loop.

When J-Powell got-to-yapping yesterday, it wasn’t just to announce a 0.25% rate cut. He also announced the Fed had revised their plan of 3 rate cuts in 2025, down to 2 – and that their new targeted inflation rate would be 2.5% instead of 2.1%.

His comments imply loans/credit repayments will stay higher than previously expected in 2025 → encouraging folks to spend less, in an attempt to keep inflation down.

(And by raising their target inflation rate up to 2.5%, they’re subtly admitting they’re struggling to control it).

But here’s the thing – it’s all theatre. 

They might change their mind again in a few months (they often do).

The trick of it all is: simply by saying they’re making fewer rate cuts next year, they can get people selling assets, cooling down the market, and buying time to see if the data changes…

‘Cause everyone was already expecting a pause on cuts in January, and the Fed doesn’t meet in February – so by the time March’s meeting rolls around, the market could once again be ready for 3 cuts.

This week, we’re talking:

1. How Bitcoin steadies as Wall Street panics. The VIX hits a historic high, but Bitcoin starts breaking away from stock market chaos.

2. Big exchanges embrace Layer 2 solutions Kraken joins the list of CEXes launching Ethereum L2s.

3. Craig Wright dodges jail again The self-proclaimed creator of Bitcoin avoids another prison sentence.

🎢  Riding the VIX Wild Wave

The Volatility Index, better known as the VIX or Wall Street’s “fear gauge,” just threw one of its trademark tantrums—spiking to its second-highest level ever. 

Panic? Doesn’t feel like it, at least if you don’t go to bed every night staring at the VIX.

But for Bitcoin, it might mean opportunity.

📉 The VIX-Bitcoin Tango

Historically, when the VIX surges, investors flee to safer havens like cash, gold… and increasingly, Bitcoin. 

This wasn’t always the case, as $BTC was seen as a wildly volatile alternative asset historically. 

However, in today’s day and age, a rising VIX, signaling stock market chaos, often nudges Bitcoin into the spotlight as a non-traditional hedge. 

According to Bloomberg, Bitcoin’s correlation with the S&P 500 has recently hit a two-year low, hinting at a growing role as a portfolio stabilizer.

📊 Numbers and Nostalgia

Take October 2023: the VIX soared by 35%, fueled by geopolitical strife and inflation jitters. 

The last time we saw such a spike? Bitcoin rallied 20% over the following six months. 

Correlation or causation? Will history repeat itself? If nothing else, it’s another chapter in Bitcoin’s narrative as a volatility sponge for jittery investors.

What’s this mean for you? 

As we’re sure you’re familiar with, Bitcoin has its own mood swings. Whether the VIX calms down or continues its wild ride, we may see a near future where this Wall Street barometer might clue you in on Bitcoin’s next big move.

🌍 The Great CEXodus: Turning Centrals into Layered Pros

With Kraken’s launch of its own Layer-2, “ink”, it’s evident mainstream exchanges are trading the comfort of centralization for the unpredictability of Ethereum Layer 2s. 

Base (Coinbase), X Layer (OKX), and Ink (Kraken) aren’t hail marys—they’re calculated moves to future-proof their platforms and rake in those sweet transaction fees.

🤑 Why the Shift?

It’s all about scaling up without the suffocating grip of regulators. Layer 2 blockchains enable global access minus the legal drama, giving anyone the tools to launch decentralized apps, trade AI solutions, or mint meme-tokens. Every click, swap, or trade pours money into the coffers of these exchanges.

Case in point: Coinbase’s Base earned $82 million in its first year. That’s no pocket change, and OKX and Kraken clearly want a piece of the pie.

⚔️ The Double-Edged Sword

Layer 2s may seem like a paradise, but they come with challenges. Decentralization invites hackers, scam tokens, and chaotic projects. 

While the financial upside is immense, these exchanges risk eroding trust if they can’t control the wilder side of this ecosystem.

But then if they exert too much control on their L2 ecosystem projects, they defeat some of the purpose of decentralization. 

What’s this mean for you? 

The move toward Layer 2s feels inevitable. Each new ecosystem will see new opportunities. $BRETT, for example, is Base’s most popular memecoin and went up a staggering 12,814% this year. 

Why? Largely because it’s Base’s most popular memecoin, attaching itself to the narratives and growth that accompanied Base. 

As always in crypto: adapt or fade. “Buy the ticket, take the ride.”

This Week in Crypto is brought to you by Uphold.

Why are we rocking with Uphold?

Uphold has been around since 2014, hasn’t had any notable scandals, and it publishes its reserve status live.

New tokens often go live Uphold before the other large exchanges because it’s connected to over 28 underlying exchanges, including centralized, decentralized, layer-2s, and even roll-ups.

Its fees are middle of the road, it has a clean mobile app, and the customer service is top-notch.

psst check out our Uphold guide for a deeper dive!

🤔 What’s New at CoinCentral: Will Bitcoin Hit $250K?

IBitcoin at $250,000—a headline-grabbing prediction that seems like a moonshot to some and pure inevitability to others.

 Our latest deep dive explores what it would actually take for Bitcoin to hit this milestone, dissecting the economic, political, and institutional factors that could align to make it happen.

We talk halving (seems like so long ago, doesn’t it?), the institutional effect from BlackRock and Fidelity, Trump’s crypto-friendly presidency, and talk of the U.S. Bitcoin reserve.

It’s not all green candles and FOMO: macroeconomics remain Bitcoin’s wild card. Inflation needs to cool, interest rates must drop, and regulatory frameworks need to solidify for a $250K Bitcoin to emerge.

Is it realistic? Maybe. Is it exciting? Absolutely. 

Dive into our full article for the details, history, and scenarios that could propel Bitcoin to a quarter-million dollars.

Check it out here!

👤 Satoshi’s Shadow: Wright’s Judicial Jamboree

The “oh yeah, that guy” is back in This Week in Crypto for the first time in years.

Craig Wright, the man who swears he’s Bitcoin’s elusive creator, Satoshi Nakamoto, is back briefly in headlines—this time with a suspended sentence for contempt of court. 

A British judge recently ruled Wright in contempt for failing to cough up details about his alleged crypto cache. The man has spent years chasing lawsuits to prove he’s the brain behind BTC. 

But, spoiler alert, no one’s buying it— at least not the crypto community, not the courts, not even those sketchy YouTube ads promising “guaranteed crypto riches.” 

Here’s the thing: this isn’t just courtroom cosplay. If Wright ignores the judge’s orders again, his next monologue might be delivered from a prison cell. 

So far, his track record of defiance suggests he’s walking a fine line—call it a suspended sentence tightrope act.

What’s this mean for you? 

If we’re being honest, nothing really. If anything it’s another interesting footnote in the media obsession of finding out who is the real Satoshi Nakamoto. 

We’ll see you next week!

AM

DISCLAIMER: This newsletter is provided for educational purposes only and does not constitute financial advice. The content herein is not an investment recommendation or a solicitation to buy or sell any financial instruments or assets. Readers are advised to conduct their own research and exercise caution in making any financial decisions.