Crypto Markets Are Down Bad. Are DATs to Blame? - Bits + Bips
Watch on YouTube ↗  |  February 04, 2026 at 18:15 UTC  |  1:00:21  |  Unchained (Chopping Block)
Speakers
Austin — Host / Moderator
Chris — Regulatory & Market Structure Expert (Likely Chris Giancarlo contextually)
Cosmo Jiang — Portfolio Manager at Pantera Capital / Director at HSDT

Summary

  • Market Context (Feb 2026): The discussion takes place in early 2026, referencing a major market crash on "10/10" (October 10, 2025) that was larger than the FTX collapse. Bitcoin has been red for four months.
  • Macro/Regulatory Shift: The nomination of Kevin Warsh (Fed) and Scott Bessent (Treasury) signals a shift toward a smaller Fed and a Treasury-led "export stablecoins" policy. This is viewed as a massive tailwind for US Dollar dominance via crypto rails.
  • The Rise of "Internet Capital Markets": A key structural shift is occurring where price discovery for traditional assets (Gold/Silver) is moving to DeFi platforms (Hyperliquid) because they trade 24/7, unlike the CME which closes on weekends.
  • DAT (Digital Asset Trust) Dislocation: Many DATs are trading at massive discounts to Net Asset Value (NAV) (e.g., 0.5x). The speakers predict a wave of shareholder activism, M&A, and arbitrage trading to close these gaps.
Trade Ideas
Ticker Direction Speaker Thesis Time
LONG Austin Campbell
Founder, Zero Knowledge Group; Co-host Bits+Bips (Unchained); Adj. Prof. NYU Stern
"Clearly, the price discovery is actually happening on internet capital markets now... Hyperliquid volumes on silver and gold are exploding." Traditional finance (CME) raised margins on Gold/Silver and closed on weekends during a volatility spike. Traders migrated to Hyperliquid (DeFi) to manage risk 24/7. This proves "product market fit" for DeFi derivatives over TradFi rails. LONG. Platforms facilitating permissionless, 24/7 trading of real-world assets (RWA) are stealing market share from legacy exchanges. Regulatory crackdown on DeFi derivatives; smart contract risk.
LONG Austin Campbell
Founder, Zero Knowledge Group; Co-host Bits+Bips (Unchained); Adj. Prof. NYU Stern
"Micros Bitcoin would have to hit 11K and stay there for three years straight for Micro Strategy to go bust." Critics arguing MSTR is insolvent don't understand the balance sheet (debt is termed out to 2027+). While DATs are distressed, MSTR acts as an operating company that can acquire distressed assets or simply wait out the volatility without forced selling. WATCH/LONG. The bankruptcy thesis is flawed; MSTR remains a levered bet on the eventual recovery. Bitcoin dropping below $11k for an extended period (highly unlikely but possible).
SOL /BTC
LONG Chris Giancarlo
Former CFTC Chairman
"It does feel to me like the market is bottoming... prices are a lot lower... risk reward looks better." The "10/10" crash flushed out leverage and retail tourists. Sentiment is at rock bottom ("Bitcoin's obituary"). Historically, when retail leaves and institutions/regulators (Warsh/Bessent) step in with favorable policy, it marks the cyclical bottom. LONG. "Just wait" is the strategy. The flush is complete, and the regulatory setup is the best it has ever been. A second leg down if the "10/10" structural damage (bad debt) isn't fully resolved. 42:20
LONG Cosmo Jiang
Portfolio Manager at Pantera Capital / Director at HSDT
"If there's a debt [DAT] trading at 0.5, you can get it back to 0.7 that's a 40% gain... shareholders are going to look out for what's best for shareholders." Digital Asset Trusts (like Grayscale products or similar closed-end funds) are trading at deep discounts to the crypto they hold. Two catalysts will close this gap: 1) Activist investors forcing liquidations/buybacks, and 2) M&A where strong DATs buy weak ones to acquire assets cheaply. LONG. Buying $1 of assets for $0.50 offers a safety margin even if crypto prices remain flat. Management teams refusing to capitulate; prolonged "crypto winter" widening discounts further. 46:47
LONG Austin Campbell
Founder, Zero Knowledge Group; Co-host Bits+Bips (Unchained); Adj. Prof. NYU Stern
"Your bank benefits more than anybody else in the world from stable coins because of your rates, franchise, and repo trading desk." The new administration (Bessent at Treasury) wants to export stablecoins. Stablecoins are backed by bank deposits and reverse repo. Therefore, large US banks (specifically JPM) will see massive deposit inflows and fee generation if they embrace the stablecoin ecosystem rather than fight it. LONG. Banks are the ultimate beneficiaries of stablecoin regulation (Clarity Act). Banks continuing to lobby against stablecoins due to misunderstanding the mechanics; strict capital requirements not being lifted. 26:18