Crypto Market Sees $2B in Liquidations

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Good Morning.

Markets got a harsh reminder that macro still rules all, as Trump’s tariff announcement triggered $2B in liquidations, wiping out overleveraged longs faster than a rug pull. Bitcoin and altcoins took a beating, with investors now bracing for potential inflation-driven rate hikes. Meanwhile, Kraken’s $1.5B revenue and Tether’s $13B profit prove that CEXs and stablecoins remain crypto’s cash cows.

In Today's Email:

• What Matters: Crypto Market Sees $2B in Liquidations 💸 

• Product: Uniswap V4 Goes Live 🦄 

• Charts: Tether’s $13B Profit & Kraken’s $1.5B Revenue 💰️ 

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WHAT MATTERS

Crypto Market Sees $2B in Liquidations as Trump Tariffs Spark Sell-Off

State of play: The crypto market saw $2B in liquidations in 24 hours after US President Trump announced new tariffs on imports from Canada, Mexico, and China—surpassing liquidations from both the COVID crash and FTX implosion.

• According to Coinglass, 450,000+ traders were liquidated in the past day.

• Investors fear the tariffs could drive inflation higher, prompting the Federal Reserve to maintain elevated interest rates.

• Bitcoin dropped 7.5% to $91,969, while Ether plunged 20.1% to $2,510.

• Altcoins suffered steeper losses, with XRP falling 28.2% and Dogecoin down 26.9%.

• Analysts suggest that macroeconomic concerns are weakening the bullish sentiment in crypto, leading to further volatility.

What’s next: If tariffs lead to prolonged inflationary pressures, risk assets like crypto could face extended downturns. However, any dovish shift in monetary policy or pro-crypto developments from the Trump administration could reignite bullish momentum.

For builders and investors: Those with long-term conviction might find buying opportunities in oversold assets, but short-term traders should prepare for heightened volatility.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

PRODUCT OF THE WEEK

Uniswap V4 Goes Live, Unlocking Customizable Liquidity and Lower Fees

Uniswap V4 has officially launched, transforming the protocol into a developer platform with hooks, enabling deeper liquidity, improved swaps, and customizable trading mechanics.

• The upgrade also introduces a singleton liquidity architecture, reducing gas fees and enhancing efficiency.

• Liquidity provision is live, with swaps rolling out across web and wallet platforms over the next few days.

• One of the most innovative projects leveraging Uniswap V4 is Flaunch, which reimagines liquidity provision and token launches.

• Flaunch introduces an internal swap pool (ISP) that reduces sell pressure and improves execution prices by paying LPs in ETH rather than the token being traded.

• Additionally, Flaunch utilizes Uniswap V4 hooks to lend liquidity on Aave, generating yield and returning 100% of fees to users.

Other cool products:

• Bunni, a DEX built on Uniswap v4.

• Pearl Diver Island, a new on-chain game.

• Venice, a privacy-focused, permissionless AI platform.

• Jar Protocol, a investment protocol on the BNB Smart Chain.

• Ekubo, Ekubo Protocol is an AMM with a singleton architecture.

CHARTS OF THE WEEK

Kraken Sees $1.5B Revenue in 2024

State of play: Kraken reported $1.5B in revenue for 2024, more than doubling its 2023 earnings, according to CEO Dave Ripley.

• The exchange remains profitable and saw significant growth, holding $42.8B in assets, reaching 2.5M funded accounts, and facilitating $665B in volume.

• Co-CEO Arjun Sethi highlighted Kraken’s 40% global stable-fiat volume market share among major CEXs. Arjun is attributing the growth to deep liquidity pools and strong product execution.

• In January 2025, Kraken recorded $49.2B in spot trading volume.

Our take: Kraken’s $1.5B revenue in 2024, doubling 2023 earnings, underscores a key trend: CEXs remain amongst crypto’s most profitable business.

Tether Reports $13B Profit in 2024

State of play: Tether reported $13B in net profits for 2024, including $6B in Q4, according to its latest attestation reviewed by BDO.

• The company’s U.S. Treasury exposure hit a record $113B, while its excess reserves grew 36% to surpass $7B.

• Tether issued $23B in USDT in Q4, bringing the total for the year to $45B.

• CEO Paolo Ardoino hinted at expansion into AI, telecommunications, and education.

• Despite its financial strength, Tether continues to face scrutiny over reserve backing and regulatory concerns.

• USDT recorded $55.5B in 24-hour trading volume on January 31.

Our Take: With $55.5B in daily volume, Tether’s role in crypto liquidity is firm. Expansion into AI and telecom signals diversification, yet raises focus concerns

QUICK BITES

• 21Shares files for Polkadot ETF in the US.

• Trump-imposed tariffs to begin Tuesday.

• Tether posts massive $13B profit for 2024.

• Crypto sees over $1.7B liquidated in past day.

• Raydium overtakes Uniswap in monthly DEX volume.

• US spot Bitcoin ETFs saw net inflows surpass $5B in January.

• MicroStrategy raising $584M in stock sale to boost Bitcoin stash.

• South Korea’s Bitcoin 'kimchi premium' soars to 10-month high.

• Uniswap V4 goes live, with swaps rolling out across the next few days.

• VC Investments in crypto surged 63% in January 2025, reaching $1.2B.

NOTEWORTHY READS & MEME

• Coinmetrics’s read on Bitcoin ETFs, One Year Later.

• Crypto Gideon’s read on Big AI catalyst CT is ignoring - dTAO.

• Delphi Digital’s read on Market Musings - New Year, More Volatility.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.