New York morning trade.
We're looking at Bitcoin up nearly 4% while he is rallying by 6%, but we have to keep in mind where we are.
Bitcoin is wrestling with its most violent drawdown since 2024, plummeting 32% from the $90,000 handle to lows below 63,000 while we saw a tentative and brief recovery to the $70,000 level.
The underlying plumbing tells a more defensive story.
Stablecoin dominance has spiked to levels we haven't touched since the FTX collapse.
So joining me this morning to weigh in on where we are is Adam Morgan McCarthy, senior research analyst at.
Well Adam, great to have you back.
Thank you so much for joining us.
So let's talk Bitcoin in 2026.
We've seen quite the collapse from a peak above the 126,000 level last year.
So where are we right now and what do you expect to see?
Yeah, I think, um, thanks for having me, Remy.
It's good to be here.
I wish the market was in a better place, but, uh, you know, I think this is kind of the midway point of a bear market potentially in in crypto right now.
We saw the prices break down in mid-October with the kind of flash crash which was led by some structural market issues, but more broadly it was just, you know, happenstance that there was a kind of liquidity event on a Friday evening where there was a lot of activity in crypto which kind of Pull back the the sheet on crypto and reminded people that it is kind of fragile.
These are it is prone to these crashes and that, you know, despite maturing with ETFs and everything else that's happened over the last few years, there's still a high risk there.
Um, so what we've seen in the months since, I think it's been that grind lower.
There's been a lot of kind of uncertainty, and we've had sort of, you know, pausing on rates as well more recently, which hasn't helped, but I think the kind of drastic dip that we've seen since the start of the year is primarily led by, you know, this downturn in volumes and activity as we show here on the screen.
You know, liquidity is the key thing in crypto, and it's narrative driven.
Bitcoin had the kind of narrative of the ETF this time two years ago, and that was kind of, you know, 6 months into it already.
So we're looking at it, we're probably nearly 33 years on from that ETF-driven narrative which started around June 2024, 2023.
So that's run out of steam, and when the narrative hype cycle like this runs out of steam and the liquidity dries up, it's prone to turn it into downturns like this.
Adam, while I have you here, I do want to ask you about prediction markets, especially on the heels of last night's State of the Union address here in the US, but prediction markets yesterday priced the State of the Union in real time, but with the vast majority of trades under $100 do you think these platforms offer a tradable macro signal or just high speed retail sentiment?
Yeah, I think that these more high speed retail sentiment, you said it yourself there, most of the trades are under $100.
We looked at the data and I think, you know, 75% of all trades on these platforms are less than $100.
You know, they're probably just replacing kind of phone polls, like, you know, with a bit more accuracy because there's money on the line.
We still have polling in the last few elections kind of really was way off from Brexit to the first US presidential election in 2016 with Donald Trump and more recently again.
Uh, I think that these are a bit more money on the line.
You can see sort of where people are betting.
Obviously there's some issues if they're not, you know, available in certain countries.
So how, you know, how valuable is the insight for, for US markets when polymarket wasn't available in the US in 24, 2024.
It is now though, so I guess it's becoming more of a kind of bellwether for things and might, like, you know, give a good kind of sentiment index, uh, but you know.
Institutional wise people with like, you know, higher risk tolerance.
I don't know how many of them are on there putting their money at risk, yeah.
And Adam, finally, before I let you go, we have a little over 60 seconds as we're approaching the opening bell.
We are looking at Circle shares rallying close to 20% this morning on the heels of its earnings report, but I do want to ask you about stable coin dominance.
So it is nearly the 11% mark that we saw during the 2022 crash.
So what's going on here?
I think a part of that has to do with, you know, Bitcoin being so volatile early on in these cycles, you tend to see some periods where people shift into Bitcoin with small bounces, um, but then, you know, by and large people move back into stables.
I think it's the safest place to be.
Rates are still high, so you're going to get a bit of yield, and it's kind of a good place to park your cash while the market's very uncertain like this.
And before I let you go, we are keeping a close eye on Bitcoin prices this morning and of course as we head into the rest of 2026.
So what are some price levels in terms of technical that you're watching.
I think we're looking at, you know, personally, uh, you know, we don't try to look at the price too much, you know, kind of reading the tea leaves, but I like to, I'm thinking, you know, if things get around the 55K mark again, 50K mark, that's when I might start, you know, changing my, change my view on the outlook.
I think we might kind of get near a bottom there, but I wouldn't like to call it too soon.
OK, Adam, always great talking to you.
Thank you so much for joining us.
Thank you so much for sharing your insights as well as perspective.
Thanks for having me.
