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It may not be a sea of green just yet, but Strategy’s taking advantage and buying up the dip.

This morning, per an SEC filing, Michael Saylor’s firm announced that it had acquired 130 BTC in the past week for roughly $10 million. 

It may not be enough to change sentiment right now, but it’s at least a positive start for a very institutional-focused week as our very own Digital Assets Summit gets underway in New York. 

Meanwhile:

• Bitcoin’s hanging around $83,000, up a smidge in the past day. ETH’s up 1.6% to $1,900. 

• The outflow streak from investment products is now the worst on record totaling $6.4 billion over the past five weeks, according to CoinShares data.

• DEX volume is up 1.5% in the past 24 hours to $5.4 billion, per Blockworks Research.

🏄 Riding the waves

Crypto markets have a natural tilt towards momentum investing — a fairly popular tactic in equities. But is it worth it? 

A recent Kaiko report delved into the subject, which I admittedly hadn’t really considered in crypto. But as the report points out: “Crypto markets, driven by sentiment and network effects, offer strong momentum opportunities. Network effects drive value by attracting more users, developers, miners, and investors, reinforcing growth and adoption.”

The team put together the Vinter Hashdex Risk Parity Momentum Index, which backs the Momentum Factor ETP offered by Hashdex. Kaiko’s Adam McCarthy noted that they distributed risk in this approach to prevent a single asset from weighing over 30%. 

Oh, and if you’re not so sure about this yet, keep in mind it’s been a few years of the team keeping an eye on this. 

While I’m not necessarily surprised by the sizable beat the index had over bitcoin last cycle, I am slightly surprised that the index was able to stay on top of bitcoin this cycle — especially as we watched the bull take off like it was participating in the Running of the Bulls. 

As of February, Bitcoin has the largest weighting which should come as no surprise. Then you have litecoin, XRP, and tron. 

Taking rebalancing into account here, litecoin is actually a big outperformer “benefiting from increased anticipation of a potential ETF approval, leading to a higher allocation.”

“Polkadot, which is preparing for a major 2025 upgrade aimed at enhancing scalability, flexibility, and developer accessibility, has also gained traction.”

Going back to the index’s performance: there is a question about the longevity of this strategy, especially in a market like the one we’re currently in where macro takes center stage even if there are plenty of reasons to be bullish on the industry. 

“In 2025, crypto-specific narratives, such as growing institutional adoption and a friendlier regulatory environment, could provide tailwinds for crypto momentum strategies, even as equity momentum shows signs of exhaustion,” McCarthy wrote.

The report notes that it was fairly successful in “identifying and capturing returns from emerging winners” instead of going with the flow and trying to keep up with trends. 

The “ability to rotate capital into promising opportunities, while maintaining diversification represents a dynamic approach to momentum investing in digital assets.”

What I’m personally curious about is how this strategy compares to a more fundamental-based strategy as that develops this cycle. 

Clearly, momentum’s paid off so far, but as the market matures I wonder if it’ll continue to be such an out-performer.  

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• Telegram CEO Pavel Durov was granted permission to temporarily leave France amid an investigation. His passport was returned so he could travel to Dubai. 

• North Korea’s Lazarus Group now owns more bitcoin than Bhutan or El Salvador after the group’s attack on Bybit, per Arkham data.

• OKX suspended its DEX aggregator after facing regulatory scrutiny in the EU over its potential use to launder funds during the Bybit attack.

🤝 Lend me a hand

Speaking of momentum…Empire’s Jason Yanowitz spoke to Carson Cook and James Roth of Membrane Labs for this week’s podcast. 

The three delved deep into what went wrong with crypto lending last cycle (shocker: a lot), and gave their thoughts on lending this cycle.

Putting the bad aside from the last cycle, Yanowitz asked if we could see something akin to the numbers that companies like Genesis were putting out (for example: half a billion in loan originations way back in the fourth quarter of 2021). 

Roth seemed to think so…as long as the markets behave.

“ I do think that, over time, you'll have more and more money coming in, more and more safety being provided to folks around how they lend … and more providers stepping in like custodians, etc,” he said. 

But what really made me perk up — and perhaps this is because I just wrote about it — was Cook’s response, which is that it’s a momentum-driven game in crypto and not a fundamentals game…yet.

 ”As soon as markets go in one direction, the demand for leverage and lending exacerbates those moves. So they're sort of the flywheel connects … As James was saying, if it gets going on the price movement side, you're going to see a lot … I think you could blow through those numbers,” Cook said. 

The biggest way to grow the lending and credit parts of the market is through custodians, Cook continued. That’s how you unlock “massive potential” and encourage folks to move out of qualified custody or their cold wallets into the market. 

We’re still early here and the medium to longer-term issue is not necessarily the markets (though they’ll always have an impact) but it goes back to a very familiar subject: regulatory clarity. 

Man, I can’t wait till I don’t have to write those two little words again. But for now, we still have the long haul ahead.

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On our minds: Institutions