The Core Thesis: Price Lagging Fundamentals
We are in a period where price is lagging fundamentals. This is a recurring pattern in markets, and it has clear historical precedents. Nvidia was rangebound for several years before it had a parabolic move. The memory stocks were rangebound for roughly two years before they exploded. The lesson is consistent: when fundamentals are compounding, price often does not follow immediately — but eventually it catches up, sometimes violently.
JP Morgan Backs the Crypto Clarity Act
A major piece of news arrived: JP Morgan has publicly backed the Crypto Clarity Act. In a statement released on their website titled "Getting the Framework Right for Digital Assets in the United States," authored by Umar and Peter — the global head of JP Morgan Payments and the CEO of digital assets and blockchain solutions — the bank laid out a strongly favorable view of the technology.
They wrote that the promise is clear: tokenization and programmable money can reduce friction in payments, shorten settlement cycles, and unlock efficiencies that benefit businesses and consumers alike. These technologies, they argued, have the potential to modernize financial infrastructure in meaningful ways, particularly as commerce and investment become more global and operate around the clock.
This is a significant endorsement from one of the world's largest banks. It suggests the Clarity Act might still get passed before the midterms.
MicroStrategy's New Capital Framework
There was also a major development for Bitcoin's biggest corporate holder. Michael Saylor's company, Strategy (MSTR), announced a new "digital credit capital framework" — a new plan for managing its capital structure. Under this plan, the company will be selling Bitcoin from time to time, increasing its USD cash reserves, and conducting buybacks.
The market reacted favorably to this announcement. MSTR's response indicated that the market likes the move, as it provides more certainty for both MSTR and Bitcoin in the short term.
Bitcoin's Price Action and the Critical 60K Level
Despite these positive developments, Bitcoin's price was barely up, just eking over $60,000. The price looks heavy, and much of the crypto market appears to be waiting for it to dump to a lower level somewhere in the low 50s range. If Bitcoin loses 60K, the next major area of interest would be around $49,000.
But if Bitcoin holds 60K and that level turns out to be the bottom, the upside is substantial. If Bitcoin merely repeats half of the gains it achieved from 2022 to 2025, its cycle high in a few years could reach $240,000. This makes the 60K level hugely important.
Why 60K Is Such a Pivotal Level
The significance of the 60K level was articulated in detail. Never in Bitcoin's history has it traded beneath the all-time high from a previous cycle for more than about a week. The previous cycle's all-time high was from 2021 — Bitcoin hit 58.6K in February, peaked a little above it in April at around 64K, sold off, and then retested that same area later in 2021. That level, which was previously resistance, is the support level being retested now.
The 60K zone represents a confluence of many factors:
- It was the main support level held in 2024.
- It was a key support level right before the Trump inauguration, during the runup driven by all the ETF buying.
- It was the low from February of this year.
- It coincides with the 200-week moving average, which Bitcoin is sitting right at.
For all these reasons, the 58 to 60 zone is a really significant support level. A large amount of the bearishness stems from concerns around Saylor. However, the key insight is that he is not going to need to sell the roughly $55 billion in Bitcoin he currently holds right now. The company has about $1 billion to $1.1 billion in cash, which is what they will use to pay out the preferred "stretch" shares to investors. The potential "reckoning" — the moment he might need to sell — does not happen until around six months out.
A great deal of the panic and fear around Saylor needing to sell has already been pulled forward, because people are derisking and selling their own Bitcoin right now in anticipation of that event. If there is a confluence of heavy market selling and forced selling into this key support level, and the level holds — especially heading into Q3, the start of a new quarter — it represents a good spot to be long with a fairly tight invalidation.
ETF Capitulation and Long-Term Holder Accumulation
If you bought Bitcoin via ETF over the last two years, the vast majority of holders are now "puking" — capitulating and selling. It amounts to an utter ETF capitulation.
Yet for every seller there is a buyer. Despite quantum-computing fears and Saylor concerns, long-term Bitcoin holders are viewing these prices as value. Their holdings have recently reached an all-time high of nearly 17 million coins. With so many coins changing hands, this is precisely how bottoms are formed. A major signal occurs when supply-in-profit and supply-in-loss converge — historically this has always been a great time to dollar-cost average, and this time is expected to be no different. The bottom appears to be forming, just as it has time and again.
Additional bullish signals come from the RSI, which is recovering from the lowest level it has ever been, now showing bullish divergence. While the price capitulation may be happening now, it is very possible that over the next couple of months we will see a "time capitulation" instead — where price does not go much lower or much higher, simply riding the trend line. This is described as a major launchpad being formed for Bitcoin and particularly for Ethereum.
The Bull Case for Ethereum
Ethereum's fundamentals are getting stronger even if the price hasn't caught up yet. Ethereum cannot escape the fact that we are in a period where price lags fundamentals.
The fundamental improvements include:
- More real-world assets being tokenized on Ethereum. Most of the major funds and stocks being tokenized are tokenized on Ethereum because it is the most widely used blockchain.
- Major protocol upgrades. The Ethereum Foundation is now upgrading the network to make it quantum-proof and to add privacy — all the things that future-proof Ethereum.
The argument is that we already know what Wall Street is doing: they are tokenizing. If anyone questions whether we need decentralized blockchains in the future, the activity of Wall Street already answers it.
The Convergence of Crypto and AI
At the center of why one would want to be involved in crypto are two forces: the future of AI and Wall Street upgrading their tech stacks.
The AI argument is striking. AI engineers are realizing that downstream of the AI story is a need to prove identity and maintain decentralized control. As an example: it is probably not many years away before AI agents are producing income for us. They will become our delegated entities, earning income and accumulating wealth. AI agents might actually become wealthier than we are. At that point, we will start to question whether we work for the AI agent or the agent works for us.
If this all runs on a centralized system, you end up with "Skynet." That is why there will be a real focus on people relying on decentralized systems to protect humans against AI becoming too powerful. Unless we are fully comfortable trusting the future of AI and letting AI agents manage our wealth and our sovereignty, we will need decentralized blockchains. If we are comfortable handing control to a centralized "Skynet and Visa," then we don't need them — but if we care about that sovereignty, that is precisely why crypto will be extremely relevant.
Money Becoming Software
This has not been a summer of crypto; the price action has been terrible, frustrating, and disappointing. But in every drawdown, the focus should be on the opportunities. When crypto winter officially ends and crypto spring begins, Ethereum is positioned to be a central player in everything relevant in future financial services.
The whole industry is becoming a tech stack. Money is becoming software. When money is made into software and rendered composable, there is a transformation of the economy — and that is where Ethereum is expected to shine. Suddenly stocks can trade 24/7, but stocks still trade on factors, creating enormous opportunity.
To reinforce the "fundamentals compounding while price stagnates" theme, consider a personal example: working at JP Morgan for 15 years, the stock was largely around $17 for perhaps 13 of those 15 years. Where is JP Morgan now? Over $200. That is what it looks like when fundamentals compound but price doesn't follow — until it does.
The Setup for an Altcoin Season
Buying Ethereum today is comparable to buying Ethereum at COVID-crash levels. There is reason to believe that if we see strength in the second half of this year, altcoins could really take off — we could witness an altcoin season of sorts. Notably, nobody wants to talk about an altcoin season at this point, and that lack of attention might be the very reason it ends up happening.
The overall message is one of confident, contrarian optimism: the present moment of fear, capitulation, and disappointing price is exactly the kind of environment in which the foundation for the next major move is quietly laid.
