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The Kobeissi Letter Profile picture
@KobeissiLetter
Feb 25 • 11 tweets • 4 min read • Read on X
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Did liquidity in crypto just dry up?

Crypto markets have now erased -$325 BILLION of market cap since Friday morning.

At 5:00 PM ET today, crypto lost -$100 billion in 1 HOUR without any major headlines.

What is happening with crypto? Let us explain.

(a thread) Image
Over the last 24 hours alone, we have seen ~$150 billion liquidated from the crypto market.

Selling has broadened with just about all crypto assets falling sharply.

Even the memecoin market appears to have lost a significant portion of its liquidity.

So, what's happening? Image
It appears to have all began with Solana which is now down -22% since Friday.

Amid the memecoin frenzy, Solana saw extreme relative strength.

However, as memecoins began to fade, Solana also began to fade.

For a while, selling in Solana was largely isolated from Bitcoin. Image
However, as the S&P 500 began selling off on Friday, Bitcoin joined the downward move.

As seen below, the drop in the S&P 500 came with an acceleration of selling in Bitcoin.

Now, Bitcoin is losing its relative strength after breaking below $98,000 support today. Image
It's rather strange that this comes hours after Citadel made a major pivot on their crypto stance.

Today, Bloomberg announced that $65 billion Citadel Securities is looking to become a liquidity provider for Bitcoin and crypto.

Markets took this as a "sell the news" event. Image
It also seems that the Bybit hack on February 21st has dampened sentiment in the market.

Arkham Intelligence has declared this hack the "largest financial heist in history."

The closest competitor is the theft from the Central Bank of Iraq, which lost $1B in March 2003. Image
In fact, the Bybit hack more than DOUBLED the 2nd largest hack in crypto history.

PolyNetwork's $611M hack in August 2021 was previous largest crypto hack.

Weakness seen in Ethereum has also put more pressure on broader crypto markets.

Hacks deteriorate confidence. Image
The technical picture also appears to have lost momentum.

However, this also does not mean that crypto markets are set for a prolonged bear market.

We have seen countless -10% pullbacks in Bitcoin over the course of this bull run.

Technical pullbacks are healthy. Image
And, to top it all off, Sam Bankman-Fried is back on X.

Amid the crypto crash, SBF returned to state he has "a lot of sympathy for government employees."

This comes as DOGE and Elon Musk prepare for more mass layoffs in the federal government. Image
Lastly, as volatility returns to equity markets, risky assets like Bitcoin are pulling back.

We saw historic levels of risk appetite in 2024 and heading into 2025.

A pullback in risk appetite means less liquidity for crypto markets.

This has certainly happened before. Image
Overall, there really isn't one specific factor pushing crypto lower right now.

Rather, its a combination of factors which have resulted in reduced liquidity.

Crypto markets need LIQUIDITY to thrive.

Follow us @KobeissiLetter for real time analysis as this develops. Image

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More from @KobeissiLetter

The Kobeissi Letter Profile picture
Sep 29
This is insane:

As the record run in gold accelerates, US gold reserves just exceeded $1 TRILLION for the first time in history.

The US now holds ~2.4 TIMES more gold than Germany, the 2nd-largest holder in the world.

What is gold telling us? Let us explain.

(a thread) Image
Today's move puts gold up +44% year-to-date.

This means gold is now up 3.5 TIMES more than the S&P 500 during one of its strongest bull runs ever.

Historically, gold falls when stocks rise as it's a "safe haven" asset.

However, the EXACT opposite situation is happening now. Image
In fact, gold is now on track to post its best year since 1979, when inflation in the US was above 11%.

Not even the 2020 Pandemic, 2008 Financial Crisis, or 2000 Dot-Com bubble saw gold post a 40%+ annual gain.

The move puts US gold holdings at ~$1.1 TRILLION. Image
Read 12 tweets
The Kobeissi Letter Profile picture
Sep 25
An affordability nightmare:

It would take a -38% drop in home prices OR a +60% JUMP in household income JUST for affordability to go back to 2019 levels.

You must now make ~$113,000/year to afford the MEDIAN home in the US.

Will housing ever be affordable again?

(a thread) Image
According to Fannie Mae calculations, affordability is at record lows for the US housing market.

Just for housing affordability to return to 2019 levels, mortgage rates would need to fall ~415 basis points.

The combination of inflation and higher rates has been catastrophic. Image
A big issue is that wage growth has significantly underperformed productivity.

Between 1948 and 2014, productivity rose ~240% while wages rose ~109%.

On top of this, home prices have risen at a much faster pace than wage growth over the last 5-10 years.

All as rates spiked. Image
Read 12 tweets
The Kobeissi Letter Profile picture
Sep 23
Crypto adoption is about to SURGE:

A new Bank of America survey shows 75% of investors have ZERO exposure to crypto.

Now, US lawmakers are requesting the SEC implements President Trump's Executive Order allowing 401(K)s to BUY crypto.

What's next? Let us explain.

(a thread) Image
Below is a letter that was sent by lawmakers to the SEC this week.

It asks the SEC to begin opening up 401(K) plans to crypto "swiftly."

This opens ~$10 TRILLION worth of capital, which is 2.5 TIMES the current market cap of crypto. Image
Image
On August 7th, Trump signed the below Executive Order.

This called for the "democratization of access to alternative assets," also known as crypto.

Prior to this, 401(K)s could only buy crypto ETFs and some stocks.

Now, Congress is calling for the SEC to implement the Order. Image
Read 11 tweets
The Kobeissi Letter Profile picture
Sep 22
What is happening in Argentina?

In 24 hours, Argentina's stock market COLLAPSED -10%, with the Argentine Peso now down -99% in 10 years.

Today, the Trump Administration offered a "lifeline" to Argentina, sending stocks surging +8%.

Can Argentina be saved?

(a thread) Image
Just 2 hours ago, US Treasury Secretary Bessent made this post:

He said "all options for stabilization are on the table" for Argentina.

This may include swap lines, direct currency purchases, and purchases of USD denominated government debt.

But, how did they end up here? Image
Immediately after Javier Milei became Argentina's President, inflation hit 300%+.

In late-2023, inflation in Argentina was above 25% PER MONTH.

At one point, a cup of coffee cost more by the time you finished drinking it.

It's now down to ~2% per month or ~34% YoY. Image
Read 13 tweets
The Kobeissi Letter Profile picture
Sep 21
Tariff revenue is SKYROCKETING:

The US is now collecting a record $350 BILLION in annualized tariff revenue.

This marks a +355% increase compared to 2024, all as the S&P 500 has added +$16 TRILLION since April 2025.

What's coming next? Let us explain.

(a thread) Image
Just to put this all in perspective:

The US is now collecting tariffs that are equal to 18% of household income taxes.

Prior to 2025, this percentage averaged ~4% and has not crossed above 10% in 80+ years.

Not even Trump Trade War 1.0 saw levels this high. Image
In August 2025 alone, the US collected $31 billion of tariff revenue.

This marks the single largest tariff collection in a month in US history.

Even as "trade deals" have begun, most people do not realize that tariffs are still historically high.

The data speaks for itself. Image
Read 12 tweets
The Kobeissi Letter Profile picture
Sep 20
The H1-B Visa Situation:

President Trump just raised the cost of an H-1B Visa to $100,000 PER YEAR, a +1,000% increase.

The US issues ~85,000 new H-1B Visas per year, which will now cost $8.5 BILLION/year.

What are the economic implications? Let us explain.

(a thread) Image
An H-1B visa allows US employers to hire foreign workers in specialty occupations.

The initial Executive Order raised the cost of an H-1B visa to $100,000 for new AND existing holders.

The implications are MASSIVE.

For example, take a look at the top 15 H-1B visa employers. Image
Amazon has ~11,000 employees on H-1B visas.

Assuming the cost of an H-1B goes from ~$10,000 to $100,000:

This would cost Amazon alone an incremental ~$990M PER YEAR.

These top 15 firms would incur an additional $7.2 billion per year in expense under the INITIAL Order. Image
Read 13 tweets

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