Why Crypto Rallies Fade: The Stablecoin and ETF New-Money Test

Bitcoin jumped above $80,000 the day after midterms. A day later, the whole jump was gone. And right now, at the time of making this video, the market has been selling off hard. So, if you hold crypto, you know that feeling. Bitcoin jumps, XRP jumps, your whole portfolio turns green, you feel good for a few days, it feels like the bull run is finally back, maybe even add a little bit more and you buy some at that peak, and then it fades, the sell-off happens, just like I mentioned in one of my previous videos.

That's happened seven times in 2026, and nine of the biggest coins are all still down for the year. A lot of holders were counting on a pro-crypto Washington to finally bring the money in. But even with Trump in the White House, Bitcoin is about 25% below where it was the day that he took office. So, the way that I see it, nearly all of those green runs had the same big problem. Not enough new money was coming into crypto to keep them going.

So, the same money just moved from coin to coin. One rally was different, though. It had new money coming in two different ways at once, and it held up far longer than the rest. And now, Democrats are taking over Congress, and one of the crypto bill's loudest critics is expected to run the committee it has to get through. So, is new money about to come back, or is it more of the same story?

Well, that's what we checked, and you'll come out of this video with two quick questions you can answer yourself the next time crypto goes green. Let's run it. All right, bull runners, welcome back to the channel. Now, every time Bitcoin climbed about 14% or more from a low, we counted the day as a rally. It happened seven times before the midterms.

Some were small, and some went as high as 32%. Then we checked all nine coins through every one of those seven on Binance and Coinbase. In six of them, at least some of those coins fell all the way back to where they started or even lower. The run into January faded the fastest. Just 2 weeks after Bitcoin peaked, every coin had lost the whole climb.

Only one rally held up for all nine coins, and even that one is starting to crack. So, where does that leave the nine coins for the year? Well, Bitcoin and Chainlink have lost the least, about 13% each. XRP is down about 34%. Cardano about 46%.

Together, about 400 billion has come off those nine coins since January 1st. Honestly, that number sticks with me because crypto went green seven times and the market is still smaller than when the year started. And the coins that ran the hardest on the way up ended up losing the most. So, if you hold altcoins, that's the frustrating part. In six of the seven green runs, most of those other eight coins climbed more than Bitcoin did.

But over the whole year, every one of them except Chainlink lost more than Bitcoin. And XRP is the clearest example here. It swings harder than Bitcoin. So, for XRP, we only counted climbs of 17% or more. And by that measure, XRP had eight big runs of its own in 2026 alone.

And in seven of them, it fell back down below the price where the climb began. And while the altcoins kept handing their gains back, more and more of the market still in crypto ended up in Bitcoin. To me, that's a sign the same money was just moving around inside crypto with very little new money coming in. Now, here's what the whole year did to real money. Say you put $1,000 into crypto on January 1st and you split it evenly across those nine coins.

Even after all that green, you'd be down about $270. The same $1,000 in Bitcoin alone would be down about $130. So, even Bitcoin still lost you money. So, why does almost every rally fade? Well, I think it comes down to one number and you won't find it on a price chart.

That number is the stablecoin pile. Stablecoins are basically crypto's cash. They're digital dollars like USDT, USDC, and RLYUSD. And a lot of the buying on crypto exchanges is done with them. So, add up every stablecoin out there and you get a rough idea of how much cash is sitting in crypto ready to buy.

When that pile grows, new dollars are usually coming in from the outside. When it shrinks, dollars are leaving. In 2025, that pile grew by about $100 billion. That's a lot of new dollars waiting to buy crypto coming into the market. In 2026, it barely grew at all.

It crept up to about $315 billion in May and it's been shrinking ever since. Now, it's down to about $295 billion. Less than where the year started. So, how much did that pile grow each time? Well, during the January run, it didn't grow at all.

During the two big runs between February and May, it did grow about 3% and then 2% and those turned out to be two of the biggest climbs of the year. And since May, it hasn't grown by more than about 1% in any of them. So, picture what happens when no new cash comes into the market. Every dollar that buys an altcoin has to come from somewhere already inside crypto if no new money is coming into the stablecoin market. So, somebody sells the Bitcoin, the Ethereum, or the stablecoins they already have and buys something else with it.

So, price can still go up for an altcoin. Traders rush into a coin, the price jumps, but when those traders sell and move on to the next coin, there's nobody new waiting to buy from them. So, the price slides back down and that's a big reason the altcoins kept getting hit harder. But, in August, one run had a real new money behind it and you can see the difference right away. It's the year's biggest run and every coin we tracked went up hard.

Bitcoin climbs 32% in 3 weeks and XRP does even better. It goes from under a dollar to a dollar and 70 cents in just 8 days. That's up 72% so if you held XRP in August, that was the week it finally felt like XRP was turning around. It gave a lot of that climb back later, but it's still above where it started in August. In fact, for almost 3 months, all nine coins stayed above their August starting price.

No other run in 2026 came close. Stellar and Cardano only slipped under that price on November 5th, the day after the election. And if you bought XRP right at the start of the run under $1, you'd still be up about 20%. So, what was different about August? Well, it started with two pieces of news.

On August 19th, the US Treasury said it would at least double how much long-term government debt it buys back. In plain terms, the government was stepping in to keep borrowing costs from climbing. And when borrowing looks like it's getting cheaper, investors get braver so they pile into risk-on assets like crypto. And the next day, Trump stood at the White House with Ripple CEO Brad Garlinghouse and he told Congress to pass the CLARITY Act, the crypto bill a lot of XRP holders have been waiting on. XRP jumped more than 20% that day alone, and in August, new money actually came in behind the news in two ways at once.

The stablecoin pile grew by about $3 billion and ETFs, which are the funds that you can buy in a normal brokerage account, had their best month of the year. The Bitcoin ETFs alone took in about $3.5 billion, and money went into the Ethereum and XRP funds, too. Then in September, crypto tried again, but the only new money came in through Bitcoin's ETFs. The stablecoin pile didn't grow at all. Bitcoin ran 17% in 6 days, but the altcoins barely got going.

And by October 29th, every one of them had given it all back. Bitcoin is the only one still above its September starting price, about $75,000. And that's because Bitcoin ETF money can only go into Bitcoin. So, what do the midterms change from here? Well, so far, they haven't brought any new money in.

You saw what happened to that jump after the election. Behind it, the stablecoin pile kept shrinking right through the election, and more than $1.1 billion left the Bitcoin ETFs in the days before the vote. And the analyst on Bitfinex, one of the big crypto exchanges, looked at every bounce since October 30th. They say it came from traders who had bet on a drop, buying their coins back to close those bets. There was very little new buying behind it.

And the rules are where the midterms could change the most. So, if you hold XRP, that's the part to watch. And if you remember what set XRP off in August, well, it was Trump pushing the Clarity Act. That bill would finally set the rules for crypto in America. It passed the house, but in September failed to vote in the Senate 49 to 50.

No Democrat voted to move it forward. And one of the loudest voices against it was Senator Elizabeth Warren. In a speech the night before the vote, she called it a bill that would juice the value of President Trump's crypto empire. Now, Democrats are taking over the Senate, and the news a lot of holders were dreading came right after. Anti-crypto Senator Elizabeth Warren expected to become the chair of the Senate Banking Committee, giving her major power over the financial industry.

And even the crypto industry's own lobby group, the Digital Chamber, calls that committee the biggest thing standing in the Clarity Act's way. So, here's what happens next. The bill has until January 3rd, if the Senate doesn't pass it before the new Congress starts, has to start over from scratch with Warren likely running the committee it has to get through. Now, it could still pass before then, but not many people think it will. Lee Reiners, who studies crypto rules at Duke University, put it in three words, "Clarity is dead." And to me, that's bad news for new money, too.

Without clear rules, a lot of the big money, the institutional money, waiting on the sidelines for the compliance teams to give them approval, is likely to keep waiting. So, whatever coins you hold, January 3rd is the date to watch. And until then, there's one price I'm watching. It's Bitcoin at or above $75,800. That's roughly what people who bought Bitcoin in the last 5 months paid on average.

So, below it, they're sitting on a loss. And on November 5th, Bitcoin fell under it. If it stays there for a whole week, that's where I'd start to watch for the price to move lower. So, is new money coming back after the midterms? Well, so far, from everything we checked, it's more of the same.

In August, new money came in both ways at once. Since the election, it hasn't come in either way. And here's what would change my mind. I'd need to see new money flowing in both ways again. That means more stablecoin cash coming in while prices climb and the ETFs having another month like August.

If that happens, and Bitcoin closes a week above its September top of about $87,400, then new money is back. And I'll be the first to tell you here on this channel, when you subscribe right now. And here's the two questions that I promised you. The next time crypto goes green and you want to add more, ask these first. Is the stablecoin pile growing?

And are the ETFs taking money in? If both say yes, that move has new money behind it, like August. If only the ETFs say yes, that money is buying Bitcoin, like in September. And the altcoins may not come along. And if both say no, it's the same kind of move that we saw after the election.

And that's where I'd be cautious there to keep some cash back for the next drop. And if you hold XRP, 2026 has worn you out. Eight times you watched it run and seven times you watched the whole climb disappear. And that's how a lot of XRP holders end up getting hurt twice. First, they buy in on a green week that fades right near the top.

Then they start doubting every green week. So, when a run like August finally comes along, they're too burnt to even trust it. And the two questions are the easy part. The hard part is sticking to the answer with your own money. When every coin you hold is green and it feels like everyone else is getting in the market, so you want to hold for the next move up.

And that's a lot easier when your plan is already made. So, the smartest thing that you can possibly do is sit down on a free strategy call with an expert on my team before crypto's next major run, so you can look at how your coins are held, how much you hold in each, where they're held, and understand your strategy before the next major move in the market. On the call, they'll go through which of your coins have been climbing with the market and still ending up lower. They'll show you what your XRP and your altcoins could be doing for you while you wait to earn yield, and they'll also give you access to our private intelligence network with other investors who are just like you. So, that way you can develop the best trading strategy, the best yield generation strategy, and the best self-custody strategy to protect your crypto long-term.

So, you'll find the first link in the description below. It says, "Put your XRP to work." On mobile, just tap the button that says more. It's the first link at the top. There's a short video, and then it takes less than a minute to schedule a call. So, do that right now, so you can get access to our private intelligence network.

So, that way when the next major move in the market comes, you're ready for it. I'll see you on the next video through the link below. I'll see you at the top. As always, you know what to do. Stay bullish.

[music] [music] [music]