Russia is Diving Into Bitcoin! What it Means

It’s an uncomfortable truth that Bitcoin’s value proposition has often been proved in ways that many might find unpalatable. The use of BTC as the currency of the Silk Road dark web marketplace was perhaps the earliest example of this. It proved that there was demand for a permissionless and pseudonymous digital currency after all.

Silk Road showed how Bitcoin could empower the individual, albeit to do shady stuff. But, that was then. As Bitcoin turns sixteen and Q1 of the 21st century nears its close, Bitcoin is empowering nation states. That, as they say, escalated quickly.

Russia has been largely shut out of the dollarised part of the global financial system since its invasion of Ukraine in early 2022. While it is still able to trade with countries that aren’t closely aligned with the US sphere of influence, this is far from frictionless and Western sanctions have to some extent achieved the desired effect. Russia is finding it increasingly difficult to trade, even with countries that are willing to do business with it. But, Bitcoin may provide a solution to Russia’s problem.

In today’s video, we examine how Russia is adopting Bitcoin for use in cross-border trade and proving its usefulness on an international scale. Despite being hostile to Bitcoin in the past, Vladimir Putin and co are finally beginning to appreciate what it can do. The consequences could be profound.

You can watch that video here.

📈 Crypto Market Forecast 📈

Last week confirmed that macro has become the most dominant force in the crypto market. That’s because a barrage of bearish macro data managed to beat down crypto prices. This was despite all the objectively bullish crypto factors being announced, such as the Czech central bank considering adding BTC to its reserves, and a Bhutan hub setting up a strategic crypto reserve.

This suggests that this week’s macro data could move the crypto markets just as much, if not more, regardless of any bullish crypto news that comes out. The most important of these data prints will be the PPI and CPI on Tuesday and Wednesday, respectively. If they come in higher than expected, it will be bearish, and if they come in lower than expected it will be bullish.

This begs the question of which it will be: higher or lower? It’s impossible to predict the future, but oil prices in December suggest the answer could be lower. That’s because oil prices appear to have been very low in December. You’ll notice that the last time oil prices were that low was in September and the September CPI subsequently came in lower (albeit still higher than expected).

However, if you drill down into the inflation data (specifically the CPI), you’ll find that most of the inflation is being driven by services, which includes shelter - i.e. rents. High rental costs are a big part of why the CPI has remained elevated. Lo and behold, real-time data suggests that rental costs came down slightly towards the end of last year - i.e. in December.

The caveat is that even if the CPI comes in lower than expected, the crypto market may be hamstrung by bearish crypto-specific factors. The biggest of these is arguably the US Department of Justice getting the green light to sell $6.5 billion in BTC it seized from the Silk Road marketplace. Although these sales likely won’t start for a while, concerns around them could be headwind for the crypto market.

The caveat to this caveat is that there could simultaneously be a bullish tailwind coming from repayments to FTX creditors, which will be made within 60 days from January 3rd, so basically between now and March 4th. What’s interesting is that the initial distributions will go to smaller claimants, which could mean that most of this capital will find its way into altcoins rather than Bitcoin (as these smaller claimants are likely retail).

At the same time, the crypto market could start to rally in anticipation of Donald Trump’s inauguration on Monday, January 20th. As it so happens, BTC traders are reportedly positioning for a rally to record highs after Trump’s inauguration. This makes some sense, as it’s possible that Trump could begin signing executive orders about crypto in the days after he gets into office, although realistically he’ll likely be focused on other things.

That being said, there’s a good chance that ‘American’ altcoins could see the greatest gains going into Trump’s inauguration. These include the likes of XRP, Hedera, Cardano, Stellar and Algorand. What’s interesting is that these cryptos were very resilient during last week’s downturn. This suggests that they could see the biggest gains when markets start recovering.

Another crypto to watch closely is Sui, where the dip buying was relentless. Meanwhile, memecoins continued to bleed, and fall to lows not seen in months. It’s much too soon to say, but it’s possible that all the speculation in memecoins is finally about to find its way back into altcoins. It might make a stop at the AI agent casino first though. Hopefully we will see which one it is this week!

🤖 DeFAI (DeFi + AI) 🤖

Last week, we explored how infrastructure projects are emerging as a key focus within the AI agent space. This shift is particularly noteworthy because, in prior weeks, the spotlight was firmly on AI agent KOL projects - essentially AI-powered tweet bots fighting for attention on platforms like X. For the most part, this narrative was no different from the memecoin mania we saw in the months prior, with both trends driven by a single currency: attention.

In contrast, the current shift in focus toward AI agent infrastructure projects reflects a renewed appetite for utility and technological advancement - traits last seen during the previous bull market. We also observed striking parallels between the competition among AI agent framework projects and the battles for dominance among layer-1 and layer-2 blockchain solutions during the 2017 and 2022 bull cycles.

Therefore, it should come as no surprise that one of the first narratives to potentially emerge from the foundations of a utility-focused AI agent ecosystem would involve another star from the previous cycle - DeFi.

Over the past week, we’ve observed a notable increase in projects branding themselves as "DeFAI" (a fusion of DeFi and AI). In essence, these projects aim to leverage AI agents to deliver a vastly improved DeFi user experience.

Though still in its early stages, the DeFAI ecosystem already features a diverse range of projects, each with a distinct area of focus. Let’s delve into some of the key categories we’ve identified.

The first and arguably most prominent category focuses on abstraction as a core offering. These projects aim to simplify user interactions with DeFi protocols by enabling natural language commands to execute complex actions. Imagine performing DeFi swaps, staking, or even claiming airdrops simply by texting an AI agent - no more navigating clunky interfaces, signing transactions, or figuring out how to bridge funds across chains. The AI agent handles all the complex technical details, making the process seamless for users.

Sounds like a dream? Well, friend, it’s real. In fact, we’ve been building towards making DeFi simple for quite some time now. The DeFAI abstraction movement is just a natural extension of the progress we’ve made previously on intent-based DeFi protocols and wallet/account abstraction tech.

Several notable projects are working within the DeFAI ‘abstraction’ niche, including Griffain, HeyAnon, Orbit, Neur and HiveAI. Interestingly, three of these projects - Griffain, Neur, and HiveAI - are exclusively building on Solana. HeyAnon, on the other hand, supports SONIC, Solana, and EVM, while Orbit operates on both Solana and EVM (117 chains).

The second category of DeFAI projects focuses on autonomous trading agents - AI-driven systems that autonomously formulate, execute, and adapt complex DeFi strategies. These AI agents continuously monitor real-time on-chain trends, incorporating user-defined inputs to adjust strategies dynamically.

Compared to abstraction-focused DeFAI projects, autonomous trading agents operate on a higher level of complexity, capable of managing intricate strategies with minimal user intervention. A notable early example of this category is AI-powered hedge fund DAOs like ai16z. In these investment DAOs, token holders define high-level strategies and policies, while AI agents take charge of execution, real-time monitoring, and optimization. On that note, autonomous AI agents can also be used to optimise yield-farming strategies across DeFi protocols. WeBera and HeyAnon are examples of projects focusing on yield optimization.

An alternate example of an autonomous trading agent is the Polytrader agent. Notably, this AI agent focuses on autonomously executing trading strategies on the prediction market platform Polymarket by analysing available markets, gathering and interpreting real-time news, forming an informed opinion, and placing bets accordingly.

The third and final category of DeFAI projects includes infrastructure and launchpads projects for DeFAI AI agents. Mode Network is one of the pioneers within the DeFAI infra niche. The project is a Layer 2 network specially designed to attract highly technical AI x DeFi builders. It features several infra tools, including an AI Agent ‘App Store,’ that help DeFAI builders attract liquidity and users to their platform. Some examples of projects building on Mode include Modius (an autonomous trading agent built on Balancer), ARMA (autonomous stablecoin farming), and Amplifi (an agent focused on yield-bearing BTC strategies).

We suspect we’ll start seeing more categories of DeFAI projects emerge in the weeks ahead. For now, you can keep track of projects within this niche by monitoring the category page on CoinGecko or even data dashboards like the one built by TK Research.

📈 Hot Deal of The Week 📈

The start of the new year is often a time for people to reflect on their most important goals for the coming year. Given that you are reading this, we assume you take crypto somewhat seriously. But have you made it your new year's resolution to do all you can to level up your crypto education?

Those that want to lock in on crypto in 2025 will want to check out the Coin Bureau Club. Here you will find:

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🔮 Video Pipeline 🔮

* Virtuals: A Comprehensive Analysis!
* Our Top AI Agents: Why are they revolutionary?
* What is Bitcoin Mining? How does it really work?
* Crypto On A Budget: How to identify narratives and coins with potential!
* China Update: Its evolving stance on crypto explained!
 
🏆 What's New at CoinBureau.com This Week? 🏆

* What 2024 Taught Us About Crypto
* UK Crypto Taxes in 2025: A Complete Guide
* Discover the Top AI Crypto Projects in the Market!
* Discover The Top 7 Crypto Exchanges For Scalping In 2025
* Discover The Top DeFi Yield Farming Platforms In 2025

📖 Quote of the Week 📖

Success in crypto can make you wealthy in monetary terms, but that money won’t make you complete. A rich and full life is one wherein there is always something worth striving for.

"To be without some of the things you want is an indispensable part of happiness" - Bertrand Russell

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.