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- Ethereum Rewrites the L2 Narrative
Ethereum Rewrites the L2 Narrative
PLUS: Trump’s Crypto Ties Threaten CLARITY
Welcome back to The Warmup.
This is me looking at the BTC chart this morning.
Here’s what we’re watching:
Market Snapshot
Trump’s Crypto Ties Threaten CLARITY
BTC Weekly Liquidity Sweep
Ethereum Rewrites the L2 Narrative
Market: Crypto leads the downside, equities soften, while gold catches a bid and the DXY stays firm, pointing to defensive positioning.
Trump’s Crypto Ties Threaten CLARITY
What’s going on:
Sen. Chris Murphy accused President Donald Trump of “potentially criminal conduct,” claiming UAE-linked capital flowed into Trump-affiliated crypto firm World Liberty Financial just days before his inauguration.
The allegation centers on a $500M deal where UAE-backed investors bought 49% of the firm, with ~$187M reportedly going to Trump family entities shortly before the US approved expanded United Arab Emirates access to advanced AI chips.
Trump denies knowledge of the deal, and World Liberty Financial rejects any policy link.
The controversy hit as the White House hosted a crypto summit with major exchanges, issuers, and banks to negotiate stablecoin rules under the CLARITY Act.
No deal yet. February deadline set.
What it means:
The crypto market structure bill is now caught in partisan crossfire.
Democrats want anti-corruption guardrails. Banks are holding firm on stablecoin provisions. And this scandal gives lawmakers cover to delay.
Net-net: regulatory clarity just got pushed further out.
Politics, not policy, is back in the driver’s seat.
BTC Weekly Liquidity Sweep
What’s going on:
BTC just swept prior weekly lows around $74–75K, clearing liquidity after a sharp pullback from the ~$120K highs.
Price is now heading toward the weekly EMA200 (~$68–70K) a level that has historically acted as cycle support.
This looks more like a reset and flush, not structural failure.
Key levels we’re watching:
Support: $74–75K (swept lows)
Major support: $68–70K (EMA200 weekly)
Resistance: $85–90K
Range high: $100K+
Directional Bias: Cautiously constructive
As long as BTC holds the weekly EMA200, this favors accumulation over panic.
What we’re waiting for:
Hold or reclaim above $74K
Strong reaction at EMA200
Spot demand stepping in, not leverage
Ethereum Rewrites the L2 Narrative
What’s going on:
Vitalik Buterin is openly walking back Ethereum’s long-standing L2 thesis.
He argued that many L2s no longer function as secure extensions of Ethereum, relying instead on centralized sequencers and multisig bridges.
In short: if users have to trust intermediaries, Ethereum isn’t really being scaled.
At the same time, Ethereum’s base layer has improved. Gas limits are rising, fees are lower, and developers are moving toward native rollups, where execution is verified directly by Ethereum validators.
With zkEVMs coming, Ethereum is becoming more capable on its own.
What it means:
Vitalik’s message to L2s: stop competing on throughput and start specializing in areas like privacy, identity, finance, social, or ultra-low-latency use cases.
Ethereum is re-asserting itself as the core execution and security layer. L2s aren’t dead, but the “generic scaling L2” trade is losing its edge.
The question for investors now isn’t L2s or not, it’s which ones actually have a reason to exist.
 | HOOD: |
 | ONDO: |
 | ENA: |
 | GLXY: |
After Vitalik’s comments, are you more bearish on generic L2s? |
This is a good reminder that markets don’t move on vibes, they move on plumbing.
A new Fed chair doesn’t magically flip a switch on liquidity, inflation, or rates.
What matters is the framework they inherit and the constraints they operate under.
Political pressure may get louder, but the bond market still sets the rules.
Until liquidity actually turns, volatility is the feature, not the bug.
The real edge here isn’t predicting headlines, it’s staying patient, watching rates and balance-sheet signals closely, and positioning before policy has to bend.
— The Warmup Team
Always do your own research. This newsletter is supplemental material to help educate readers as they make their own decisions. Projects mentioned here are provided to give a potential early-mover advantage.