January 2026 Diamond Pigs Newsletter | Crypto news

As we begin the new year, markets are responding to a shift in liquidity conditions, crypto sentiment is slightly improving, and our strategy performance highlights the importance of downside protection. Below you’ll find this month’s full update.

In This Issue

• Global Market Update – Fed liquidity is returning, improving conditions for risk assets.
• Crypto Market Highlights – Bitcoin rallies, ETF inflows rise, and regulation stays in focus.
• Strategy Performance Review – Protect strategies reduced losses versus HODL in volatile markets.
• What’s New at Diamond Pigs – Crypto.com Fast Connect launches integration with Diamond Pigs.

Global Market Update

At the start of 2026, the U.S. Federal Reserve has clearly shifted its stance back toward injecting liquidity into markets, adding over $200B after months of tightening through a mix of Treasury bill purchases, balance sheet adjustments, and a cautious 25 bps rate cut. This marks the first net liquidity expansion since 2021, resulting in easing funding stress and improving financial conditions.

Historically, rising liquidity has been a powerful tailwind for risk assets, especially equities and crypto, with growth-focused sectors like technology, AI, electric vehicles, financials, and infrastructure typically leading rallies. Crypto markets, in particular, tend to respond strongly to liquidity expansions, and sentiment around Bitcoin and altcoins is improving as traders anticipate better conditions ahead.

While this does not guarantee immediate price gains or new highs, the return of liquidity is an important supportive force for markets in the coming months—making disciplined risk management and selectivity more important than ever for investors navigating this environment.

Crypto Market Highlights

Crypto sentiment has moved back into “greed” for the first time since October, with the Fear & Greed Index rising to 61. The shift has been driven by Bitcoin’s rally last week to a two-month high near $97,700 and strong inflows into Bitcoin ETFs — $843 million in a single day, about $1 billion over the past week, and $1.5 billion year-to-date. This recovery aligns with JPMorgan’s view that late-2025 de-risking is largely behind us and that crypto inflows are set to strengthen in 2026. While confidence has clearly improved since October’s sell-off, sentiment remains constructive rather than euphoric.

On the regulatory front, the U.S. Senate Banking Committee has delayed its vote on the Clarity Act, as there are still unresolved disagreements. We view U.S. regulatory clarity as a major catalyst for a strong year for crypto and the next phase of crypto inflows. As written in his latest piece for Crypto Insiders, Diamond Pigs co-founder Idan Velleman highlights the Clarity Act as one of the key obstacles holding back a new rally. Passing the Clarity Act would increase institutional participation across ETFs, venture funding, and corporate adoption, while also enabling U.S. retail investors to participate in crypto in a safer and more regulated manner.

With talks ongoing, the coming weeks are pivotal — and markets reflect this uncertainty, with Polymarket currently assigning a 62% chance that the bill passes this year.

‍

Diamond Pigs’ 3-Month Strategy Performance

Over the past three months, markets experienced elevated volatility across major crypto assets. The performance below highlights how Diamond Pigs’ strategies navigated these conditions, with a clear focus on downside protection versus traditional HODL approaches.

Best Performing Protect Strategies

Solana Protect (–1%)
Lost far less than Solana HODL (–27%), showing strong downside protection in a volatile period.

Bitcoin Protect (–8%)
Performed better than Bitcoin HODL (–14%), with smaller losses while keeping Bitcoin exposure.

Ethereum Protect (–10%)
Declined less than Ethereum HODL (–18%), reducing the overall drawdown.

Ripple Protect (–11%)
Outperformed Ripple HODL (–15%), limiting losses over the period.

Dogecoin Protect (–13%)
Lost much less than Dogecoin HODL (–30%), cutting a large part of the downside.

Mid-Range Performance

Top 3 Crypto Protect (–15%)
Did better than ETH HODL (–18%) and SOL HODL (–27%), and performed similarly to BTC HODL (–14%), offering more balanced exposure.

Weaker Performing Strategies

Top 10 Crypto Index (–19%)

Tracked the broader market downturn with no downside protection.

Meme Coins Protect (–21%)
Still saw notable losses due to high volatility in meme coins.

Crypto Mix Protect (–26%)
Had the largest decline, reflecting weakness across several altcoins.

Across all major assets, Single Coin Protect strategies consistently outperformed HODL approaches, clearly demonstrating their effectiveness in reducing downside risk during challenging market conditions.

What’s New at Diamond Pigs

Earlier this week, we added a new exchange connectivity partner, Crypto.com, using Fast Connect technology that removes the need to create or manage API keys. Users can now connect their Crypto.com accounts to Diamond Pigs in just a few clicks and choose from Diamond Pigs’ range of investment strategies. As an introductory offer for Diamond Pigs users, Crypto.com is providing VIP Tier 1 status (0.0650% for limit orders and 0.1000% for market orders) to a limited number of users. This reduces trading fees and helps ensure Diamond Pigs’ strategies perform with minimal fee-related friction.

If you are interested in joining the VIP program, please email us at info@diamondpigs.com, and we will forward your request to our contact at Crypto.com.

Contact Us

Got questions or need help? We're here for you:

Chat with Piggy AI, our support bot, anytime in the app.

Or send us an email: support@diamondpigs.com