Transcription
I've said this once before. This is likely going to be the most important call that I make in my life. XRP is going to leapfrog Bitcoin when the domino theory plays out because it's going to be the only way that Bitcoin can survive. And we are right on the precipice of a black swan event playing out that nobody sees coming. And those that are positioned are going to be able to take full advantage of the largest wealth transfer in our lifetimes.
So before we get started, I have to give my disclaimer. Nothing here is financial advice. It's only for entertainment educational purposes only. If you need financial advice, please reach out to Digital Ascension Group or Digital Wealth Partners, which is one of our subsidiaries. It is an SEC registered RAIA to help you make financial decisions for your crypto portfolio.
So, let's get into it. This is the fourth video that I've made about the Domino Theory about 21 months ago. You can see the first iteration of that right here. Go check it out if you haven't, and that way you'll have better context for this one. We're going to go over everything at a high level here and the few things that have changed and where we're at today before all of this takes place.
So, at a high level, here are the steps that I believe are going to take place. So, if you've been living under a rock, which most of you haven't, you're probably watching the news and you are aware that Iran is having a complete meltdown and crisis over there, a change in regime. There's instability in the region, and we have a lot of geopolitical things going on with the US and Venezuela and China and Russia. All of these things culminating in a way that could and likely will rise the cost of oil globally, but mostly coming out of the Middle East. The chart that I'm watching closest is the Japanese yen versus oil. The escalating events are going to raise the price there. I don't know if that's going to be from them shutting down the straight of Hormuz or if oil is going to get shut down or, you know, they blow up factories or refineries. I don't know what's going to happen. My anticipation is that we are going to see the spike in oil and that is going to be the straw that breaks the camel's back for the reverse carry trade.
If we see a 20, 30, 40% spike in oil in a very short period of time, which we've already seen a 5% rise here in the last couple days, this is going to have significant effects on Japan. There's going to be inflation. There's going to be currency risk and they're going to have to raise their interest rates. This is not just a spark. It is a fire that's going to happen. Japan's import costs on their energy is going to go up substantially and higher costs are going to be felt across their entire economy. They already have significant inflation. This is just going to exacerbate that situation and it's also going to cause the Japanese yen to become weaker in the global scheme of things. The only way that the Bank of Japan is going to be able to combat that is they're going to have to raise interest rates and that's where the reverse carry trade is going to become compromised.
Over the last three decades, we've had trillions, tens of trillions of dollars borrowed in yen. That money was taken and invested. It's in treasuries, it's in stocks, it's in private credit, it's in gold, and it's in crypto. Whatever you can think of, it's tens of trillions of dollars. It's not going to matter where you have your money. There is going to be a liquidity crisis that sucks liquidity out of that investment. And that only stays working as long as Japan's interest rates stay low. We've already seen their bond rates rise to the highest that they've been in three decades across every single one of their bonds. So the 1-year, the 2-year, the 5-year, the 10-year, the 20-year, the 30-year, the 40-year, doesn't matter. Some of them are at the highest amount that they've ever been. And right now, people are already getting margin called, but they believe that they're going to be able to, you know, slowly issue their way out of this. If there is an event that occurs that is not on their road map that's outside of what they believe, you're going to see a rush for the door. And that is going to happen when the Bank of Japan has to aggressively raise interest rates on the other side of oil spiking. Borrowing yen gets very expensive in this situation, and the carry trade stops working, positions must be closed. And this is mechanical. It's not emotional.
When the carry trade unwinds, people are going to sell whatever they can to move toward the safest thing in their mind, which is likely going to be Japanese bonds. In this situation, that means that US treasuries are going to get sold off to the tune of $1.6 trillion that's held by Japan and potentially the other parties in the BRICS nation that still hold US debt, around $2.3 trillion totally. When that many treasuries hit the market at once, prices fall, yields rise, liquidity dries up. And this is dangerous because treasuries are the backbone for banks, pensions, institutions, money markets, stable coins, everything. If the US defaults on their treasury obligations, the whole game is over. And right now, it's designated as a tier one asset by the BIS. The US has defaulted twice in its history. But in this situation, I think they're going to be able to make good on everything. Stable coin regulation, which was passed in 2025, is going to be the key here. We're going to see stable coins not just as a crypto tool, but the major banks are going to use them to be able to stabilize the treasury market. They're going to be issuing stable coins and buying those treasuries to be able to back them.
In 2025, there was about $50 billion worth of stable coin trade. As we sit here in January of 2026, Tether's total market cap is around $190 billion with 135 billion of that coming from US treasuries. The rest of that comes from other assets like Bitcoin, gold, and other bonds that make up their balance sheet. This makes Tether one of the largest treasury buyers in the world. The reason that the US government has allowed this is it creates demands for US treasuries. As China and Russia have sold off their bonds over the last 5 and 6 years, Tether has been there to soak those up and it helps stabilize the bond market. It moves stress off of the traditional banks or the Fed to print money to buy those bonds back. The banks just aren't going to be strong enough when all this plays out. They're already sitting on huge unrealized losses. The long-dated bonds that they have, commercial real estate, equities, and these losses are unrealized, but they are still very, very real. And US banks have hundreds of billions of dollars in these unrealized losses. Banks won't be able to absorb unlimited amounts of stress, and their balance sheets are going to crack under this pressure.
Tether, I do believe, also, is going to have problems in this situation because they have those other assets on their balance sheet. About 30% of Tether's balance sheet is made up of other things like Bitcoin, gold, bonds, and other private credit that they've issued. If we see a global margin call, all of those assets are going to be affected. And if we see, you know, 20, 30, 40, 50% down in those assets all collectively together, Tether is going to depeg. They hold around a 100,000 Bitcoin on their balance sheet today and over a 100 metric tons of gold. These assets seem safe and they are today, but in this crisis they will not be. Everything becomes collateral. Bitcoin sells off, gold sells off, redemption spike, and the peg will be tested.
And this is where Shane Ellis's theory may come into play. Bitfinex and other exchanges use large amounts of Tether as their liquidity provider. If they don't have access to that or they're what they're drawing down isn't worth as much, they're going to have to find another source for that liquidity and potentially the really there's only one thing that could that could be and that's XRP because of the pairs and the adoption that it has and the speed for settlement. Like that's the piece. You could you might be able to use Bitcoin, you might be able to use ETH because of their market caps, but with XRP being the third largest market cap today in crypto and having the fastest settlement and cheapest cost to move money, it becomes that liquidity source when Tether depegs.
The other piece is stable coins only work if people trust it. If redemptions accelerate and liquidity tightens, spreads widen, and market makers step back, this is going to create fear around Tether. It's going to be like somebody yelling fire in a theater. We saw this happen with FTX. We had Binance come out and CZ say that he thought that they, you know, couldn't meet their redemptions. And sure enough, when people started redeeming at scale, they weren't able to. Banks are in the same position. They do not have the liquidity reserves in order to be able to back all the redemptions. Fractional reserve lending, they're holding 10%. FTX actually had more than 10%, they still went under, but that's a different story. What I'm saying here is that when stable coins are tested like Luna or others, if they don't reply, the confidence is lost and there will be downward spiral as people redeem the assets from them and they're not able to meet those obligations.
Many crypto exchanges rely on Tether and its liquidity. When stable coins are stressed, trading is going to slow, order books are going to thin, and withdrawals are going to become delayed. So, if you're holding your assets on exchanges or you're wanting to make trades while this situation is playing out, best of luck to you. I don't know that it's going to be possible. Liquidity is going to disappear very fast and if there's not a solution that steps in, markets are going to lock up. As soon as there's headlines about this, contagion will spread and the market plumbing will lock up. Micro strategy, these other treasury companies and Bitcoin ETFs will become forced sellers. In panic, institutions will sell what's easiest, and that means ETFs. Investors will be redeeming shares. Authorized participants will be selling the underlying asset. Bitcoin will hit the market. Price will drop and more redemptions will follow. It will be a negative feedback loop that continues to force selling on Bitcoin. I think we could see a $20,000 Bitcoin when all of this plays out and XRP will be the solution that saves this and keeps Bitcoin around over the long term. That also means Bitcoin ends up on the XRPL.
So, let's talk about the stock market. The settlement is going to be a problem. They have these ETFs. They have this exposure. Bitcoin settles close to real time. The market still settles T+1. That happened on May 28th of 2024 with the option to settle T+0 using a digital asset. And they have tried this and finalized that project in 2022, August of that year with Project Ion. R3 and the DTCC built a system to be able to settle and reconcile the back-end trades on the stock market from the exchanges to the clearing houses. And this just so happened to be what the president of NASDAQ was talking about with Monica Long in 2025 at Swell. She was interviewed and she stated that the first place that they're going to be implementing distributed ledger technology is going to be for the back-end settlement reconciliation of the stock market. And if trades can't settle, counterparty risk explodes and margin systems will fail. So they will have to move to something that has instant settlement. And the only way that is going to be possible with XRP or any other asset is if there's enough liquidity in that asset. You need instant settlement. You need no counterparty risk. You need no prefunding. And you need global movement of that value. It's not speculation. It is the infrastructure that we're going to move to when all this plays out.
In 2025, we did see the launch of the XRP ETFs. The majority of the volume to date for those. We saw a strong rise in XRP in late 2024 and throughout 2025. It continued to, you know, trend sideways somewhere between $2 and $3 for the majority of the year. That's sustained volume from these institutions buying XRP using TWAP or VWAP to be able to average into the market with large buys. And if they are issuing larger orders or don't want that to impact the market, they will go through the OTC desk or the dark pools. Unfortunately, there's only so much available supply for XRP on the market. Institutions, Ripple, other enterprises and retail are holding XRP and not selling it. And because of that, the available supply becomes less and less every single day that these ETFs continue to eat it up off the market. At some point, the OTC desk and dark pools will be out for available supply there, and the volume will have to move to the exchanges. I believe that we're going to see BlackRock issue an ETF when the time is right in order to be able to save this system. They will have to move to instant settlement on the back end of the stock market, but they need enough liquidity in XRP to do that. The only way to get the price to the levels it needs to be is huge amount of demand all at one time. You're going to have the FX market impacted. You're going to have the the stock market impacted. You're going to have Bitcoin impacted. You're going to have the exchanges impacted and the volume and demand from these ETFs and those buyers with not much available supply for XRP.
If you took economics in high school, you understand supply and demand dynamics. The supply for XRP is going to be, you know, I think less than a billion. That's my best guess based on conversations and things that I'm seeing. It could be more, it could be less, but that's what I think we're at, you know, here in the beginning of 2026 left on the OTC desk, dark pools, and the exchanges. It really could be even as little as 100 million XRP, but there's no way that you can look at the on-chain analytics and be able to discern that. You're going to have to talk to every single exchange, OTC desk, and dark pool and get verified numbers if you really wanted the correct amount because the on-chain analytics just show you what's sitting in a wallet. It doesn't show you the overlying accounting mechanism across all these parties.
So, with all that said, it really won't take that much volume on XRP. If there's only 100 million XRP left to be traded, you would only need at today's price around $200 million worth of interest or buying pressure on XRP before all of that was gone. And then price would gap up to where people were starting to sell their XRP onto the market to be able to meet that demand. And if there's an insatiable appetite, price will gap significantly higher than people anticipate. And that is where people will be willing to sell their XRP and enough will come onto the market to be able to meet that demand. And that'll be the new price on the market for XRP, which will also allow the back-end settlement of these systems. The FX market will then be able to use it as a liquidity buffer as all of that yen flows back in to the Bank of Japan or those other currencies swap back to yen to be able to repay those loans. There's going to need to be something there that's a decentralized exchange between those currencies at scale. Otherwise, the FX market's going to lock up. Same thing on these exchanges. If Tether depegs, because of the reverse carry trade unwinding, there's not going to be enough liquidity for them to settle between all of these currencies. They are also going to need a DEX or a bridge asset to be able to settle those pairs. You've also got the back-end settlement of the stock market. You need something between the clearing houses and the brokers to be able to derisk from those Bitcoin positions and the other stock positions real time for these investment banks to mitigate those losses. And ideally, they're holding something like XRP on their balance sheet that allows them to rebalance their assets and liabilities. And again, a lot of this is speculation, but at the end of the day, I don't see another option out there that fixes all of these gaps that are going to occur in the market. XRP is designed to move value instantly, bridge currencies, and reduce settlement risk. Japan's going to face the FX volatility as capital rushes back across the borders, and XRP could act as that buffer, not a reserve.
During this crisis, OTC liquidity is going to disappear. Dark pools are going to dry up, and the trading is going to move onto the exchanges. If demand spikes and supply is thin, price becomes the clearing mechanism. And realistically, XRP is going to have to be somewhere between three and four digits in order to be able to facilitate the liquidity requirements necessary in this situation.
In closing, hopefully you have a better grasp and understanding of what all this means. We are at a point in history where the entire infrastructure for the financial system is about to shift. When I say this is a once-in-a-lifetime opportunity, I don't mean that lightly. People will tell you, "Oh, there's a bunch of once-in-a-lifetime opportunities." This literally will not happen again for the next two, three, 500 years. This levels the playing field for all of the sovereign nations out there in order to be able to compete, settle real time without counterparty risk. There will be no one reserve currency. On the other side of this, XRP will sit as a decentralized neutral bridge asset in between all of those sovereign currencies to be able to settle them real time where everybody runs a node on the network and they can trust the network. They don't have to trust one another. This has been built in the background for 20 plus years culminating to this point in time where it's going to be used in this crisis reaction solution type situation. You've heard many politicians say never let a good crisis go to waste. This is that situation that's going to be playing out.
So again, this is not financial advice. You should do your own research, verify everything that I'm saying. I'm just some crazy guy on the internet. But at the end of the day, I want to make sure people are informed. They understand the catalysts that need to happen in order for these things to play out. And I do believe that it's highly possible here in 2026 that we could see all of these macroeconomic events unfold, the dominoes fall and XRP rise to that number one digital asset. Let me know what you think in the comments below. Do you think I'm crazy? Do you think this is way too much and it's never going to happen? Do you think that this is on point and you're excited? Let me know down below. Please like, subscribe, and we'll see you on the next.