Paper Gains, Real Pain

The Dutch have a soft spot for savings. We like having something tucked away, even if it just sits there. Zero percent interest? Fine. As long as it's in the account, like a financial security blanket. This perception of financial safety means we barely invest.

That's a problem, according to everyone who knows anything about money. De Nederlandsche Bank, for instance. Or the AFM, they say it too. And recently former CEO Peter Wennink came by with a future report still fresh off the press. All delivering the same message in different fonts: we're saving ourselves poor. We're leaving money on the table, in our own country.

Investing, they say, isn't just good for your own wallet, but for the Netherlands too. More investors means more capital, more investment, more growth. You'd think: great. Let's encourage that. Let's make it easier. Let's gently nudge people toward "participating" instead of "watching from the sidelines."

But no. The Hague has a different plan.
The Hague says: "How nice that you invest. We're going to tax that more heavily!"

The new miracle cure is called an unrealized gains tax. The essence is simple: if the value of your investment rises, you owe tax. Even if you don't sell. So you have gains, but none of it is actually in your account yet. It's the kind of gain you can point at. On paper, or in an app. A little graph ticking upward that briefly makes you feel like a clever boy.

And then: pay up. Paper gains, real taxes. And with a bit of bad luck, you'll be sitting at the table calculating like a nervous first-year student. Not because you enjoy it, but because otherwise you'll have a fiscal disaster on your hands.

This has a lot to do with volatility. Investors know that word all too well. Prices can go up, but also down. Sometimes sharply down. That's not a bug, it's the nature of investing. Without those risks, returns couldn't exist.

But under the proposed system, that volatility becomes a kind of financial chokehold. Imagine you have a stellar year. Your portfolio shoots up. You pay tax. And the following year comes the crash. So you've lost both your tax payment and your gains. If you didn't sell in time, you could end up with a problem that can't be neatly resolved with "a conversation."

And we haven't even mentioned people who can't simply sell. Real estate. Family business. Gold bars. Illiquid holdings. The kind of wealth that doesn't come with an app with a flashy "sell" button, but requires a notary, a buyer, and three months of paperwork. The system acts as if you can always liquidate and there's always someone standing by with a smile and a bag of cash.

A world where liquidity is always available. Where timing never works against you. Where the tax authority never shows up at an inconvenient moment. That world surely exists somewhere. Just not in the real world. Somewhere in heads, in PowerPoint presentations and Excel sheets.

And the strange thing is: alternatives exist. A wealth tax, for example. Boring. Wonderfully boring. Predictable. No timing games. No "pay without cash." You tax ability to pay, not daily market rates. You can even make it progressive, if that's your thing.

But The Hague is stuck in a tunnel. About 25 years ago, "taxing returns" became the mantra, and it's since been treated as holy writ. So now they're mostly tinkering with details like reference dates, definitions, and exceptions. Nobody's asking the main question anymore: do we want to burden people with taxes on gains that don't exist yet?

We already know The Hague's answer.
"How nice that you invest. We're going to tax that more heavily."

More Alpha

Are you a Plus member? Then we continue with the following topics:

1. Battle against Clarity Act intensifies
2. NYSE embraces tokenization
3. Ether staking hits record

1️⃣ Battle Against Clarity Act Intensifies

Contribution by Erik

In the News brief of January 19, we wrote that consideration of an important American crypto law had been postponed. Unexpectedly, Coinbase CEO Brian Armstrong withdrew his support for the Clarity Act. This week the situation escalated further: what began as political delay has erupted into a head-on collision between the traditional banking world and the crypto sector. Yet the impasse isn't complete, and work continues behind the scenes on a compromise.

A week and a half ago, Armstrong warned that the law in its current form "stifles innovation." Last week, at the World Economic Forum in Davos, he chose a frontal assault by publicly accusing the banking lobby of "hijacking" the Clarity Act to eliminate competition.

In his appearance on the WEF panel The Tokenization of Everything, he elaborated on the Clarity Act. He stated there that a law intended for consumer protection was at risk of becoming an instrument for bank protection.

American banks have also hardened their stance and launched a counteroffensive this week. More than three thousand bankers have sent a letter to the Senate. Their goal? Banning yield on stablecoins. The fear in the traditional sector is palpable: if consumers can easily earn higher interest via dollar stablecoins than on a regular savings account, banks fear capital flight.

The Crypto Sector Becomes Divided

Although Coinbase is now blocking the law to secure better terms for DeFi and stablecoins, the crypto front is showing cracks. Parties like Circle, the issuer of USDC, and exchange Kraken are inclined to support the law anyway, despite its flaws. Their argument: a bad law is better than no law. Without this legislation, the US will continue to lag behind Europe (MiCA), putting the brakes on much-needed institutional adoption.

An Escape Route?

While the Banking Committee is in a stalemate, an escape route opened on January 21. Republican Senator John Boozman has presented an updated bill through the Agriculture Committee. Unlike the Banking Committee's Clarity Act, this version avoids regulating stablecoin yields, as this falls outside the Agriculture Committee's jurisdiction. The proposal also gives the CFTC, the commodities watchdog, more power over the crypto market.

The proposal is a "GOP-only" draft, meaning it doesn't need support from Democrats. Think of it as a fast, partisan route to break the deadlock.

Why Time Is Running Out

The urgency has only increased this week. Political analysts warn that the Clarity Act must pass the Senate before summer. If it doesn't, the approaching midterm elections in November will consume all attention and this "American MiCA" might disappear into cold storage for years.

There's still plenty of reason for optimism, by the way. Although Boozman's proposal is currently presented as a purely Republican initiative, Democratic Senator Kirsten Gillibrand remains notably optimistic about an eventual broadly supported solution. In an interview with CNBC, she emphasized that the "GOP-only" status of the current text is a snapshot. According to Gillibrand, Democrats and Republicans on the Agriculture Committee have been in daily talks for months and are very close to an agreement.

2️⃣ NYSE Embraces Tokenization

Contribution by Peter

The New York Stock Exchange (NYSE) is working on a new trading platform where listed products can be issued and traded as tokens. The initiative falls into the real-world assets category and focuses on so-called "tokenized securities": stocks and ETFs that circulate as tokens with activity taking place on blockchain-like infrastructure.

According to parent company ICE, the platform should combine several features that are currently mainly known from the crypto world. Think 24/7 trading, instant settlement, and the ability to place orders based on dollar amounts instead of share quantities. Notably, ICE also mentions "stablecoin-based funding," suggesting that stablecoins could play a role as payment method or collateral.

With this, the NYSE is betting on an overhaul of the relatively slow and expensive infrastructure behind traditional markets. In the plans, Pillar, the NYSE's newest matching engine, is integrated with blockchain networks. The company states that the new platform "supports multiple networks," including for "transaction processing and custody." Details are lacking, but it appears to be more than just a marketing layer on existing trading.

Tokenization has long been on the radar of major financial players. Nasdaq has also recently submitted a proposal to US regulators to enable tokenized securities. Further rollout depends on SEC approval.

In the crypto world, this news has been received mostly positively. It would underscore the inevitable shift toward 'RealFi,' the integration of DeFi with traditional financial systems.

But there's also criticism. The press release leaves many important details open. Which networks will be supported? Which stablecoins are involved? Where is the platform accessible? Can issued tokens circulate freely? Analysts who have been in the crypto world for a while fear the answers: "It always ends the same way. The suit simps will be disappointed yet again."

3️⃣ Ether Staking Hits Record

Contribution by Peter

Ethereum appears to be undergoing a quiet but significant shift. For the first time, more than 30 percent of all ether is staked. In absolute numbers, we're talking about over 36 million ETH, with a combined value of approximately $120 billion. This means a record portion of the total ether supply is now locked up. The network is more economically secured than ever.

This development is visible in the validator queues. After months of outflow pressure, the exit queue has almost completely emptied. Validators who want to exit can currently do so within minutes. At the same time, the entry gate is busy. New validators must now wait 45 to almost 50 days to join, longer than during the previous peak in summer 2023.

Some analysts directly link this development to their price expectations. The larger the portion locked up for staking, the smaller the liquid ETH supply, thus lower selling pressure ahead. If buyers come, it moves the ether price faster, the reasoning goes.

An important role in staking dynamics seems to be played by major players. Staking provider Kiln withdrew hundreds of thousands of ETH from staking last fall following a security incident. Some of that has since returned to the company's validators, though current levels remain significantly lower than before.

Additionally, BitMine's activity stands out—the ether treasury with Tom Lee at the helm. The company now holds more than 4.2 million ETH and recently reported staking nearly 600,000 additional ETH in a single week. That inflow coincided almost exactly with the rise in the entry queue.

The high staking ratio brings a familiar tension. Ethereum deliberately limits the pace at which validators can exit. This increases network stability but also means a large-scale exit—for example, if there's market-wide need for liquidity—takes significant time to process. The current situation mainly reflects confidence now, not stress resilience under extreme conditions.

Vitalik Defends Ethereum Exit Queue Amid Galaxy Digital FUD

Ethereum founder Vitalik Buterin responds to criticism over staking exit delays, while Galaxy Digital deletes controversial posts critical of ETH.

Cointelegraph

Either way, for now the picture is relatively calm: the Ethereum network is slowly but surely becoming more economically robust. No spectacular news, but a structural development.

🍟 Snacks

To wrap up, some quick bites:

• BitGo kicks off 2026 with crypto IPO. The custody company priced its public offering at $18 per share, above the previously indicated range. With this, the company raised over $212 million and reaches a valuation of around $2.1 billion. BitGo is the first serious crypto player to go public in 2026. Analysts are positive about the custodian's successful IPO: institutional interest is currently not in hype, but in infrastructure.
• Kansas wants to establish state fund for bitcoin and crypto. According to the bill, the fund will be filled with crypto assets that come to the state through unclaimed property rules, for example when holdings go unclaimed for extended periods. Notable detail: bitcoin, unlike other assets, explicitly may not be transferred to the general state treasury. The plan fits a broader movement in the US to establish how governments handle bitcoin.
• Stablecoins could absorb up to 20% of bank deposits in emerging markets. According to S&P Global, total stablecoins in emerging economies could grow in the most extreme scenario from around $70 billion now to $730 billion, accounting for 10 to 20% of bank deposits in countries like Argentina and Turkey. The driving forces are familiar: purchasing power protection, international payments, and trade. At the same time, S&P states that even this scenario won't disrupt banks and monetary policy.
• Bermuda wants to bring its entire economy 'onchain' with help from Circle and Coinbase. The island wants to run payments, financial services, and business processes as much as possible via blockchain networks and has chosen Base, Coinbase's network, for this purpose. USDC is to play a central role as payment method, bypassing expensive and sluggish international payment rails. Bermuda positioned itself early for this development: the country has been working toward this transformation since 2018.
• DePIN loses shine with venture capital. Investors are becoming divided about so-called decentralized physical infrastructure networks (DePIN): projects that aim to decentralize and finance physical infrastructure, from GPUs to cell towers, with tokens. Critics say the models clash with economic reality. Hardware is expensive, financing even more so, and returns often fall short. Last year, the WEF predicted this market could grow to $3.5 trillion. In 2025, DePIN tokens lost more than 80% of their value on average.
• Bitcoin is seen as a payment method but mostly sits idle in wallets. More than half of crypto holders rarely or never use their bitcoin for payments, according to a GoMining survey of 5,700 participants. Nearly 80% say they do believe in bitcoin as a payment method. The gap is mainly practical: too few stores accept bitcoin, transaction fees are perceived as high, and price volatility makes payments unattractive. Those who do spend crypto mainly do so in games, for gifts, or larger purchases.
• Colombian pension sector also cautiously moves toward bitcoin. AFP Protección, Colombia's second-largest fund manager, wants to launch a fund with limited bitcoin exposure. The product is exclusively intended for investors with a suitable risk profile and is offered through financial advisors. This is explicitly about long-term diversification; mandatory pension funds remain off the table. Protección has approximately $55 billion under management.
• Bitcoin creeps into daily life in Las Vegas. More and more shops and services in Las Vegas accept bitcoin, from chains like Steak 'n Shake to small businesses and medical practices. Entrepreneurs say it attracts new customers and lowers payment costs. Square helps with this: about 4 million American retailers can accept bitcoin free of charge through 2026. This bypasses the usual 2.5 to 3.5 percent credit card fees.
• UBS takes cautious step toward crypto for wealthy clients. According to Bloomberg, UBS wants to make crypto investments available to some of its private banking clients. The Swiss bank, managing around $4.7 trillion in assets, is working on an offering for bitcoin and ether, among others, but is still selecting partners and working out details. A concrete launch has not yet been set. UBS was long known for being cautious about crypto.
• Binance bets on Europe with MiCA application in Greece. The exchange has also established its European holding there, under the name Binary Greece. If the regulator gives the green light, Binance can offer and market its crypto services throughout the EU. Whether that succeeds remains a pressing question: Binance is at odds with important European regulators.

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