Artemis Weekly Digital Finance Fundamentals 2026.02.06
This week we dive into Hyperliquid, Market Rotation and Strategy & DATs
Welcome back to Artemis’ Weekly Digital Finance Fundamentals!
February started off with an intense drawdown in risk assets across crypto and tech. BTC and ETH drifted down an additional 18-27% alongside other majors, while QQQ was down 2.6%.
However, these selloffs look to be isolated, SPY is flat while the Dow is up as investors rotate to the safety of Verizon and Johnson and Johnson.
Despite the crypto drawdown, HYPE is up 7% as daily revenue continues to remain strong. Crypto-linked equities like $COIN, $HOOD and $FIGR sold off heavily this week, following the Bitcoin drawdown.
Today We Highlight:
Hyperliquid: The only green candle
Market Rotation from Growth to Value and Hard Assets
Strategy Q4 2025 Earnings ; DATs cumulative losses
1. Hyperliquid: The only green candle
Hyperliquid demonstrated exceptional resilience during this week’s crash as HYPE gained about 7% following the HIP-4 announcement and achieved new weekly highs despite broader market volatility.
Product Market Fit Validation
The HIP-4 upgrade introducing prediction markets and options addressed genuine user demand. Builders like @outcomexyz immediately positioned to deploy on HIP-4 which signals huge ecosystem confidence.
Furthermore, Coinbase listing provided institutional legitimacy. This is precisely what the market needs when sentiment is fragile.
Operational Excellence
Hyperliquid’s metrics that matter (last 7 days):
Daily revenue: maintained ~$3 million
Perps Volume: grew from $8 billion to $25 billion
Open Interest: stabilized around ~$5 billion
The team also reduced their unlocks for $650M to ~$5M monthly showing how they are aligned with the broader market.
Hyperliquid’s ability to ship meaningful product upgrades (HIP-3 → HIP-4) while maintaining strong operational excellence shows how strong fundamentals are able to ride through volatility.
2. Research & Article Spotlight
This week our head of Fundamental research Mario (@coveredcall) released a new piece on what’s behind the recent crypto and tech volatility. In “The Great Unwind,” he breaks down how the market has hit this weird moment where the Dow is cruising past 50,000 while crypto and fintech have gotten absolutely hammered, down 40% to 70%. What makes this especially rough is that it’s not some broader market crash; it’s a rotation.
Younger, tech-heavy investors are watching their net worth take a hit while Main Street is doing fine. Mario’s argument: this isn’t the death of growth, it’s a tactical shift into value and hard assets, and the institutional buyers plus production cost support suggest the pain is temporary with a clear setup for what comes next.
3. Strategy adjusts STRC mechanism, form Bitcoin Quantum program and sits on $5.7B in unrealized losses
Strategy reported Q4 2025 Earnings last night and was heavily watched as investors wanted to know what Saylor would do amidst the recent market volatility as bitcoin fell below $65K.
Highlights:
Massive Bitcoin Accumulation: Strategy increased its total holdings to 713,502 BTC at an average cost of $76,052 per bitcoin.
Dominant Capital Raising: The company became the largest US equity issuer in FY2025, raising $25.3 billion to fund its treasury strategy and “digital fortress”.
Operating Loss Driven by Accounting: Strategy reported a $17.4 billion operating loss for Q4 2025, primarily due to unrealized losses on its digital assets under new fair value accounting rules.
On Strategy’s earnings call, Saylor mentions Bitcoin would have to fall to $8K and stay there for 5 years for MSTR to not be able to cover their debt. The market seems to be reassured by these statements, as Bitcoin bounced off the $60K support zone and recovered to around $70K today.
However, there were important announcements between the earnings release:
STRC New “Variable Dividend” Mechanic
During the call, CEO Phong Le outlined adjustments to Strategy’s STRC preferred stock that management aims to anchor its market price near a $100 target. The monthly yield is calibrated according to the stock’s Volume-Weighted Average Price (VWAP) to minimize volatility.
As of February 2026, the dividend rate is 11.25%. The rules-based adjustment guidelines are as follows:
The systematic dividend adjustment framework risks creating a compounding yield trap if the STRC price persists below $95.00 for an extended duration. Continuous monthly increases of 50 basis points could lead to an unsustainable cost of capital that significantly shortens the company’s dividend coverage runway.
Nonetheless, the update provides flexibility to management to continue the proliferation of “digital credit”, but monitoring closely in times of market volatility will be crucial.
Quantum Resistance and Strategy’s Response
Quantum threats have acted as a persistent drag on Bitcoin’s price while dividing the community over how soon the risk will materialize and the best path toward achieving quantum resistance. This debate has created a rift between developers and investors regarding whether the network needs immediate cryptographic upgrades or if the danger remains a distant concern.
Executive Chairman Michael Saylor directly addressed “quantum fears,” dismissing them as “horrible FUD” and stating that any meaningful threat is at least a decade away.
However, to proactively manage this, Strategy announced the launch of a Bitcoin Security Program: Strategy intends to lead a program to coordinate with global cybersecurity experts and the Bitcoin community to develop quantum-resistant upgrades.
Every DAT is largely underwater on their holdings
DATs sit on $25B in cumulative losses, led by Bitmine and Strategy average cost basis around $3.9K and $76K. Furthermore, Bitmine’s losses alone exceed FTX, where ~$8B of customer assets were lost.
These unrealized losses represents a sobering statistic for DATs and underscores the significant headwinds currently facing the sector. While major players like $BMNR and $MSTR sit on multi-billion dollar drawdowns, we will be closely watching how this plays out.
Charts of the Week
The 20 Million Milestone: Bitcoin Supply is No Longer the Story
Memecoins make up less than 0.07% of Kamino’s deposits in 2026, down from 10% in 2024
Thanks for reading! Stay ahead this week by using the Artemis Terminal or pulling live data with =ART() in Excel.
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