Written by: Charlie Little Sun

Hello everyone, welcome to the year 2026. It has indeed been a long time since our last update, and I’m excited to communicate with you all.

In the new year, our plan is to better integrate this blog with our public account. Over the past year, our public account has mainly focused on content related to blockchain and cryptocurrencies, and we will continue in this direction in the new year.

The new year has an interesting start.

Over the weekend, a highly shocking event occurred, which is very much related to my previous professional experience. This event, which you may already know about, is: the President of Venezuela was unexpectedly captured in a lightning operation by U.S. special forces and taken to the United States. Today, Monday in the U.S., the court proceedings have begun.

This entire event has a significant impact on the entire Latin American market, as well as the international political situation and financial markets. When I was at Franklin Templeton, I was responsible for the Latin American market. Although I did not directly manage investments in Venezuela, the markets I covered, such as Colombia and Chile, are very relevant. Colombia, for instance, has also been affected by this event in a certain sense, which I will elaborate on later.

The event was very sudden, occurring in the early hours of January 3rd, Saturday. The U.S. Delta Force unexpectedly launched a raid on the Venezuelan capital, Caracas, capturing President Maduro and his wife.

This operation, codenamed "Absolute Resolve," began around 2 a.m. The U.S. military targeted many key locations in Caracas, and we can see many images online of U.S. helicopters flying at low altitudes.

What is shocking is that there was no resistance. Delta Force quickly captured the Maduro couple and transported them out of the country via helicopter and transport planes. We can see that Trump posted a very famous photo on social media: Maduro blindfolded, holding a Costco water bottle, and wearing Nike clothing. This photo spread across all social media.

Let’s start with a "Brief Overview": Why is it noteworthy?

Why is it noteworthy? There are several points. I will first provide a brief overview, along with our baseline scenario and a general analysis of tail risks. After that, I will delve into specific analyses regarding international politics, U.S. politics, capital markets, and even blockchain, among other aspects.

Overall:

This action was not authorized by the United Nations. Such unilateral military actions represent a significant subversion of the internationally recognized norms, leading to a strong backlash.

We can see that not only Venezuelan soldiers suffered casualties, but civilians did as well. We also know that Venezuela has a very close relationship with Cuba, and many Cuban advisors lost their lives in this operation.

Trump had already accused Maduro of "drug terrorism" during his first term. The main charge against him in U.S. court today is also this accusation. In the U.S. narrative, this charge is considered a legitimate action, but everyone knows that drug terrorism is just a pretext; the underlying factors are actually related to energy and oil.

This "surgical enforcement" was very swift, but most countries condemned the military action that was not approved by the Security Council. This sets a very dangerous precedent. One can imagine that if the U.S. has the capability to act in this way, then no head of state is absolutely safe.

We can see that most of America's allies have been cautious in their wording and have not directly criticized the action. However, major powers like China and Russia, as well as Latin American countries like Brazil and Mexico, have strongly condemned the U.S. for openly violating the sovereignty of these nations.

We remember the last time the U.S. acted in such a manner was around 1989 when it invaded Panama. Since that military action, this is the most dramatic intervention by U.S. forces in Latin America.

Therefore, especially in the current chaotic international situation, this has caused a significant shock. Many regimes are beginning to worry: will the next round be us? The media is discussing, for example, Iran—because Iran has also seen a lot of domestic turmoil recently.

Including the currently contentious relationships among major powers: will U.S. relations with China and Russia become more tense? In fact, this level of action has exceeded the scope of "Latin American and American news" and has become a global news event. Despite the ongoing discussions about America's Monroe Doctrine, "America for Americans," this incident indeed has international and global implications.

Baseline Scenario: Political Transition Has Begun

Overall, in my view, the development of this situation has a baseline scenario.

We now see that Venezuela has begun the process of political transition. After Maduro's capture, Vice President Delcy Rodríguez temporarily took charge of the capital and has received support from the military. Today, we see reports from U.S. media stating that Rodríguez has begun cooperating with Washington.

Interestingly, the U.S. is not directly supporting the current opposition in Venezuela but is cooperating with the current Vice President. We can see that the Vice President is a so-called technocrat with good execution capabilities, so forming a transitional government is a relatively reasonable action.

The basic changes I foresee are: opening up the oil industry and combating drug smuggling. These may be the two most important directions.

Today, we can see news from Reuters: Chevron's operations in Venezuela, which had been paused, have begun to resume. There is a photo of a Chevron oil tanker leaving Venezuela. We can see that the oil industry is in a relatively stable transitional state, and it appears that the current caretaker government is cooperating smoothly with the U.S.

Of course, the U.S. military also poses a threat of further military strikes, as this lightning operation was relatively limited, targeting only key objectives. The next steps could include lifting the oil export ban, further opening the Venezuelan oil market to more U.S. oil companies, and cooperating with U.S. drug enforcement actions, all of which are likely scenarios.

Market Reaction: Betting on "Controllable Risks"

The market's reaction also reflects this baseline scenario.

For example, oil prices have only risen slightly, with Brent crude increasing by about 1.5% to 1.6%. The stock market has not been significantly affected, showing a slight increase.

Investors generally judge that although Venezuela has very large reserves, its production is limited due to industrial capacity and the lack of access for international oil companies, so its output accounts for only about 1% of global production, which is very small. With a new government in place and the U.S. easing sanctions, Venezuela's crude oil supply may increase, which is why oil prices have not surged significantly.

This indicates that investors currently view this as a situation with very controllable risks: the market believes that U.S. actions will be limited to Venezuela and may not trigger a larger conflict. Despite many countries expressing concerns about the next steps from the U.S., we will discuss this further.

Tail Risks: Low Probability, but Truly Dangerous

In addition to baseline risks, there are also tail risks. Although they are low probability, we can imagine some extreme scenarios occurring.

If the situation deteriorates:

First, if China and Russia take asymmetric retaliatory actions—even if not directly confronting U.S. forces, such as launching cyberattacks or supporting proxy states in opposition, or using this as an excuse to do similar things in other places against smaller countries. For example, if the U.S. can capture people, can we also threaten countries we are concerned about? For instance, could Putin really take action to capture Zelensky? These scenarios are not entirely improbable.

The second, more dangerous scenario involves Iran. If Iran gets involved, its oil production is far higher than Venezuela's. Iran is in a core position in the Middle East and is a powder keg that can explode at any moment. If Iran were to unite with Venezuela to confront the U.S., conflicts in the Gulf region could disrupt the Strait of Hormuz, which is a key route for 20% of global oil transport. Then oil prices would not just rise by 1.5%, but could skyrocket, leading to a global energy crisis.

Inflation could surge, significantly impacting economic growth, and could potentially trigger a global recession, which is very possible. If such a black swan event occurs, global markets and political situations would be very turbulent.

Thus, while the baseline scenario is relatively optimistic and calm, even potentially favorable for capital markets and the crypto market, tail risks still exist, and we will continue to monitor them.

Cryptocurrency: Geopolitics Treating Crypto Financial Infrastructure as Weapons and Battlegrounds

Beyond the macro situation, when discussing the cryptocurrency ecosystem, we can see that this event reflects how geopolitics has begun to treat crypto financial infrastructure as weapons and battlegrounds.

Why do I say this? Because Venezuela's actions in the cryptocurrency field over the years have become an interesting case of the game between major and minor powers.

Under the heavy sanctions imposed by the U.S., the Maduro regime has actually developed a set of "crypto survival skills" in the cryptocurrency field. For example, using Tether's USDT to bypass U.S. financial sanctions. Reports indicate that starting in 2024, Venezuela may even allow foreign buyers to use USDT to pay for oil.

Domestically, we know that Venezuela has severe inflation, strict import and export controls, and its currency is tightly controlled. Many businesses and citizens use cryptocurrencies as a daily transaction tool to buy everyday goods. We see some data estimating that by 2025, 10% of retail transactions will be completed through cryptocurrencies; approximately 9% of national remittances are conducted through crypto channels.

Thus, in the cracks of U.S. financial blockades, cryptocurrencies have become a pillar of Venezuela's shadow economy—similar to Argentina and other countries with severe inflation and currency controls: stablecoins play the role of a "dollar substitute."

Now, since the U.S. has taken the lead in this change, we will see that the crypto economy, which runs parallel to the traditional banking system, will face a severe test.

The U.S. began promoting stablecoin legislation last year, a so-called "reconciliation," tightening these crypto channels. Through OFAC sanctions, more wallet addresses and currency services related to Venezuela may be blacklisted.

If one follows the U.S. compliant stablecoin route, issuers have the right to freeze your address; compliant exchanges may also hesitate to touch these funds. Venezuelan-related accounts carry significant risks: once linked to the Maduro government or sanctioned entities, they may be locked or frozen. We have also seen that Tether and Circle have the ability to freeze stablecoin addresses. Exchanges may temporarily block access from Venezuelan IPs or even freeze local withdrawals, introducing stricter regulations.

Even the "oil cryptocurrency" Petro issued by the Venezuelan government in 2018 may be completely delisted or isolated.

For ordinary Venezuelan users, this is not good news. In my last startup, our design team leader lived in Venezuela and had a strong need to receive salaries in stablecoins. If merchants and citizens start using stablecoins for payments, will they worry that their USDT becomes "black money," potentially linked to the government or sanctioned addresses?

As soon as the news broke, there were rumors that local USDT over-the-counter trading immediately saw discounted sales, such as USDT being sold at a discount of $0.95—fearing that the coins would be locked in wallets. Although this is more speculation, it is enough to illustrate the panic mentality.

If everyone rushes to exchange potentially "tainted" stablecoins for other assets, could this lead to greater demand for Bitcoin, Ethereum, Solana, and other cryptocurrencies that do not rely on centralized issuers and cannot be frozen at will? It is possible.

Thus, in the short term, the use of cryptocurrency in Venezuela may actually decline, but we will gradually see a shift: from easily frozen stablecoins to more decentralized and non-freezable mainstream cryptocurrencies.

This also serves as a warning for other emerging markets: Argentina, Nigeria, Kenya, etc., where the public uses cryptocurrency as a hedge against local devaluation and financial instability. In the future, they will be more concerned about whether the U.S. can extend its jurisdiction to freeze stablecoins and whether exchanges can suspend accounts at any time. They may turn to more decentralized currencies and decentralized exchanges.

Overall, this incident has pushed the crypto financial pipeline to the forefront of geopolitical games: a larger split in the crypto world may emerge—on one side are compliant stablecoins that are "reconciled and sanitized"; on the other side are decentralized, offshore gray crypto asset camps.

Regulation will also continue to tighten, closing loopholes that hostile regimes exploit to evade sanctions using cryptocurrency. Anti-money laundering and anti-fraud measures will become stricter. Ordinary people will be more worried about traditional finance and centralized cryptocurrencies, leading them to rely more on decentralized assets to protect their wealth.

Geopolitical Risks for Crypto: A Double-Edged Sword

From the perspective of international order, the impact on cryptocurrency is twofold.

On one hand, in an atmosphere of "who will be next," the appeal of decentralized, censorship-resistant assets (like Bitcoin) increases. Individuals in high-risk regimes—wealthy individuals and high-ranking officials—may quietly transfer their wealth from stablecoins to Bitcoin or privacy coins to protect against traditional financial freezes, moving their assets outside the banking system.

There are indeed rumors that Venezuelan high-ranking officials have been accumulating Bitcoin as a shadow reserve in recent years: converting part of their oil revenue into cryptocurrency reserves. Reports suggest that since 2018, the Maduro regime has hoarded up to 600,000 Bitcoins through gold and oil transactions, and the confiscation of mines. This number is high and awaits verification, but it indicates that the possibility of Bitcoin serving as a national wealth reserve is not unfounded. Similarly, sanctioned countries like Russia and Iran are also exploring ways to use cryptocurrency to bypass the dollar system.

From an investment perspective, investors may believe that these regions will buy large amounts of BTC/ETH as a hedge, thereby driving up coin prices. Today, Bitcoin has seen a slight increase, which reflects that this line of thinking is being partially accepted.

The rise in geopolitical risks will enhance the long-term demand for crypto assets, and the "digital gold" narrative will be reiterated—especially when the real world is unsafe.

However, on the other hand, short-term geopolitical shocks can also hinder the crypto market. When the risk-averse mode is activated, investors often first sell high-risk assets. Historically, when sudden conflicts trigger financial panic, Bitcoin prices often drop alongside the stock market, rather than rising like gold.

For example, during the outbreak of the Russia-Ukraine war in 2022 and the surge in oil prices, Bitcoin experienced a significant drop. In times of panic, funds flock to traditional safe-haven tools like the dollar, U.S. Treasury bonds, and gold. The "digital gold" narrative does not hold in the early stages of a crisis—at least initially, Bitcoin resembles a high-risk "digital Nasdaq."

Therefore, if the worst-case tail scenario we mentioned earlier occurs (escalation of conflict, soaring oil prices, etc.), Bitcoin may decline rather than rise.

At the same time, during tense situations, countries often impose stricter controls on capital flows to prevent capital flight: prohibiting the public from buying and selling cryptocurrencies, and tightening VPN regulations. As Western countries advance stablecoin legislation, they will also be more vigilant against hostile nations using cryptocurrency for fundraising or money laundering, immediately freezing addresses at the first sign of trouble.

This is not good news for the gradually formalizing crypto business: compliant exchanges and wallet service providers will be forced to enhance monitoring, compliance costs will rise, and user experience will deteriorate. Industry development will be slowed down.

In summary, when the international order is disrupted, cryptocurrency will exhibit a contradictory double-edged sword effect: on one hand, reinforcing the narrative of "hedging tools," and on the other hand, providing countries with more reasons to weaponize the financial system and strictly control crypto channels.

Sanctions and Compliance: The U.S. Will "Plug the Leaks," and Crypto is a Key Link

This incident highlights the central role of sanctions in U.S. strategy while also exposing the loopholes in traditional sanctions. The U.S. will seize this opportunity to shore up its defenses, and the crypto space is one area that has been relatively overlooked.

For a long time, the U.S. has imposed severe economic sanctions on Venezuela, Iran, Russia, and other countries, and these regimes have been trying their best to evade them. Taking Venezuela as an example, the Maduro government has managed to survive to this point largely by exploiting loopholes in the sanctions system, with cryptocurrency being one of the key gaps.

After Maduro's capture, the U.S. will likely gather a wealth of internal intelligence to study how he maintained fiscal resources under sanctions. This will drive the U.S. to strengthen its sanctions against cryptocurrencies.

It is expected that they will find substantial evidence: how the Venezuelan government or its proxies utilize cryptocurrency and stablecoin transactions; how PDVSA uses USDT to bypass banking regulations; how brokers help businesses convert bolivars into USDT for imports; who the counterparties are and what the channels are. The U.S. will then close these loopholes one by one.

Next, we may see: the OFAC sanctions list gradually expanding, adding a batch of crypto wallet addresses related to Venezuela, and even linking addresses from countries like Iran. More wallets will be frozen—especially those belonging to government officials, relevant institutions, and addresses involved in illegal oil trade.

In the process of plugging these leaks, U.S. dollar stablecoins will become more prominent: the U.S. will pressure stablecoin issuers to implement geo-fencing or more targeted freezes, restricting the use of stablecoins by Venezuelan users and offshore accounts, and freezing addresses related to criminal activities.

If this happens, large amounts of USDT in the national treasury will be passively affected, leading to significant impacts. The liquidity of black market USDT will plummet, and the USDT held by ordinary people will differentiate into "clean" and "dirty." Clean coins are those not related to sanctioned funds; dirty coins will trigger panic, discounted sales, and reduced trading. There may even be a "two-tier pricing" situation: USDT being sold at a significant discount locally, greatly diminishing the purchasing power of ordinary people.

This "clean/dirty" differentiation may not only remain within stablecoins but also permeate DeFi and offshore exchanges: platforms will strengthen regional and address restrictions, unwilling to serve blacklisted users to avoid trouble with the U.S.

What is even more challenging is: if DeFi liquidity pools mix in funds that have touched sanctioned addresses, they will become "dead money" that cannot be withdrawn, affecting the pool's exchange rate, and governance of the protocol will also face headaches. Will DeFi protocols refuse to accept collateral from certain addresses? How to determine if it is related to sanctioned entities? Should assets be frozen? All of these issues create conflicts between the ideal of "decentralized governance" and the reality of compliance.

Many core teams of DeFi projects may fear legal repercussions and ultimately seek compliance for self-preservation. If major DeFi protocols all adopt compliance filtering, the DeFi ecosystem may see a split between "clean DeFi" and "underground DeFi": compliant institutions will enter the market, but the ideals of privacy and statelessness will fade; the underground side will insist on anti-censorship principles, but its scale may shrink, existing in a "guerrilla" form.

Regardless, for global crypto enterprises, compliance costs will rise significantly: more resources will be invested in monitoring on-chain activities and cooperating with investigations. On-chain monitoring and data analysis companies may benefit; smaller companies may struggle, and some small projects may exit. Industry concentration will increase, innovation will slow, and the decentralized ethos will be undermined.

In summary, from the perspective of compliance and sanctions, this incident has a profound impact on the crypto ecosystem. Venezuela serves as a case study for sanction loopholes, and these loopholes will be gradually tightened by the U.S. The crypto space may face a wave of "cleansing": clearing out parts exploited by dictatorial regimes, leading to short-term turmoil and liquidity contraction; in the long term, forming a new shape—clean assets integrating more into mainstream finance, while non-compliant assets hide in gray areas. Ordinary users must be more cautious: a misstep could lead to their assets being frozen or trading being restricted.

Unfortunately, in the context of great power competition, "Code is law" must give way: the real law is still state power. The crypto world will be reshaped by the realities of power in the real world.

Energy: Mild in the Short Term, Potentially Lower Oil Prices in the Long Term (Baseline Scenario)

Now let's talk about the elephant in the room: oil and gas. Venezuela is, after all, the country with the largest oil reserves in the world. Although its production has accounted for less than 1% of global output in recent years, the regime change has profound implications for oil, gas, and even shipping.

In the short term, the market perceives the crisis as relatively minor: Brent crude has risen slightly by 1.5%, and investors are not overly concerned about supply disruptions. Chevron's oil tanker has left Venezuela, and various signs indicate that the risks of oil field shutdowns and port blockades are low. Production has not been affected, and many believe that after the regime change, the U.S. may lift restrictions on Venezuelan oil, opening it up to more companies (U.S./European) for investment in extraction and refining, leading to increased future supply and stable oil prices.

Unless a worse situation arises: if the caretaker government cannot control remaining factions and a "scorched earth policy" emerges—such as blowing up refineries or damaging pipelines. Repairing these facilities will take time and will significantly impact the oil market. Or if military conflicts disrupt tanker transportation, that would create a stark contrast to the baseline scenario.

In the medium to long term, the baseline scenario suggests that if the transition is successful, the U.S. lifts some sanctions, and international oil companies return to invest, production will increase, global supply will rise, and oil prices may actually decline. But this is an ideal situation that requires stability and time (it may take two to three years to see results).

Based on short-term and medium-to-long-term judgments: oil prices may rise slightly in the short term but decline in the long term, which is friendly to inflation; central banks will have more room for easing, which is favorable for risk assets.

Gold, Silver, and Volatility: Safe Haven Buying, but No Panic

The instinctive reaction of investors to major geopolitical events is twofold: one is to flock to gold, silver, and U.S. Treasury bonds, and the other is that uncertainty drives up volatility.

This time is no exception: gold has risen significantly, while stocks are also up (but not skyrocketing). On one hand, safe-haven assets are rising, while risk assets are also increasing, because investors believe that the crisis will have a limited impact on the global economy, viewing it as a localized event that does not hinder overall risk appetite.

The VIX has not risen significantly, remaining in the teens; the oil volatility index has also risen moderately. This means that while a few are cautious, the majority remain relatively optimistic.

Macro: Baseline Almost Unaffected; Tail Risks Could Plummet

Let’s systematically review the macro situation: interest rates, dollar strength, emerging market credit risks, and global liquidity.

The macro backdrop at the beginning of 2026: central banks have raised interest rates to combat inflation, and now inflation is easing while growth is weak, bringing monetary policy close to a turning point—interest rates will either remain high or begin to decline, with the Fed's rate cuts serving as confirmation.

Will the Latin American events change the macro picture? In the baseline scenario, it is almost unaffected, and may even become more accommodative: if the situation stabilizes, the new government cooperates, and the transition is smooth, the U.S. eases sanctions, reducing one uncertainty for global investors, who will shift their focus back to fundamentals. This year may see a more accommodative monetary environment, which often leads to better performance for crypto assets.

However, if tail risks materialize (issues in the Middle East, soaring oil prices), the macro situation could plummet: inflation expectations may rise, central banks may become more hawkish, and interest rate hike expectations could return, tightening global liquidity. Risk aversion will push up the dollar and U.S. Treasury yields, which would be a significant blow to crypto. Emerging market spreads will soar, capital will flee, local currencies will depreciate, and a chain reaction of debt crises could lead to a decline in risk assets.

In summary, the macro impact depends on the direction of the situation.

AI and Energy: Rising Priority of Energy Security Will Indirectly Affect Computing Infrastructure

Finally, let’s discuss a more practical topic: Venezuela is related to energy, and energy is closely connected to AI.

The event itself has no direct relation to the AI industry, but the indirect impact lies in the fact that if it triggers a broader energy crisis or policy adjustments, countries will reassess energy distribution, which will affect investments in AI infrastructure.

First Level: Geopolitical conflicts lead to tight energy supplies and rising electricity prices, prompting countries to take extraordinary measures to ensure power for critical sectors; in extreme cases, high-energy but non-essential industries may be sacrificed to safeguard livelihoods. AI is important, but in extreme situations, it may also become a victim—potentially slightly ahead of crypto mining, but when power distribution is truly needed, both crypto computing power and AI may have to yield temporarily.

Another Perspective: The event has triggered a global emphasis on energy security, forcing countries to invest in energy independence. With Venezuela, the country with the largest reserves in the world, falling under U.S. influence, other nations will reassess their strategies from the perspective of "energy security first," while also not wanting to fall behind in the AI wave. This will create a "want both" scenario: on one hand, "drill baby drill," and on the other, "build baby build," expanding both energy production capacity and computing infrastructure simultaneously.

In the long run, this is actually beneficial for AI: the construction and training of AI data centers are currently constrained by energy. The event has heightened the importance of energy security, prompting countries to strategically reassess both traditional and new energy sources—in the context of intensified U.S.-China AI competition and the chaos of great power rivalry, the interplay between AI and energy deserves closer observation.

Conclusion

Today, we quickly analyzed the Venezuelan event from various angles, including international situations, geopolitics, cryptocurrencies, various financial markets, and even AI and energy. Of course, this is only the third day since the event occurred, and more developments will gradually unfold.

The situation is quite complex, especially at such a sensitive time, starting the year with such an unprecedented event.

If anyone has questions, feel free to leave a comment. If this is interesting, we can also consider doing live interviews, etc. Thank you all for your attention, and I hope you enjoy our new format this year.

Alright, see you next time, bye!

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