Quick note from me this week: the number that sent ENA up as much as 27% in two days lives in a governance post, not a filing or a contract. I went looking for what it actually promises, and the answer is $22.5 million a year, eventually, if USDe grows another 78% first. The part that surprised me is where that money would come from, which is the budget Ethena currently uses to buy the growth the switch is waiting for.

Ethena Just Proposed Buybacks. How Does Its Plan Look for Investors?

Crypto projects have started returning value to their tokenholders, buying back tokens with real revenue the way public companies buy back stock, and voting to cut new supply. Ethena proposed a buyback program last week and ENA rose as much as 27% over the two days that followed. Solana's validators voted to cut the supply of new SOL. And Hyperliquid already spends nearly all of its trading fees buying back its own token, every day, automatically.

Buybacks themselves aren't new. Binance was burning BNB with a fifth of its quarterly profits years ago. What changed this year is that paying tokenholders stopped looking legally radioactive in the U.S., and value-return programs became standard in about a month.

These programs are not alike. Some are rules: written into code or a fixed schedule, automatic, easy to verify. Some are pens: decisions a foundation makes privately, on terms it sets. And the one that moved the market most last week hasn't bought anything: Ethena's buyback does not switch on until USDe, its synthetic dollar, grows 78% from here.

What Ethena Actually Proposed

Ethena's proposal would activate a "fee switch," routing a share of the protocol's revenue into ENA purchases. Ethena runs USDe, a $4.22 billion synthetic dollar that earns yield from the basis trade: hold an asset, short its perpetual future, collect the funding longs pay.

The terms are a staircase. The take rate (the share of net revenue directed to buybacks) starts at 5% when USDe supply reaches $7.5 billion and scales to 25% at $25 billion, per the milestone table in the governance post. At the first milestone, that's roughly $22.5 million a year of buying, by the post's own illustrative math; at $20 billion of supply, $240 million.

The number that traveled last week was 95%: the share of the Foundation's revenue take that buys ENA once the first milestone hits. The number that matters is the take itself, and the proposal never reconciles its own two rules: the milestone table takes a share of gross protocol revenue, while the text directs 95% of the Foundation's net revenue. An equity buyback comes wrapped in board authorization, securities filings, and liability. This one is a governance post and a vote.

That vote is live on Snapshot and closes Sept. 2 at 13:59 UTC. As of Tuesday evening it ran 17.7 million ENA in favor, none against, across 85 votes. ENA trades near $0.158, below the proposal day's peak but up roughly 77% in 30 days.

In the rest of the issue, subscribers get:

• the math at today's numbers: what the buyback yields, and the growth it assumes

• what the money is doing instead, and why the same take rate costs Ethena more than Hyperliquid

• the rule vs. pen test that separates value return from financial engineering

• bull, base and bear scenarios for ENA, with price targets, plus the dated catalysts

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Bitcoin is up about 22% in seven days, trading near $80,000 after touching the low $80Ks intraday.

The reason many seem to be crediting for the move is a "$1 trillion Treasury liquidity injection," shorthand for CNBC's report that Treasury Secretary Scott Bessent could tap the government's roughly $1 trillion cash account to fund an expanded bond-buyback program.

But what the Treasury actually committed to is raising its buybacks to at least $4 billion per operation, and even that does not begin until September. The trillion is money Bessent could deploy, not money he has released into the market.

So the more interesting questions are whether those funds ever get spent, how fast, and whether the rally has front-run a flood that may only ever be a trickle. Meanwhile a second, slower trade is running underneath all of it, and that one doesn't need the trillion to work.

On August 19 the Treasury said it would raise the maximum size of its long-end buybacks from $2 billion per operation to at least $4 billion, effective September 9 through November 4. Nothing has been bought at the new size yet. In the most recent operation, dealers offered nearly $20 billion of bonds to sell and the Treasury took its full $2 billion limit. Doubling the limit lets it buy more against that supply, but the larger operations do not start until September, and the rally happened before a dollar of it was spent.

The "$1 trillion" is a separate thing: the balance of the Treasury General Account, the government's checking account at the Fed, which held about $936 billion as of August 19. It is firepower Bessent has the option to use, not a transfer he has made.

The "$1 trillion" is the Treasury's cash balance, firepower Bessent could tap. What's actually committed is raising operations to at least $4 billion, and the most recent operation bought $2 billion. Source: U.S. Treasury (SB0607), FRED (WDTGAL, Aug 19), FXStreet.

The market did not need the trillion-dollar figure to sense something larger was coming. The morning after the announcement, Bessent went on CNBC and said the operations "could be more than the $4 billion per issue," that the Treasury has "a big toolkit," and, pointedly, "I have asymmetric information ... What do I know that the market doesn't know?" Traders did not wait to be told what the toolkit held. The roughly $1 trillion sitting in the Treasury's account was the obvious candidate, and on August 24 CNBC reported officials were weighing exactly that.

In this issue, subscribers get:

• Why two of the sharpest macro minds alive call this real liquidity, and why the man who trained Bessent says it fails

• What the cross-asset tape reveals about whether this is risk-on or a bet against the dollar

• The case that this bear market never actually bottomed, and the level that would prove it

• The bull, base, and bear scenarios, and the dates in September that settle the argument

Already a subscriber? Keep reading.

Everyone says everything is becoming a perp. They're right about the direction and wrong about what it means. This week I worked through why crypto's loudest growth story is really a story about share, not size: who actually collects the tolls, and the one number on the venue everyone calls cheap that's off by roughly half.

— Jeff Albus

Perpetual Futures Now Rule Crypto Trading as Volumes Sink to a 31-Month Low

Perpetual futures are winning the crypto market, but the prize is smaller than it was a year ago.

Stocks, indexes, gold and pre-IPO names have begun trading as round-the-clock perpetual contracts, and on venues almost entirely unknown to investors a year ago. The share numbers are a bit of a land grab, but they don't really represent growth. In fact, the market these contracts are taking over seems to be shrinking beneath them.

Equities are 82% of the 24-hour volume across Hyperliquid's 205 traditional-asset markets. Source: HypeTrad.

The drain is happening everywhere except the price. When a firmware flaw turned Coldcard hardware wallets into a nine-figure theft in late July, holders ran for the exits, sending their coins to exchanges and fresh wallets in order to get out from under a single compromised vendor. Over a short few days, roughly 210,000 bitcoin left long-term-holder wallets in the largest exodus since December 2024.

But as far as price was concerned, it barely moved the tape. Bitcoin remains right where it's been all summer, hovering around $63,500, or about 50% below its October high. This in the same interim when the stock market has been setting records. A market that doesn't flinch at a shock like that has no marginal buyer left. What is still moving is moving between venues, not into the asset, and the busiest venue left is the perp.

In this issue, subscribers get:

• The contraction: centralized perp volume just hit a 31-month low and onchain perps fell 21% in a month. Why “everything is becoming a perp” is a statement about share, not growth.

• The hollow spine: bitcoin's carry trade has paid less than a 2-year Treasury for over 165 days, a stretch matched only once, in 2022-23. Why that collapse is the engine, and why the precedent is usually quoted wrong.

• The mirage test: July's tokenized-stock “surge” was mostly one zero-fee promo token, and what it leaves behind flips the growth story negative. Plus the dated test that settles it on August 31.

• Who actually collects the tolls: one venue clears 40% of onchain perps, but it is cheaper on screen than in reality, a major bank says its share is under attack, and the deployer behind most of its growth has no backstop.

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After reading the Orange Juice announcement and Twenty One Capital's "refreshed strategic priorities" a week apart, it was clear that a new Bitcoin treasury model was emerging. This article is my attempt at breaking down how this new model works and what the competition means for MSTR.

- David

The Bitcoin Treasury Model Is Shifting. What Does It Mean for MSTR?

The Bitcoin treasury model may be... well, quietly changing. 

Many of the pure-play companies are exiting, as recently highlighted by VanEck digital assets research chief Matthew Sigel. The credit model that sector pioneer Strategy has transitioned to is under real strain too. 

Twitter tweet

Against this backdrop, a new model may be emerging, one based on cash flow. The first signal of this was the announcement of Orange Juice, a proposed "permanent capital company backed by a Bitcoin treasury" with names such as Lyn Alden and Jeff Booth among the founders. 

Roughly one week after Orange Juice's announcement, Tether-backed Twenty One Capital, alongside disclosure of an executive shake-up, detailed a reworked strategy that bore an eerie resemblance to Orange Juice's proposed plan.

"Two successor models are emerging from the pure-play's shell, and they are opposites of each other,” Global Head of Onramp Institutional Glenn Cameron told Unchained, referring to Strategy's credit model and the permanent capital model.

Which model will prove superior? What does the competition mean for MSTR?

In this issue, subscribers get:

• An autopsy of the pure-play Bitcoin treasury model. Where did the premium go?

• A look at Strategy's credit model and why the flywheel is now working in reverse

• What the cash flow model promises. How practical is the Berkshire Hathaway of Bitcoin ambition?

• What the competition means for Strategy. Why its edge must go beyond size alone

Already a subscriber? Keep reading.

Traders have roughly $5 billion of notional exposure riding on passage of the CLARITY Act, the bill that would settle who regulates American crypto.

Across this year, the bill's shifting odds account for 4.3% of how bitcoin has actually traded day to day, according to Charles Schwab. Not 43%. Four point three.

So the largest concentration in the bitcoin options market is a bet on a variable that barely registers. The two biggest positions on Deribit's entire board are calls struck at $70,000 and $72,000, expiring Friday. Orbit Markets co-founder Jimmy Yang said in an interview this week that "a lot of this positioning was driven by expectations that the CLARITY Act could be passed before the end of the month." Senate Majority Leader John Thune said on July 23 that it would not get done before the recess.

The same traders have stopped paying for protection against the one event this week that does move prices. In late June the book carried about three puts for every four calls. It now carries just over one for every two, a put/call open interest ratio of 0.52 against 0.76, and the skew, which measures how much more traders will pay to be protected than to be long, sits near 4% at one week against 11% to 12% further out. The book was insured for the autumn and bare for Wednesday's Federal Reserve decision.

Meanwhile the thing that actually sets the price is not in Washington at all. It is in the Treasury market, and it has quietly moved the bar bitcoin has to clear to roughly $154,000.

Open interest by strike price at $70,000 and $72,000 call towers

Positioning tells you what a market believes, and the bond market tells you what that belief costs.

In this issue, subscribers get:

• The math on the $154,000 hurdle, and how much every 100 basis points of real yield takes off it

• Why the $5 billion is roughly a sixtieth of what the headline implies, and what the structure reveals about conviction

• The four days in July when yields and ETF flows moved together, and what that says about the channel

• The strongest case that this entire framing is wrong, and the levels that would prove it

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The bitcoin miners had a whipsaw month: a 34% slide, then a violent, selective bounce, with a free Chinese AI model and a $19 billion lease headline in the middle of it. This piece is the screen I built to sort that chaos, four questions that separate the miners holding bankable AI contracts from the ones holding announcements.

— Jeff

Bitcoin Miners Are Becoming AI Landlords. But Which Leases Are a Positive Investment Signal?

The best story in bitcoin mining hasn't had anything to do with bitcoin in a long time. Years ago, this business (which long lived on the spread between bitcoin mining revenue and power bills) found a richer tenant next door. The AI industry needed power in gigawatts, permitted and ready to energize, and miners had spent multiple cycles acquiring exactly that. So they stopped selling only Bitcoin hashrate and started leasing megawatts to the AI labs training frontier models.

The receipts piled up fast. This month the U.S. bitcoin miner TeraWulf struck a 20-year deal with Anthropic that the company values around $19 billion over the term — more than TeraWulf's entire market capitalization for a single campus in Hawesville, Kentucky.

Nevada-based bitcoin miner CleanSpark inked a $6.6 billion, 20-year lease in Georgia. Equity research firm Benchmark took its Hut 8 target from $85 to $165, then raised it again to $195 eight days later, and started calling it a “power-first data center REIT.” Bitcoin treasury company Empery Digital went further and sold nearly half its bitcoin stack to help fund a data center stake. Basically, you buy up miners while the market still values them on hash prices, and collect the rerate before Wall Street figures out they're really infrastructure.

Logic Problems

Miners ETF WGMI, the exchange-traded fund of bitcoin mining stocks, more than doubled over the past year while bitcoin dropped by almost half. Then from its June 18 high to July 17, it fell 34% from $72.10 to $47.57. For most of that slide the selling was conventional: sentiment cooled across AI infrastructure and semiconductors broadly, the giant lease headlines invited profit-taking, and doubts crept in about whether the miners could actually capture AI's demand for compute, even as analysts kept raising targets.

On July 16, the Chinese AI lab Moonshot released Kimi K3, a soon-to-be open-weight model that debuted at number one on LMArena's Frontend Code Arena, a major leaderboard that ranks AI models on frontend coding, though it still trails the closed frontier, Fable 5 and GPT-5.6, on overall intelligence. 

On July 27, Moonshot says it will publish the model's full weights, the trained parameters themselves, so that anyone can download the model and run it without paying a lab for access. Days later, Alibaba previewed its own frontier model, Qwen3.8-Max, which it says will also go open-weight, the second such escalation in a week. And the miner-to-AI trade, at its foundation, is a bet that compute stays scarce enough that model labs will keep signing decade-long leases to get it.

WGMI vs BTC, 1-year, PortfoliosLab

The stocks meant to be the purest expression of the AI capital cycle ended the month trading like the thing most exposed to it. Then, just as fast, they bounced, but not all of them, and not evenly.

The miner-to-AI-landlord trade is a leveraged bet that compute stays scarce. The market spent a month selling the whole complex, and is now spending this week sorting the bankable leases from the hopeful ones.

In this issue, subscribers get:

• The scarcity test: why open-weight models are a genuine threat to the demand curve these 20-year leases are underwritten against, and the specific mechanism by which cheaper capability weakens a tenant's reason to sign.

• Contracted does not mean collected: the KBW detail buried in the selloff that tells you which of these leases are actually locked and which are more headline than substance

• Where the screen breaks, and the second test a lease has to pass before the market will pay for it.

• The structural shift that could eventually retire one of bitcoin's most reliable sellers, even as it is bearish for the stocks.

Already a subscriber? Keep reading.

It's been a little over a week since OUSD's announcement and people are still talking about it. Is this a genuine threat to Circle, or just another consortium coin destined to fade after the initial hype? In this Bits + Bips, I look at the numbers, the precedent and the nuances to paint the full picture.

— David

Circle’s Stock Tanked 19% on OUSD's Announcement. How Justified Was the Reaction?

The stablecoin world has a new entrant and its announcement has had at least some Circle investors shaking in their britches.

Circle's stock fell nearly 19% last week as new stablecoin company Open Standard  announced plans to launch Open USD, or OUSD, a stablecoin backed by nearly every finance giant you can think of, from BlackRock to Western Union.

It didn't help that a report of Circle being delisted from several Russell growth indexes broke the day before. While Circle has pared some of last week's losses, it is still trading below its price before the OUSD announcement at $66.65.

CRCL daily candle chart. Source: TradingView

The market reacted poorly for a number of reasons. Open Standard's partnerships suggest it is targeting the same market as Circle: compliant Western enterprise payments. But Open Standard, which will launch later this year and is helmed by Stripe-owned stablecoin company Bridge CEO Zach Abrams, isn't just going after Circle's target market; Open Standard is also trying to undercut Circle while at it

Unlike Circle, Open Standard says it won't charge fees on redemption and minting. In comparison, Circle charges up to 0.05% on redemptions depending on volume. Open Standard also promises to give the revenue earned on reserves to partners, less a management fee.

So is OUSD “an existential threat” to Circle, as Coin Bureau founder Nic Puckrin put it?

In the rest of this issue, subscribers get:

• A critical look at how OUSD challenges the two main drivers of Circle's business

• Coinbase’s role in any emerging competition

• Whether the consortium model just might work this time

• The bull, base and bear cases for Circle

• What investors should be watching for the clearest near-term indication of what is to come for Circle's business. 

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A week ago, when Strategy's STRC preferred broke decisively below its $100 par, the question was whether it signaled real trouble or merely a passing scare. As we near the end of June, sky still falling, that question seems to have been answered.

STRC trades near $75 today, a record low at a 15% effective yield, after starting the week around $88. The common stock just hit $85, a two-year low, down 78% over the past year. Every one of Strategy's dollar-denominated preferreds is now below par. Within a few short sessions, a middling problem with one security became a rapid repricing of Strategy's entire company.

Strategy.com

What changed was not bitcoin. BTC is indeed down, below $60,000 and more than 50% off its October high, but it has clearly held above its own low from the previous cycle. The same can not be said for Strategy's securities. What seems to have changed is that the market stopped treating Strategy as a bitcoin proxy and started pricing it as what it is: a leveraged bet on the decisions of one man whose grip on the company, through ten-vote shares, far outruns his economic stake in it.

Praxos Capital co-founder Vinny Lingham made a prescient call in October 2024, with MSTR near its 2024 peak, that was deeply unpopular at the time. Saylor, he said, would "do more damage to Bitcoin than FTX." This week the position came due.

In this issue, subscribers get:

• How Saylor kept an outsized share of the vote even as years of Class A issuance diluted his economic stake

• The two coverage numbers Strategy reports about itself, and which one actually governs what it can do

• Why the preferreds repricing in order of seniority means the market is pricing credit, not a liquidation

• An important rule individual crypto investors should remember

Already a subscriber? Keep reading.

STRC's drawdown has been arguably the hottest topic in crypto in the past few weeks. And it is for good reason. Strategy is the largest corporate holder of Bitcoin, any signs of cracks in its model could have disastrous consequences for the price of the asset. As such it is necessary to cut through the noise to understand what is driving the drawdown.

- David Okoya

Strategy’s STRC Drawdown Continues Despite $300 Million Cash Boost. What Gives?

The new centerpiece of Michael Saylor’s Bitcoin accumulation engine is failing to perform as intended.

Strategy's STRC preferred stock has not traded near its $100 par value since the end of last month. It closed at $88.79 on Monday, after bouncing off a new record low of $82.53 reached last Thursday.

STRC daily candle chart (Source: TradingView)

STRC's bad spell did not break as it approached its now past ex-dividend date of June 15. Bitcoin's rebound to $67,000 last week surprisingly did not help, nor has Strategy announcing on Monday that it now has $1.4 billion in cash reserves after adding $300 million last week. It has also not helped that the company has shifted to a bi-monthly dividend payment structure.

So, what gives?

The theories making the rounds include shorting of STRC, a rotation to Strive's SATA preferred stock and an unraveling of leverage. Though the real reason is likely less dramatic, the question now becomes what Strategy is likely to do — and what the chances are that it can turn around its struggling empire.

In the rest of this issue, subscribers get:

• An in-depth look at all the theories thought to be driving STRC's decline: from the likelihood of a short seller depressing the price to the possibility of a SATA rotation, to the hypothesis that liquidations are causing the slump.

• Why rumors of Strategy's death may be greatly exaggerated: What “death spiral” prognosticators are missing.

• A look at how Strategy could handle the situation and the potential outcomes: why Strategy still has several tools at its disposal to bring STRC to par.

• The two main numbers to watch for STRC's recovery.

Already a subscriber?  Keep reading.

Ethereum is winning the institutional platform war, and it isn't even close.

Asset manager Janus Henderson, all $480 billion of it, made a strategic investment in ENA and partnered with DeFi synthetic dollar protocol Ethena around tokenized CLO collateral and potential USDe distribution. Around the same time, DeFi lending and vault protocol Morpho raised a record $175 million at a $2 billion valuation; the largest DeFi raise in history, according to Morpho cofounder Merlin Égalité.

In fact if you zoom out, the gang's all here: BlackRock's tokenized Treasury fund, BUIDL, holds more than $2 billion onchain. JPMorgan put its first tokenized money-market fund on Ethereum. 

Franklin Templeton, VanEck, and Apollo are building or tokenizing across Ethereum and adjacent onchain rails, while Citi is pushing tokenized private markets through separate blockchain infrastructure.

Some of the architects of Wall Street's crypto on-ramps have gone all in. Joseph Chalom spent two decades running digital-assets strategy at BlackRock, where he helped launch its Ethereum ETF, before leaving to run SharpLink, an Ethereum treasury company that now holds more than 875,000 ETH. "In capital markets, Ethereum is leading this transformation as the settlement layer for financial transactions, [...] it is by far the most rigorously tested financial infrastructure to date," he said at a conference on Thursday.

The institutional bid for Ethereum is real. The problem is, the bid for ETH isn’t.

In this issue, subscribers get:

• Why the institutional bull case for Ethereum is red hot

• Why ETH’s big value-capture problem finds the asset stalled

• The tokens to which the money is actually accruing

• The bull, base and bear cases, plus what to watch

Already a subscriber? Keep reading.

Bitcoin just had its worst week since late 2024.

It fell below $60,000 on Friday, tagged its 200-week moving average, and ripcorded a wicked $200 billion out of the market over a few short, brutal days.

U.S. spot Bitcoin ETFs have bled around $4.4 billion across a record ~two week period, with assets falling from $104 billion to $83 billion. On June 4 alone, the market liquidated more than $1.5 billion in leveraged long positions.

And just like that, everyone is suddenly scrambling to find a villain. Common wisdom initially blamed Michael Saylor's Strategy, which recently sold 32 BTC (~$2.5 million) in late May — its first sale since 2022. At roughly 0.0038% of the company’s total stack though, the sale was more of a rounding error. It may have dented sentiment, but certainly not supply.

Others side-eyed an ancient wallet linked to the long-shuttered Mt. Gox exchange which moved 10,422 BTC on June 2. But as analyst Merlijn Trader pointed out, "the coins went to a new, unmarked wallet. Not an exchange. Not a custodian. No sale… The fear is real. The selling, so far, is not."

As boring and unglamorous as it may be, the move probably doesn’t have much to do with anything in the news. The only story with any real teeth is the narrative around AI. Saylor himself said, “Capital markets are funding the AI buildout at historic scale: ~$400B over 6 months [...] This is a capital rotation, not a Bitcoin impairment.”

In the rest of this issue, subscribers get:

• The AI rotation, interrogated: what the SpaceX and Anthropic mega-IPOs are actually doing to crypto's bid — and the honest caveat most hot takes skip

• The real engine behind the four-year cycle: why it was never just the halving, and the liquidity signal that called this leg down months in advance

• Where the cycle bottoms: the onchain line that has marked every prior bear-market low — and why it hasn't fired yet

• Bull, base, and bear cases with explicit price targets: ranging from the floor-is-in camp to one institution’s mass drawdown scenario

• Six signals to watch: the specific levels that will tell you which scenario is most likely playing out

Already a subscriber? Keep reading.

Seventy-five days into the U.S.-Iran war, the playbook most investors brought into 2026 has stopped working. Stocks have shrugged off the conflict, with the S&P 500 index hitting an ATH. Gold, the asset every macro framework says should benefit from a Middle East war, is down 11%. Bitcoin, which most institutional models treat as a high-beta proxy for the Nasdaq, has outperformed both, gaining 20%, while still hovering 37% below its peak.

Source: TradingView

That should not be happening, and the reason it is has to do with a misunderstanding of the asset.

Retail investor sentiment remains cautious and sidelined even as stocks and crypto rally, underscored by the Fear and Greed Index, hovering in the fear territory.

Twitter tweet

The instinct is to dismiss Bitcoin’s outperformance as a single-cycle quirk. The historical record argues against that. According to an RBC Wealth Management analysis of 20 major post-WWII conflicts, the S&P 500 dropped 6% on average and recovered in 28 days. Oil-shock conflicts broke that pattern: the 1973 Arab oil embargo and 1990 Kuwait invasion drove losses of 16% and 15.9%, with recovery taking six years in 1973.

Bitcoin behaves similarly, but the dips are deeper and the recoveries faster. In its 17- year history, Bitcoin has endured two wars. In both cases, the trajectory was the same: an initial sharp drop, then a recovery of much larger magnitude in a much shorter span.

"At the onset of geopolitical conflicts, investors tend to offload risky assets instinctively, and such herd behavior often drives asset price declines far beyond the actual economic damage inflicted by the conflict," Allen Ding, Head of Research at Bitfire, told Unchained. "Nevertheless, market liquidity typically returns within 30 to 60 days, fueling a subsequent market rebound."

Part of the reason Bitcoin's recovery is faster than stocks is structural. Ding points to two overlooked features:

“Cryptocurrency represents the world's only major financial market operating 24/7,” he said. “When geopolitical shocks break out on weekends or late at night while conventional markets remain closed, global investors can promptly hedge risks or adjust portfolio positions via the crypto market, a flexibility unprecedented in traditional finance."

(Only recently, with the advent of oil perpetuals on Hyperliquid, have real-world assets had a similar outlet.)

And unlike real estate or physical gold, which face logistical hurdles in transportation and delivery, "Bitcoin's exceptional portability and seamless cross-border transfer capabilities have made it a practical option for residents in conflict-stricken regions to relocate and preserve wealth," he said.

So what's the next move? Buy the war dip? Stay sidelined for the eventual peace? Short the recovery on the assumption that this rally is borrowed time?

The answer depends on which Bitcoin you think you're buying. And most institutional money is buying the wrong one.

Bitcoin's wartime behavior is being systematically mispriced by investors who still treat it as a high-beta liquidity trade. The repricing is already underway. The window to position before it solidifies is open, but not infinite.

In this issue, subscribers get:

• The decoupling math: how Bitcoin's T+60 performance gap versus the S&P 500 has widened from essentially zero in 2022 to nearly 800 basis points in 2026, and what the YTD numbers reveal about the role of starting points

• The mispricing thesis from FalconX: why institutional models that classify Bitcoin as a risk asset are missing the structural inevitability of fiscal dominance, and the specific timeline on which the decoupling should solidify

• What the deadlocked negotiations actually mean for prices: the sticking points that make a quick peace unlikely, and why Israel-Lebanon escalation could lock in the inflation-hedge thesis

• Three scenarios with explicit probabilities: a bull case, a base case, and a bear case below, with the conditions that would have to be true for each

• What to watch: the onchain, macro, and geopolitical signals that would confirm or break the thesis

Already a subscriber? Keep reading.

Bitcoin gained roughly 12% in April, its best month in a year. So far, May has extended these gains, pushing the leading crypto beyond $80,000. And yet, almost nobody trusts the rally.

The move did not come from a rush of new buyers. It came from mechanics: Strategy added more than $3.8 billion in BTC during April, institutions ran basis trades through BlackRock's IBIT, and short liquidations outpaced longs by nearly a billion dollars since mid-April, per CoinGlass.

Perpetual funding rates for bitcoin, an indicator of sentiment, have been negative for over 46 consecutive days, the longest bearish positioning streak in years. The market rallied into a wall of shorts and kept climbing.

But here is what is missing: spot demand. 

CryptoQuant founder Ki Young Ju has warned that apparent onchain demand remains net negative even as ETFs absorb supply. Nine consecutive days of Bitcoin ETF inflows through April 24 totaled $2.1 billion, the longest streak since September 2025.

However, much of the ETF flow reflects cash-and-carry trades, not conviction. Also, onchain analytics suggest the ETF bid served as exit liquidity for short-term holders rather than genuine accumulation amid an unresolved war with Iran in the background.

All this means that spot demand hasn't arrived yet, despite the 12% rise. And the market is sitting on a pile of short fuel with a few potential positive catalysts that could arrive in the same window.

Catalyst 1: The CLARITY Act

On May 1, the Senate released the Tillis-Alsobrooks compromise text on stablecoin yield, the final sticking point blocking the CLARITY Act's Banking Committee markup. Coinbase CEO Brian Armstrong, who has been resistant to previous iterations, responded: "Mark it up.”

Catalyst 2: U.S. Government Bitcoin Reserve

Separately, White House digital assets adviser Patrick Witt told the Bitcoin 2026 conference that his team has achieved "a bit of a breakthrough" on the Strategic Bitcoin Reserve and teased a "big announcement" in the coming weeks.

Wildcard Catalyst: Geopolitics

The U.S. and Israel's war against Iran has kept Bitcoin and broader risk assets subdued. But a decisive de-escalation could become a solid tailwind. On Sunday, President Trump announced "Project Freedom" on Truth Social, posting: "I have told my Representatives to inform them that we will use best efforts to get their Ships and Crews safely out of the Strait." Bitcoin surged to $80,000, with CoinGlass data showing more than $300 million in short liquidations across crypto markets. That move underscores how sensitive the market is to any hint of peace.

Jimmy Xue, co-founder of quantitative yield protocol Axis, framed it this way: the Reserve signals demand, with the U.S. holding roughly 1.56% of total supply as a sovereign asset. The CLARITY Act is plumbing, ending the SEC-CFTC jurisdictional fight. "The market is pricing these as independent binaries," Xue said, "when the actual function is multiplicative."

When BlackRock filed for a spot Bitcoin ETF on June 15, 2023, nothing was approved. But the filing crossed a confidence threshold: the market decided approval was a matter of when, not if, and Bitcoin rallied roughly 82% over the following seven months before the ETFs even began trading. The actual approval in January 2024 triggered a 15% sell-off. The signal did the work. The event was the exit.

The question for May is whether the CLARITY Act markup and the Reserve announcement can cross that same threshold. And if they do, 46 days of accumulated shorts could become an accelerant to the rise in Bitcoin's price.

When that collective confidence is reached, the unwind happens fast—and the math changes.

Subscribers also get:

• Why Bitcoin's negative funding rates are an accelerant

• Why the $82,000 CME gap can make or break the rally

• Why people are mispricing the catalysts: the compound probability play

• Bull, base, and bear scenarios with realistic price targets

• The four key dates that determine which one plays out

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Circle had its worst day as a public company on Tuesday. CRCL fell 20%, erasing $5 billion in market cap on volume nearly 4x its 90-day average. Coinbase dropped 11% in sympathy.

The catalyst: a new draft of the CLARITY Act that would ban passive yield on stablecoin balances. Since 95.5% of Circle's revenue comes from interest on USDC reserves, the market treated the bill as an existential threat.

Bernstein, the Wall Street research firm with a $190 price target on CRCL, thinks the market is reading it wrong. The question is whether a 20% haircut on an already volatile stock is a rational repricing or a gift.

However, the CLARITY Act might be the best thing that ever happened to Circle's margins. 

In this issue, we’ll go over:

• The issuer vs. distributor distinction that Bernstein says the market is botching, and why the bill's real target is Coinbase's leverage, not Circle's revenue

• The $908 million question: how Circle's revenue-sharing deal actually works, why it likely renews in five months, and what a few points of margin improvement means at scale

• Our own bottom-up valuation using Citi's stablecoin TAM, actual Fed dot plot data, and Circle's reported financials, with bear, base, and bull scenarios

• Why AI agent payments and Circle's own blockchain sit outside the model entirely, but could rewrite the multiple

Bitcoin fell below $69,000 on Thursday, erasing roughly a week of gains in a few hours. 

The catalyst was a pile-up of macro headwinds: the U.S. producer price index rose 0.7% in February, more than double the 0.3% economists expected. Core PPI jumped to 3.9% year-over-year, its highest in over a year. Hours later, the Federal Reserve held rates steady at 3.5% to 3.75% and projected only one cut for the remainder of 2026. Chair Powell's tone was cautiously hawkish, emphasizing that rate cuts would require real progress on inflation, particularly goods inflation driven higher by tariffs and surging energy costs.

Energy costs are the other half of this story. The Israel-Iran conflict has pushed Brent crude above $108 per barrel, up roughly 40% since the war began in late February. Israeli strikes on Iran's South Pars gas field, the world's largest, triggered a new round of retaliation threats and pushed oil prices toward levels not seen since 2022. Rising energy prices feed directly into producer costs, which drive consumer inflation, which makes the Fed reluctant to cut. The loop is tightening.

The Company That Bought the Dip (And Then the Dip Got Deeper)

Here's the part most people are not connecting. Strategy, the largest corporate holder of bitcoin, owns 761,068 BTC purchased at an average price of $75,696. At Thursday's price of roughly $69,100, the company is sitting on approximately $5 billion in unrealized losses across its entire stack. That is not a crisis. Strategy has no debt covenants that would force a liquidation, and its $2.25 billion in cash reserves can cover about 25 months of dividend obligations.

But Strategy's buying engine has quietly shifted. Last week, the company bought 22,337 BTC for $1.57 billion, its fifth-largest acquisition ever. Of that, roughly $1.18 billion, or 75%, came from selling shares of STRC, Strategy's perpetual preferred stock. Benchmark analysts have called STRC the "primary engine" for the company's bitcoin accumulation going forward. 

STRC is a preferred share designed to trade near $100 par value while paying an 11.5% annualized variable dividend. In calm markets, the instrument works beautifully: investors buy STRC for yield, Strategy sells STRC into the market, and the proceeds go straight into bitcoin.

The question investors should be asking is simple: what happens to that machine in a bear market like this one?

Strategy has built a $10 billion preferred securities stack around an asset it has vowed never to sell, and the interest clock is running at over $1 billion per year with zero operating income to cover it. The macro environment that's crushing bitcoin is the same one that threatens the machine buying it.

In this issue, we’ll go over:

• The STRC feedback loop in reverse: how the instrument that funded 75% of Strategy's latest bitcoin purchase depends on two sentiment-driven conditions that are both deteriorating right now, and what happens when the flywheel runs backward

• The stakeholder conflict most people are ignoring: Arca CIO Jeff Dorman's argument that Strategy's four stakeholder groups, bitcoin holders, debt holders, preferred holders, and common shareholders, all believe they are safe, but mathematically cannot all be right

• Three scenarios for where bitcoin goes from here: the bull, base, and bear cases, each tied to specific macro triggers and Strategy's ability to keep buying

• What to watch: the concrete data points (mNAV, STRC par price, oil, and the Fed's dot plot) that will tell you whether the flywheel is holding or breaking

Private credit is having its worst month in a decade, and possibly its most important one.

Blue Owl Capital, a giant asset manager that specializes in private credit, permanently gated its $1.6 billion OBDC II fund in February after redemption requests overwhelmed the quarterly cap. The firm's stock entered an 11-day losing streak, erasing roughly 60% of its market value.

Blackstone hit its quarterly redemption limit on its $82 billion BCRED private credit fund. BDC sales collapsed 49% from their all-time high. And in London, the collapse of private lender Market Financial Solutions, with creditors alleging £930 million in double-pledged collateral. Jamie Dimon seems to have been right when he said last fall that one collapse means more "cockroaches" were likely to emerge.

The structural flaw underneath all of this is not complicated. Private credit is, by definition, illiquid. The underlying loans have 90-day lock-ups, quarterly redemption windows, and no secondary market to speak of. For years, fund managers packaged these illiquid loans into products that promised investors semi-liquid access. That math works when nobody asks for their money back. When everybody asks at once, you get gates.

Meanwhile, the reported default rate of below 2% has been flattering the asset class for years. Once selective defaults, liability management exercises, and restructurings are factored in, Fitch tracked a 9.2% default rate among a subset of 302 companies in 2025. JPMorgan has begun marking down collateral, particularly software company loans, and restricting new lending to private credit funds. Roughly 40% of private credit borrowers now carry negative free cash flow.

The Parallel Build

So TradFi private credit is cracking. Here's what's less discussed: crypto builders are quietly constructing the infrastructure for a parallel version of the same asset class.

Total RWA value onchain has grown roughly 5x in the past 12 months to $26.7 billion. An estimated $700 million in leveraged positions against tokenized private credit now sits across Morpho, Aave, and Kamino. The FalconX Credit Vault on Pareto, looped through Morpho with risk management by Gauntlet, has generated over 13% APY on $74 million in collateral. 

Sid Powell, CEO of Maple Finance, said on Unchained that Maple is actively exploring allocating to private credit onchain as a strategy to boost utilization and drive toward a $100 million ARR target. 

"It's a combination of more assets under management, higher utilization rate of deployments, and branching into new areas like private credit that will help Maple hit 100 mil ARR,” he said.

The convergence is moving in both directions: TradFi credit managers exploring onchain rails, and crypto-native lenders moving into private credit yield.

The question for investors is whether the onchain version fixes the structural problem, or just replicates it with more leverage and prettier plumbing.

The investment case for tokenized private credit depends entirely on whether crypto's infrastructure solves TradFi's structural flaws or repackages them.

In the rest of the issue, subscribers get:

• The honest reckoning: which of private credit's three structural failures (illiquidity, redemption mismatch, opaque pricing) tokenization actually fixes, and which it amplifies

• The Morpho V2 unlock: why fixed-rate lending changes the risk calculus for RWA looping, explained by Morpho's CEO on our show

• Which three tokens could benefit from this convergence, with full fundamental analysis

• The specific catalysts, bear cases, and signals to watch for each position

This week Aave governance advanced a framework proposal called “Aave Will Win” by passing a temperature check, which is an early, non-binding signal vote that precedes a formal onchain proposal. The vote passed narrowly: 52.58% in favor, 42% against, and 5.42% abstain, with about 622,300 votes on the yes side.

At a high level, the framework is trying to resolve an awkward reality: crypto’s biggest DeFi borrow/lend protocol is governed by a DAO, but much of the user-facing product layer has been built and operated by the centralized company, Aave Labs. “Aave Will Win” proposes routing 100% of revenue from Labs-run products back to the DAO treasury (net of partner payouts), formally positioning Aave v4 as the long-term technical foundation, and pairing that with a major funding request of $25 million in stablecoins plus 75,000 AAVE.

The problem is that this vote is landing in the middle of a governance credibility crisis. A dispute over interface fees and control escalated into broader accusations that Labs-linked voting power can effectively decide outcomes, and key groups have announced plans to step back this spring and summer.

As Taylor Monahan put it on Uneasy Money: “What the heck is the AAVE token going to be useful for moving forward?”

In the rest of this article, we’ll cover:

• Whether AAVE is actually a good investment after the DAO drama, not just a “big DeFi name”

• The bull case and the bear case, and what has to happen for each to be true

• Real value capture: fees, buybacks, treasury flows, and what is real versus aspirational

• Whether Aave can defend its moat if key builders and governance stewards keep leaving

When Coinbase’s Base announced it was leaving the Optimism Superchain, 94% of Optimism’s daily commission income disappeared.

Optimism built the infrastructure, Coinbase built Base on top of it, Base grew until it no longer needed the arrangement — and is now leaving. It was a rational business decision by a counterparty that had outgrown the deal — and a predictable one.

To be fair, OP did win new business around the same time. EtherFi, one of the more serious protocols in the liquid restaking space, migrated its Cash product from Scroll to OP Mainnet. That is a real protocol with real TVL choosing their chain. 

Could that close the gap?

And if not, is the problem OP is facing with Base a one-time event or a structural feature of the generalized L2 business? If the latter, that has implications not only for Optimism, but also for Arbitrum, newly home to Robinhood Chain.

In the rest of this piece, you will find:

• The graduation trap by the numbers: what the Superchain actually generates without Base, what the buyback program is worth at current revenue levels, and why the math doesn’t work at today’s market cap

• What EtherFi actually means: why the migration from Scroll is a real win for OP — and whether it can fill the hole Base left

• ARB and the Robinhood question: whether Arbitrum’s arrangement with Robinhood represents a genuine new revenue model or a three-year countdown to the same outcome OP had with Base

• What the market is pricing: why OP Mainnet’s headline multiple doesn’t tell the full story

The AI story is usually told as a product story. Smarter models. Faster inference. Agents that book your flights and rebalance your portfolio.

The balance sheet version is less cinematic.

Across the major hyperscaler cloud service providers, annual capital expenditure tied to AI now totals roughly $700 billion in aggregate guidance. Data centers are being expanded. Power contracts are being signed. Debt is being layered onto infrastructure that will take years to be fully utilized.

Markets have started to flinch. In mid-February, the Magnificent Seven ETF broke below its 200-day moving average for the first time since the tariff shock of 2025. Microsoft, the weakest of the group, has lost nearly a quarter of its value over the past six months and now trades at roughly 24x forward earnings, down from a three-year average above 34x. The Mag 7 are down over 6% year to date as a group. 

At the same time, something quieter is happening. Bitcoin miners are signing long-term AI colocation leases backed by hyperscaler credit. Payment networks are being wired for autonomous agents to transact in stablecoins. A protocol called x402 is already processing hundreds of millions of dollars in machine-to-machine payments this year.

If the capex regime is even slightly mispriced, the hedge is not in better models.

It’s in the toll roads.

In the rest of this piece, we answer three questions investors should care about:

• Where does the real downside sit if AI capex slows?

• Which public proxies are quietly most exposed?

• And where might the more durable cash flows actually be hiding?

On Wednesday, BlackRock announced that its $2.4 billion tokenized Treasury fund, BUIDL, would be tradable on UniswapX through a partnership with Securitize.

The firm also disclosed it had purchased UNI tokens as a strategic investment. Robert Mitchnick, BlackRock's head of digital assets, called it "a notable step in the convergence of tokenized assets with decentralized finance."

This is, by any reasonable measure, a significant development. The biggest player in global finance is routing a tokenized government bond through DeFi infrastructure. Whitelisted investors with $5 million minimums can now swap BUIDL for USDC around the clock, settled on Ethereum. 

It's worth noting which chain BlackRock chose for this: Ethereum. A decade of uptime and credible neutrality is quietly paying off. When the world's largest asset manager needs a settlement layer for tokenized Treasuries, it picks the network that has never gone down.

UNI surged from $3.26 to $4.57 in about 15 minutes. By the next morning, it was back to $3.37.

The market bought the thesis, did the math, and sold.

Nic Carter put words to this dynamic recently on the Bits + Bips podcast. Paraphrasing: the VC-backed, flashy token era is over. What's left is "the boring stuff," the cash-flowing businesses, crypto as invisible infrastructure powering finance. 

Wednesday's UNI price action was a perfect illustration. The protocol got a landmark endorsement. The token couldn't hold a rally for 12 hours.

In the rest of the article, we’ll cover:

• Why the UNI rally died within hours

• The key metric institutions actually price

• Three scenarios for UNI over 12 months

• The catalysts that could re-rate UNI’s economics