USDh on Runes is now sunset.

Eligible holders can redeem USDh and sUSDh on Runes for BTC directly in the Hermetica app, priced via Pyth at the time of redemption. Redemptions are available for balances above $10 until August 15, 2026 at 00:00 UTC.

Redeem USDh and sUSDh on Runes for BTC: app.hermetica.fi/runes 

Outstanding sUSDh on Runes no longer earns staking yield, and new Runes activity is no longer supported in the Hermetica app.

USDh and sUSDh on Stacks are unaffected and remain live.

Thank you, Runes.

Runes holds a distinct place in USDh’s history as the first market where USDh went live.

The launch established USDh’s first presence in the Bitcoin ecosystem. We appreciate the users, builders, and partners who participated in that first phase.

Hermetica remains focused on building institutional-grade financial products for Bitcoin.

IN THIS ISSUE

🗞️ Exclusive: hBTC Access Opens Soon
🪙 USDh Runes Redemption Live 
💰 Yield Recap
📈 Weekly Market Review

Jakob TL;DR

This week, we moved some pieces on our internal board.

The first move is exclusive to you. We are once again opening hBTC access in the coming weeks, and weekly readers are hearing it before anyone else. If you are not on the waitlist yet, join before the next allocation window opens.

Second, USDh on Runes is officially sunset. If you hold USDh on Runes, your redemption window is now live in the app. USDh on Stacks remains live and unaffected.

Two moves, both in the same direction. Forward.

Exclusive: hBTC Access Opens Soon

You heard it here first: the next hBTC waitlist cohort opens May 27th.

The waitlist continues to grow, and one question keeps coming up: when does access open again?

Now we have the answer. Invitations for the next deposit window go directly to waitlisted emails in the coming weeks.

Since launch, hBTC has performed exactly as designed. Yield has averaged 4.89% APY, and all risk controls have remained within their target ranges.

New deposits enter a product that already proved itself.

If you are not on the waitlist yet, now is the time to join. The next allocation window opens soon, and waitlist members go first.

USDh Runes Redemption Live

USDh on Runes is now sunset.

Holders with balances above $10 can now redeem USDh and sUSDh on Runes for BTC directly in the Hermetica app. 

sUSDh on Runes no longer earns staking yield, and new Runes activity is no longer supported in the Hermetica app. 

The USDh platform on Stacks is unaffected; the products remain live and fully supported.

The redemption app is now live. Redeem your USDh on Runes for BTC.

Yield Recap

A week with Hermetica:

• hBTC: 3.91%, paid in ₿

• USDh: 7.99%, paid in $

Idle capital isn't really our thing.

Market Review

Bitcoin traded back below $80,000 and settled near $79,600, driven by $1.251B in spot Bitcoin ETF net outflows since Thursday, which erased most of the prior week’s $1.699B inflow.

Equities again diverged from Bitcoin: the S&P 500 and Nasdaq closed at records led by tech, while Bitcoin did not follow.

Data Summary:

• DVOL: 38.13%

• Equal-weighted futures basis spread: 1.79% APR

• The futures curve is in normal contango, with a low front end and March 2027 at 3.10%

• Perp funding rates remain near zero, with a few high periods

• Aggregated altcoin market caps are flat at $1.03T from last week

• Bitcoin dominance fell to 60.75% from 60.92%, but remains above the 60% threshold

• Spot Bitcoin ETFs saw $1.251B of net outflows from last Thursday onward

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $79,600

• 7-Day SMA: $80,600

• 30-Day SMA: $78,200

• 180-Day SMA: $79,600

• 360-Day SMA: $95,600

• 200-Week SMA: $60,900

Bitcoin is below the 7-day SMA and just above the 30-day SMA, showing cooled short-term momentum without fully breaking the April recovery. The key test is the 180-day SMA at $79,600; a sustained close above reopens $82,800–$86,000 as resistance zones, while a move below puts $78,200 and $75,000 as support zones. Major resistance remains the 360-day SMA at $95,600, while the 200-week SMA at $60,900 is structural cycle support.

BTC ETF Flows

Net outflows totaled $1.251B this week.

Flows reversed from last week’s $1.699B inflow, driven by broad outflows on May 13 across IBIT, FBTC, ARKB, and GBTC. The ETF complex has shifted from marginal buyer to marginal seller in the last two weeks, as Bitcoin tests the 180-day SMA.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL sits at 38.13%, slightly below last week’s 38.42% and near the bottom of the 35%-45% range seen before recent geopolitical tensions. The decline is notable because spot weakened and ETF flows turned negative. Current price action remains favorable for vol sellers, as Bitcoin is not rising fast enough to materially increase risk for call sellers.

The February spike toward 90% now reads as an event shock, not a regime shift. Covered-call supply against IBIT, Strategy-linked securities, and miners has compressed implied volatility, improving the setup for long-vol strategies.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread fell to 1.79% APR from 2.29%. Basis is still positive across the curve, but the front end remains weak for a market near $80,000. 

Figure 6 shows normal contango, with the curve rising from the front end to March 2027: May 22 at 0.69%, May 29 at 0.75%, June 5 at 0.66%, June 26 at 1.65%, July 31 at 2.00%, September 25 at 2.53%, December 25 at 2.98%, and March 2027 at 3.10%. The spread between the lowest and highest maturity is 2.44%. Near-zero perp funding and low basis indicate the rally is not being driven by levered longs.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Fed held the federal funds range at 3.50%-3.75% on April 29. April PPI was above target, with final demand up 6.0% year over year and core PPI up 5.3%.

Geopolitical developments involving the U.S., Israel, and Iran continue as the Strait of Hormuz remains effectively closed. Brent averaged $117/b in April, touched $138/b, and is expected to remain elevated as inventories draw down. 

VIX near 17.9 and MOVE/US10Y near 15.7 remain calm relative to the energy shock. Against that backdrop, crypto shows relative underperformance versus broader financial assets, with the Nasdaq and S&P 500 at new highs while Bitcoin remains 37% below its highs and other cryptocurrencies sit in deeper drawdowns.

Sincerely,
The Hermetica Team

IN THIS ISSUE

🏆 Pioneers of STRC On-Chain 
🌅 USDh on Runes Chapter Closes
💰 Yield Recap
📈 Weekly Market Review

Jakob TL;DR

We made the news again.

Hermetica was named by Saylor on Strategy’s Q1 earnings call as one of the teams driving STRC’s $270M+ of on-chain growth. We already account for 2% of on-chain STRC, and we are just getting started.

This week, we brought one of Hermetica’s earliest chapters to a close to make room for what comes next. We have decided to sunset support for USDh on Runes on May 15 to better serve today’s users. If you hold USDh on Runes, read on for details on the redemption path.

We turned a page this week, and we’re looking forward to our next chapter.

Pioneers of STRC On-Chain

STRC exposure in DeFi has surpassed $270 million in just eight weeks.

On Strategy’s Q1 2026 earnings call, some of Wall Street’s most-followed analysts pressed Saylor on where Bitcoin-backed credit is going. His answer pointed straight to DeFi. 

More than three dozen initiatives have brought STRC on-chain in the past eight to twelve weeks. Hermetica was named among the leaders with stUSDh.

Today, stUSDh represents 2% of the over $270 million in DeFi STRC exposure, and it is growing. 

Saylor sees digital credit as Bitcoin’s killer app. We share that conviction and are already building the digital money layer on top of STRC.

USDh on Runes Chapter Closes

We are sunsetting support for USDh on Runes on May 15.

Runes activity has shifted materially over the past year, and we’re consolidating support to keep USDh simple, safe, and better supported to accommodate today's users. 

USDh on Stacks remains live and unaffected. 

Hermetica will contact select users through May 13, 2026, for assisted conversion of USDh from Runes to Stacks.

Remaining holders with balances above $10 at the May 13, 00:00 UTC snapshot will be eligible to redeem for BTC through Hermetica’s official sunset app. 

Redemption instructions will be shared after snapshot through official Hermetica channels only.

To everyone who held and built with USDh on Runes, thank you. Stay tuned for what comes next.

Yield Recap

Week 18:

Bitcoin yield → 4.44% (hBTC)
Dollar yield → 8.00% (USDh)

No need to pick a side. You can have both.

Market Review

Bitcoin reclaimed $80,000 for the first time since late January, supported in part by $1.99B of net inflows into spot Bitcoin ETFs.

The S&P 500 and NASDAQ reached record highs on AI and semiconductor earnings while oil fell on geopolitical headlines.

Data Summary:

• DVOL: 38.42%

• Equal-weighted futures basis spread: 2.29% APR

• Futures curve is in normal contango beyond a front-week kink

• Perp funding rates are near zero to slightly positive, consistent with spot-led demand rather than a levered squeeze

• Aggregated altcoin market caps rose to $1.03 trillion from $1.01 trillion

• Bitcoin dominance rose to 60.92% from 60.63%, keeping BTC above the 60% dominance threshold

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $80,200

• 7-Day SMA: $79,700

• 30-Day SMA: $76,400

• 180-Day SMA: $80,400

• 360-Day SMA: $96,000

• 200-Week SMA: $60,600 

Bitcoin is above its 7-day and 30-day SMAs, which now act as rising support. Price is testing the 180-day SMA at $80,400 for the first time since the February selloff; a weekly close above it would improve the intermediate trend. The 360-day SMA at $96,000 still marks major overhead resistance, while the 200-week SMA at $60,600 remains structural cycle support.

Support levels are $79,700, $76,400, $73,700, $60,600, while resistance levels are $80,400, $82,800, $86,000, $96,000.

BTC ETF Flows

Net inflows totaled $1.699B this week.

Inflows extended the post-April reversal and were concentrated around Bitcoin’s breakout back above $80,000. IBIT remained the dominant source of issuance. ETF demand appeared to absorb profit-taking without pushing Bitcoin below short-term moving averages. That dynamic suggests the ETF complex acted as the marginal buyer, rather than a source of supply.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

Bitcoin implied volatility compressed as Bitcoin reclaimed $80,000. DVOL declined to 38.42% from 42.48%, moving back toward the lower end of its pre-tension 35%–45% range. Options markets appear to be pricing steady ETF demand and a benign macro/geopolitical backdrop, rather than near-term convexity.

The February move toward 90% increasingly looks like an isolated shock rather than a new baseline. Meanwhile, renewed covered-call supply from IBIT-linked strategies, Strategy-related products, and miners is rebuilding short-vol inventory on Deribit, which may help anchor spot near high-open-interest strikes while realized volatility remains subdued.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

Basis is positive across all maturities. The equal-weighted spread rose to 2.29% APR from 1.77%, driven by spot strength and the end of front-week backwardation. The recovery is constructive but still well below the 5%-8% range typical of durable bull trends. 

The futures curve shows a front-week kink rather than a clean upward slope. May 15 trades at 2.82%, late May and June compress to 1.62% and 1.53%, then rise to 2.42% in September, 2.98% in December, and 3.10% in March 2027. The lowest-to-highest maturity spread is 1.57 points. Perp funding near zero to slightly positive indicates that this rally is spot and ETF-led rather than a perp squeeze.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

Macro still centers on Hormuz. The U.S. and Iran are discussing a phased framework that would address immediate de-escalation first, with nuclear limits and full Strait reopening left for later talks. As of Thursday evening, markets were reacting to reduced escalation risk.

Brent fell below $100 intraday on Wednesday on improving sentiment, settled near $101.27, and rebounded. A reopening of Hormuz could reduce the inflation premium, ease yields and the dollar, and support further gains in equities and Bitcoin. 

Cross-asset positioning is risk-on. The S&P 500 and NASDAQ are at records, earnings growth is tracking at its strongest pace since Q4 2021, and Bitcoin has joined the AI-led risk trade. Gold remains near $4,700, while 10-year Treasury yields are holding around 4.33%.

The Fed remained on hold at 3.50%–3.75% on April 29, as inflation stayed above target, with headline CPI at 3.3% and core CPI at 2.6%.

Sincerely,
The Hermetica Team

IN THIS ISSUE

🎙️ Hermetica Makes Saylor's List 
🎬 Jakob Meets The Drapers
🗞️ April Receipts Are In
💰 Yield Recap
📈 Weekly Market Review

Jakob TL;DR

I was in Vegas this week, and Hermetica was in the air.

I had a proud founder moment watching Saylor name Hermetica live at Bitcoin 2026 as one of the protocols bringing digital credit on-chain.

Still in Vegas, I was one of the founders invited by the Drapers to pitch live for Meet the Drapers. Keep an eye out for the Hermetica pitch when it airs.

Busy week, but our priorities have not changed. The April attestations are in. USDh remained fully backed, independently verified by Copper and Ceffu. The work speaks. The receipts back it up.

Hermetica Makes Saylor's List

Hermetica got a shoutout from Saylor live on stage at Bitcoin 2026. 

Saylor sees Bitcoin-backed digital credit as a foundation for global finance on Bitcoin. Instruments like STRC could help banks earn Bitcoin-backed yields and pass that value on to users worldwide.

Saylor made clear that digital credit extends to DeFi too, and he named Hermetica as one of the teams already bringing it on-chain. 

stUSDh converts yield from STRC into digital dollars, opening Bitcoin-backed credit to anyone with a phone.

Jakob Meets The Drapers

Hermetica went on air as Jakob pitched on Meet the Drapers. 

Meet the Drapers is the Draper family’s TV show, where founders pitch directly to one of venture capital’s most influential families. The Drapers have spent decades backing category-defining companies across crypto, fintech, and frontier tech.

The season winner receives up to $1 million from Tim Draper, plus access to his broader network and ecosystem. 

Jakob took the seat to pitch Hermetica.

Keep an eye out for the episode when the next season airs. In the meantime, see the behind-the-scenes footage on X.

April Receipts Are In

The April 2026 proof of reserve attestations are live. USDh remains fully backed and independently verified by Copper and Ceffu.

Get ready to see STRC exposure next month.

In summary, as of the snapshot time:

• USDh supply: $9,152,643.40

• Copper custodied assets: $8,636,064.67

• Ceffu custodied assets: $367,789.22

• Redeeming Reserve Stacks: $145,312.53

• Redeeming Reserve Ethereum: $3,490.05

• Minting Wallet: $0.00

• Total backing assets: $9,152,656.47

• Reserve Fund: $100,148.12
  • USDC: $100,148.12
  • USDh: $0.00

• Total % of USDh: 101.09%

See the full breakdown of USDh’s Bitcoin backing, verified by Copper and Ceffu.

Yield Recap

4.26% on hBTC. 5.00% on USDh.

Bitcoin showed up. Stablecoins showed up.

Did your wallet?

Market Review

Bitcoin briefly traded in the high $79,000s near $80,000 before pulling back to ~$76,000. Strategy (MSTR) disclosed an April 27 purchase of 3,273 BTC for about $255 million at a $77,906 average, lifting holdings to 818,334 BTC. 

U.S. equities remained resilient: the S&P 500 closed Wednesday at 7,135, and the NASDAQ Composite at 24,673.

Data Summary:

• DVOL: 39.55%

• Equal-weighted futures basis spread: 1.19% APR

• Futures curve: In normal contango beyond the front contract, with May 8 in backwardation and March 2027 at 2.68%

• Perp funding: Near zero to slightly negative

• Aggregated altcoin market caps fell to $995.02 billion from $1.01 trillion last week

• Bitcoin dominance fell to 60.45% from 60.63% last week

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $76,000

• 7-Day SMA: $77,000

• 30-Day SMA: $73,700

• 180-Day SMA: $81,300

• 360-Day SMA: $96,400

• 200-Week SMA: $60,300

Bitcoin is below the 7-day SMA, but above the 30-day SMA, tempering short-term momentum while keeping the April recovery intact. Price remains below the 180-day and 360-day SMAs, leaving the intermediate trend bearish until the $81,300–$96,400 zone is reclaimed.

The 30-day SMA at $73,700 is the first support level, followed by $72,000, $67,000, and the 200-week SMA at $60,300. Resistance levels are $77,000, $80,000, $81,300, and $86,000.

BTC ETF Flows

Net outflows totaled $0.253B this week.

Flows reversed from last week’s $1.276B inflow. Farside’s April 23–29 data show net outflows of $252.8M, pausing the inflow streak that supported Bitcoin’s move toward $80,000.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL fell to 39.55% from 42.48% last week despite a Bitcoin spot pullback, a spike in oil, and a marginally more hawkish Fed. DVOL is now back inside its pre-February 28 range of 35%–45% and sits near one-month Deribit ATM IV at roughly 38%. Realized volatility remains muted, with Bitcoin range-bound between $73,000 and $80,000 over the past two weeks. 

The vol-suppression trade is working again, though with a less bullish setup. Covered-call selling in Strategy, IBIT, and miners continues to add upside vol supply, while dealer hedging may help keep spot pinned near large options strikes.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread is 1.19% APR, down from 1.77% last week. Figure 6 shows the May 8 maturity at -1.15%, a backwardation print. The rest of the curve remains positive.

Beyond the front contract, the curve is in contango: May 29 at 0.50%, June 26 at 0.95%, September 25 at 1.80%, December 25 at 2.37%, and March 2027 at 2.68%.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Fed held rates at 3.50%–3.75% on April 29. The 10-year Treasury yield rose to about 4.41%, the 2-year to 3.93%, and the DXY to ~98.95. 

The macro backdrop is unchanged from the past four weeks: geopolitical tension, Hormuz disruption, and tighter energy conditions. This week, oil prices increased as Brent traded above $120 intraday and WTI near $108, from roughly $102 and $93 last week.

The VIX near 18.8 remains within the calm 15–20 zone. Gold fell into the mid-$4,500s as the dollar strengthened. Bitcoin is in the middle of two; holding at current levels as equities stay near record highs and Strategy keeps buying, but still unable to rise as ETF flows turn negative and basis stays compressed.

Sincerely,
The Hermetica Team

IN THIS ISSUE

🪙 2 Days. 25 BTC.
💸 USDh Meets STR
🎙️ hBTC Takes the Stage
💰 USDh Yield Recap
📈 Weekly Market Review

Jakob TL;DR

I told you last week we had surprises lined up. They did not disappoint. 

First, hBTC is live. Half of the 50 BTC cohort filled in less than 2 days, half the time it took to fill the private beta. The next cohort opens soon. If you are not on the waitlist, request access now.

The second surprise caught almost everyone off guard. We integrated STRC into the USDh platform as a second yield engine. Bitcoin credit is scaling fast, and we are proud to be among the first teams bringing its leading instrument on-chain. 

Want to learn more? I spent some time across a few live shows getting into the details.

2 Days. 25 BTC.

The new standard for BTC yield is here. hBTC is live. 

hBTC is Bitcoin that earns Bitcoin from blue-chip strategies, including BTC credit (STRC), basis, and Stacks Dual Staking. Profits are harvested and compounded back into Bitcoin. 

The market was ready for it. Half of the 50 BTC launch cap filled in under two days, twice the pace of private beta. 

The next deposit window opens soon.

If your mandate is BTC-denominated yield with transparent, rules-based risk controls, join the waitlist now.

USDh Meets STRC

USDh has a second yield engine: STRC. 

STRC is the leading instrument in digital credit, issued by Strategy and backed by its Bitcoin balance sheet, with a current annualized dividend rate of 11.50%. 

USDh now earns from STRC through stUSDh, adding Bitcoin-backed credit alongside basis. Together, these give USDh exposure to two distinct sources of yield: corporate credit demand and leverage demand in Bitcoin derivatives. 

Read our launch blog post for full details on how stUSDh earns from STRC.

hBTC Takes the Stage

hBTC was a major focus this week, and our Founder, Jakob, took it live twice.

At Stacks’ Builder Bash, he gave a live walkthrough of the hBTC app, covering the Yield and Reserve dashboards, the deposit flow, and how the product works in practice.

We also hosted a one-on-one session with Jakob, Yield You Can Underwrite: hBTC and the Institutional Bitcoin Yield Stack. The conversation went deeper on the inspiration behind hBTC, the design choices behind it, and how the protocol works under the hood. 

Watch the recaps for a deeper look at hBTC.

Yield Recap

5.65% on hBTC. 6.92% on USDh.

Bitcoin earning. Stables earning.

Big week for your wallet.

Market Review

Bitcoin traded above $79,000 intraweek and sits near $77,800, its highest level since early February. Strategy (MSTR) disclosed a purchase of 34,164 BTC for $2.54 billion at a $74,395 average on Monday, its third-largest, increasing holdings to 815,061 BTC, surpassing BlackRock’s IBIT (≈806,000 BTC). 

The S&P 500 and NASDAQ closed at record highs on Wednesday at 7,137.90 (+1.05%) and 24,657.57 (+1.64%), respectively. The NASDAQ’s record followed two down sessions that ended its April 17 thirteen-day streak.

Data Summary:

• DVOL: 42.48%

• Equal-weighted futures basis spread: 1.77% APR

• Futures curve in normal contango with front-week briefly in backwardation

• Perp funding is deeply negative, unexpected given the price action

• Aggregated altcoin market cap was roughly flat week over week at $1.01T

• Bitcoin dominance rose to 60.63% from 59.77% last week, its highest level since January, driven by DeFi-related selling following the Aave/Kelp exploit

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $77,800

• 7-Day SMA: $76,400

• 30-Day SMA: $71,500

• 180-Day SMA: $82,700

• 360-Day SMA: $96,800

• 200-Week SMA: $60,100 

Bitcoin has held above the 7-day ($76,400) and 30-day ($71,500) SMAs for a second straight week, with both levels now acting as support. Price is within 6% of the 180-day ($82,700) for the first time since the February selloff, making it the next key test level. Price remains below the 360-day ($96,800) and above the 200-week ($60,100) SMAs. Support levels are $76,400, $71,500, $67,000, and $60,100, while resistance levels are $78,500, $80,000, $82,700, and $86,000.

BTC ETF Flows

Net inflows were $1.276 billion since last Thursday.

The week marked a second consecutive week of inflows above $900M, following last week’s $921M. Cumulative 2026 net flows are now positive at ~$3.5B, reversing the $210M year-to-date deficit in March. With spot near $77,800, the ETF cohort’s average drawdown is now the narrowest since the October 2025 selloff.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL is 42.48%, down from 43.28% last week and about 10 volatility points below the April 2 level. Realized volatility has been lower over the past two weeks, with Bitcoin trading between $66,700 and $79,000; Wednesday’s ~4.5% move on the ceasefire extension headline was the only daily move above 3%. 

Structural vol-suppression dynamics have reemerged. Market-maker delta hedging linked to covered calls on Strategy, IBIT, and the mining complex has returned to levels seen earlier this year.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread tightened to 1.77% APR from 2.22% last week. The 45 bps compression was driven by the front-week contract printing -0.90%, briefly flipping into backwardation for the first time since the February selloff.

Basis remains positive across longer maturities. Figure 6 shows the curve beyond the front week: May 29 at 2.89%, June 26 at 1.16%, September 25 at 1.97%, December 25 at 2.58%, and March 2027 at 2.91%.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

Blockades and interdiction authority in the strait remain in place amidst the ongoing ceasefire and negotiation. A cargo-ship seizure in the Gulf of Oman over the weekend was the first known enforcement action, followed by two reported attacks on ships in the strait on Wednesday. 

Oil prices increased amid uncertainty over the conflict. Brent closed Wednesday up 3% at $101.91, while WTI settled up 3% at $92.96, leaving both 35% to 40% above levels seen before recent geopolitical developments. Hormuz tanker traffic remains near zero, and estimated supply loss tied to the Strait closure has risen to 4-5 million barrels per day, roughly 5% of global supply. European TTF gas has stabilized near €42-44/MWh, with storage at 28%-29%. 

The Fed remains at 3.50%-3.75% ahead of the April 28-29 FOMC meeting. The 10-year yield closed at 4.30%, little changed as lower oil offset March CPI. The DXY firmed into the upper 98s, while gold fell to about $4,700 on Tuesday on dollar strength. Cross-asset positioning now resembles the pre-escalation setup, with equities and crypto in risk-on while gold and Treasuries soften.

Sincerely,
The Hermetica Team

In an effort to improve the transparency of the Hermetica protocol’s backing assets, we are excited to share our sixteenth attestation report from all integrated custodians, verifying the assets backing USDh reside off-exchange within institutional custodial solutions.

Attestation reports will be released on a monthly basis to provide regular updates as to the amount and location of the assets backing the protocol.

As of 15:00 UTC April 16, 2026, USDh supply was $9,152,643.40 per the sources below.

8,767,484.15 USDh on Stacks per the Stacks explorer link: https://explorer.hiro.so/token/SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.usdh-token-v1?chain=mainnet

385,159.25 USDh on Runes per the etchings and protocol addresses below:

• USDh Token Etching: USDH•USDH•USDH•USDH

• USDh & sUSDh Cold Wallet: bc1q24t48s4lyks0309u9arqtqcrj5txc73pf6xfuxcfdgznz92wewvs8lr8re

• Protocol Address 1: bc1ppd9xd0dgnt88wfxv4fudy407y4mvq8ar62r5xw9yrlzsfxxcr96sskfd2w

• Protocol Address 2: bc1p7s7qa93gckae09lmvxpqm6j7xeva6a0pstu53397s7te86jeygxss0f0a4

The circulating supply is verifiable on-chain by subtracting the tokens held in the reserve and protocol wallets from the total supply:

Circulating supply = 1 quadrillion — reserve wallet — protocol wallets

$8,636,064.67 has been verified to be held within solutions offered by Copper as of 15:00 UTC April 16, 2026, including unrealized P&L.

$367,789.22 has been verified to be held within solutions offered by Ceffu as of 15:00 UTC April 16, 2026, including unrealized P&L.

At 15:00 UTC March 16, 2026, there was $145,312.53 in the Redeeming Reserve on Stacks, $3,490.05 in the Redeeming Reserve on Ethereum, $0.00 in the Minting Wallet, and $100,148.12 in the Reserve Fund.

• Redeeming Reserve Stacks: SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.redeeming-reserve-v1–2

• Redeeming Reserve Ethereum: 0xdDf6954BA51958DB59f32369309212aa0735a60e

• Minting Wallet: 0x6aA30bB7C64F43a3316d5E522ce01096557E5891

• Reserve Fund Address: 0xB7Fc1162B65a4a01F0924dDa980D52B629fEa9a6

In summary, as of the snapshot time:

• USDh supply: $9,152,643.40

• Copper custodied assets: $8,636,064.67

• Ceffu custodied assets: $367,789.22

• Redeeming Reserve Stacks: $145,312.53

• Redeeming Reserve Ethereum: $3,490.05

• Minting Wallet: $0.00

• Total backing assets: $9,152,656.47

• Reserve Fund: $100,148.12
  • USDC: $100,148.12
  • USDh: $0.00

• Total % of USDh: 101.09%

Copper Attestation

Ceffu Attestation

Bitcoin is a trillion-dollar asset class.

It sits on corporate balance sheets, inside ETFs, and across institutional portfolios worldwide. Yet despite its scale and maturity, Bitcoin remains largely idle. 

Early attempts to change this offered high returns but relied on hidden leverage and counterparty risk. When markets turned, those models collapsed, costing users their principal. Newer approaches corrected for this by prioritizing safety and custody, but at the cost of meaningfully lower yields.

The lesson from both extremes is that yield without transparency burns capital, and transparency without yield leaves capital unproductive.

hBTC operates in the space between.

What is hBTC

hBTC is Bitcoin that earns Bitcoin. 

Bitcoin deposited into the protocol is posted as collateral in on-chain lending markets, against which the system borrows stablecoins.

The stablecoins are converted into USDh and deployed across two staking paths: sUSDh, which captures yield from Bitcoin basis, and stUSDh, which accesses STRC yield. An additional yield layer is sourced from Stacks Dual Stacking.

Profits from all three strategies are harvested back into Bitcoin and compounded into hBTC.

hBTC provides a simple path to BTC-on-BTC yield:

• Deposit native BTC

• Receive the hBTC yield token

• Earn BTC yield, accrued daily

Users can redeem back to native BTC at any time.

Standard redemptions are subject to a 3-day cooldown, while an express option reduces the cooldown to 4 hours.

Risk Controls

What differentiates hBTC is not the existence of yield, but how that yield is produced and controlled.

Leverage, delta, and yield-spread exposure are continuously monitored and rebalanced within strict, pre-defined ranges—keeping the strategy away from liquidation and tail-risk regimes.

hBTC deploys exclusively into market-neutral strategies, operating around a 50% target LTV with minute-level rebalancing, and fully de-risks by closing positions when yield spreads fall below defined thresholds.

Every basis point of dollar profits is automatically converted to Bitcoin to continuously maintain delta neutrality. 

A dedicated on-chain reserve fund, capitalized with 5% of daily rewards, serves as a first-loss buffer designed to offset periods of negative carry and adverse market conditions.

On-chain Transparency

All activity occurs on-chain. Capital deployment, rebalancing events, reserve fund balances, and position adjustments can be observed in real time and independently verified on-chain and through Hermetica’s transparency dashboards. There are no black boxes or delayed disclosures. 

Yield is a byproduct of intentionally constrained and explicitly defined risk.

Yield Sources

hBTC is a multi-strategy BTC yield system designed to source returns across Bitcoin capital markets. The product allocates across multiple yield drivers: 

• Credit (STRC)

• Basis

• Staking

• Tokenized real-world assets

Today, hBTC derives yield from Bitcoin-backed credit through Strategy’s STRC, Basis, and Stacks Dual Staking. Additional sources will be added over time within the same risk-managed framework.

hBTC is rolling out to our first users as we speak. Early LPs are already earning 4-8% BTC-denominated yield, with real-time transparency and institutional-grade risk controls, while retaining the ability to redeem back to underlying Bitcoin.

Access to hBTC is being released in limited cohorts.

If your mandate is BTC-denominated yield with transparent, rules-based risk controls, the highest-leverage step is to request access for the next allocation window.

USDh now earns from STRC, harnessing the growth of digital credit markets to deliver a second, distinct yield source through stUSDh.

Digital credit has scaled rapidly; Strategy’s STRC program alone reached roughly $8.5B outstanding, with a $200M portion tokenized on Ethereum.

We are proud to be among the first protocols to see what BTC credits like STRC mean for on-chain yield.

One Platform, Two Yield Engines

The USDh platform now offers two liquid staking paths. Stake USDh into sUSDh to earn yield from BTC perp funding, or into stUSDh to earn yield sourced from STRC.

sUSDh was the first route, giving stakers access to yield from Bitcoin basis, one of the most liquid yield sources in Bitcoin capital markets. In 2025, sUSDh generated an average annual return of 10.56% distributed to USDh stakers daily.

The platform welcomes a second product: stUSDh.

stUSDh extends USDh into digital credit. Issued by Strategy, the world's largest corporate Bitcoin holder, STRC is a perpetual preferred security that pays monthly cash dividends and trades near a $100 par value.

Since its launch in July 2025 at 9%, STRC has undergone seven consecutive rate increases to its current annualized rate of 11.50%, maintaining 30-day volatility of approximately 1.7%. Strategy maintains a $2.25 billion USD reserve, covering more than 2.5 years of STRC dividends and interest payments, alongside 815,061 BTC in reserve, enough to cover 41 years of dividends.

Basis monetizes demand for leverage in Bitcoin derivatives markets. STRC monetizes demand for Bitcoin-backed corporate credit.

How We Access STRC

At launch, stUSDh accesses STRC through Saturn’s USDat platform, which offers exposure to STRC as its backing asset.

Execution of USDat backing is handled by Galaxy, while custody is operated by prime brokerage Clear Street. Saturn will work with Accountable to offer third-party attestation transparency of backing assets. 

Hermetica uses Copper Connect’s MPC wallet infrastructure to interact with Saturn without assets leaving qualified custody.

Future of the Bitcoin-Backed Yield Curve

USDh began with one yield engine: BTC funding. Our integration of STRC is the first step toward a broader Bitcoin income stack; the yield curve for Bitcoin. 

The STRC integration is now live at the infrastructure layer, and current protocol allocations to STRC are visible on Hermetica’s Transparency Dashboard.

stUSDh will be available soon. Once live, it will give USDh holders a second staking route and a second return stream linked to digital credit.

Join the stUSDh waitlist for exclusive access at launch:

IN THIS ISSUE

⏰ Countdown to Something New
💸 DeFi Wins the SEC Over
💰 USDh Yield Recap
📈 Weekly Market Review

Jakob TL;DR

This week kicked off a run of surprises.

hBTC is the first; it is just days away. I shared the roadmap for how access will open and what the waitlist should expect as institutional-grade BTC yield finally comes to market.

The next big surprise lands early next week, and I’m not spoiling it yet. Make sure you’re watching our X for when it drops.

I got a surprise of my own as well. The SEC cleared a path for DeFi trading interfaces to operate in the U.S. without broker-dealer registration. The new safe harbor makes clear that self-custodial interfaces are software, not intermediaries. One of DeFi’s biggest regulatory overhangs just lifted.

Countdown to Something New

We lined up two big surprises for you this month. 

The first is out. hBTC is days away, and the roadmap is live. Access opens in cohorts to waitlisted users on a first-come, first-served basis, with invitations sent by email.

Join the waitlist for first access to hBTC’s institutional-grade yield, transparency, and risk-control framework from day one.

The second? Next week, we will unveil something just as exciting as hBTC and entirely new. That's all we'll say for now.

Both announcements will drop on X before anywhere else. Follow the Hermetica account and turn on notifications so you don’t miss them.

DeFi Wins the SEC Over

Crypto's policy momentum isn't slowing down. The SEC just pushed it further.

DeFi trading interfaces like wallets and DEX aggregators covering the U.S. have been building with one eye on a lawsuit. If users traded through an interface, the provider was considered a broker, even if they never touched user funds.

Not for much longer. A new SEC staff statement makes clear that if users hold their own keys and control their own transactions, the interface is software, not a financial intermediary.

When codified into law, this distinction unlocks U.S. DeFi development in a way that hasn't existed before.

The road to yield is getting clearer. As regulatory momentum builds toward enabling access to DeFi, we're not catching up. We're already ahead of the curve.

USDh Yield Recap

As promised, USDh delivered.

6% this week.

Just wait for next week.

Market Review

Bitcoin increased to $75,164 on Wednesday in a move driven by geopolitical developments. Strategy (MSTR) disclosed its fourth-largest weekly purchase of 2026: 13,927 BTC for $1 billion at an average price of $71,902, bringing total holdings to 780,897 BTC.

The S&P 500 and NASDAQ closed at record highs on Wednesday, with the S&P 500 at 7,022.95 (+0.80%) and the NASDAQ at 24,016.02 (+1.59%). The VIX closed at 18.17 and has been below 20 in most sessions since first moving above that level on April 9.

Data Summary:

• DVOL: 43.28%

• Equal-weighted futures basis spread: 2.22% APR

• Futures curve in normal contango with front-week deeply below later maturities

• Perp funding rates neutral to slightly positive

• Aggregated altcoin market caps up to $1.01 trillion from $968 billion last week

• Bitcoin dominance rose to 59.77% from 59.47% last week

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $74,800

• 7-Day SMA: $73,600

• 30-Day SMA: $70,000

• 180-Day SMA: $83,900

• 360-Day SMA: $97,100

• 200-Week SMA: $59,800

Bitcoin reclaimed the 7-day ($73,600) and 30-day ($70,000) short-term moving averages this week, with both now acting as rising support. Price is below the 180-day ($83,900) and 360-day ($97,100), keeping the intermediate-term downtrend intact. The 200-week SMA at $59,800 continues to provide structural support. Support levels are $73,600, $70,000, $67,000, and $59,800, while resistance levels are $75,900, $78,000, $80,000, and $84,000.

BTC ETF Flows

Net inflows totaled $921 million since last Thursday.

ETF inflows posted their strongest week since January, accelerating from last week’s $197M. IBIT accounted for ~$871M, pushing 2026 cumulative spot Bitcoin ETF flows back into positive territory at ~$2.3B. The ETF cohort’s average drawdown has narrowed to its smallest gap since the October 2025 selloff.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL is 43.28%, down from 44.56% last week and ~9 volatility points lower than two weeks ago. The ceasefire, oil’s reaction to the naval blockade of Iranian ports, and Bitcoin’s steady move to the mid-$70Ks reduced the geopolitical risk premium that had been priced into options since February. DVOL is within the pre-selloff 35%–45% range for the first time since these developments began.

The structural vol-suppression regime is reappearing. TradFi call-selling, covered calls on Strategy and miners, and market-maker delta hedging have returned as desk liquidity normalized.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread is 2.22% APR, driven by compression of the front week and down from 2.52% last week. Basis is positive across maturities with no backwardation. Figure 6 shows normal contango, from 1.07% on the front week (April 24) to 1.77% on May 29, 2.05% on June 26, 2.48% on September 25, 2.89% on December 25, and 3.08% on March 2027. Long-term yields remain below the 5%–8% range seen in late 2024, and a return toward those levels would signal fuller normalization in derivatives.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

A U.S. delegation led by Vice President Vance met Iranian officials in Islamabad on April 11 for the first direct talks since 2015. No agreement was reached, and a naval blockade of Iranian ports by the U.S. Navy was imposed soon after. Transit through Hormuz remains heavily constrained.

In the week’s clearest divergence, oil prices fell despite the latest developments. Brent briefly rose to $101 on Monday before settling at $98.64, while WTI fell below $92. European TTF gas traded at €41 to €43/MWh midweek, down from €52-€53. Oil storage is entering injection season at 28%-29% of capacity, below the five-year average of 35%. No LNG has transited Hormuz in more than a month, and damage to Qatar’s Ras Laffan facility from the conflict is expected to take years to repair.

The Fed remains at 3.50% to 3.75%. March CPI rose 3.3% year over year, up from 2.4% in February. The next FOMC meeting is April 28-29.

The 10-year yield settled at 4.28%, little changed as lower oil offset a mildly hotter CPI print. DXY fell to a one-month low. Gold rose to $4,800 on Tuesday, its highest since March 18.

Sincerely,
The Hermetica Team

IN THIS ISSUE

🟠 The First Quantum Defense
💸 U.S. Greenlights Crypto Yield
💰 USDh Yield Recap
📈 Weekly Market Review

Jakob TL;DR

This week brought a wave of positive discoveries across crypto, and I tracked them all.

First, Lightning Labs’ Olaoluwa Osuntokun unveiled a prototype that could help wallet owners prove control without relying on cryptography that quantum computing might one day break. A possible defense path has now emerged.

Second, Washington moved closer to reality. A new White House paper undercut the banks’ core argument that banning yield-bearing stablecoins would protect lending. One of the banks’ strongest arguments against crypto yield just got weaker.

Crypto is getting stronger where it counts.

The First Quantum Defense

Bitcoin’s quantum debate has yielded something more useful than alarm: a possible defense.

For years, the fear has been that quantum computers could one day break the cryptography protecting Bitcoin wallets.

A path forward has emerged. This week, CTO of Lightning Labs, Olaoluwa Osuntokun, unveiled a prototype designed to avoid that outcome. 

The prototype gives wallet owners another way to prove control, relying on knowledge of the root secret from which the wallet was derived rather than on cryptography quantum computing could eventually break.

This is meaningful progress, and we expect it to continue.

As practical solutions emerge and post-quantum defenses mature, we will evaluate and integrate the most robust solutions into our infrastructure.

U.S. Greenlights Crypto Yield

One of the banks’ strongest arguments against crypto yield just got weaker.

The claim was straightforward: yield-bearing stablecoins pull deposits out of banks, reduce lending capacity, and do it without the same regulatory constraints.

This week, a new paper from the White House Council of Economic Advisers challenged that logic. It found that banning yield on dollar-backed stablecoins would do little to support bank lending, because capital shifting into stablecoins is often recycled into Treasury bills and redeposited across the banking system.

The findings reduce weight of the anti-yield case. More importantly, it points to a shift in Washington. Policymakers are getting more comfortable with the idea that digital dollars can earn, rather than remain artificially non-yielding to preserve the old deposit model.

Our view is unchanged: yield is becoming a durable part of digital financial products. Our yield product suite is ready for the market taking shape as policy catches up.

USDh Yield Recap

Did your stablecoin do anything for you this week?

USDh did. 2% APY earned in Week 15.

Market Review

Bitcoin moved above $71,000 on Wednesday as geopolitical developments drove a broad recovery in risk assets and a pullback in oil. Strategy (MSTR) bought 4,871 BTC for $329.9 million at a $67,718 average in the first week of April, raising holdings to 766,970 BTC.

The S&P 500 rose 2.5% to close near 6,760, its best session since April 2025, while the NASDAQ gained 2.8%. The VIX fell from 25.8 to 21.6; U.S. equities are now less than 5% below highs.

Data Summary:

• DVOL: 44.56%

• Equal-weighted futures basis spread: 2.52% APR

• Futures curve in normal contango with front-month below later maturities

• Perp funding rates neutral to slightly positive

• Aggregated altcoin market caps up to $968 billion from $942 billion last week

• Bitcoin dominance rose to 59.47% from 58.63% last week

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $71,000

• 7-Day SMA: $69,400

• 30-Day SMA: $69,700

• 180-Day SMA: $85,400

• 360-Day SMA: $97,400

• 200-Week SMA: $59,500

Bitcoin’s 7- and 30-day SMAs are converging near $69,400–$69,700 and are acting as support after the ceasefire spike. Price is below the 180-day ($85,400) and 360-day ($97,400) MAs, confirming the intermediate-term downtrend. The 200-week SMA near $59,500 continues to provide structural support. Support levels are $69,700, $67,000, $65,000, and $59,500, while resistance levels are $72,000, $74,000, and $76,000.

BTC ETF Flows

Net inflows totaled $197 million since last Thursday.

April 6 saw $471M in net inflows, the largest single day since February, led by IBIT ($182M) and FBTC ($147M). Earlier in the week, April 1 saw $173.7M exit the ETF complex. Total AUM is near $97B, and the average ETF holder cost basis is near $84,000.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL fell to 44.56% from last week’s 52.28%, the lowest level since February 28. Implied volatility dropped roughly 8 points in a single session, moving below the 50%-55% post-selloff range that had held for seven weeks.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread is 2.52% APR, up from 2.41% last week, with positive basis across maturities and no backwardation. Figure 6 shows normal contango, from 1.48% on the front week (April 17) to 2.39% on June 26, 3.09% on September 25, and 3.60% on March 2027.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

Geopolitical developments involving the U.S. and Iran reached a provisional conclusion on day 40. The Strait of Hormuz has reopened under a revised transit framework, with shipping routed closer to the Iranian coast and subject to inspection. Iranian officials have also indicated that transit fees will apply, with payment expected in currencies including Bitcoin, yuan, and other alternatives to the U.S. dollar. 

WTI fell 16.4% to $94.41, Brent 13.3% to $94.75, marking the largest single-day decline in oil since April 2020. U.S. gasoline remains near $4.00 per gallon, while European TTF gas futures fell ~20% to ~€44/MWh but are still ~60% above levels seen before the recent geopolitical developments.

The Fed remains at 3.50%–3.75%. The March FOMC minutes released April 8 reinforced a hawkish bias. Gold rose to $4,802, DXY fell to 98.9, and the 10-year yield eased to 4.25%. The next FOMC meeting is April 28–29.

Sincerely,
The Hermetica Team

IN THIS ISSUE

🚨 Google Sounds Quantum Alarm
💸 Enjoying Bitcoin’s Productive Era
💰 USDh Yield Recap
📈 Weekly Market Review

Jakob TL;DR

I made it through the week’s quantum panic.

Google published a paper outlining how future quantum systems could put millions of BTC and ETH at risk, and crypto erupted with hot takes. The threat is not immediate, but the paper is a wake-up call for an industry that likes to postpone hard infrastructure problems.

While quantum was the week’s reminder of what crypto needs to fix, conversations around Bitcoin yield show what crypto is starting to get right. I tuned into Stacks 'Growing Bitcoin' webinar where emerging, credible paths for BTC yield came into focus. Institutional demand is growing, and the market is evolving to meet it with more transparent, self-custodial approaches.

That, to me, is what maturation looks like.

Google Sounds Quantum Alarm

Google issued a notice to crypto: quantum risk deserves more attention.

In a new paper, Google researchers illustrate how quantum computing could impact key crypto ecosystems, like Bitcoin’s security, Ethereum validators, and smart contracts.

On Bitcoin, up to 2.3 million BTC could become vulnerable if quantum systems are capable of deriving private keys from public keys visible on-chain. 

The risk extends to roughly 20.5 million ETH in accounts with public keys visible on-chain and about $200 billion in stablecoins and RWAs reliant on admin-controlled smart contracts.

Google is the most advanced quantum computing research lab, and has set a 2029 target for its post-quantum cryptography migration; they see the quantum timeline accelerating. Bitcoin, however, cannot move quickly; Chaincode estimates that a minimal contingency implementation could take 2 years, while a complete mitigation could take 7.

The threat may not be imminent, but once development, coordination, and adoption are factored in, the timeline is much shorter.

We see the risk, and we’re active supporters of the research and development needed to make post-quantum crypto infrastructure practical.

Enjoying Bitcoin’s Productive Era

Bitcoin yield is entering a more credible phase.

As more BTC moves into institutional hands through ETFs and digital asset treasuries, demand for credible ways to earn on that BTC is growing.

Stacks hosted a webinar with founder Muneeb on what comes next for Bitcoin yield and the developments investors should watch as the market matures.

The session highlighted three emerging paths for BTC yield: allocating to CeFi managers running market-neutral arbitrage, using BTC-backed borrowing to deploy dollars into fixed income, and self-custodial dual staking through Stacks’ PoX mechanism, which generates BTC rewards without giving up custody.

Bitcoin yield is no longer defined only by opaque products or custodial tradeoffs. The market is expanding toward approaches built around greater transparency, self-custody, and BTC-denominated rewards.

hBTC fits squarely into that model as the first institutional-grade, self-custodial BTC yield product; the first of many category-leading BTC yield products to come.

Watch the recap to see where Bitcoin yield is going next.

USDh Yield Recap

5% APY this week.

Your stablecoin is outworking most people’s “high conviction” bags.

Market Review

Bitcoin traded within a $65,600–$69,500 range this week as geopolitical developments drove intraday swings. Price dipped to $65,600 over the weekend as oil rose above $112, then recovered to $68,500 by Wednesday evening ahead of President Trump’s address to the nation.

Energy was the only sector to finish Q1 in the green, with the SPDR S&P Oil & Gas Expl & Prod ETF (XOP) up over 30% YTD. The VIX remains elevated near 24.5. Bitcoin’s 30-day correlation with S&P 500 fell to approximately 0.35, with institutional short covering and ETF demand providing a floor even as equities moved lower.

Strategy (MSTR) filed an 8-K showing no Bitcoin purchases for the week ending March 29, the first week of no purchases in three weeks. Strategy holds 762,099 BTC at a cost basis of $75,694.

Data Summary:

• DVOL: 52.28%

• Equal-weighted futures basis spread: 2.41% APR

• Futures curve in normal contango with front-month below later maturities

• Perp funding rates neutral to slightly negative

• Aggregated altcoin market caps down to $942 billion from $962 billion last week

• Bitcoin dominance fell slightly to 58.63% from 58.86% last week

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $66,700

• 7-Day SMA: $67,000

• 30-Day SMA: $69,600

• 180-Day SMA: $87,300

• 360-Day SMA: $97,600

• 200-Week SMA: $59,300 

Bitcoin’s 7- and 30-day SMAs are converging near $67,000–$69,600. Price is below the 180- and 360-day MAs near $87,300–$97,600, confirming the intermediate-term downtrend. The 200-week SMA near $59,300 continues to provide structural support. Support levels are $65,000, $60,000, and $59,300, while resistance levels are $67,000, $69,600, $74,000, and $76,000.

BTC ETF Flows

Net outflows totaled $383.6M since last Thursday.

Thursday saw an outflow of $225M led by BlackRock’s IBIT with $202M. March closed with ~$1.32B in net inflows, the first positive month since October 2025 and the end of a four-month outflow streak. Cumulative net inflows since launch are above $56B. The average ETF holder's cost basis is ~$84,000.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL is 52.28%, almost unchanged from last week’s 52.57%. Despite geopolitical developments driving a $3,900 intraweek move, implied volatility barely moved as price remained within previous bounds.

Bitcoin has held a 50-55% DVOL range for six weeks, and it now marks a new structural floor after the selloff. If price stays range-bound, realized volatility may pull implied volatility lower; a breakout would reset the regime.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread stands at 2.41% APR, essentially flat from 2.40% last week. Basis remains positive across all maturities, with no signs of backwardation.

Figure 6 shows a typical contango structure, rising from 0.94% in the front week (April 10) to 2.18% by June 26, 2.93% by September 25, and 3.39% by March 2027. For derivatives markets to be considered fully normalized, basis levels would need to recover to the 5-8% range seen in late 2024.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

Geopolitical tensions between the U.S. and Iran have entered a fifth week, with restrictions on shipping through the Strait of Hormuz driving a sharp rise in energy prices. Brent is trading around $108 and WTI at $106, while U.S. gasoline has risen 35% in a month to $4.00 per gallon. European TTF gas has surged 85% to ~€55/MWh, with storage down to 5.8% of capacity. Elevated energy costs have already resulted in industrial shutdowns in Europe, including Yara International and ArcelorMittal. 

The closure has also driven fertilizer prices higher. About one-third of global seaborne fertilizer trade passes through Hormuz, and roughly 30% of exportable urea supply is now unavailable. Egyptian FOB granular urea has risen to ~$700/ton from $400-$490/ton before the closure.

Higher energy and fertilizer costs may add to inflation, with Wolfe Research estimating a combined impact of 0.55 percentage points on U.S. headline inflation. As supply-driven price pressures build alongside slowing growth, the macroeconomic backdrop can be viewed as stagflationary.

The Fed remains at 3.50%–3.75%. The next FOMC meeting is scheduled for April 28–29, with the March minutes due on April 8. The 10-year yield has risen to 4.32%, its highest level since July 2025.

Gold increased to ~$4,760 from its late-March low of $4,430 but remains about 15% below its January all-time high. The DXY is near 99.9. Oil and the dollar continue to rise, while equities, crypto, and gold have weakened, indicating a dollar-driven repricing tied to inflation pressure rather than a typical risk-off move.

Bitcoin has been a relative outperformer, supported by short covering, ETF inflows, and its perceived insulation from energy-specific disruption.

Sincerely,
The Hermetica Team

IN THIS ISSUE

🪙 25 BTC. Filled in Days.
💸 Your BTC Can Do More
🗞️ Receipts are In
💰 USDh Yield Recap
📈 Weekly Market Review

Jakob TL;DR

I was in New York for DAS this week, and everyone I talked to showed me what I already know: there is massive appetite for institutional-grade BTC yield.

I saw it first-hand as we opened the hBTC private beta, and the first 25 BTC cap filled within days. Founding LPs that deployed increased allocations by 2-4x after experiencing the product, and we already have capital queued for the next allocation window opening soon. Join the waitlist if you want exclusive access too.

In parallel, the March custodian attestation for USDh extended its record of 100%+ backing, setting a transparency standard for any yield product.

 If you want to hear how that standard applies to BTC yield, join me at the Stacks webinar on March 31.

25 BTC. Filled in days.

Institutional-grade BTC yield is in demand.

We opened hBTC to Founding LPs, and the first 25 BTC cap filled within days. Commitments are already building for the next allocation window.

Founding LPs who deployed capital increased their allocations by 2–4x after their first experience with hBTC.

Current participants are earning 6-8% APY from basis and Stacks Dual Stacking, paid daily in BTC.

If that sounds appealing, join the waitlist to secure exclusive access as additional capacity becomes available in the coming weeks.

Your BTC Can Do More

Bitcoin can be put to work in more ways than one.

Lending, liquidity, structured strategies, RWAs, basis trades. The opportunities for Bitcoin yield continue to expand, making it increasingly important to separate durable infrastructure from yield driven by temporary incentives.

Join Jakob, our Founder and CEO, live at the Stacks Bitcoin Yield Summit on March 31 as he shares the institutional approach to Bitcoin yield.

You’ll leave with a clear understanding of which opportunities are worth exploring, and what it takes to earn on Bitcoin without giving up transparency or control.

Mark your calendar so you don’t miss it.

Receipts Are In

The March 2026 proof of reserves is live.

USDh remains fully backed and independently verified by Copper and Ceffu.

In summary, as of the snapshot time:

• USDh supply: $9,441,388.43

• Copper custodied assets: $6,891,105.93

• Ceffu custodied assets: $2,411,932.27

• Redeeming Reserve Stacks: $136,764.24

• Redeeming Reserve Ethereum: $3,590.12

• Minting Wallet: $0.00

• Total backing assets: $9,443,392.57

• Reserve Fund: $104,531.76
  • USDC: $100,148.12
  • USDh: $4,383.65

• Total % of USDh: 101.08%

Read the attestations for a full breakdown of USDh’s backing, or visit our Reserves Dashboard for real-time collateral, yield, and custody data.

USDh Yield Recap

7% APY this week.

You could spend hours overthinking entries or you could stake USDh and chill.

Your call.

Market Review

Bitcoin traded between $68,000 and $71,500 this week, with daily moves tied to geopolitical developments. Price fell on Monday, rose on Tuesday after President Trump announced positive discussions, and retraced near $68,800 by Thursday as oil moved above $106. Strategy (MSTR) bought 1,031 BTC for $76.6 million at an average price of $74,326, bringing total holdings to 762,099 BTC at a cost basis of $75,694.

The S&P 500 fell 1.7% to ~6,482 on Thursday after a brief rally. The NASDAQ dropped 2.1%, led by Meta (-7.9%), Micron (-6.9%), and Nvidia (-4.2%). The VIX rose to 28. Bitcoin’s 30-day correlation with the S&P 500 fell to approximately 0.38.

Data Summary:

• DVOL: 52.57%

• Equal-weighted futures basis spread: 2.40% APR

• Futures curve in normal contango with front-month below later maturities

• Perp funding rates neutral to slightly positive

• Aggregated altcoin market cap fell to $962 billion from ~$986 billion last week

• Bitcoin dominance fell slightly to 58.86% from ~58.91% last week

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $68,800

• 7-Day SMA: $69,500

• 30-Day SMA: $69,600

• 180-Day SMA: $89,300

• 360-Day SMA: $97,900

• 200-Week SMA: $59,200

The 7-day and 30-day SMAs are converging near $69,500–$69,600. Bitcoin couldn’t hold above $70,000 on Thursday, moving back below both averages for the first time in two weeks. Supports are $68,000, $65,000, $60,000, and $59,200, while resistance levels are $70,000, $71,500, $74,000, and $76,000.

BTC ETF Flows

Net outflows total $41.70M since last Thursday. Monday saw $167M of inflows, led by IBIT ($161M), breaking a three-day outflow streak. Flows turned negative on Tuesday ($67M, led by FBTC) and Wednesday ($71M). March net flows of $1.6B have narrowed the YTD deficit to $210M. Total AUM is near $97B, and the average ETF holder cost basis is near $84,000.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL is 52.57%, slightly down from 53.46% the previous week. Despite a $3,500 intraweek range, implied volatility declined as Bitcoin remained within its recent trading range.

The post-selloff 50-55% DVOL range has held for five weeks and marks a new structural floor. If price stays range-bound, realized volatility may pull implied volatility lower; a breakout would reset the regime.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread is 2.40% APR, down from 2.61% last week. Basis is positive across all maturities, with no backwardation. Figure 6 shows normal contango, from 1.01% in the front month (April 3) to 3.47% in December. Perp funding is neutral. Basis needs to return to the 5%-8% range seen in late 2024 before derivatives can be considered normalized.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Strait of Hormuz remains closed on day 27 of U.S.-Iran developments, with shipping routes of nearly 2,000 vessels reportedly impacted. President Trump extended the deadline for reopening the strait to April 6. Iran also announced a shipping channel north of Larak Island with transit fees denominated in yuan and possibly Bitcoin.

Brent rose 5% on Thursday to above $106 (up 47% since February 28), while WTI settled near $94. The oil curve remains in steep backwardation, with firmer back-month pricing pointing to sustained supply stress due to geopolitical disruptions and the continued closure of Hormuz. The shock has also spread to fertilizer, with urea up 30% and China restricting exports, a combination Wolfe Research estimates could add 0.5 to 0.6 percentage points to U.S. headline inflation. Bitcoin, by contrast, has remained more resilient than equities through the broader deleveraging.

The Fed held at 3.50–3.75% at the March FOMC. Gold fell to $4,430, 23% below January’s ATH, as dollar strength (DXY near 100) outweighed safe-haven demand. Oil and the dollar have risen together while equities, crypto, and gold declined, consistent with a dollar-led repricing. Bitcoin has been more resilient, supported by short covering and continued ETF inflows.

Sincerely,
The Hermetica Team

In an effort to improve the transparency of the Hermetica protocol’s backing assets, we are excited to share our fifteenth attestation report from all integrated custodians, verifying the assets backing USDh reside off-exchange within institutional custodial solutions.

Attestation reports will be released on a monthly basis to provide regular updates as to the amount and location of the assets backing the protocol.

As of 15:00 UTC March 19th, 2026, USDh supply was $9,441,388.43 per the sources below

9,053,154.53 USDh on Stacks per the Stacks explorer link: https://explorer.hiro.so/token/SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.usdh-token-v1?chain=mainnet

383,850.25 USDh on Runes per the etchings and protocol addresses below:

• USDh Token Etching: USDH•USDH•USDH•USDH

• USDh & sUSDh Cold Wallet: bc1q24t48s4lyks0309u9arqtqcrj5txc73pf6xfuxcfdgznz92wewvs8lr8re

• Protocol Address 1: bc1ppd9xd0dgnt88wfxv4fudy407y4mvq8ar62r5xw9yrlzsfxxcr96sskfd2w

• Protocol Address 2: bc1p7s7qa93gckae09lmvxpqm6j7xeva6a0pstu53397s7te86jeygxss0f0a4

The circulating supply is verifiable on-chain by subtracting the tokens held in the reserve and protocol wallets from the total supply:

Circulating supply = 1 quadrillion — reserve wallet — protocol wallets

$6,891,105.93 has been verified to be held within solutions offered by Copper as of 15:00 UTC March 19th, 2026, including unrealized P&L.

$2,411,932.27 has been verified to be held within solutions offered by Ceffu as of 15:00 UTC March 19th, 2026, including unrealized P&L.

At 15:00 UTC March 19th, 2026, there was $136,764.24 in the Redeeming Reserve on Stacks, $3,590.12 in the Redeeming Reserve on Ethereum, $0.00 in the Minting Wallet, and $100,148.12 in the Reserve Fund.

• Redeeming Reserve Stacks: SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.redeeming-reserve-v1–2

• Redeeming Reserve Ethereum: 0xdDf6954BA51958DB59f32369309212aa0735a60e

• Minting Wallet: 0x6aA30bB7C64F43a3316d5E522ce01096557E5891

• Reserve Fund Address: 0xB7Fc1162B65a4a01F0924dDa980D52B629fEa9a6

In summary, as of the snapshot time:

• USDh supply: $9,441,388.43

• Copper custodied assets: $6,891,105.93

• Ceffu custodied assets: $2,411,932.27

• Redeeming Reserve Stacks: $136,764.24

• Redeeming Reserve Ethereum: $3,590.12

• Minting Wallet: $0.00

• Total backing assets: $9,443,392.57

• Reserve Fund: $104,531.76
  • USDC: $100,148.12
  • USDh: $4,383.65

• Total % of USDh: 101.08%

Ceffu Attestation

Copper Attestation

IN THIS ISSUE

🗞️ Crypto Wins the SEC Over
🏦 Mastercard Doubles Down on Crypto
💰 USDh Yield Recap
📈 Weekly Market Review

Jakob TL;DR

I did not expect a legal update to be my big news this week, but it was.

The SEC clarified that digital commodities, collectibles, tools, and some payment stablecoins fall outside securities law. Clear regulations like this make the space approachable for major institutions. 

Mastercard is already moving deeper into digital asset infrastructure through its Crypto Partner Program and planned acquisition of BVNK.

I’m watching to see who enters crypto next.

Crypto Wins the SEC Over

The SEC has established a new legal baseline for crypto in the US.

The March 17 release classifies digital commodities, collectibles, tools, and some payment stablecoins as non-securities. Mining, staking, one-for-one wrapping, and some airdrops do not, by themselves, amount to securities transactions. 

Tokenized securities stay subject to the same securities laws that apply to stocks, bonds, and other TradFi instruments. Putting an asset on-chain does not change its legal character if the underlying instrument is still a security.

Defined legal framework for crypto markets, with clearer boundaries around where securities laws apply, makes crypto accessible to everyone, especially institutions looking to enter the space and protocols looking to expand their services in the US.

Mastercard Doubles Down on Crypto

Mastercard is going all in on crypto.

First, it launched a Crypto Partner Program bringing together more than 100 crypto-native companies, payments providers, and financial institutions to shape how on-chain payments plug into existing commerce flows.

Then it went further, announcing an agreement to acquire BVNK for up to $1.8 billion, linking stablecoin infrastructure to the reach, compliance, and settlement layers that already power global payments.

Mastercard, which processed $10.6 trillion in gross dollar volume in 2025, alongside a growing list of global financial players, are actively looking for ways to integrate crypto infrastructure that fits their mandates.

As crypto increasingly becomes a necessary layer of financial infrastructure across industries, we’ll be there to build the reliable yield systems the system demands.

USDh Yield Recap

8% APY this week.

Another week of earning.

Market Review

Bitcoin reached a six-week high of $75,912 on Tuesday, driven by derivatives activity, including the closure of large $60,000 put positions, before reversing after the FOMC meeting to near $70,600 by Thursday. Strategy ($MSTR) announced its largest Bitcoin purchase of 2026 on Monday, buying 22,337 BTC for $1.57 billion at an average price of $70,194 and bringing total holdings to 761,068 BTC.

The S&P 500 fell 1.4% on Wednesday after the FOMC meeting. On Thursday, all three major indices breached their 200-day moving averages for the first time since mid-2025, triggering algorithmic selling. Bitcoin’s decoupling from equities became more pronounced, the 30-day S&P correlation declined to ~0.40. Bitcoin also fell after FOMC, continuing a pattern seen after seven of the past eight Fed meetings since early 2025.

Data Summary:

• DVOL: 53.46%

• Equal-weighted futures basis spread: 2.61% APR

• Futures curve in normal contango with front-month below later maturities

• Perp funding rates are neutral to slightly positive

• Aggregated altcoin market cap is flat at ~$986 billion

• Bitcoin dominance is steady at ~58.91%

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $70,600

• 7-Day SMA: $72,100

• 30-Day SMA: $69,000

• 180-Day SMA: $90,700

• 360-Day SMA: $98,100

• 200-Week SMA: $59,000

Bitcoin remains above its 30-day SMA for a third straight week, but fell below the 7-day SMA after the failed rally to $75,900. The 7-day and 30-day SMAs are now converging in the $69,000 to $72,000 range, forming a consolidation base. Bitcoin trades below the 180-day and 360-day moving averages, keeping the intermediate-term downtrend intact. The 200-week SMA near $59,000 continues to mark structural support, while $75,900 is now confirmed as resistance.

Support levels are $68,000, $65,000, $60,000, and $59,000, while resistance levels are $74,400, $76,000, $80,000, and $86,000.

BTC ETF Flows

Net inflows totaled ~$326 million week-over-week.

Bitcoin ETFs recorded the longest inflow streak since October 2025, with seven consecutive days of inflows from March 9-17 totaling $1.16 billion. The streak ended on Monday, coinciding with the FOMC meeting. There was $129 million in outflows, bringing cumulative net inflows to $56.41 billion. Total net assets rose to $96.74 billion from $88.34 billion at the start of the streak.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL is 53.46%, down slightly from 54% last week despite Bitcoin printing a $5,300 range and briefly reaching a six-week high. Tuesday’s derivatives-driven rally, fueled by put closures, left market-maker positioning largely unchanged by week’s end. DVOL remains in the 87th percentile over the past year, above the 35% to 42% range seen before the selloff but below February’s 90% spike. The post-crash 50% to 55% regime is now in its third week, a break from the multi-year DVOL downtrend that persisted through January 2026.

The TradFi vol-suppression thesis, driven by systematic ETF call selling, covered calls on treasury companies, and market-maker delta hedging, has partially returned as options desk liquidity improves, but wider bid-ask spreads show tail risk remains repriced. Continued range-bound price action reduces realized and implied volatility, while a breakout in either direction could reset the regime.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread is 2.61% APR, down slightly from 2.68% last week, pausing its recovery from February’s 1.73% low. Basis is positive across all maturities, with no front-month backwardation. Tuesday’s rally briefly lifted front-month basis before the post-FOMC selloff reversed most of the activity. The curve remains in normal contango, with perp funding neutral. Open interest is rebuilding but is well below January peaks. Basis needs to return to the 5%-8% APR range seen in late 2024 for the derivatives market to be considered normalized.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Fed voted 11-1 to hold rates at 3.50% to 3.75%. Updated projections raised 2026 inflation from 2.4% to 2.7% in December, while GDP was left at 2.4% and unemployment at 4.4%.

Meanwhile, the $2.1 trillion private credit market is showing its most acute stress since 2008. Fitch Ratings reported U.S. private credit defaults at a record 9.2%, more than double the broadly syndicated loan market. Redemption pressure has also intensified: Blackstone’s BCRED faced $6.5 billion in withdrawal requests. For Bitcoin, the relevance is liquidity: if private credit funds draw on bank credit lines to meet redemptions, broader financial conditions tighten.

Geopolitical developments drove a repricing in energy markets. Energy was the sole outperformer, with XOP up more than 25% year to date. Brent Crude rose above $119 intraday on Thursday before settling at $108.65, its highest close since July 2022, while WTI settled at $96.14. Since February 28, Brent has risen by roughly 80%. Physical Middle Eastern crude also moved to extreme premiums, with Oman settling above $152 versus $96 for WTI, far beyond the normal $5-$8, which may indicate supply scarcity in Asia. The move followed strikes on energy infrastructure across the region and continued disruption to shipping through the Strait of Hormuz.

Gold had its worst week since February 1983, falling about 10% as dollar strength absorbed safe-haven flows and margin calls drove liquidation. The DXY rose to about 99.4, the VIX closed at 25.09, up 12%, and the 10-year yield increased to 4.26%. Cross-asset correlations stayed elevated amid forced deleveraging, with Bitcoin a notable exception as it continued to show greater resilience to equity drawdowns.

Sincerely,
The Hermetica Team

IN THIS ISSUE

💸 Reliable USDh Pricing For DeFi Is Here
📰 Alpen’s Glock Now Duty-Free
💰 USDh Yield Recap
📈 Weekly Market Review

Jakob TL;DR

This week brought two infrastructure upgrades for Bitcoin DeFi.

USDh now uses a more accurate reserve-backed fair value feed from DIA, giving lending, trading, and liquidation markets pricing based on reserves rather than secondary market activity.

Second, Alpen Labs introduced Duty-Free Bits, a meaningful step toward cheaper Bitcoin-native protocol design by reducing garbled lock sizes and lowering deployment costs.

I, for one, appreciate seeing practical steps toward a more robust Bitcoin-powered financial system.

Reliable USDh Pricing For DeFi Is Here

USDh should be priced from reserves. Now it is.

We’ve partnered with DIA to bring a reserve-backed fair value feed for USDh. Pricing is now more accurately derived directly from the assets that back USDh, rather than secondary market activity.

The feed compares total reserve value against USDh supply in real time. If reserves meet or exceed supply, USDh is priced at $1.00. If reserves fall below supply, the price reflects the actual backing ratio.

The result? A more reliable pricing for lending, trading, and liquidations.

There’s more:

Alpen’s Glock Now Duty-Free

Introducing Duty-Free Bits: a cheaper path for Bitcoin-native protocols.

Alpen Labs’ latest Glock upgrade reduces the size of state-of-the-art garbled locks by 20-45x, making Bitcoin-compatible protocols materially cheaper to deploy. In one example, encoding size falls from 22.16 MB to 500 KB. In another, it drops from 6.8 MB to 355 KB.

Duty-Free Bits makes Bitcoin-native systems cheaper to build, easier to scale, and more realistic to deploy by replacing large multiplicative overhead with a smaller additive one.

We have our eyes on Alpen, as they continue to build BTC-native, cost-efficient pathways to the BTC economy.

USDh Yield Recap

21M BTC. USDh yield.

Some things stay beautifully constant.

8% on your stables this week.

Market Review

Bitcoin held steady this week as higher oil prices and geopolitics-linked equity selling dominated broader global markets. Bitcoin traded from $69,500 to $71,300 after starting near $70,500, a roughly 2.5% weekly range and lower volatility than other markets. Bitcoin’s 30-day rolling correlation with the S&P 500 fell from 0.55 to about 0.45, the widest divergence since the February selloff.

On Thursday, both the S&P 500 and the NASDAQ experienced declines, falling 1.52% to 6,673 and 1.78% to 22,312, respectively. Despite a significant 10% rise in oil prices and a 739-point drop in the Dow, Bitcoin remained relatively stable. This stability was supported by continued ETF inflows and a shift by some portfolio managers to reduce exposure, cover software and crypto shorts, and move toward cash.

Data Summary:

• DVOL at 54%, stable week-over-week

• Futures curve is in normal contango, with front-month contracts below later maturities

• Perp funding rates are neutral to slightly negative

• Aggregated altcoin market caps are flat at approximately $979 billion

• Bitcoin dominance steady at approximately 59.32%

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Simple Moving Averages (SMA) in Figure 1:

• Current Price: $71,300

• 7-Day SMA: $69,100

• 30-Day SMA: $68,100

• 180-Day SMA: $92,400

• 360-Day SMA: $98,400

• 200-Week SMA: $58,800

Bitcoin has traded above both short-term moving averages for a second consecutive week, the first sustained crossover in two months.

The 7-day and 30-day SMAs are converging near $68,000-$69,000, forming a base.  Price is below the 180-day and 360-day MAs near $92,000-$98,000. The 200-week SMA near $58,800 is a key structural support and has marked cycle bottoms since 2015.

Support levels are $68,000, $65,000, $60,000, and $58,800, while resistance levels are $74,000, $76,000, $80,000, and $86,000.

BTC ETF Flows

Net inflows total approximately $234M since last Friday.

The ETF complex has broken its five-week outflow streak that drained $3.8B. On Monday, March 10, net inflows totaled $251M, led by BlackRock’s IBIT at $186M. Gold ETFs saw record outflows over the same period, suggesting early rotation from precious metals into digital assets. Total ETF AUM recovered to approximately $88B. The average cost basis for ETF holders remains near $84,000, roughly 16% below current levels.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL is 54%, flat from last week’s 54.7%. Despite Brent crude oil rising from $85 to above $100, Bitcoin implied volatility barely moved, contrasting with the move to 90% during February’s selloff. Geopolitical developments keep DVOL elevated, while institutions reducing exposures have limited price action.

DVOL is in the 87th percentile on a one-year basis. The post-selloff 50%-55% range sits above the pre-selloff 35%-42% range but below February’s levels, consistent with a structural regime shift in Bitcoin implied volatility.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The equal-weighted basis spread has risen to 2.68% APR from 2.49% last week, well above the 1.73% February trough. Basis is now positive across maturities with no front-month backwardation, indicating reduced derivatives stress.

The curve maintains normal contango with front-month below later maturities. Perp funding rates are neutral to slightly positive, and open interest has stabilized but is still below January peaks. Basis would need to return to the 5%-8% APR range seen in late 2024 to indicate fuller normalization in derivative markets.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Fed remains at 3.50%-3.75% ahead of the March 17-18 FOMC, which includes the quarterly dot plot. February CPI came in at 2.4% on March 11. The VIX hit 27.29 on Thursday, the 10-year yield rose to 4.27%, and DXY climbed to 99.7. 

Tensions involving the U.S., Israel, and Iran entered a third week. Shipping through the Strait of Hormuz remained constrained amid closure, affecting a key energy route that normally carries around 20 million barrels of oil per day. Even with rerouting, over 15% of global supply is halted by the closure.

WTI rose 9.72% on Thursday to $95.73, and Brent settled at $100.46, its first close above $100 since 2022. WTI is up ~67% from its 2026 open of $57.42. Gulf production has been curtailed by 6.7 million barrels per day due to storage constraints, and even with bypasses at full capacity, 15.17 million barrels per day of production is expected to shut down. The IEA’s 400-million-barrel strategic reserve release on March 11, the largest in its 52-year history, did not materially move prices. Spillovers extend beyond crude: global LNG supply is down 20%, European and Asian gas prices have doubled, and fertilizer prices have risen ahead of the U.S. planting season.

Sincerely,
The Hermetica Team

In an effort to improve the transparency of the Hermetica protocol’s backing assets, we are excited to share our fourteenth attestation report from all integrated custodians, verifying the assets backing USDh reside off-exchange within institutional custodial solutions.

Attestation reports will be released on a monthly basis to provide regular updates as to the amount and location of the assets backing the protocol.

As of 16:00 UTC February 25th 2026, USDh supply was 9,992,812.71 per the sources below

9,454,935.22 USDh on Stacks per the Stacks explorer link: https://explorer.hiro.so/token/SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.usdh-token-v1?chain=mainnet

533,439.38 USDh on Runes per the etchings and protocol addresses below:

• USDh Token Etching: USDH•USDH•USDH•USDH

• USDh & sUSDh Cold Wallet: bc1q24t48s4lyks0309u9arqtqcrj5txc73pf6xfuxcfdgznz92wewvs8lr8re

• Protocol Address 1: bc1ppd9xd0dgnt88wfxv4fudy407y4mvq8ar62r5xw9yrlzsfxxcr96sskfd2w

• Protocol Address 2: bc1p7s7qa93gckae09lmvxpqm6j7xeva6a0pstu53397s7te86jeygxss0f0a4

The circulating supply is verifiable on-chain by subtracting the tokens held in the reserve and protocol wallets from the total supply:

Circulating supply = 1 quadrillion — reserve wallet — protocol wallets

$7,386,822.58 has been verified to be held within solutions offered by Copper as of 16:00 UTC February 25th 2026, including unrealized P&L.

$2,367,461.35 has been verified to be held within solutions offered by Ceffu as of 16:00 UTC February 25th 2026, including unrealized P&L.

At 16:00 UTC February 25th 2026, there was $23,625.90 in the Redeeming Reserve on Stacks, $223,595.07 in the Redeeming Reserve on Ethereum, $0.00 in the Minting Wallet, and $75,148.12 in the Reserve Fund.

• Redeeming Reserve Stacks: SPN5AKG35QZSK2M8GAMR4AFX45659RJHDW353HSG.redeeming-reserve-v1–2

• Redeeming Reserve Ethereum: 0xdDf6954BA51958DB59f32369309212aa0735a60e

• Minting Wallet: 0xc6906Eb209902AD17f3207bec947eFa2687b2C75

• Reserve Fund Address: 0xB7Fc1162B65a4a01F0924dDa980D52B629fEa9a6

In summary, as of the snapshot time:

• USDh supply: $9,992,812.71

• Copper custodied assets: $7,386,822.58

• Ceffu custodied assets: $2,367,461.35

• Redeeming Reserve Stacks: $23,625.90

• Redeeming Reserve Ethereum: $223,595.07

• Minting Wallet: $0.00

• Total backing assets: $10,001,504.89

• Reserve Fund: $79,586.22
  • USDC: $75,148.12
  • USDh: $4,438.11

• Total % of USDh: 100.84%

Ceffu Attestation

Copper Attestation

IN THIS ISSUE

Jakob TL;DR

Two things stood out to me this week.

First, Zest V2 is live, a step change in BTC lending risk controls that moves us closer to institutional-grade BTC yield.

Second, River’s latest Bitcoin ownership report. In 2025, businesses added 489K BTC, funds and ETFs added 205K, and governments added 135K. More BTC is landing on institutional balance sheets, yet under 1% of BTC earns today compared to 75%+ of corporate cash. Adoption is outpacing productivity. 

Now more than ever, the market needs institutional-grade yield products.

Zest V2 Live. hBTC Is Next.

Bitcoin lending has a new look.

Zest V2 is live with upgraded risk pricing and liquidations. V1 placed every loan against collateral into one shared risk profile, which meant conservative limits whenever a single pair carried outsized liquidation risk.

V2 introduces pair-level risk groups, staged liquidations with partial and full thresholds; a clear path to institutional-grade BTC yield.

hBTC launches with basis, borrowing stables like USDh against BTC and deploying into high yield staking strategies, powered by Zest V2 risk controls.

With the pieces coming together, the waitlist is warming up. Subscribers will start receiving updates as we approach launch.

If you are allocating capital to institutional-grade BTC yield, join the waitlist for launch access.

BTC Ownership Is Changing

Institutions continue to gravitate toward Bitcoin.

River reports that in 2025, businesses added 489K BTC, funds and ETFs added 205K, and governments added 135K. Supply is consolidating onto balance sheets.

Balance sheets don’t hold idle assets.

Over 75% of corporate cash earns yield in TradFi, less than 1% of Bitcoin supply does. ETFs and treasury programs solve exposure and custody, not capital efficiency. As Bitcoin moves into mandate-driven structures, the expectation is yield.

Institutions need a yield stack that is built for governed balance sheets, where custody, reserve verifiability, and risk control are non-negotiable. hBTC fits that requirement: self-custodial, full transparency, with daily yield.

If you are evaluating BTC yield, the waitlist is open.

USDh Yield Recap

7% APY this week.

By reading this, you’re agreeing to stop chasing narratives, stop bottom-calling, and let your stables do the work.

Market Review

Bitcoin made a volatile round-trip this week, dropping to $62,800 on Monday, recovering to $69,500 briefly on Wednesday, and ending near $67,000 by Friday.

The S&P 500 closed Thursday at 6,908.86. NVIDIA shares dropped 5% despite a strong Q4 ($68.1 billion revenue, +73% YoY). Block laid off over 4,000 employees, about half its workforce, adding to the ongoing AI-driven repricing in SaaS. The VIX moved above 20 on Friday. Deribit’s $8.72B BTC and ETH options expiry is today, with 114,705 BTC contracts and max pain at $75,000.

Data Summary:

• DVOL: 52.27%; IV percentile: 87.7%

• BTC front-month IV: 47%; ETH: 65%

• Futures curve in contango with front-end volatility premium around February expiry

• Perp funding rates are near neutral

• Total crypto market cap excluding Bitcoin: $936.35B

• Bitcoin dominance: 58.55%; altcoins outperformed (ETH +4.8%, SOL +5.5%, ADA +7%)

• BTC options expiry: $7.74B notional; put/call: 0.76; max pain: $75,000

Figure 1: BTC Price, Daily Candles, & Exponential Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

Bitcoin's technical structure remains bearish as price trades well below both the 50-day ($75,700) and 100-day ($83,400) Exponential Moving Averages (EMA). The 200-week EMA near $68,000 acted as a brief buffer midweek.

The weekly close relative to the 200-week EMA ($68,000) is important: a close above makes a potential move to $80,000 possible, while a close below keeps $60,000–$62,000 as the next support zone.

Below $60,000, $50,000-$55,000 is the next support zone, while resistance is at $70,000 and $76,000–$78,000. Bitcoin is down 47% from its October 2025 ATH and 23% YTD.

BTC ETF Flows

This week's inflows totaled $903M. U.S. spot Bitcoin ETFs ended a five-week net outflow streak totaling $3.8B, the longest since February 2025. YTD net outflows are $4.5B, with IBIT down more than $2.1B and FBTC down $954M. Total AUM fell from $170B, the October 2025 peak, to $84.3B.

Strategy (MSTR) announced its 100th Bitcoin purchase, buying 592 BTC for $39.8M. Total holdings are 717,722 BTC at an average cost of $76,020.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL is 52.27% (87.7th percentile), down from the 90% peak during early February’s heaviest selling. The 25-delta skew recovered from -30 to -8/-9, signalling less acute hedging demand. Today’s expiry removes $8.72B in gamma exposure, which may allow for larger directional moves.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

Basis spreads fell to a YTD low of 1.73%, equal-weighted basis across maturities. The curve remains in contango across most of the curve, except the front week. Perp funding is near zero after turning negative during the February 5 selloff.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Producer Price Index (PPI) data released this week was high, which has shifted market pricing toward fewer near-term rate cuts. A stronger PPI reading can signal inflation pressure, prompting caution around rate cuts. Separately, on February 20, the Supreme Court invalidated IEEPA tariffs, after which the administration implemented a 15% global tariff.

U.S.-Iran developments remain in focus for markets. Indirect talks in Geneva concluded on Thursday, and some governments have issued travel guidance related to the region as tensions continue.

A Strait of Hormuz disruption would likely influence energy prices and inflation expectations. Gold is around $5,230, while broader risk assets have been less responsive. In prior geopolitical episodes, including the June 2025 twelve-day Israel-Iran conflict, Bitcoin initially sold off rather than trading as a defensive asset.

Sincerely,
The Hermetica Team

IN THIS ISSUE

Jakob TL;DR

My top reads this week were Messari’s and Nansen’s Stacks ecosystem reports. Both point to growing demand for institutional-grade BTC yield, referencing hBTC as the “long-awaited” Bitcoin Earn Vault. We hear you. hBTC is closer than you think.

Outside the reports, I’ve seen a flood of “how does BTC yield actually work” questions. I’ll be live at the Stacks Bitcoin Yield Summit to talk about the core earning paths available today, the risk, custody, and security standards behind durable yield.

The Wait Is Almost Over

The market’s demand for BTC yield is getting louder.

Independent research desks, Messari and Nansen, point to the demand for institutional-grade BTC yield with transparent mechanics in their Stacks ecosystem reports, referencing hBTC as the “long-awaited” Bitcoin Earn Vault.

We see the demand, and we hear you. The wait is almost over.

hBTC has cleared key readiness gates. Two independent audits are complete. A live bug bounty is running on Immunefi. The build is production-ready, and liquidity is aligning ahead of launch.

Access will roll out to the waitlist soon.

If your mandate includes BTC-denominated yield with transparent mechanics and rules-based risk controls, the waitlist guarantees access.

Your BTC Can Do More

Your Bitcoin can work more than one job and pay you.

Join Jakob live on March 11 at Stacks’ Bitcoin Yield Summit to learn what BTC yield opportunities exist, and what separates durable strategies from temporary incentives.

Tracking where Bitcoin is headed next?

Join the session and leave with a clear understanding of where to earn, what tradeoffs exist, and the right questions to ask before you deploy.

Register to attend:

USDh Yield Recap

7% APY this week.

This used to be reserved for “high-yield accounts” with minimums, lockups, and an account manager.

Now, everyone eats.

Market Review

Bitcoin started the week near $68,900, traded down to about $65,800 on Thursday, before moving back to $67,800 by Thursday evening. Ether, XRP, and Solana fell more than Bitcoin, extending the risk-off rotation away from higher-beta assets. Strategy (MSTR) disclosed a 2,486 BTC purchase acquired between February 9–16 at an average price of $67,710 for $168.4M, bringing total holdings to 717,131 BTC at a blended cost basis of $76,027. 

The S&P 500 rose 0.56% to 6,881 on Nvidia and Amazon strength, before giving back gains. Walmart’s FY2027 EPS guide of $2.75–$2.85 (vs. $2.96 consensus) and hawkish FOMC minutes pulled the index down 0.28% to 6,862 and the NASDAQ down 0.31% to 22,683. The S&P briefly reclaimed its 50-day moving average at 6,894.

Data Summary:

• DVOL: 52.55%

• Equal-weighted futures basis spread: 2.19% APR, slightly up as market stabilizes

• Futures curve: flat-to-normal contango, with the front month still in backwardation

• Perp funding rates: flat to slightly positive

• Aggregated altcoin market cap: $943B

• Bitcoin dominance: down 0.42% to 58.88%

• ETF holder average cost basis: $84,000

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

The moving averages (MA) in Figure 1 are:

• Current Price: $66,800

• 7-Day MA:  $67,900

• 30-Day MA: $75,500

• 180-Day MA: $97,500

• 360-Day MA: $99,400

• 200-Week MA: $58,300

Bitcoin trades below all major moving averages except the 200-week, a key structural support near $58,300. The 180-day and 360-day MAs sit near $97,000–$99,000, and Bitcoin would need roughly a 40% move to reclaim the 180-day MA. The 7-day MA has started to flatten, indicating slower selling momentum. Other support levels are  $65,000, $60,000, and $52,000, with resistance at $70,000, $73,300 (20-day Exponential Moving Average), $76,000, and $80,000.

BTC ETF Flows

Net outflows continued, with $389M leaving on Monday, including a $120M outflow from BlackRock’s IBIT that ended a 71-day inflow streak. Tuesday saw another $133M in outflows. Flows were mixed across products, suggesting rotation within the ETF complex rather than a uniform exit. While IBIT and Grayscale’s GBTC saw outflows, Fidelity’s FBTC took in $58.9 million on Monday and Grayscale’s Mini Trust added $35.9M.

Approximately $8.5 billion has exited U.S.-listed spot Bitcoin ETFs since October 2025. Cumulative net inflows have fallen from a $61.5B peak to around $55B, and total ETF AUM has dropped to roughly $95B from a January peak of $168B.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

DVOL has moved from 72% to 52.55% but remains above the 35%–42% range seen before the selloff. The February 5 price action took DVOL to 90%, the highest since FTX. DVOL has since cooled, but remains high.

Structures that suppressed DVOL through 2024–2025, including TradFi call selling on ETFs, covered-call activity on treasury companies, and market maker delta hedging, have been disrupted. The February selloff overwhelmed hedging capacity and reduced market maker liquidity during peak selling. DVOL remains high in the 50%–65% range, but may normalize if Bitcoin stabilizes above $65,000 long enough for institutional options desks to re-engage.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The futures basis has improved from the intermittent backwardation seen in early February. Front-month futures still trade below spot, but the negative basis is smaller than in recent weeks. The average equal-weighted spread is 2.19% APR this week versus 1.85% APR last week. Perp funding, negative during the selloff, has moved to neutral and is now slightly positive, suggesting short pressure has eased and the market is less oversold.

The curve has returned to flat-to-normal contango, though spreads remain low compared to 8%–12% APR seen in October–November 2025. Open interest remains below January peaks after more than $5 billion in liquidations.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Fed released the January 27–28 FOMC minutes, interpreted as hawkish by the market. The committee voted 10–2 to hold rates at 3.50%–3.75%. The next meeting is March 17–18. The White House has continued advocating for rates as low as 1%, and the Powell-to-Warsh transition in May remains a key focus for monetary policy.

U.S.-Iran discussions remain a market driver, with markets responsive to related headlines. WTI crude is $66.50, gold trades near $4,990 after rebounding from $4,404, silver has stabilized in the low-to-mid $70s after its 41% drop from $121, DXY is 97.85 (down 8% year over year), the VIX at 20.2 is elevated but not signaling acute equity stress, and WTI is $66.5. Bitcoin remains down 47% from recent highs, with ETF holders about 20% below cost.

Sincerely,
The Hermetica Team

IN THIS ISSUE

Jakob TL;DR

hBTC audits were the first step. This week, we reinforced our security-first approach with a bug bounty program on Immunefi, offering up to $100,000 for meaningful findings.

In parallel, I read Messari’s State of Stacks report for Q4. I’m impressed by how central stablecoins are becoming to Stacks DeFi. USDh, our BTC-backed stablecoin, was highlighted as the largest stablecoin on Stacks after aeUSDC, powering liquidations for Zest and enabling more scalable Bitcoin-backed loans.

On the other side, the market is also validating our approach to institutional-grade products. BlackRock took its first DeFi step by making $2.2B of its tokenized Treasury fund, BUIDL, tradable on Uniswap.

Find Bugs. Earn Up to $100K

Audits were step one. Our security-first approach stays on.

We have launched a public hBTC bug bounty on Immunefi, with rewards up to $100,000 for critical security findings.

Immunefi secures 650+ protocols, and hBTC is now open to that same global researcher network, reinforcing our focus on institutional-grade security.

We invite independent security researchers to review the protocol and report any significant findings.

See details:

Stacks Q4 2025 Recap

In Q4 2025, Stacks’ DeFi depth grew. TVL grew in STX terms, up 120.8% to 488.1M STX.

Stacks’ DeFi diversity score rose from 4 to 5, showing activity spreading across more protocols instead of pooling in one venue. Even as the STX price fell, momentum held, with stacked STX up 6.1% QoQ.

Stablecoins became a bigger part of Stacks’ DeFi stack. 

Total stablecoin market cap reached $20.5M by the end of Q4, up 177.5% YoY. USDh, our BTC-backed stablecoin, powered liquidations for Zest and supported more scalable Bitcoin-backed lending, while holding its position as the largest stablecoin on Stacks after USDC. Circle also launched USDCx in Q4, bringing a fully backed T1 stablecoin to the network.

Read the Messari State of Stacks Q4 2025 report for the complete breakdown of Q4 performance.

BlackRock goes Onchain

Institutions are expanding their investing playbook to include DeFi.

BlackRock took a first step into DeFi markets by making shares of its $2.2B tokenized Treasury fund, BUIDL, tradable through Uniswap. Qualified holders can move between BUIDL shares and USDC on-chain, with 24/7 execution and liquidity instead of waiting on traditional market hours. 

This is not a one-off. Banks and institutions are continually expanding client access to on-chain use cases.

Beyond adoption, the choice of venue paints a picture.

We’ve consistently seen institutional capital gravitate toward protocols that hold up under scrutiny on security, transparency, and operational readiness. Products built to that bar plug into how global banking and finance operate, meeting expectations of this new wave of users.

hBTC earns Bitcoin yield in a way that clears that standard.

USDh Yield Recap

USDh earned 4% APY this week.

Someone had to work during the dip.

Market Review

Bitcoin recovered from last week’s lows near $60,000, trading briefly above $70,000 before settling near $66,500. The price move extended into the new week, coinciding with spot Bitcoin ETFs recording back-to-back net inflows totaling $616M for the first time in nearly a month. Exchange volumes remain about 30% below late 2025 levels, signalling lower retail participation.

The S&P 500 started the week up 0.5% before falling 1.57% to 6,832.75. The NASDAQ dropped 2.03% to 22,597, driven by skepticism over AI capex sustainability. Cisco fell 12.5%, Apple dropped 5% in its worst session since April, and Amazon, Meta, and Broadcom each moved 2%–5% lower.

Data Summary:

• DVOL: ~50%, down from 72% last week

• Equal-weighted futures basis spread fell to 1.85% APR

• Futures curve is in steep contango in back months. Front month slipped into backwardation during selling episodes

• Perp funding rates are near zero to slightly negative

• Aggregated altcoin market caps are up slightly to $0.93T from $0.91T

• Bitcoin dominance rose to ~58.92% from 58.71%

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

The moving averages (MA) in Figure 1 are:

• Current Price: $66,700

• 7-Day MA: $68,400

• 30-Day MA: $81,300

• 180-Day MA: $99,300

• 360-Day MA: $99,900

• 200-Week MA: $58,200

Bitcoin remains below the 7-day MA and broader short- and long-term moving averages since the sell-offs. Key support levels are $60,000, $58,500, $52,000, and $48,000, with the 200-week MA near $58,500 marking cycle bottoms in 2015, 2018, and 2022. Key resistance levels are $70,000, $72,000, $80,000, and $86,000. At $66,500, Bitcoin is trading between 200-week MA support and the $70,000–$72,000 resistance zone.

BTC ETF Flows

Net outflows totaled $4M. ETF flows turned positive with $471.1M of inflows on Friday, followed by $144.9M on Monday and $166.5M on Tuesday, led by ARK 21Shares ($68.5M), Fidelity ($56.9M), and BlackRock’s IBIT ($26.5M). The broader trend remains outflow-dominated, but this streak of inflows suggests institutional and retail buyers view the $60,000–$70,000 range as a strategic accumulation zone.

From November 2025 through early February 2026, the spot Bitcoin ETF complex shed roughly $6.2B in net capital. Total ETF assets under management are about $97B. The average holder cost basis is near $90,200, leaving the ETF investor base roughly 26% underwater at current prices. In its Q4 2025 13F, Goldman Sachs cut IBIT holdings by 39.4% and added positions in spot XRP ETFs ($152M) and spot Solana ETFs ($108M), signaling a rotation from Bitcoin toward altcoin ETF products.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

Bitcoin’s implied volatility (DVOL) fell from last week’s close of ~72% to 52% by midweek as the price action from $60,000 to $70,000 reduced demand for protective puts. DVOL remains above the sub-40% levels seen through most of late 2025. Option premiums are elevated, consistent with a market still searching for a durable bottom.

The long-term DVOL downtrend, driven by TradFi call selling on Bitcoin-linked products such as ETFs, Bitcoin treasury companies, and miners, was disrupted by the scale of recent liquidations, breaking the trend that ran from late 2023 through September 2025. DVOL has roughly doubled from three months ago to levels not seen since the FTX collapse in November 2022. Strategy (MSTR) reported a $12.4B net loss for the most recent quarter.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The basis spread, or futures pricing over spot, recovered this week from last week’s lows. The average equal-weighted basis spread rose from ~1.73% to 1.85% APR as the relief rally reduced hedging pressure that had pushed front-month futures into backwardation last week. Front-month basis is improving, but remains negative.

The futures curve remains in steep contango in the back months, with a wide front-to-back spread. Perp funding is near zero after turning negative during last week’s capitulation. More than $5B in positions were liquidated last week, keeping perp open interest below levels seen before the selloff. Lower open interest and near-zero funding point to lighter positioning, which may limit forced selling but also reduce short-side fuel for a squeeze-driven rally.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

Following a brief government shutdown tied to a budget impasse over Department of Homeland Security funding, the January CPI report was rescheduled from February 11 to Friday, February 13. This is the second recent instance of a shutdown disrupting the release of key economic data. The BLS still has not published the October 2025 figures following the prior, longer shutdown.

The January jobs report was stronger than expected, with a lower unemployment rate to start 2026. The federal funds rate remains 3.50%–3.75% after the January 28 FOMC meeting. The next meeting is scheduled for March 17–18. Fed Chair Powell’s term expires in May, and the transition to nominee Kevin Warsh remains in focus.

Gold trades near $4,957 per ounce, down 2.8% from recent all-time highs but still near record levels and well above year-ago prices. The VIX rose to 20.83, up 18% on Thursday, while the Dollar Index (DXY) climbed to 97.05. Strong jobs data, delayed inflation data, and ongoing AI capex concerns have kept cross-asset volatility elevated into the weekend.

Sincerely,
The Hermetica Team

IN THIS ISSUE

Jakob TL;DR

If you’ve followed Hermetica for any length of time, you’ve seen the pattern. Security comes first.

This week, we closed another milestone. Clarity Alliance completed its review of hBTC, and the full audit trail is public, from findings to remediation.

In parallel, Fireblocks is integrating Stacks, pushing BTCfi upstream into the custody stack used by over 2,400 enterprises. As that rail goes live, Fireblocks clients will be able to access BTCfi opportunities on Stacks, including institutional-grade BTC yield through hBTC.

Security First

hBTC has hit a new milestone: security audits are complete.

Clarity Alliance has published a security review of the hBTC protocol, closing out the latest audit cycle. The assessment covers the protocol’s smart contracts and interfaces with third-party partner protocols.

The audit trail anchors findings to specific commits, with remediation captured in the final code referenced by the report.

This is the second independent audit of the protocol. All audits are public and available in our documentation.

With the audit cycle complete, the protocol is cleared for production. The foundation is set.

Fireblocks Integrates Stacks

Institutional access to BTCfi just moved upstream.

Fireblocks is integrating Stacks, opening Bitcoin DeFi opportunities powered by Stacks to more than 2,400 enterprises.

Over 500M wallets trust Fireblocks, with more than $10T in digital asset transactions running through its rails. This integration brings BTCfi into the custody and operations layer institutions already use to move capital.

The result is distribution.

Institutional clients can access BTCfi opportunities on Stacks, including all Hermetica products. Fireblocks clients on the waitlist will access institutional-grade BTC yield through hBTC as the integration goes live.

USDh Yield Recap

USDh pulled 3% APY this week.

Dip? Sorry, didn’t see it from up here. 😌

Market Review

Bitcoin reached a low near $59,000, down more than 30% over five trading days in its sharpest selloff since the FTX collapse. More than $5B in leveraged positions were liquidated during the week, including $2B on Thursday alone.

Spot selling was concentrated in Binance markets and initially absorbed by demand from retail and DATs like Strategy (MSTR), but as macro liquidity tightened in recent weeks, selling pressure outweighed demand. CryptoQuant reports that 44% of Bitcoin supply is now held at a loss, a level historically associated with early bear market phases. The average cost basis for U.S. spot Bitcoin ETF holders is around $90,200, implying the ETF investor base is down roughly 30%.

The S&P 500 fell by 1.23% to 6,738, while the NASDAQ dropped 1.59% to 22,541, marking a third straight session of losses.

Data Summary:

• DVOL: 72% (spiked to 90% intraweek)

• Equal-weighted futures basis spread: fell to 1.73%

• Futures curve remains in steep contango in the back months, even as the front month slipped below spot amid liquidation pressure

• Perp funding rates turned negative midweek as longs were liquidated and remain so

• Aggregated altcoin market caps are down to $0.91T from $1.18T last week

• Bitcoin dominance rose to 58.71% from 58.09%

Figure 1: BTC Price, Daily Candles, & Moving Averages; 2 years; Source: Binance

Figure 2: Crypto Market Cap Excluding Bitcoin, Daily Candles, & Moving Averages; 2 years

Figure 3: Bitcoin Dominance, Daily Candles, & Moving Averages; 2 years

The moving averages (MA) in Figure 1 are:

• Current Price: $69,000

• 7-Day MA:  $73,000

• 30-Day MA: $86,600

• 180-Day MA: $101,200

• 360-Day MA: $100,500

• 200-Week MA: $58,000

Bitcoin is trading below all major moving averages for the first time since the 2022 bear market lows. Price moved below the 7-day, 30-day, 180-day, and 360-day MAs in rapid succession this week. The 200-week MA near $58,000 remains a key long-term reference level and has historically aligned with cycle lows.

Support levels are now at $60,000, $58,000, $52,000, and $48,000. Resistance levels are $70,000, $76,000, $80,000, and $86,000.

BTC ETF Flows

Net outflows were approximately $1.2B. ETF flows have been negative except for $561M of inflows on Monday. BlackRock’s IBIT, a relative bright spot in prior weeks, saw $528M of withdrawals in a single day. Cumulative net inflows have fallen to about $55B from a mid-January peak of $57.8B. Total ETF assets under management have declined to roughly $97B from a $168B peak, a $71B drop since October. From November 2025 through early February 2026, the spot Bitcoin ETF complex has shed roughly $6.2B in net capital, the longest sustained outflow streak since launch.

Figure 4: Bitcoin ETF Flows, Daily Bars; Source: The Block

Volatility

Bitcoin’s implied volatility (DVOL) rose this week as liquidations drove prices lower. DVOL rose from 37% to a peak of 90%, the largest weekly move since early 2023 and the highest level since November 2022. DVOL has since cooled to about 72%, breaking the 40%–50% range that had held since the October 2025 crash.

The DVOL downtrend in place since late 2023 has broken. Implied volatility was at two-year lows in September 2025, moved into the 40s during the October–November declines, and reached levels not seen since the FTX collapse during this week’s price action. Volatility-suppressing forces such as TradFi call selling, market maker hedging, and options pinning at expiration gave way to liquidations and reduced market maker liquidity.

Figure 5: DVOL 2 Years; Bitcoin Index Price; Source: Deribit

Basis Spread

The basis spread, or futures pricing over spot, fell this week as liquidations pushed market makers to hedge with long-term futures. Front-month futures traded in backwardation at times on peak selling days, a rare occurrence that signals extreme stress. The average equal-weighted basis spread fell to 1.73%, driven primarily by negative front-week and front-month futures.

The futures curve shifted from last week’s inverted contango to intermittent backwardation. Perpetual open interest declined as more than $5B in positions were liquidated over the week. Perp funding rates turned negative during the most intense selling, indicating capitulation.

Figure 6: Futures Curve; Maturity Date, APR %

Macro

The Federal Reserve held its first 2026 FOMC meeting on January 28, voting 10–2 to keep the federal funds rate at 3.50%–3.75%. 

Meanwhile, Earnings season pressured AI-linked equities as investors focused on the scale of hyperscaler spending versus near-term returns. Alphabet guided 2026 capex at $175–$185 billion and Amazon guided about $200 billion for AI infrastructure. Alphabet, Amazon, Microsoft, and Meta have committed about $660 billion of 2026 AI capex versus roughly $400 billion in annual net profits, weighing on the neocloud segment of independent AI datacenter companies.

Precious metals experienced historic volatility this week. Gold fell 21% from near $5,600 to $4,404 on Monday, then recovered to ~$4,850 by Thursday. Silver dropped 41% from above $121 to $72, its largest percentage decline since March 1980. 

The VIX approached 20% during the week’s heaviest equity selling before easing, while the Dollar Index (DXY) rebounded from recent four-year lows. Cross-asset correlations rose as Bitcoin, gold, silver, tech, and software sold off together, consistent with forced deleveraging rather than fundamental repricing. Treasuries, European equities, and select cyclical sectors held up as the rotation from tech and risk assets into “old economy” names accelerated.

Sincerely,
The Hermetica Team