Bitcoin Observations
This is NOT investment advice.
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Intervention Update
Well - we got the intervention, except it was more fiscal policy intervention via social media. Dropping the tariffs down to a flat 10% for 90 day for most is timely intervention with many various markets on the ropes. Will update a lot more on the weekend post.
Extreme Bond VOL Blows Up JPow's Plans
We shall see if/how the markets perhaps calm down, but this is the stuff that will definitely put the Fed on high alert.
We mentioned previously Bond Market Stability and Banking Liquidity and Plumbing as things that for sure have the attention of Powell. Check that Rel VOL reading below and see how the 10YR vaulted to the top of the list if you will of the fastest moving meme stock trades of the past few days (not exactly what Bessent is seeking). A global run on dollars. If no trade deficit, why do we need these UST?
A lot of chatter swirling about some major hedge funds running into serious trouble on the so called basis trade. Even the Fed's own data highlights leverage as high as 56x on these trades, and sure enough the Swaps invert with UST and we see a blow out to record negative swap spreads. This leads to the very high volatility. Hedge Funds isolate tiny little "free money" opportunities such as the delta between the yield on a Swap and UST of the same duration, then lever it up a zillion times. Everyone is buying a new house in the Hamptons . . . . . . . . until they're not.
Note the current level relative to where it went in the 2020 meltdown:
This Bond VOL shown by the MOVE is insane. Note how in prior occurrences of sharp moves higher they tended to be somewhat gradual versus the straight line up of this week.
And let's check on Japan:
Yuan Deval driving the Spyder. Translation - Movement of US Stocks is tied directly to the movement of the Yuan. Entire market watching for a Yuan Deval.
But there's even more fun inbound, a fresh 10YR UST auction on the 9th and a 30YR on the 10th.
Bitcoin Daily
Seems like this 74K-78K zone was a preferred landing spot for some time now, but as we sit here we find ourselves surrounded by a bond market meltdown perhaps underway. Maybe it's fate. I'd imagine BTC will most certainly be closely tied to the ongoing Macro drama.
BTC vs NVDA
Green - Scarcity is very important to the Bitcoin market here. In this zone NVDA could announce tomorrow they are adding 500 million shares to the float.
Blue - Market doesn't care about scarcity here.
Orange - Scarcity is important for Bitcoin here. Only so many of 'em, so can only go so low? If NVDA is here it means business is struggling in all likelihood.
Tied at the hip yet very different.
Shopify AI
What if every CEO asked first if an AI Agent would do the job before hiring a W2? Big implications.
Amboss Data
Amboss.space produces some great data and tools for the Lightning Network:
Bitcoin L2s
Out of the limelight for a bit now with the Macro stuff on high speed nonstop, but there is always innovation humming along in Bitcoin. I have my own take on "Alt Season" . . . . . . and it may in fact still be forthcoming. I am monitoring to see if/how/when it might manifest.
Signal21 puts out some cool data and tools looking at L2s and Bitcoin.
Here's some action going on now with the L2s:
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Alex Grey
Wonder
