GM to all of you nutcases. It’s Crypto Nutshell #986 bringin‘ the news… 🥜

We're the crypto newsletter that's more patient than a banker who spent nineteen years chipping through his cell wall with a rock hammer hidden behind a poster… 🔨⛈️

What we’ve cooked up for you today…

What’s in the Crypto Nutshell Portfolio?

BREAKING: CFTC Unveils Plan to Bring Crypto Exchanges Under Federal Oversight

If your Bitcoin sits on an exchange that also offers leverage, America's derivatives regulator now thinks your everyday trades might be its business.

On Monday the CFTC published early plans for a federal rulebook covering crypto exchanges.

(The CFTC polices futures and leveraged trading, while the SEC handles securities.)

It's an advance notice, the stage before a formal proposal, with comments open for 60 days once it lands in the Federal Register.

Congress was meant to hand the CFTC control of plain spot trading through CLARITY, the market-structure bill that failed a Senate vote in September.

Without that power, chair Mike Selig is coming in through leverage, the one door the agency already has.

Offering margin anywhere on a platform, even in the terms of service, could pull fully paid trades under CFTC rules too, as long as the coins stay on the exchange's books.

Those trades only escape through "actual delivery," which the CFTC suggests could mean the customer holding the private keys.

Exchanges that skip leverage altogether can carry on under state money transmitter licences.

That makes who holds the keys the dividing line between a federally policed trade and a state-licensed one.

Last week Robinhood said US users will get perpetual futures with up to 10x leverage, alongside the plain Bitcoin it already sells, which is the kind of setup that could bring its ordinary trades under the CFTC.

Selig, the agency's only commissioner for nearly a year, says the goal is to "prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX."

Moving coins to your own wallet keeps them clear of the CFTC, and clear of its protection too, with no regulator to call if a seed phrase goes missing.

Bitcoin bought outright on a plain exchange is still mostly the states' business, but any US platform offering leverage is now in the CFTC's sights, right down to the trades that never used it. 🚀

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Fred Krueger thinks Bitcoiners are spending far too much time on Strategy's financial products.

He's a Stanford PhD mathematician, former Wall Street prop trader and the author of "Bitcoin One Million: The Final Chapter of Fiat", so you can guess where he thinks the price is headed.

Here's what he posted on Monday:

"Digital Credit" and "Amplification" are Strategy's own labels.

(Digital credit is Strategy's Bitcoin-backed preferred stock, like STRC, which pays holders a regular income, and amplification is MSTR shares as a leveraged bet on Bitcoin.)

Michael Saylor spent the weekend selling that pitch, posting that STRC's 30-day volatility has dropped to 9%, below the S&P 500 tracker SPY.

Krueger would rather people studied the power law, a model from physicist Giovanni Santostasi that plots Bitcoin's price against time since the 2009 genesis block, both on log scales, and gets a near-straight line.

(Price rises with time raised to a power of about 5.8, so the yearly gains shrink in percentage terms without ever stopping.)

Projected forward, that line reaches $1 million around 2033, more than 11 times today's $85,950.

To be fair, the curve's record is mixed…

It called a peak near $210,000 for January 2026, and the real top was $126,080 back in October 2025.

Its 2026 floor of about $60,000 held up better, with Bitcoin's low so far this year at about $58,600 in July.

"On its own" also glosses over the buyers, and Strategy alone now holds roughly 4% of all the Bitcoin that will ever exist.

For holders, it's a reminder that the coin and the products built on it are separate bets.

A power-law believer only needs to own the coin and wait, with no dividend, leverage or company balance sheet sitting in between.

If he's right, the curve gets plain Bitcoin to $1 million without any help from Strategy's products. 📈

Back to the ETF flow data, our weekly read on institutional appetite.

Green means money flowing in, red means it's heading out.

This week the Bitcoin funds stayed mostly green, with one fund doing nearly all the buying.

US spot Bitcoin ETFs took in about $241 million across five sessions, a long way down from the $2.39 billion the week before.

Four of the five days were green, and the one red session, Wednesday, saw $149 million leave.

BlackRock's IBIT took in about $450 million on its own, nearly twice the net for the whole group.

Fidelity's FBTC lost $168 million, and Grayscale's GBTC shed another $55 million.

Ether went the other way.

The ether funds lost about $138 million, with four of the five sessions in the red, after taking in $690 million the week before.

Fidelity's FETH led the exits at roughly $74 million, and Grayscale's ETHE gave up $28 million.

That hands back about a fifth of the previous week's haul.

Last week neither fund group had a single red day, and this week they had five between them. 📊

Strategy opts for bigger spending on STRC buybacks over BTC purchases. Strategy spent $176.3 million buying back STRC preferred shares last week, against $28.7 million on 334 Bitcoin, taking holdings past 848,000 BTC.

SEC Clears 3x Leveraged Bitcoin and Ethereum Funds for Trading. Volatility Shares won approval for six 3x funds on Cboe, including Bitcoin and Ether, but the order sets no launch date.

Metaplanet sold 10,000 BTC in Q3 before buying back 11,000 BTC to ‘demonstrate liquidity’. The sale, worth about $790 million, was meant to show it can turn Bitcoin into cash as it pursues credit ratings.

Crypto's campaign arm, Fairshake, sets lists of U.S. House favorites it'll spend on. Fairshake is backing 32 House incumbents, 19 Republicans and 13 Democrats, with six set to get $1 million each before November's midterms.

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Because what would the crypto world be without its share of memes?

Trivia Answer: Ending up worse off than if you'd just held the two tokens, because their prices moved apart 🥳

When the two tokens in a pool move apart in price, the pool rebalances itself, leaving you with more of the laggard and less of the winner. It's "impermanent" because the gap closes if prices drift back, and it becomes very permanent if you withdraw before they do.

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