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What’s in the Crypto Nutshell Portfolio?

BREAKING: Bitcoin Falls Lower as Trump's Iran Snub Sends Oil, Yields Higher

Gold fell more than 3% on Monday, a bigger drop than Bitcoin's.

Bitcoin slid under $83,000 after President Trump rejected Iran's seven-day plan to end the fighting and reopen the Strait of Hormuz.

A war headline normally sends money into gold, and the metal fell anyway as the 10-year Treasury yield climbed to 5.24%, its fourth straight daily rise.

(Neither gold nor Bitcoin pays you anything to hold it, so a fatter guaranteed return on government debt makes both look pricier to own.)

Futures traders have mostly stepped back, with open interest at 652,000 BTC, one of its lowest readings this year and down from a peak of 800,000 in the early months, per Coinglass.

(Open interest is the total of futures bets still open.)

What's left leans bearish, with funding rates flipped negative.

(Funding is the fee that keeps perpetual futures in line with the spot price, and when it turns negative, short sellers are paying the bulls to keep their bets open.)

Crowded shorts fuelled last Monday's jump past $86,000, when around $648 million of bearish crypto bets were wiped out in a day.

Bitcoin's still up about 40% this quarter, its best third quarter since 2017 on CoinGlass data.

The quarter closes Wednesday alongside the Fed's preferred inflation gauge, and Friday brings the jobs report.

Futures markets are already pricing roughly two-in-three odds of another rate hike in October…

The pressure on Bitcoin is coming from the bond market, and the traders paying to short it are the ones exposed if yields turn back down. 🚀

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Ray Dalio posted a short lesson on debt on Monday, and it goes a long way to explaining why Bitcoin keeps sliding while bond yields climb.

Dalio is the founder of Bridgewater Associates, the largest hedge fund in the world, and the most studied voice on long-term debt cycles alive today.

Here's what he posted:

His argument is that productivity sets how fast an economy grows over decades but barely changes from one year to the next, so credit is the part that swings.

Borrowing lets people, companies and governments spend more than they earn for a while, and the bill arrives later as a stretch where they have to spend less to pay it back.

(He's clear that debt isn't bad in itself, as long as the borrowed money goes into something that earns enough to repay it.)

The bond market sets the price of that credit, and it keeps getting dearer.

With the 10-year Treasury yield above 5%, mortgages, corporate loans and leveraged trades all cost more to carry, which leaves less spare money for anything that can fall in price.

Bitcoin tends to be one of the first things sold when that spare money dries up, which is why a bond-market squeeze can hit it harder than most crypto headlines.

That puts Bitcoin on two clocks, and the short one, set by the cost of borrowing, is the one moving the price now.

The long one moves on things that barely change month to month, which for Bitcoin means a supply capped at 21 million in a world still piling on debt.

Credit is setting Bitcoin's price this month, and by Dalio's own description credit moves in cycles that eventually turn. ⏳

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 there was no red at all.

US spot Bitcoin ETFs took in roughly $2.39 billion across five sessions, every one of them green, after netting just $6 million the week before.

Monday did the heavy lifting at $999 million, and the daily totals tapered from there to $134.5 million by Friday.

IBIT led with about $1.16 billion and Fidelity's FBTC added $702 million.

ARK's ARKB, which shed $142 million the week before, took in $289 million on Monday alone, its biggest day on Farside's records.

Morgan Stanley's MSBT added $203 million, including a record $99 million on Tuesday for the fund that launched in April.

Ether joined in.

The ether funds took in about $690 million, five green sessions out of five, reversing the $141 million they lost the week before.

BlackRock's ETHA brought in $326 million of it and Fidelity's FETH another $174 million.

Across the two, Bitcoin still drew nearly four of every five dollars.

Ten sessions across the two fund groups, and not one of them saw money leave. 📊

Tether’s USDT at center of Iran’s shadow banking network, new Senate Report says. A 28-page report from Sen. Richard Blumenthal found 87% of 757 wallets tied to Iranian terror financing mainly used USDT.

California Bans Public Officials From Issuing Meme Coins Under New Newsom Law. AB 2409 also stops exchanges listing new meme coins tied to federal, state or local officials from January 1, 2027.

Solana ETFs draw record $188 million in a week as Bitwise takes two-thirds of inflows. Bitwise's BSOL took about $128 million of the week, and Friday's roughly $87 million was the funds' biggest day since launch.

Blockchain.com eyes $500M IPO as crypto capital markets thaw: Report. Bloomberg reports the company is targeting a valuation of $4 billion to $6 billion, well below its $14 billion peak in 2022.

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

Trivia Answer: Magic: The Gathering cards 🥳

The name is short for "Magic: The Gathering Online eXchange". Jed McCaleb turned the site into a Bitcoin exchange in 2010, and it collapsed in 2014 after saying it had lost about 850,000 BTC.

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