Did the Fed Just Kill the BTC Bull Market?

Chart of the Day — BTC trading like gold
Trade of the Day — SPCX below resistance
Alpha Leaks — Anthropic IPO coming soon?
News Roundup — Fed latest, SOL disinflation, Ethena four-point plan

BTC Gold Correlation Is Back

As highlighted in a new Grayscale report, market perceptions of bitcoin are shifting, with BTC’s ninety-day correlation with Nasdaq-100 dropping from over 60% to around 33%, while its correlation with gold has risen from zero (and below zero last year) to, currently, above 50%.

This indicates that although earlier this year, bitcoin was treated similarly to a tech stock, it is increasingly being regarded as part of the debasement trade, that is, as a scarce, inflation-resistant store of value.

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SPCX is still looking like it’s in a broad structural downtrend, with the area from $145 - $150 continuing to act as resistance, so we favor short positions here. Go Premium for our recommended entries, stop losses, and take profits on this and other trades across stocks and crypto. Inner Circle members have been profiting from our set ups, so go Premium today to catch our signals.

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Warsh Strikes Hawkish Tone at Jackson Hole

Markets were paying close attention to Kevin Warsh’s first Jackson Hole keynote remarks as Fed Chair yesterday, and although Warsh is perceived as a Trump selection put in place to cut rates, his remarks came across as distinctly hawkish.

One key statement was that “while this summer’s [inflation] readings were better than expected, they do not tell me that underlying trends have meaningfully improved”.

Warsh also reiterated that the Fed is committed to a 2% inflation target, and explained that if inflation doesn’t improve, then “we have work to do”. Relatedly, keep in mind that PCE came in higher than expectations earlier this week.

Warsh noted that the economy “appears to have strengthened”–suggesting that inflation takes priority now–although he also explained that he is simply giving guidelines, stating, “just don’t call it forward guidance”.

September rate hike odds have now jumped to 57% on CME FedWatch (from around 35%), and BTC dropped back down from around the $80K mark to below $77K (although it is now, at the time of writing, closer to $78K again), while stocks and metals also took an immediate hit.

SOL Disinflation Proposal Passes

Solana is becoming a more disinflationary chain, as proposal SGP-0002, titled Double Disinflation, passed with 67% support on Friday.

Validators approved doubling the annual rate at which new SOL issuance declines, from 15% to 30%, which will bring Solana down to its long-term inflation floor of 1.5% by the first half of 2029, around three years earlier than previously planned.

Lower inflation means fewer new tokens hitting the market, but stakers will feel the trade-off through smaller rewards, as first-year staking yields are projected to come in at 4.34% in the first year of the new system, compared with 4.93% under the old system.

Ethena Ecosystem Overhaul

Ethena has revealed a four-point plan to revamp its ecosystem by improving tokenomics, giving a boost to the ENA investment case.

The four incoming changes are:

1. Early investor buyout: Ethena has bought all locked tokens from major seed investors who have sold any ENA over the last nine months.

2. Token and equity alignment: Protocol IP and value now belong exclusively to the Ethena Foundation, under token-holder governance. Ethena Labs’ equity investors have no claim on protocol cash flow.

3. Revenue-funded buybacks: A live governance proposal will, if passed, use net revenue from all Ethena businesses to programmatically buy back ENA.

4. VC unlocks removed: Investors’ remaining unvested tokens will be released ahead of schedule, ending future monthly token overhangs. Team tokens remain subject to their original vesting schedules.

Additionally, Ethena has detailed plans to expand USDe’s crypto basis-trade strategy into equity perpetuals. The move would diversify USDe’s income beyond crypto by tapping into a fast-growing new market.

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