US Yields Hit 19-Year ATH

Chart of the Day — Bitcoin vs. US M2
Trade of the Day — Shorting SOL — Sponsored by Kalshi
Alpha Leaks — ETHFI, HYPE, & SOL
News Roundup — US Bonds Hit High, Saylor Taps ATM, & Citi Announces BTC Custody

Bitcoin vs. US M2

Here’s Bitcoin compared to the US M2. Now Bitcoin is rightly regarded as a hedge against inflation and monetary debasement, so the general idea is these two are positively correlated, with Bitcoin following US M2.

However, since 10/10, you can see a clear “K” shaped divergence, with US M2 rising, while Bitcoin is falling. And if you’re plugged into Bitcoin Maxi land over on X, then you will have noticed over the past few weeks some hand-wringing over this divergence.

So do these last 10 months of price action break the “Bitcoin as an inflation hedge” thesis? We say no way, for a few reasons:

1. Ten months of divergence doesn’t mean much when evaluating macro trends. One usually needs to zoom out much more to understand what’s happening.

2. This divergence has happened before. Look at Bitcoin’s year-long bear from December 2017 to December 2018, all while the US M2 was climbing.

3. Bitcoin as an inflation hedge is only part of the story. Another part is the four year cycle, which as the data shows is alive and well. Both can be correct (they’re not mutually exclusive).

Ultimately, there’s multiple macro factors that influence Bitcoin’s price, and no one completely understands why Bitcoin moves the way it does. And that’s part of what makes the asset so fascinating.

Shorting SOL — Sponsored by Kalshi

Today’s Trade of the Day is sponsored by Kalshi — the platform where Americans can now trade perps legally. Kalshi perps allow you to long or short Bitcoin, Ethereum, Solana, Hyperliquid, and nine other cryptos with up to 6.1x leverage, without ever needing to hold the underlying token. And when you use Lark’s sign-up link, you'll receive a $25 bonus after you trade your first $50 on Kalshi.

Now back to today’s trade, we think there’s two opportunities to short Solana here, depending on if the asset retests the 200D SMA at $81, or breaks below this symmetrical triangle at $74.75.

Now go Premium for the full technical short on Solana, with the recommended stop loss and take profit targets. Inner Circle members have been stacking wins recently, with successful BTC, ZCash, and TSLA shorts generating real percentage gains. We’re taking positions regardless if the larger market is going up or down. Go premium today to catch our signals.

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US Treasury Yields Hit 19-Year All-Time High

The US 30-year treasury yield hit 5.33% this week, which is the highest level in 19 years. This affects the US economy, the stock market, and Bitcoin, so let’s discuss.

First, a quick primer. US treasuries (bonds) are the foundation of the US monetary system. Treasuries are loans issued to the government. You give the government money (buy their bonds), and they pay you interest (yield), and then your full principal at the bond’s maturity. Now yields and treasury prices are inversely correlated. When yields rise, treasury prices fall. And when yields fall, treasury prices rise. So simply put, higher yields signal weaker demand for US treasuries, because higher yields mean prices are falling (due to less demand).

So here’s why US yields are currently climbing:

● Large US Budget Deficits and National Debt: The US 2026 fiscal year deficit is on track to hit $2T, about a 10% higher deficit than the prior year. Then there’s the national debt. That should cross $40T this week. All of this amounts to bond investors being less confident in the government's ability to repay (so they demand higher yields).

● AI Bond Supply: The AI companies are selling corporate bonds like hotcakes. Right now, the estimates are these companies have sold $200B in bonds this year so far, which is more than what they sold in all of 2025. These corporate bonds compete against US bonds for the same pool of capital (which thereby reduces demand for government bonds).

● Inflation and Energy. Inflation remains well above the Fed’s 2% target, and US - Iran tensions continue to keep oil elevated. All of this reduces the real return on government bonds, which forces bond investors to demand higher yields.

Now don’t underestimate what higher yields do to the larger economy and our assets. With regards to the former, higher yields effectively tighten financial conditions, making borrowing costs on basically everything more expensive. And higher borrowing costs tighten overall liquidity, which typically puts downward pressure on risk assets like Bitcoin and tech stocks.

Saylor Hits MSTR ATM. No BTC Sales this Past Week.

According to a K-8 filing yesterday, Strategy sold 3.46M MSTR shares last week for approximately $334M, and the company made no bitcoin purchases or sales during the period.

From the sales proceeds, $52.4M funded STRC preferred dividend payments, $132.2M was used for buying back STRC shares, and $149.1M was placed into Strategy’s USD reserve (total is $4.8B). The company’s Bitcoin holdings remain unchanged at 840,447 BTC (purchased at $75K on average).

Last week’s actions fit inside Strategy’s Digital Credit Framework program. Announced on June 29th, this program prioritizes STRC’s $100 peg, dividend payments, and the USD reserve, in exchange for MSTR sales and up to $5B in potential Bitcoin sales. And with STRC currently trading at $94, expect further MSTR or Bitcoin sales until it is back to $100.

We’ve also got some news on the MSCI front. The index provider is consulting on new rules that could designate Strategy as a “non-operating company”. If the rules go into effect, and Strategy receives the designation, the company would likely be removed from the Global Investable Market Indexes. Any removal (if at all) wouldn’t happen until November, and JP Morgan analysts state that a removal probably triggers $2.4B in forced MSTR selling from passive funds that track MSCI indices. So with Strategy’s current market cap at $39B, such forced selling isn’t ideal, but it’s also not fatal.

Citi Announces Bitcoin Custody for Q4

Breaking news as of this morning, Citi plans to launch Bitcoin custodial services later this year under its new Custody+ platform. So basically, clients will be able to access both traditional and crypto custodial services all within a unified setup. Citi has approximately 650K “wealth relationship” clients.

The bank initially signaled crypto custodial plans late last year, and this morning’s announcement is the biggest update we’ve received since. Citi’s Custody+ platform is built for continuous trading, shorter settlement cycles, and tokenization, so Bitcoin custodial services fit inside Custody+ neatly.

Citi’s Bitcoin custodial services come on the heels of multiple other systemically important banks doing the same, including Charles Schwab, US Bank, BNY Mellon, and PNC Bank.

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