Happy Saturday everyone, hope you all have had a great week so far.
Lots happening this week with oil at four-year highs, a divided Fed, and a Las Vegas conference. Let's get into it.
1. Brent crude tops $126 as the Hormuz blockade drags on
Iran has been throttling traffic through the Strait of Hormuz with mines and drones since the late-February air war, and this week, Trump escalated by ordering a US naval counter-blockade. The Navy is now intercepting ships that pay Iranian tolls, and the White House says it stays until Tehran agrees to a nuclear deal.
This has caused the price of oil to continue to skyrocket and pushed Brent crude above $126 a barrel overnight Wednesday, which is the highest level since 2022.
To explain the impact it has on Bitcoin is when oil spikes, inflation runs hot, and the Fed is almost forced to keep rates high, which has been a headwind for bitcoin all year. However, the flip side is that a Middle East crisis is exactly the moment people remember why they want money no government can freeze or sanction.
2. Fed holds at 3.50–3.75% in an 8–4 split and likely Powell's last meeting.
The Fed kept rates unchanged on Wednesday, but four members dissented, which was the most since October 1992. The committee is fracturing internally as oil-driven inflation runs hot and the Fed is essentially stuck between a rock and a hard place.
Keep rates high = US debt burden becomes even more unsustainable.
Lower rates = pour fuel on an already intense fire that is inflation.
However, the bigger story could be that Jerome Powell, under sustained White House pressure, signaled this may be his final meeting at the helm. A politicized central bank with sticky inflation and an imminent leadership change is the exact macro setup bitcoin was designed for. I don't think markets have priced any of it in yet.
3. Tether wants to roll up Strike, Twenty One Capital, and Elektron into one Bitcoin giant.
A big announcement came out of Vegas on Wednesday, with Tether Investments proposing a three-way merger of Strike (Jack Mallers's payments and lending company), Twenty One Capital (the listed Bitcoin treasury vehicle backed by Tether and Cantor, holding around 43,500 BTC), and Elektron Energy, a Bitcoin miner running roughly 5% of global hashrate.
The combined company would put treasury, mining, lending, and payments under a single listed entity. In the same moment, Mallers announced Strike has secured a $2.1 billion credit facility and is launching a "volatility-proof" bitcoin-backed loan with Tether. Essentially borrowers pay a fee and their collateral can't be liquidated regardless of price.
Tether is quietly assembling the most powerful vertically integrated Bitcoin company in existence, so will be interesting to see how this further develops.
4. Saylor's Vegas keynote highlights digital credit as the next phase of Bitcoin.
Michael Saylor's keynote was the most-quoted moment of the conference, and the framing was new. He pitched Bitcoin as the collateral layer for a coming generation of credit products: Bitcoin-backed lending, yield accounts, ETFs, and structured finance built on top of corporate BTC treasuries.
Saylor told the room that between $20 and $100 billion of digital credit will form on top of bitcoin in the next 12 months, while only $10 billion of bitcoin is "naturally available for sale" at current prices. He named JPMorgan, Citi, Schwab, Morgan Stanley, and Barclays as banks preparing to enter, and called the past twelve weeks more innovative than the previous five years combined.
There was not a reaction to the price, which is currently sitting at $78k, still roughly 40% below October's all-time high, however, Saylor's bet is that price will eventually have to follow the credit
5. Bitcoin Weekly Concept: The Cantillon Effect
When a central bank prints new money, it doesn't reach everyone at once. The people closest to the source, banks, primary dealers, governments, big asset holders, get it first, while it still has its original purchasing power. They spend it before prices have adjusted and by the time the new money has rippled out to wage earners and people on fixed incomes, prices have already risen and the same dollars buy less.
The Irish-French economist Richard Cantillon noticed this pattern in the 1700s, and it's why inflation works as a quiet wealth transfer from the people farthest from the money printer to the people closest to it.
The Bitcoin angle is that there is no money printer. New bitcoin enters the economy on a fixed schedule that has held for seventeen years, and no holder sits closer to issuance than any other. Nobody gets first dibs on the new supply. Owning bitcoin is the simplest available exit from the Cantillon line.
Stay humble, stack sats.
— Stephan