This is not the time for complacency; as we wrote two days ago, Bitcoin was ready to move.

After months of Bitcoin trading within a tight range, we anticipated a decisive move in either direction. Our preferred strategy this month was buying the $70,000 strike calls, which traded for as little as $300 on August 5 (here), dipped to just $30 three days ago, and then rallied to a high of $1,600; they currently trade around $1,300.

Those returns have been phenomenal, and the collapse in implied volatility this month made this the best risk-adjusted way to position for an upside spike, especially at a moment when most traders weren't expecting one, as reflected in the low trading volume at the time. An even better trade was (or still is) our $70,000/$80,000 call spread expiring in September, a slightly more bullish structure that also offered the flexibility to buy back the lower-strike call if Bitcoin broke through our $62,000 stop, which it fortunately did not.

Bitcoin (LHS) vs. US Debt (RHS) - periods of BTC over- and under-valuation

Circle was another of our top recommendations this month (here): we suggested buying the dip after its earnings release as the stock fell toward $60–$61, and it now trades at $80, up more than 31%. Ahead of the February earnings report, where we projected a wave of short covering, we made a similarly successful call; Circle shares quickly rallied 80% as that short covering played out (here).

Three of our four crypto equity trades for the next 6–12 months (here) have now also reached our "top chart" rating, a signal that requires trading above both the short-term (7-day) and medium-term (30-day) moving averages while also outperforming Bitcoin.

Our gold trade has played out similarly well. We first flagged it on July 7, 2026 (here), when weekly technicals turned oversold, a rare setup that had only occurred once before, in September 2023, ahead of that period's major breakout. Our trading signals flagged a setup on August 5 (here) that had worked 10 out of the last 10 times, with an average upside of +12.9%. Stocks, however, often move ahead of the underlying commodity, and in this case, our signals had already picked up a similar pattern in Newmont Goldcorp on July 30 (here), which has since returned +31%.

Gold - breaking the triangle - confirming the base

Of course, not every trading signal will be successful, but we kept reiterating the gold call as it aligned with our macro view, and the breakout materialized, with gold rallying from $4,100 to $4,571 (+11%). The core driver behind our thesis was our expectation that U.S. debt would soon eclipse $40 trillion, generating headline risk that would push gold, and likely Bitcoin, higher.

Technically, the gold trigger was a break above $4,200; a level that not only confirmed the bottoming-out process was complete (here), but also signaled that the market was looking past the hawkishness of the Fed members, a view we don't share. Quite the opposite: we see Warsh's early comments as an attempt to build credibility with the bond market, given that the 4.70% yield level is being actively defended by the Fed, the Treasury, and even Trump.

Bitcoin (LHS) vs. Gold (RHS)

That's why we believe Warsh's task force is largely buying time until inflation resumes its decline, which our models indicate is already underway, rather than laying groundwork for further tightening. The market is currently pricing in two more hikes; we think neither will materialize. This divergence has made us more bullish, and we expect a Bitcoin cycle bottom to be confirmed this month, in August.

Higher bond yields, or more precisely, a higher cost of capital, have mattered more than headline interest rates, since bond yields reprice far more frequently and reflect the market's real-time read on supply and demand. Debt issuance has driven that dynamic: total U.S. debt has grown roughly 10% over the past 12 months, rising from $36 trillion to the psychologically significant $40 trillion level after Trump pushed through a new debt ceiling in early July 2025.

Compounding the pressure, U.S. tech companies have been issuing record amounts of debt to fund AI data center buildouts, and because their yields now sit close to what the U.S. government itself offers, that corporate issuance is increasingly crowding out demand for Treasuries.

Japan is one of the largest foreign holders of U.S. Treasuries, with $1.1 trillion outstanding, making it America's largest foreign creditor. Five years ago, Japanese interest rates sat near zero, forcing Japanese insurers and pension funds to search for yield abroad, much of it in U.S. bonds.

That calculus has now shifted: Japanese 10-year yields have climbed to 2.85%, and the 30-year sits near 4.0%, high enough for domestic bonds to meet those institutions' return obligations on their own. With the yen having weakened 42% against the dollar over the past five years, the case for staying in U.S. Treasuries looks even less compelling, since Treasury bond losses are eating into returns even as domestic yields rise.

At some point, the logic tilts toward taking profits and repatriating capital, much as has been feared with Chinese holders (sold $700 billion), and that's the core worry for the U.S.: high Treasury yields mean any capital loss on the bonds compounds the pressure to sell, and Japan pulling back as a buyer would remove one of the largest sources of demand in the market. This dynamic prompted Treasury Secretary Bessent to intervene in the yen on July 31, 2026, reportedly buying $5–10 billion, the first such intervention in 15 years.

Bessent is no stranger to Japan or its policymakers. Back when he was CIO of Soros Fund Management, I met with him at his office to discuss the Japanese equity sectors during the Abenomics era, and he mentioned, almost in passing, that Japan's Finance Minister had been sitting in that very same chair just an hour before me.