| GM. This is The Crossover. |
| The Fed starts its two-day meeting today with bitcoin at $80,126 and the people who bought it with borrowed money still in. |
Bitcoin traders kept their bets on for the Fed
The Federal Reserve starts its two-day meeting today and decides on Wednesday afternoon. On Polymarket this morning, 94% say it leaves rates alone and 75% say it raises them in December. Nick Timiraos, the Wall Street Journal reporter who covers the Fed, posted on Monday that the hold is "a closer call on the data than the market-implied probabilities suggest." The hawks' case is a hot September inflation report, a December hike everyone already expects, and a view inside the Fed that rates aren't yet high enough to bite.
Bitcoin is $80,126 this morning, up 0.3%. Glassnode's weekly data says the push toward $85,000 on Wednesday was bought with borrowed money and sold hard from Thursday, and the borrowing never left. Futures open interest (the value of bets still open) rose 2.7% on the week to $37.5 billion, near the top of its usual range. Traders betting on a rise are still paying the funding fee that keeps those bets open.
The traders betting the other way are paying too. Options traders have paid up for protection against a fall, and the contracts that pay out if bitcoin drops now cost well more than the ones that pay if it rises. The US bitcoin funds took in $301 million in the week to 23 October, but on Thursday $635.6 million left and on Friday another $137.9 million went. On Monday they took in $110.3 million, all of it into BlackRock's fund.
So the price is flat while the leverage and the hedges have both grown. If the Fed holds and says nothing new about December, the traders paying to keep their bets open go on paying. If Timiraos is right and the hold is closer than 94% suggests, the traders on borrowed money are the first to sell, and everyone else finds out where the next buyer is. None of that needs you to do anything before Wednesday, except know what you hold on borrowed money.
OKX and Trade.xyz sell Anthropic bets with no shares
Anthropic filed on Monday to go public, and crypto venues had products out the same day. OKX is offering eligible traders in the European Economic Area up to 10x leverage on Anthropic's valuation, settled in cash. There are no shares, no IPO allocation, and a share-count adjustment meant to keep a bet's value steady if the company's share count changes. Trade.xyz, built on Hyperliquid, launched an ANT contract with the same 10x and no equity either. Base, Coinbase's chain, is promoting "tokenized Anthropic shares" without naming who issues them or which contract they sit in.
The filing itself set out the company's finances and its tightly controlled structure and gave no valuation. On Polymarket, 89% expect the listing by November 30. If you buy any of these, you own a bet on a number and no piece of the company. The number you're betting on hasn't been set yet.
Hyperliquid named Kraken's parent its first regulated deployer
Hyperliquid posted on Monday that Payward, the company that owns Kraken, will be its first deployer regulated by the CFTC (the US derivatives regulator). Payward said as much on September 16. What's new is Hyperliquid putting its own name to it.
Under the plan Bitnomial, the CFTC-licensed exchange Payward bought this year for up to $550 million, would create and run the contracts and settle them. Trades would match on Hyperliquid's on-chain order book, and only US accounts both firms have approved could trade. Hyperliquid's existing markets stay closed to Americans.
Nothing is approved, nothing has a date, and the allowlist feature the plan depends on runs only on testnet. Ashley Ebersole, a former SEC lawyer, said in September that approval could take up to a year. If you're in the US and want Hyperliquid's markets, this is the route, and it's still on paper.
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🔭 What to Watch
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📈 The Tape
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In Pro today Strategy bought its own shares instead of bitcoin On Monday Michael Saylor posted Strategy's weekly figures: no bitcoin bought, $205 million spent buying back STRC, its preferred stock, and the same number of coins held as the week before. The same morning Strive filed that it had bought 6,182 bitcoin for about $511 million. Crypto social media read Monday as a day of corporate buying, and the Strive figure is the one most people saw. Strategy holds roughly twenty times as much bitcoin as Strive, so the question for anyone who holds bitcoin is what the bigger company is doing with its money. We went back through Strategy's own Monday posts since the start of September. In the six weeks to 25 October it bought 3,466 coins and spent $1.09 billion buying back STRC. At the prices of those weeks, that is nearly four dollars on its own shares for every one on bitcoin, on our arithmetic. Strategy bought three-quarters of those coins in the fortnight to 27 September, when bitcoin reached its high for the autumn. In the four weeks since, as bitcoin slid to $80,000, it bought 851 coins and then none. Its buybacks went the other way, larger every week since the start of October. Its cash fell as the buybacks rose. Strategy's dollar assets dropped by $1.4 billion in the seven weeks to 25 October, by its own figures. So the company most people count as the floor under bitcoin has bought less of it at every lower price and spent more on its own shares. Why would it do that, and what does it mean for the price you hold bitcoin at?
The rest of this one is for Pro readers. It picks up where this stops. |
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The Fed decides on Wednesday, and the traders paying to keep their bets open pay every eight hours until then.
TC
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| This is The Crossover. We read the derivatives data and the Fed reporters so you can get on with your day; where you put your money is your call. We’re decent at spotting who’s paying for protection, less good at guessing what they’re protecting against. |
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