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VIPTreasury Pricing Shifts Toward Credit Risk as Capital Rotates Into Crypto

1. The relationship between Bitcoin and U.S. Treasury yields has entered a new regime. Based on weekly changes, the 26-week rolling correlation averaged −0.21 in 2022 and −0.31 in 2023, when rising yields tended to coincide with falling Bitcoin prices. The correlation averaged +0.16 in both 2025 and 2026 and stands at +0.18 this week. The key difference is what is driving yields higher: previously, it was expectations of monetary tightening; currently, the pressure increasingly comes from fiscal deficits and concerns over U.S. sovereign creditworthiness. When the market is more concerned about sovereign credit risk than the cost of capital, supply-constrained assets such as Bitcoin and gold can move in the same direction as yields. 2. Macro liquidity remains tight, while the room for policy maneuver continues to narrow. U.S. real GDP grew at an annualized quarter-over-quarter rate of 1.5% in Q2, down from 2.1% in Q1, while the Core PCE Price Index rose 3.34% year over year in July, unchanged from June. This leaves the Fed with limited justification for either rate cuts or further hikes. Meanwhile, the ON RRP balance has fallen to just $456 million, down 35.04% over the past 30 days. With this buffer against the liquidity impact of Treasury issuance now largely depleted, bank reserves have also declined 0.35% over the same period. 3. Prices were largely range-bound this week, but capital rotated meaningfully within crypto. Bitcoin gained 1.14% for the week to $77,860 and Ethereum rose 1.40%, while SOL surged 12.84%. Bitcoin spot ETFs recorded $925 million in net inflows, down 35% from $1.415 billion the previous week. Ethereum inflows climbed 160%, from $314 million to $816 million, while SOL inflows surged 397%. As a result, Bitcoin's share of combined net inflows across the four asset categories fell from 79% to 46%, pointing to a broader diversification of crypto allocations. Assets to watch: BTC, ETH, SOL, HYPE, XAUUSD, UKOUSD, NVDA, AVGO, DELL, PANW.

VIPCrypto Enters the U.S. Rulebook: Repricing Digital Assets Amid a Regulatory Reset

1. In a single week, the U.S. delivered two developments the crypto industry had long lacked: a dedicated issuance framework and explicit backing from the White House. On August 18, the SEC proposed the Crypto Assets Regulation, establishing dedicated rules for token offerings for the first time. The proposal creates two fundraising pathways—up to $5 million over four years and $75 million in any 12-month period—alongside a safe harbor under which tokens can cease to be treated as securities. At the White House crypto meeting the following day, the president publicly called on Congress to pass the CLARITY Act. The shift from regulation by enforcement toward rulemaking provided the common catalyst for crypto repricing this week. 2. The result was a sharp divergence between crypto and equities. Bitcoin gained 22.2% over the week to $77,105, while Ethereum rose 26.4%. Over the same period, the S&P 500 fell 1.86% and the Nikkei 225 declined 3.96%. Real assets also rallied, with gold up 4.90% and Brent crude up 5.68%, while the 30-year U.S. Treasury yield briefly climbed above 5.33%, its highest level since 2007. Equities came under pressure from fiscal and consumer-sector strains, while crypto benefited from the policy catalyst. 3. We caution that leverage, rather than fresh cash, is increasingly fueling this rally. The market-wide leverage ratio rose from 3.24x to 3.78x over the week, the highest level of the current rally. Meanwhile, daily spot ETF net inflows fell from $540 million to $140 million, and digital asset treasury companies recorded no additional purchases across five consecutive observations. The Crypto Fear & Greed Index stands at 72, in Greed territory. At $77,105, Bitcoin remains around 39% below its October 2025 all-time high of $126,200. We therefore view the current move as a policy-driven recovery rather than the start of a new all-time-high rally. 4. Assets to watch: BTC, ETH, SOL, HYPE, XRP, LINK, XAUUSD, UKOUSD, NVDA, PDD.

VIPAre There Quantitative Indicators That Work Over the Long Term in Crypto?

Cooling inflation has revived expectations for monetary easing. The probability of a September rate hike fell from around 55% to 34%, while the S&P 500 broke above 7800 for the first time and 18 global equity indexes reached all-time highs on the same day. South Korea's KOSPI led the gains, rising 10.9% for the week. In earnings, Tapestry, Cisco, and JD.com all beat quarterly expectations but still plunged 7%–16% in a single session after disappointing guidance. In the current market, strong results alone are not enough—investors are rewarding strong guidance. Crypto has been left behind by the broader rally, but we believe it is consolidating near a potential bottom. BTC fell 2.6% for the week to around $63,400, but spot ETF outflows moderated and approximately $1 billion flowed back into stablecoins. Sentiment shows an unusually wide divergence: the U.S. equity Fear & Greed Index stands at 66 (Greed), while the Crypto Fear & Greed Index remains at 29 (Fear). Quantitative strategy focus: the four top-performing strategies we identified significantly outperformed buy-and-hold. For ETH, Supertrend generated a total return of 151.2% (44.8% annualized) and outperformed buy-and-hold by 117 percentage points after fees, while ATR Channel Breakout achieved a Sharpe ratio of 1.33 with a maximum drawdown of just 10.2%. For BTC, Bollinger Band Mean Reversion returned 151.3%, outperforming buy-and-hold by 54 percentage points after fees. The effectiveness of each strategy depends on the market regime: mean-reversion strategies perform better in range-bound markets with an upward bias, while trend-following strategies that can move into cash are better suited to range-bound markets with a downward bias. Key assets to watch: BTC, ETH, SOL, XAUUSD, UKOUSD, USOUSD, rWMT, rHD, ONDO, RDDT.