Hi all, happy Wednesday!

A growing money supply should have been a tailwind, the "institutions are coming" mantra should have been a floor, and yet here we are. BTC lower, the 4-year cycle is stubbornly intact, and only three sectors (Miners, Perps, and DeFi) are printing green YTD. Today we dig into what may be moving price, why the macro relationships investors leaned on have broken down, and what Ethereum's brutal May reversal tells us about where the leverage and the flows have gone.

There has been a debate on whether Strategy selling 32 BTC sparked the most recent downturn, and while it was an incredibly small amount, price dictates the narrative. 

So while there were likely many factors (AI sucking liquidity, macroeconomic factors, geopolitical events), the fact remains that BTC is down because people are selling. If the mantra “institutions are coming” is to be believed, then their actions matter more, and the chart below exemplifies this relationship. 

With the World Cup just around the corner, why have so many BTC investors been caught offside? A world with a growing money supply should have been a major tailwind, but the correlation between the two has actually been negative. 

We see the same breakdown in the relationship between the US business cycle (measured by the ISM) and BTC’s price.

So despite the suit coiners (and myself) harping on about the end of the 4-year cycle, that thesis seems to remain intact. In fact, the only sectors with positive returns YTD are Miners (thanks to the AI pivot), Perps (thanks only to HYPE), and DeFi (thanks to HYPE again and a little praise to MORPHO).

The 4-year cycle implies a new bull market starting around Q4 2026, and at this point, investors need to see the light at the end of the strait.

— Marc

Ethereum's May Reversal

May undid April's recovery in almost every dimension. ETH fell ~11% on the month, sliding from ~$2,250 to close near $2,000, and the bleed has accelerated into June, down another ~19%. The clearest tell was positioning. May closed with the largest long-liquidation cascade since October 2025 with ~$650M of forced unwinds in the final week, plus a secondary ~$350M flush on May 11.

Options markets repriced the downside as the 25-delta skew spiked to ~13%, its highest since 2023, a full inversion from the call-skewed regime at the June 2025 lows.

Flows confirmed the turn. ETH ETFs saw ~$500M of global outflows, snapping a two-month positive streak and marking the fifth net-outflow month out of the last seven (mirroring the BTC ETF reversal in the same window).

The only meaningful source of demand was DATCOs, which bought 341K+ ETH, with Bitmine alone responsible for ~338K of that.

Simultaneously, May saw five senior departures from the Ethereum Foundation, including Tim Beiko and Barnabé Monot.

However, the institutional side remained strong with JPMorgan’s second tokenized fund (JLTXX), Fidelity's FYHXX filing, BlackRock's BUIDL extension, SoFiUSD, and Hong Kong's HKDAP all printed in May. Tokenized assets edged up ~4% to $16.6B, keeping Ethereum at just over half of all-chain RWA supply.

— Marc

1. Europe's Bitcoin Treasury Companies

Europe’s nascent BTC Treasury Company sector comprises 15 entities that collectively hold ~16,500 BTC with an aggregate market capitalization of roughly $1.0 billion. The sector is heavily shaped by two overlapping, crypto-native architect orbits led by Adam Back/TOBAM and UTXO Management/Nakamoto Holdings. Rather than directly replicating the capital markets playbook of American counterparts like Strategy, European companies are actively navigating structural limitations (shallow convertible bond markets, fragmented exchange infrastructure, strict IFRS accounting rules, and stringent regulatory frameworks like Solvency II). Moving forward, the industry faces an inflection window defined by upcoming MiCA and FCA regulatory deadlines, pending primary listings in the Netherlands, and a highly anticipated push to launch the first domestic, tax-advantaged perpetual preferred equity instruments to tap deeper pools of institutional and retail capital.

2. The Full-Stack Privacy Ecosystem

Privacy is not merely an abstract principle or a tool to mask identity, but a critical infrastructure stack essential for user protection and institutional crypto adoption amidst escalating digital surveillance. The authors map a multi-layered privacy landscape that encompasses active developments across Ethereum, L2s, cross-chain application networks, and a nascent ecosystem on Solana. Driven by the post-Tornado Cash legal landscape and the predictive threats of artificial intelligence data mining, modern privacy primitives are increasingly blending cryptographic innovations like zero-knowledge proofs (ZKPs), multi-party computation (MPC), fully homomorphic encryption (FHE), and hardware-enforced trusted execution environments (TEEs). Ultimately, the ecosystem is shifting toward selective disclosure architectures that can optimize for legal survivability, protect proprietary trading strategies, and unlock corporate use cases like private payments and encrypted data markets, while simultaneously providing authorized compliance and audit access points.

DAS is back!

Crypto's premier institutional event returns this fall in Singapore & London. Grab your seat in the most important room in the industry today.