Digital Assets and Crypto: Macros Turns Supportive

Bitcoin surged nearly 24% last week, its strongest weekly gain since March 2023, as macro, policy and market structure aligned in a rare tailwind for digital assets. Secretary Bessent said the Treasury would at least double the size of long-dated buybacks, funded through greater short-dated bill issuance. Markets read this as a step that may reduce the volume of duration the market must absorb, with potential moderating effects on long-end yields, term premium, and real-yield expectations. If sustained, this softens the marginal carry appeal of the US dollar and improves the relative backdrop for finite-supply and non-sovereign assets like cryptocurrencies. President Trump's meeting with representatives from Coinbase Global Inc. and Payward Inc. was interpreted as reinforcing the administration's constructive stance. The president urged Senate passage of the Clarity Act, a market-structure bill that did not reach a vote before the August recess. Sustained executive engagement can improve institutional confidence even without enacted legislation. Over $2 billion in bearish Bitcoin positions have been liquidated, spot ETFs are running for their biggest weekly inflows since January, and the long-term-holder share of supply is the highest since December 2023.

Exhibit 1 — Macro-to-crypto transmission mechanism (market-interpreted)

Bitcoin — Primary institutional expression

Bitcoin remains the primary institutional expression of the thesis: a finite-supply, non-sovereign digital monetary asset that may attract demand when investors seek alternatives to fiat-currency debasement risk or falling real-yield environments. Institutional access through US-listed spot ETF continues to deepen the buyer base, with this week's inflows and short-covering providing near-term positioning support. Large token holders, known as Bitcoin whales, recently added roughly $2.75 billion worth of the token in 60 days, according to CryptoQuant.

Ownership composition reinforces the setup: long-term holders now control 83% of supply, the highest share since December 2023. Only 14% of long-term supply was acquired above $100,000, versus 30% in October, while 19% was acquired between $60,000–$70,000 — above the 15% level historically associated with bear-market-bottom conditions. Fewer holders sit on vulnerable high-cost bases, lowering forced-selling pressure. Ownership concentration and cost-basis composition do not guarantee future gains.

Exhibit 2 — Bitcoin's weekly net flows

Exhibit 3 — Bitcoin's ownership base appears more resilient

Technicals (Bitcoin)

Bitcoin’s recent rally has pushed it above both the descending 50-day SMA (black line) and the 200-day SMA (blue line), reinforcing the bullish setup. Resistance stands around $83,000, while support is seen at $69,000 (200-day SMA), followed by $67,500, the triangle breakout zone.

Ethereum — Differentiated Infrastructure Exposure

Ethereum offers a differentiated exposure through its role in smart-contract settlement, stablecoin issuance, and tokenised-finance infrastructure. The coin surged 31% over the past week, reaching a high of $2,546 fueled by strong inflows into Ethereum ETFs, short covering, and reduced exchange supply. Spot ETFs attracted nearly $700 million in net inflows, with major players like BlackRock leading demand. The rally was supported by shrinking ETH supply on exchanges and increased futures activity. Exchange Reserve tracks the total amount of a crypto asset held across exchange wallets at any given time and serves as one of the most direct on-chain indicators of available sell-side supply on the market. After a surge in May and June, a sustained decline signals coins moving to self-custody, reducing available supply and reflecting longer-term holding behaviour.

Exhibit 4 — Ethereum Exchange Reserve

Ethereum also showed similar price action to Bitcoin, recovering its 50-day SMA (black line) and 200-day SMA (blue line), suggesting bulls are now in control. Resistance stands around $2,800, while support is seen at $2,010 (200-day SMA), followed by $1,815.

Stocks Snapshot

Coinbase (COIN)

Coinbase is a global digital asset platform that provides retail trading, institutional prime brokerage, cold-storage custody, and decentralized blockchain infrastructure through its proprietary Base network. In the second quarter, net revenue declined 19% year over year as softer market sentiment and lower token prices pushed spot trading volume down 24%. Net income reflected a GAAP loss primarily driven by $210 million in unrealized pretax crypto mark-to-market losses, though adjusted EBITDA remained positive at $208 million for its 14th consecutive quarter.

Lower Treasury yields and a weaker dollar inject global liquidity into financial markets, driving capital out on the risk curve into Bitcoin and digital assets. On a company level, this macro shift directly accelerates Coinbase’s high-margin trading fee revenue as retail and institutional volumes rebound. Rising asset valuations simultaneously increase custodial fee income across spot Bitcoin and Ethereum ETFs, where Coinbase serves as the dominant vault provider. Furthermore, broader market liquidity fuels user adoption on Base, Coinbase’s Ethereum Layer-2 network that captures 71% of Layer-2 transactions and is expected to generate $140 million in fee revenue this year.

Galaxy Digital (GLXY)

Galaxy Digital is a diversified digital asset platform spanning institutional crypto trading, lending, prime brokerage, staking, tokenization, and investment banking through its Global Markets business, alongside AI/HPC data center capacity via its Helios campus. Second-quarter revenue of $8.6 billion missed consensus of $9.2 billion and adjusted EBITDA showed a $77 million loss, though this understates the franchise's resilience: Digital Assets posted $66 million in adjusted gross profit, trading volume fell just 7% against the industry's ~20% drop, and assets under stake reached $2.8 billion. The recent macro-driven crypto rally with Bitcoin up ~24% and Ethereum ~31% in a single week, alongside record spot ETF inflows and heavy short covering after Treasury buyback expansion softened long-end yields and the dollar directly lifts Galaxy's trading fee run-rate, staking yield, asset management AUM, and the mark-to-market on its $1.2 billion on-balance-sheet crypto and venture book. Three crypto-native tailwinds compound the setup: institutional migration onto blockchain rails scales Galaxy's integrated platform across custody, staking, and tokenization, with anchor partners including Invesco, State Street, and Morgan Stanley; deepening spot Bitcoin and Ethereum ETF flows extend the institutional allocation runway; and the Helios CoreWeave lease anchors ~$1.2 billion in average annual revenue at ~90% lease-level EBITDA margins.

Circle (CRCL)

Circle Internet Group operates the primary infrastructure for digital dollar payments, serving as the offcial issuer of USDC and EURC stablecoins. Beyond stablecoin issuance, the company is evolving into a full-stack financial platform providing global liquidity, cross-border settlement through Circle Payments Network (CPN), Cross-Chain Transfer Protocol (CCTP), and institutional blockchain infrastructure via its proprietary Arc network.

In the second quarter of 2026, total revenue reached $701 million, a 7% YoY increase. Revenue was driven by $668 million in reserve income as average USDC in circulation climbed 25% year over year to an all-time high of $76.5 billion. Second quarter adjusted EPS was $0.18, beating consensus estimates, while net income totalled $48 million.

Circle's primary earnings engine is the high-margin interest income generated by the short-term US Treasuries backing its massive USDC reserve. Even with recent rate suppression, Treasury yields remain historically elevated, providing a steady, highly profitable baseline of cash flow. Simultaneously, this easing liquidity environment has ignited strong bullish sentiment across Bitcoin and the broader cryptocurrency market, accelerating trading velocity and driving USDC circulation to record levels. This powerful combination of robust Treasury yields and surging digital asset adoption is further amplified by Circle's regulatory dominance under the GENIUS Act and the impending institutional launch of its Arc network, positioning the firm to capture massive upside in the expanding digital economy.

High Risk Stock

(DATCO)

Strategy (MSTR)

Strategy has transformed from a small enterprise software provider into the world's leading Bitcoin Treasury company, guided by Executive Chairman Michael Saylor. It is the first and largest bitcoin treasury firm. Strategy’s Q2 2026 revenue rose by 7% yoy to $122.4 million with a gross profit of $81.6 million, representing a 66.6% gross margin. It reported a second-quarter operating loss of $8.3 billion and a net loss of $8.6 billion, driven mainly by a non-cash bitcoin mark-to-market charge. However, the BTC yield was 5% QoQ and 11% YoY, while BTC gains reached 30,000 BTC year-to-date, representing roughly 30% of last year’s full-year gain. Despite the significant YoY drawdown in BTC price, management still expects positive performance across its key KPIs, supported by the potential to return STRC to par, lower the STRC rate below 12%, use buybacks when the security trades at a discount, and further monetise BTC.

Lower long-term Treasury yields and a softening US dollar inject fresh liquidity into global markets, driving capital into alternative assets and strengthening Bitcoin's store-of-value appeal. On a company level, declining yields lower the cost of capital, allowing Strategy to issue preferred digital credit, such as its 12% STRC preferred shares, to aggressively fund accretive Bitcoin purchases. Moreover, Strategy controls roughly 4% of Bitcoin's total 21 million supply.

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