Bitcoin and Macro: The Fed, Treasury Yields, the Yen Carry Trade and Liquidity
Rate hikes, a 5% ten-year, a thirty-year high in Japanese yields and a ripping yen. The letter tests which macro channels actually reach Bitcoin and which are stories.
Macro explains a lot of Bitcoin's big moves, and it also produces a lot of bad shortcuts. "Strong yen, sell Bitcoin." "Fed hikes, crypto crashes." "Global M2 is rising, so Bitcoin must follow." The letter tests each channel against the actual tape before giving it weight.
In 2026 the backdrop has been hostile: the Fed hiked in September to a 3.75% to 4.00% range, the US ten-year yield pushed above 5%, and Japan's ten-year government bond yield hit a thirty-year high while the yen strengthened sharply. Higher yields raise the hurdle rate for an asset that pays nothing and tighten financial conditions, but they do not liquidate Bitcoin on a one-day beta.
The letter's September 2026 work on the yen found that Bitcoin was not trading as a daily yen carry trade sleeve. The dollar was the clearer daily link, and the yen channel was episodic: it can fire under disorder, as in August 2024, without driving the average day. Keeping the mechanisms separate (yen funding, dollar and global risk beta, and bond-market fiscal stress) avoids confusing a central bank date with a tradable signal.
Global M2 stays the main bullish counterargument in the letter's models. The issues below cover the Warsh speech, the Fed hike, the yen shock and how each fed into the scenario weights.
