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Bitcoin Brief

Sup, freaks.

The Bank of Japan just raised rates to their highest level in 31 years. Every previous BOJ hike since 2024 has crashed Bitcoin within weeks. This time, BTC is holding $66K. We break down why the pattern might be breaking and what it means for the carry trade. Plus: BlackRock's second Bitcoin ETF launches today, Kevin Warsh chairs his first FOMC meeting, Strategy and MARA are both buying, and on-chain data shows long-term holders capitulating while whales pull coins off exchanges.

Lead Story

The BOJ Just Raised Rates to a 31-Year High. Every Past Hike Crashed Bitcoin. This Time It Didn't.

The Bank of Japan's Policy Board voted 7-1 today to raise the benchmark interest rate from 0.75% to 1.0%. It is the highest rate in Japan since 1995 and the first hike since December. Deputy Governor Shinichi Uchida said the bank plans to continue raising rates in line with economic conditions. The catalyst is oil-price inflation from the Iran war, which is pushing yen-denominated import prices higher and broadening domestic price increases toward the BOJ's 2% target.

Here is the pattern that makes this important for Bitcoin holders. Every BOJ rate hike since the bank began normalizing in 2024 has triggered a significant selloff through the unwinding of the yen carry trade. March 2024: Bitcoin dropped 18%. July 2024: 18.5%. January 2025: 25%. December 2025: 28%. The mechanism is straightforward. Investors borrow cheaply in yen, convert to dollars or stablecoins, and park the proceeds in higher-yielding assets including Bitcoin. When borrowing costs rise, that leverage unwinds, and risk assets take the hit.

Today, Bitcoin is trading at $66,200. It has not flinched. This is either a pattern break or a delayed reaction that has not played out yet.

Several things could explain the divergence. The carry trade may have already been partially unwound during the December 2025 rout, which saw a 28% drawdown and cleared out much of the leveraged exposure. Markets had fully priced this hike at 80% probability, reducing the element of surprise. And the US-Iran peace agreement reached over the weekend may be absorbing the geopolitical risk that would otherwise amplify the unwind.

But the structural risk has not disappeared. The BOJ is now at its tightest in three decades. Uchida explicitly said more hikes are coming. If yen strengthening accelerates, the carry trade unwind could still play out on a delayed basis. In August 2024, the initial hike was fully priced, but the second-order liquidations caught markets off guard three weeks later when the yen surged and triggered cascading margin calls. The question is whether the December 2025 crash already cleared the decks, or whether a new crop of carry trades has built up in the six months since.

We have been covering this storyline on the podcast and in the Brief. Last month, Peruvian Bull walked us through Japan's yen crisis and why it is the most important macro story most people are ignoring. In May, we broke down Japan's 30-year bond hitting 4% for the first time ever, the warning shot that made today's hike inevitable. Luke Gromen told us the bond market is saying "tick-tock", laying out the trap: the deficit cannot be cut without triggering a depression, which means central banks are tightening into a debt structure that will eventually force them to reverse course. The BOJ hiking to 1% while carrying a debt-to-GDP ratio above 250% is exactly the tension Gromen described. If you want the fuller picture of why the BOJ matters to your Bitcoin thesis, start there.

Signal

Macro

Kevin Warsh Chairs His First FOMC Meeting. A Rate Hold, a New Dot Plot, and a Press Conference Tomorrow.

Why it matters: The new Fed Chair inherits a mess. Core PCE at 3.2%, oil-driven inflation, and a president who wants cuts.

The two-day FOMC meeting that opened today is Kevin Warsh's first as the 17th Chair of the Federal Reserve. He was sworn in on May 22. Markets overwhelmingly expect a rate hold. The real action is in the updated Summary of Economic Projections, the new dot plot, and Warsh's first press conference at 2:30 PM ET tomorrow.

The backdrop is uncomfortable. Core PCE sits at 3.2%. Oil-driven inflation from the Hormuz disruption is keeping energy costs elevated. The labor market is softening. And the president wants rate cuts that the data does not support. Warsh's tone tomorrow will set expectations for the rest of the year. Watch the dot plot for any shift in the median 2026 rate projection.

On-Chain

Checkonchain: "Momentum Sprouts." The Absolute Values Are Bearish. The Rate of Change Is Not.

Why it matters: James Check's latest piece argues the bear market is in its final grinding stage. The supply structure now looks "bottom-heavy."

James Check published "Momentum Sprouts" this morning with a thesis that cuts through the noise: absolute values rarely matter as much as rate of change. Bitcoin is sitting near the 200-week moving average at $62K, a level that has historically marked accumulation zones in every prior bear. The macro floor price has a 4-year compound annual growth rate of 30%. Roughly $42 billion worth of coins have been redistributed from buyers around $80K to new buyers near the 200-week MA, producing a "bottom-heavy" URPD supply structure, the opposite of what existed at the cycle peak.

Long-term holders now account for $828 billion worth of the Realized Cap (77.3%), holding 3.4 times more capital than short-term holders. At the bull market peak, that ratio was inverted. Nearly half of LTH supply is underwater, LTH-SOPR is deep in the red at 0.746, and LTH-MVRV shows long-term holders are averaging a 15.5% loss. The capitulation process is grinding forward. But the rate of change is starting to tell a different story. Large holders withdrew more than 11,000 BTC from exchanges this week. The people selling are selling at a loss. The people accumulating are pulling coins into cold storage.

AI / Regulation

42 State Attorneys General Subpoena OpenAI. The Investigation Covers Ads, Health Data, and Model Sycophancy.

Why it matters: The most extensive state-level investigation ever launched against an AI company landed days before OpenAI's IPO filing.

A coalition of 42 state attorneys general led by New York's Letitia James served OpenAI with a broad subpoena on June 12. The demands cover advertising practices, user engagement strategies, consumer and health data handling, policies on minors and seniors, and something called "model sycophancy," where chatbots prioritize telling users what they want to hear over providing accurate information.

The timing is pointed. OpenAI had confidentially filed IPO paperwork that could value the company near $1 trillion. Florida has a separate criminal investigation tied to ChatGPT's alleged role in a 2025 mass shooting. Last week we covered Dario Amodei calling for mandatory AI testing. Now the regulatory apparatus is actually arriving, and it is not the one the labs designed. This is 42 states with subpoena power asking hard questions about data, advertising, and what the models are really doing to people's decision-making.

Bitcoin Tech

Arthur Hayes' Maelstrom Publishes First Grant Report. Half the Money Goes to Bitcoin Privacy.

Why it matters: Real money is flowing into Silent Payments and PayJoin development. The tools that make Bitcoin transactions harder to trace are shipping.

Maelstrom's first annual grant report reveals four funded open-source Bitcoin developers, two working full-time on privacy. PayJoin, which scrambles the assumption that all inputs belong to the sender, is already live in Bull Bitcoin and Cake Wallet with five more integrations pending. Silent Payments, which lets you share a single payment code while every incoming payment lands at a fresh unlinkable address, now ships in Sparrow Wallet. A new GPU tool called Frigate has cut payment scanning from minutes to seconds.

The bottleneck is Bitcoin Core integration. A Silent Payments pull request exists but depends on a cryptographic library still under review, deliberately slow because bugs there put real money at risk. The other two grantees work on Core itself: one with over 1,100 review comments in 2025 alone. Privacy on Bitcoin does not happen by accident. It requires funded, patient development.

Protocol

Bitcoin Optech: Testnet5 Proposed to Replace Broken Testnet4. BIP324 Quantum Security Discussions Begin.

Why it matters: Bitcoin's testing infrastructure is being rebuilt, and developers are already working on post-quantum transport encryption.

Optech #409 details a draft BIP proposing testnet5, a replacement for testnet4 which has been rendered unreliable by sustained exploitation of its difficulty exception rule, causing "block storms." The new network would remove that rule to better mirror mainnet behavior and activate the BIP54 consensus cleanup soft fork from block 1. Also shipping: LND 0.21.0-beta and Core Lightning 26.06.1.

Meanwhile, Optech #408 covered discussions around making BIP324 transport encryption quantum secure using Module-Lattice-based key encapsulation (ML-KEM), plus a proposal to standardize QR-based signing payloads for miniscript wallets. The quantum work is especially relevant given the pace of quantum computing advances. Bitcoin developers are not waiting for the threat to arrive.

Energy / Mining

Cipher Hires ERCOT's Grid Coordination Director to Lead Power Sourcing. The Race to Energize HPC Pipeline Is Real.

Why it matters: When a Bitcoin miner turned HPC developer poaches the person who ran the Texas grid, the power bottleneck is not theoretical.

Cipher Digital (CIFR) appointed Bill Blevins as Head of Grid Strategies. Blevins spent more than 30 years in power systems, most recently as ERCOT's Director of Grid Coordination, where he managed real-time grid operations for the largest independent grid in the United States. Before ERCOT, he held roles at NERC and Duke Energy. A 270 MW solar project in Texas was named after him.

The hire signals how seriously the miner-to-HPC pipeline companies are taking the power bottleneck. Cipher has roughly 3,170 MW in pipeline capacity that needs to be energized. Their current available power sits at 507 MW against 700 MW already leased to tenants including Amazon. Navigating ERCOT's interconnection queue, which has ballooned as data center demand surges, now requires the kind of insider knowledge that only comes from having run the grid yourself. This is the third major strategic hire Cipher has made this year, following Lee Bratcher and Drew Armstrong in January.

⚡ Freedom Tech Corner

Set Up Multisig Self-Custody This Week

When central banks move markets, the value of Bitcoin is that nobody can freeze your access to it. But only if you hold your own keys.

Sparrow Wallet makes multisig accessible. Connect two hardware wallets (a ColdCard and a Trezor, for example), create a 2-of-3 multisig quorum, and you have a setup where no single device compromise can cost you your stack. The third key is your backup, stored offline on steel. The whole process takes about 30 minutes. Start with Sparrow's best practices guide and set it up this weekend.

Data Snapshot

⚡ Browse BitcoinProducts.com

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See you tomorrow,

Marty Bent

Follow: @MartyBent · @TFTC21

Nostr: primal.net/marty

YouTube: TFTC · Podcast: tftc.io/podcast