Near-dated puts priced 7.0 vol points over calls; BTC up 0.3% at $84,709

Start with the discount rate. The US 10-year sits at 5.18%(+2.2bp d/d), the top of its one-year range, 100th percentile, and this is precisely the regime where cash flows furthest out get marked down hardest.

Money, however, moved the other way. US spot bitcoin ETFs took in +$134M on 25 Sep, and +$2.4B over the last 5 sessions (Farside, confirmed a day late). The institutional window did not close while yields rose. Look inside it, though, and the bid is concentrated: IBIT alone took +$97M, 72.1% of the total, with the rest at FBTC +$49M, BITB -$12M.

The resolution sits on the liquidity side. Take the Fed balance sheet at $6.75T, subtract the Treasury General Account at $924.6B and reverse repo at $600M, and $5.82T is what actually circulates (Fed H.4.1, US Treasury, NY Fed). Reverse repo has drained to $600M, which means the cash once parked at the Fed's window is already inside the market. Money is expensive, but it has not been withdrawn.

The dollar points the same way. DXY at 100.97(-0.32% d/d) against a 30-day correlation to bitcoin of -0.42 (1-year -0.18) keeps the structure intact: flows arrive when the dollar gives way. The settlement layer grew with it: USDT $183.7B (+0.24% w/w), USDC $75.3B (+1.23% w/w), and total stablecoin supply is +0.78% on the week (DefiLlama).

💡 Chief strategist's read: High rates and drained liquidity are two different things. Right now money is expensive but it has not been withdrawn, and that gap is what keeps the downside sticky. So the number to watch is not the level of yields but whether the Treasury balance starts rebuilding while reverse repo is already empty — from that point on, higher rates really do mean less liquidity.