This editorial is from this week’s edition of the newsletter Week in Review, sent to subscribers on Friday. Subscribe to the newsletter to get this weekly editorial the second it’s finished. The newsletter also includes the biggest stories of the week, with a comment on each story.
Bitcoin traded flat this week while everything else went up. Gold posted its best week since January, gold miners went vertical with GDX up 21.3% for its best week since 2008, and the S&P 500 broke out to a new all-time high on a 3.6% weekly gain, its best since April. Cooling July CPI did most of the work, easing fears the Warsh Fed might hike in September.
The gold bugs are getting giddy again, so it is worth dwelling on the yellow rock. Just on price, Milton Berg, who sold the gold top back in January, is still convinced that we are in a long-term bear market in gold.
Michael Kao argues the chart everyone posts, the one implying central banks are structurally rotating out of Treasuries into gold, is mostly just the gold price rising. Michael Nicoletos explicitly addresses China’s gold rush away from America:
“The uncomfortable truth is that China’s gold-buying frenzy isn’t a vote of no confidence in America. It’s a desperate hedge against something far more alarming: the potential implosion of China’s own economic system.”
Martin Armstrong lands nearby, arguing China is preparing for a world where reserves can be frozen and payment systems weaponized, not a theatrical dollar collapse.
Luke Gromen thinks Scott Bessent must let gold rise a lot more, or push it there by buying to prevent bond yields from soaring. Senator Rand Paul confirmed that all approximately 147 million ounces really are sitting in Fort Knox. Many were suspicious of Mr. Paul’s claim, prompting Brent Johnson to wonder why Russia and China somehow are more trusted on their reserve numbers.
Meanwhile, one of the largest private discretionary piles of fiat is leaving the sidelines. Berkshire Hathaway has begun deploying the $397.4 billion Warren Buffett accumulated over 14 consecutive quarters. Elsewhere in the risk-on column, SPCX climbed back above its IPO price, up 30% in three days.
By comparison, Bitcoin and crypto might not be doing much, but bottom signals keep accumulating! Here’s a great reminder of bottom signals thus far. Glassnode data shows conviction buyers, the cohort that buys at or below cost basis during weakness, have accumulated to bear-market-bottom levels, absorbing straight through a 49% drawdown to hold roughly 4 million BTC. Will Clemente notes that weekly technicals are acting like late 2022: a selloff into prior-cycle highs, the first oversold reading in years, bleeding into a bull divergence. DonAlt posted that Bitcoin looks like it wants to explode.
Eric Wall cheekily points to a rebound in Richard Heart’s Pulsechain, “the bellwether of retard money,” as the first sign of a crypto spring. Less cheerful is the sheer number of projects that have sunset or pivoted in 2026. Bitcoin miners continue to leave for AI. For example, Keel (formerly Bitfarms), ended all Bitcoin mining operations.
Washington, D.C., provided another bottom signal. Crypto haters came out to celebrate CLARITY’s likely demise. A former actor toasted the defeat of the CLARITY Act, warning that “the fight against crypto is far from over.” The negative fixation on crypto from an ex-actor is odd, but the fundamental misunderstanding of CLARITY and crypto in general is tragic. With CLARITY unlikely to pass, the SEC is ready to fill the vacuum.
In ETF land, BlackRock is dropping the minimum for in-kind exchanges of BTC for IBIT from $25 million to $1 million. On Tuesday, ARK, VanEck, and Fidelity all sold, and BlackRock’s clients bought more than all of them sold combined. Jamie Coutts noted ETH institutional demand is running about 2.8x daily issuance, while BTC’s sits roughly 23% below issuance, almost entirely ETF flow with DATs quiet.
Speaking of DATs, Strategy posted another USD Reserve increase, up $650 million alongside $109 million of STRC repurchases. STRC is now $5 from its $100 price target.
The most interesting analysis of the week came from Lorenzo Valente, asking who is actually capturing the value crypto creates: on-chain or off-chain (centralized) companies? It’s been centralized companies because they tend to own the user relationship, and they remove all the annoying on-chain clunkiness that most users refuse to deal with.
Robinhood Chain via the Robinhood app is a good example of this in action. It is the #1 Ethereum L2 by blockchain revenue in its first full month live, generating $3.6 million in July against Polygon’s $2.7 million and Base’s $2.1 million.
It’s not all bad news for on-chain products. Mr. Valente notes:“On-chain is clearly in a bear market, but the lesson for protocols, L1s, and on-chain primitives is to build and verticalize more. Get closer to the end user.”
On-chain tech is finally good enough to compete with centralized experiences. Hyperliquid has proven this. By the way, Hyperliquid users are trading RWA and stocks more, surpassing crypto trading in some cases. Solana is performant enough with apps such as Pump.fun. Solana led all chains in app revenue in 25 of the last 27 months and hasn’t ranked below second since January 2024. Users clearly prefer blockchains with web2-like performance.
Finally, on-chain apps have an edge over centralized ones by mechanically returning value to their token holders. The people who have remained in crypto know this. The coins going up now are part of projects making real money and returning it to holders via buybacks, a departure from every previous cycle.
Despite the rise in popularity of tokens that accrue real value, memecoins still seem to generate some amount of attention. Thankfully, there has been a recent growing backlash to memecoins and the grifter mindset they engender. One participant noted the OGs shamed and ran out anyone doing extractive things rather than celebrating them. Omid Malekan stated that memecoins were, are, and always will be stupid, and you can draw a straight line from the billions siphoned off by grifters and snipers to the current bear market in all coins. Marc Zeller called them a slaughterhouse, and said supporting them is sociopathic and short-sighted. Mr. Zeller’s opinion might sound overly harsh, but is arguably supported by this list from Pump.fun’s top 100 KOL memecoin traders. It reveals that these “Key Opinion Leaders” usually buy tokens well under $1M market cap and hold for minutes, indicating a propensity to extract from their audience. A capital offense.
Memecoins and their nihilistic, extractive, grifter culture are much beloved by many newer crypto entrants. A thoroughly navel-gazing but revealing fight broke out amongst crypto natives when one of these new cyclers claimed his cohort has it tougher than older ones, who had it easy because they were “trading against plumbers.” Huh?
Obviously the OGs objected for various reasons. The image in this post sums up the OG argument well. This argument surfaces every bear market. Mostly because crypto natives have nothing better to do!
Solana, the home of much of the memecoin activity, had a scare. A routing failure at infrastructure provider Teraswitch pushed 28.83% of staked SOL delinquency, against the 33.34% threshold at which the network stops finalizing transactions. Jacob Creech’s framing was that the network stayed up and you probably didn’t notice. Operators in his replies disagreed, reporting primary and fallback RPCs dying together and visibly degraded performance.
A few quick hits to close. Tether completed its first full financial audit with KPMG US. The audit, while great, still doesn’t cover all of Tether. Tron’s stablecoin base rose 2.7% over three months to a record even as aggregate stablecoin supply across all chains fell 4.4%, leaving Tron with roughly 30% of all stables. Jeff Amico published a follow-up walking through exactly how an RWA credit facility blows up.
Finally, two security stories worth your attention. Trezor disclosed that one of its shipping providers suffered a data breach exposing sensitive order data for customers in the US, UK, Sweden, Colombia, Brazil, Italy and Portugal who received orders in the last 90 days. Buy your hardware wallets in person from a trusted retailer, and pay cash.
ZachXBT exposed a “caller,” a person who phones victims posing as exchange or wallet support and talks them into handing over access. This caller is allegedly responsible for over $5 million in thefts. Listen to ZachXBT’s recording of one of her calls.
Stay safe out there.
-David Sencil
