Welcome back to Across the Digiverse, the weekly read on where crypto, blockchain, finance, and AI converge. A heavy week for risk: the company that propped up bitcoin for four years started to crack, the Iran ceasefire took fresh strikes, and one bank made the most hawkish Fed call on the Street. Here is what mattered, each piece self-contained.
1. The buyer that swore it would never sell, sold
For four years, Michael Saylor's Strategy was the most reliable buyer in all of bitcoin, accumulating about 847,000 coins, close to 4 percent of every bitcoin that will ever exist. The pledge was absolute: never sell. This month, the machine behind that pledge started to seize.
Strategy funds its buying largely through a preferred stock called STRC, designed to trade around 100 dollars. In June it broke below par, falling toward 87, and the company reportedly paused new issuance, cutting off its cheap fuel. Worse, its annual dividend obligations have nearly quadrupled to about 1.2 billion dollars while its cash reserve fell 38 percent, shrinking dividend coverage from seven years to roughly fourteen months. To pay those dividends, Strategy sold bitcoin for the first time since 2022.
The sale was tiny, but the symbolism was not. The honest caveat: this is disclosed financial strain, not hidden fraud, and the company still claims a large reserve cushion. But the risk is real.
We broke down the full mechanism in this week's column, linked below.
2. The Iran ceasefire takes fresh fire
The "peace" that calmed oil markets in mid-June looks far shakier this week. After the June 17 memorandum of understanding established a 60-day ceasefire and a plan to reopen the Strait of Hormuz, the truce frayed fast. By June 26, the US carried out fresh strikes on Iran after accusing it of violating the ceasefire, even as a separate Israel-Lebanon framework was announced the same day.
On the waterway that actually moves oil prices, the US Navy's monitoring center announced a widened shipping route near Oman on June 27, a direct challenge to Iran's control of the strait. Through it passes roughly 20 percent of the world's oil.
Why it matters for your money: the entire optimistic case for falling inflation and no rate hikes rests on this conflict staying calm and the strait staying open. Both are now in question. The single biggest swing factor for oil, inflation, and Fed policy over the next two months is not the Fed. It is whether this ceasefire holds.
3. Wall Street's most hawkish Fed call
Bank of America now expects the Federal Reserve to raise rates three times this year, 25 basis points each in September, October, and December, with no cuts until 2028. The reasoning ties directly to the new Fed chair: last week's meeting, where half of policymakers signaled hikes, plus Kevin Warsh's hawkish debut, prompted the change.
Keep it in perspective. This is one bank's forecast, and it sits at the hawkish extreme. The market itself is pricing only about one hike by year end, far milder. And BofA names its own conditions that would cancel the hikes: a sharp jobs slowdown, soft inflation prints, or a major equity selloff could derail the hiking path. If the Iran ceasefire holds and oil keeps falling, the case for three hikes weakens considerably.
Still, the direction of travel is clear. "Higher for longer" is now the base case at one of the largest banks in the country.
This week's column: The deepest risk in the market right now may be hiding inside bitcoin's biggest champion. Strategy built a machine that only ran one way, buying bitcoin with money raised from stock and preferred shares. This month that machine seized. Read Volume 09, "When the Buyer Has to Sell," on how a forced unwind could reach a severity that earns comparison to FTX, and why that is a statement about market shock, not fraud: https://onedigiverse.com/across-the-digiverse/strategy-saylor-reflexivity.html
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Disclosures: The author holds positions in assets across crypto and related equities, and may hold positions in any asset discussed in this issue. One Digiverse does not disclose individual positions, and observes a seven-day no-trade rule on any asset named in its coverage. This newsletter is editorial commentary, not financial advice. Full standards at onedigiverse.com/standards.