Digital Asset News: Fed hawkishness, CPI week, whale Bitcoin buying, and crypto storage strategy
A solo market commentary episode from the Digital Asset News channel covering macro conditions, Bitcoin accumulation, and crypto custody.
Summary
The host covers a busy macro week headlined by a hawkish speech from Cleveland Fed President Beth Hammack, who signaled preference for continued restrictive policy and smaller 25-basis-point rate hikes, with CPI data due Wednesday and Fed Chair Powell speaking Thursday from Thailand. The housing market is flagged as a concern, with home sellers now outnumbering buyers by the largest margin ever recorded, partly driven by 7.5% mortgage rates. On the crypto side, Strategy (MicroStrategy) added 250 Bitcoin and repurchased $119 million of stock, bringing holdings near 850,000 BTC total, and Bitmine added $32 million in Ethereum as Tom Lee's firm nears its self-imposed 5% supply cap. The host also discusses Bitcoin-backed loan products from Strike (a volatility-proof loan with no margin calls, capped at six months and up to 11.25% APR) and Salt, as well as a South Korean bank's Bitcoin-backed corporate loan product. An AI agent discovered a decade-old critical vulnerability in XRP's code — active since 2015 and surviving more than a dozen audits since 2024 — that could have allowed 18 trillion tokens to be minted in a single transaction; the discovering firm was paid $250,000. The host covers the ongoing debate around Bitcoin ETF custody versus self-custody sparked by Plan B's decision to move Bitcoin into ETFs, reflecting on Bitcoin's original white paper purpose as a peer-to-peer payment system. Finally, the host discusses iTrustCapital's new AI-driven 'Q' strategy product and its backtested returns, and advocates diversifying crypto storage across multiple custody types — ETFs, hardware wallets, institutional custodians, and hot wallets — as a practical risk management approach given recent hardware wallet security concerns.
Key Takeaways
FULL TRANSCRIPT
Monday DCA and the dynamic Bitcoin buying plan
It is Monday, one of my favorite days, because these are the days that I get to DCA Bitcoin. What I do is get some information from Ben's website, the Cryptoverse — just take a look at the risk levels. Today was relatively not too risky: 0.49, right in the middle. I've been hoping for some major pullbacks, but I am just not getting them. But I have a plan. We stick to the plan. The plan is: as the price goes down, you start to dynamically DCA. You 2x as it goes below the 0.4 level, then you 4x when it goes below 0.3, and then you 8x if it goes below that. So right now we're just at a regular dollar cost averaging.
Let's see if it actually works out. I remember around this time in 2022 when Bitcoin was roughly around $18,000–$19,000 — you can correct me in the comments section — and I was just thinking to myself, it's like I'm throwing sand in the ocean. Then of course, what happened? I did roughly about a 6x from there. So these are the plans that we have. We'll stick to them and see how it goes.
Macro week ahead: Fed, CPI, PPI, and Powell in Thailand
There are some interesting things going on in the market. First of all, big week this week for macroeconomics. We've got the Fed speech, which just happened from Cleveland Fed President Beth Hammack. We also have small business optimism, existing home sales — which we're going to talk about right now — CPI, CPI year-over-year, CPI core year-over-year percentage, and all those great things coming up roughly on Wednesday. Then Thursday you've got PPI, the producer price index, which is the precursor for CPI. And then of course Fed Chair Powell will be speaking at 11:30 p.m. on Thursday. He's in Thailand, that's why. So we'll see how hawkish he gets.
Beth Hammack's hawkish speech: restrictive policy, tariffs, and the neutral rate
Beth Hammack, the Cleveland Fed president, gave a speech a couple of hours ago. Here are the highlights. She wants policy to be restrictive — what does that mean? They have a dual mandate: get inflation under control around 2%, which they're doing a horrible job at, and keep jobs running hot, which they're doing reasonably well. But because of that, inflation needs to get back to 2% on time, meaning more tightening, not cuts — meaning they're going to raise rates.
She prefers smaller rate moves, which means steady 25-basis-point hikes, not 50, not 75. She thinks inflation is broad-based, not just energy. She names tariffs and AI-driven demand for electricity and components as reasons for inflation. She's hearing real warning signs about inflation expectations. She thinks the neutral rate is higher than people assume, so today's rates may be doing less tightening than believed. And she called Treasury yields modest by historical standards, and said 3% mortgages coming back would likely be a sign of economic trouble. That would be great if you're selling a house — 3% rates, we'd take that all day. Right now we're looking at roughly 7.5% on the 30-year.
These are the things going on, and this is one of the reasons why we have so many houses up for sale — because ain't nobody buying with those rates.
October 28 Fed meeting probabilities
What does that mean for the meeting coming up on October 28th? Are we going to see a rate hike? You would think so. Right now the probabilities show almost an 80/20 split: 78.4% chance they keep the target range at 375 to 400 basis points, and about a one-in-five shot they raise rates by 25 basis points. But again, we'll see what Fed Chair Powell says in Thailand at 11:30 p.m. Thursday. If he's hawkish, that whole thing could flip. We'll also see if that is actually baked into the markets themselves.
Housing market: sellers outnumber buyers by the largest margin ever recorded
There are some things going on underneath the market that are quite concerning. This is from Bar Chart — definitely worth a follow on X. Housing market: home sellers now outnumber home buyers by the largest margin ever recorded. Not so long ago we had rates around 2.5–3% and people said they would never sell their houses. Well, things change. And of course, the houses being sold could be from 10 or 20 years ago — we don't have that data. What we do know right now is that it is definitely a buyer's market. So if you're trying to sell your house, good luck — it's going to be very difficult, especially with rates at 7.5% and probably going higher, which means we're going to have more people trying to sell. And as you know, that is a big indicator for the economy itself.
Strategy acquires more Bitcoin; MicroStrategy's long-term stock story
There is some good news, as there always is. Sailor does it again — tip of the hat to him. He said he was going to do it, he keeps doing it, that's all you want. Strategy has acquired 250 Bitcoin and repurchased $119 million of stock, and they now hold almost 850,000 Bitcoin. Wow. At some point they're going to hold a million Bitcoin. Impressive. And $5.5 billion in USD assets.
I like Sailor doing these things because I like people who do what they say they're going to do. Going back in time, he did say don't sell your Bitcoin — but maybe he should have made a little clarification: you don't sell your Bitcoin, my company can sell Bitcoin, but you can't. Just kidding, but not really.
As a reminder, Strategy did great with Bitcoin. This is the stock over the last 20-some years for MicroStrategy. Michael Saylor will even tell you himself — he's like, "I did everything I could with the company, data analytics." The stock was flat ever since the dot-com bubble crash, just trucking along fine but pretty flat. It wasn't until they got into Bitcoin that things really took off. And you can see that if you just stick around, good things happen.
Bitmine adds $32 million in Ethereum; Tom Lee says firm is nearly done
One of the biggest bulls in crypto, Tom Lee and Bitmine, did what they said they were going to do too. They said they were going to buy Ethereum, and once they hit 5% of the supply, they're stopping. Well, they're almost there. Bitmine adds $32 million in Ethereum as Tom Lee says the firm is nearly done. Tip of the hat to the people who do what they say they're going to do.
A little quick history lesson on Bitmine: same story as MicroStrategy — pretty flat stock. Bitmine goes back to 2008. Bitcoin wasn't around then. Before the Ethereum digital asset treasury, they were into liquid cooling for Bitcoin miners — but that wasn't happening in 2008 either. They were actually a gas and oil company back in 2008, and there was a reverse merger. They did a lot of things for Bitcoin miners and cooling and liquid cooling. And then once they got into Ethereum, there was a big jump — from flat to nothing, a big jump, and then right back down. We'll see if Tom Lee, the ever-bull, can put them into Valhalla. But again, I'm just glad people do what they say they're going to do, because it's very rare these days.
Bitcoin-backed loans: Strike's volatility-proof product and the buy-borrow-die strategy
Some good news on Bitcoin loans. My goals aren't your goals — you are much different in what you want to do as opposed to, say, a billionaire like Michael Saylor or Tom Lee. We all have different goals and different ways of doing things. A lot of people say you never sell your Bitcoin. But if you don't sell your Bitcoin, what do you do with it? Well, you can do what they call buy, borrow, die. Essentially, that's the way rich people get richer: they buy an asset, they borrow against it, they let that run, and they just die and pass things off to their kids. Works out pretty well.
But with loans, we've had a disaster ever since Celsius. If you've ever taken a Bitcoin loan, I'd like you to comment in the comment section and let me know how that went. I'll tell you how mine went — it went like a disaster. It was with Celsius. I got margin called and I paid it off, and I paid it off again. Then I missed one and got liquidated, and it was a taxable event. I lost all my Bitcoin. So I'm not bitter. Okay, I'm a little bitter.
Here's a good story though. South Korea just got its first traditional bank loan backed by Bitcoin. Maybe this is the catalyst moving forward. June Bank has started offering Bitcoin-backed loans to corporate clients only — not to retail customers like me and you. And proceeds are limited to business operating costs. So you just can't take it for whatever you want. Baby steps, right? That's good. The report did not disclose loan rates — I'm going to guess they're pretty high — or borrowing limits or collateral requirements. Jenky Ilbo reported that the bank reviewed loan-to-value ratios and margin call thresholds for major tokens including Bitcoin and Ether while designing the product.
What does that mean? That means there is a margin call. If you do a secondary mortgage on your house — let's say your house is worth $500,000 — they never margin call you because they're like, "Yeah, that's how much it is." They don't come back to you in a year or five years and say, "Hey, your house isn't worth $500,000 anymore, it's worth $350,000, so you have to give us more collateral." That's not how it works. And that's why I'm hoping things work with a Bitcoin-backed loan, but we don't have that yet — except for Strike.
Did you guys know this? Strike, Jack Mallers — they just introduced something called volatility-proof loans. Borrow against your Bitcoin. The price no longer determines what happens to your collateral. No margin calls, no price liquidations. Bitcoin falls 80%? No big deal. Just make your payments, keep your Bitcoin, ignore the price. I was like, man, that's awesome. How did I miss this?
Here's the problem though. The volatility-proof loan launched in July 2026. No margin calls, no liquidation as long as you keep making payments. Max 45% loan-to-value versus 50% on their standard loan — not a big deal. But the term is six months max instead of 12, meaning you can't go 10, 20, or 30 years. And the rate is about three points above their standard 7.49%, so up to 11.25%. Imagine if your credit puts you at 10% — you want a loan against your Bitcoin, and they say sure, 13%. If you look at an amortization table, over six months it wouldn't be that bad, but still. That's a step in the right direction, but just not there yet. If you miss a payment, there's a 10-day grace period, after which they can sell part of your collateral.
There's also one called Salt Shield — you pay a one-time fee to remove margin calls and price-trigger liquidations from the loan. I looked it up and could not find anything about what the actual APY is or what the fee is. It doesn't say it anywhere. So I'll just chalk that up to: it's a good story and we're moving in the right direction, but we really would like some type of loan where there's no margin call and we can just keep it. If banks just get past that point, I think in 20 years they'll probably do pretty well holding Bitcoin.
XRP: Standard Chartered custody, Ripple's $150M institutional push, and the AI-discovered vulnerability
XRP — I know I don't talk about it that much on this channel, but there are a couple of things I found interesting. First, Standard Chartered is offering Ripple's RLUSD stablecoin custody in Dubai and plans an LMAX collateral link. Ripple previously gave LMAX $150 million in financing to integrate RLUSD into its institutional infrastructure. I know we'd all like things to get picked up on their own merit, but with so much competition, maybe that's just how you have to do it. Maybe this will move the price of XRP and we'll get some more adoption.
But the thing that me and Jerry talked about yesterday, which I was pretty impressed with, was the resolution of a quantum and AI security issue that was discovered and actually fixed. There was a hack that was avoided just recently. How was it done? By the co-founder of Briabs. They found a vulnerability in XRP's code. XRP is currently the fifth largest cryptocurrency and launched with a fixed supply of 100 billion tokens. The issue they found in the code — discovered by an AI agent — would have allowed someone to mint 18 trillion XRP with a single transaction. That would have collapsed the entire chain.
And the funny thing is, the bug had been live on the XRP ledger for nearly a decade, since 2015. That blows my mind that no one found it. What also blew my mind is that people have been going over this code for years and totally missed it. This is one of the most heavily reviewed code bases in crypto, and it survived some of the heaviest scrutiny. It's had more than a dozen audits by real people and audit contests since 2024 alone, and they didn't see it at all.
I know people are scared about AI, but I think AI can help us move to the next level. AI agentic agents are going to be the ones used for payments. I think this is a win-win. Congratulations to XRP — even though, if you really think about it, XRP didn't do anything. They're just the beneficiary of some random company that ran an audit. And you know how much they paid them for saving their billion-dollar chain? $250,000. Maybe that's not fair. We'll see.
Plan B's ETF move, the custody debate, and Bitcoin's original purpose
Plan B — we've known about the hacks and the issues with Ledger and all the stuff going on, but I have to tip my hat to Plan B for sticking to his guns. He said, just 12 hours ago: "Update. I moved my Bitcoin to ETFs in 2025 and got a lot of heat for that decision. Then the ColdCard entropy issue, then the Ledger devices." And he says, "You know what? I have zero regrets about my ETF decision. Peace of mind, baby."
In the comment section, people just pile on. Joe Turner from Arise Bitcoin says, "You therefore own precisely zero Bitcoin." Plan B replies, "Yeah, that's right. I own precisely zero Bitcoin. I own shares in a pool of Bitcoin." And then everybody else piles on: "You have zero sovereignty." "Industry is so sick." "Decay has begun." "You got heat for so many terrible calls in previous bull runs." "You hold zero Bitcoin." Essentially: you've lost the plot.
And I'm looking at this thinking, man, people just don't like when you go against their values. I get it. For me, I have iTrustCapital custodying my crypto. I also have a little Ledger, which I'm not really happy with obviously. I have Tangem. I'm getting into Bitcoin ETFs. I put it all into different things. All these people piling on — I just don't see why.
And then I thought about this: has anybody read the white paper from Satoshi Nakamoto? It's linked in the description. You can find it on bitcoin.org. The very first thing you see: "Bitcoin is a peer-to-peer electronic cash system." That's what it was designed for. This was right after the Great Recession. It was all about moving funds globally without restrictions, without government, without middlemen. It was for payments.
Now, in the comment section, I'd like everybody to answer this: when's the last time you used Bitcoin to pay for anything? And if you look at this white paper and say, "Well, it's a good store of value" — just do a search. There's no "store of value" in there. And if you say "it's a hedge against inflation" — there's no "hedge against inflation" there either. I just find it interesting that what it was generally created for is not what people are using it for. I see it as a store of value. But technology moves in the direction of whatever people want it to be. Hundreds of thousands of years ago when man found iron ore, he had no idea we were going to use it for flints and arrows, then shields, then armor, then building structures, then high-rises and condos and everything. That's new technology. That's how it goes. You have to roll with the times.
Diversifying crypto storage across multiple custody types
Just a little PSA given all the hacks going on. Times are changing. I use Tangem — I have all the cards, they're seedless, you can use a seed but I'm not going to do it. I've got a Ledger, Bitcoin ETFs, and iTrustCapital. The good thing about iTrustCapital for custody is, first of all, it's a pain to get funds out — but if you want to go into a Bitcoin ETF and you have Bitcoin now, you have to sell all your Bitcoin, take that cash, and then buy the ETF. Unless you have over a million dollars and want to go into BlackRock — then they'll take an in-kind transfer. But if you're just a regular person, you have to sell it all and then buy. With iTrustCapital, you can put whatever crypto you have and they'll do custodial services, the same as BlackRock and Strategy use through Coinbase Prime.
Also speaking of XRP and Solana — iTrustCapital has a new service called Q, which I'm very interested in. It's an AI that works within the platform to either buy and hold, or sell little amounts along the way and buy back in. They did backtesting over the last four years, and the XRP and Solana strategy returned 600 and 61%. There's also one called the Quantum Alternative Strategy — Bitcoin, Ethereum, Chainlink, Solana, and XRP — which returned plus 471%. I didn't put everything in. I put a little bit in and I'm going to see how it goes. I'll report back. But if it does what it says it can do and AI is that strong, why not?
Q&A
Host: All right, Dan — that's pretty funny. Mullet is right: Viagra isn't used for what it was invented for either. That's how a lot of medications actually work. I remember I was working in dialysis right after I got out of the army as a medic. I was responsible for putting patients on and off the dialysis machines. One of the guys on there — I forget his name, but he always had this big afro — I always remember talking to him. I think it was Johnny. I said, "How do you get such great hair?" He said, "Oh, this stuff called Rogaine." I was like, "What? I've never heard of this" — this was years ago. He said, "Yeah, it's for my blood pressure because I have hypertension. They gave it to me and for some reason my hair just grows like crazy." And I was like, "Huh, maybe there's something to that." Then years later — oh, that's what it is for. So Viagra, same thing. Welcome to Digital Asset News, where we try not to give you medical advice for things to help you with your hair and your blood pressure.
Keith Kimmel asks: "Rob, do you have any advice on how to get my funds out of eToro? I can't move or remove any assets." Send me an email and we'll see if we can work through it. There's a link in the description. I haven't used eToro in a long time, but I'm sure there's a way around that.
Bogdan says: "They only paid the white hat $250,000 to save a multi-billion dollar chain." I mean, it was an AI agent, which makes me think I'm in the wrong business. I should just make AI agents to scrub all the different blockchains out there, find vulnerabilities, then go and say, "Hey, I just found something. I'm going to keep half of that, but I'll give the rest back." Could have easily lost nine figures, and that's the thanks they give. They have billions in treasury. You know what's funny? In a couple of weeks, no one will remember that story. They'll start thinking about whether their bags went up, what's on Netflix. No one will remember this story, but it's true.
Aman says: "This is why they're stuck between a dollar and $3." That could be true. Although XRP has stood the test of time. Congratulations to the XRP army and the holders — you definitely have high conviction. I will never take that away from them.
Keith Kimmel says: "You advised against it, remember?" Yeah, if it was eToro, maybe so, but I don't remember them at all.
On the debank and everything slowly herding back into tradfi — yeah, I think about it like this. Let's say Bitcoin, Ethereum, Solana, XRP, whatever altcoin you have — Canton, Hyperliquid, let's just say they go to where you think they're going to go, they just go crazy and you're up $5 million. Let's say you've got one device — a fill-in-the-blank cold storage wallet — and for some reason, somehow, something was implanted in all the devices years ago and now we're just figuring it out, and they've been slowly siphoning funds away, and you wake up and all your funds are gone. All of it. Five million — that sucks.
Now let's say you have the same $5 million, but you've spread it across an ETF, some iTrustCapital, a Trezor, a Ledger, a Tangem, a hot MetaMask wallet. And all of a sudden you wake up and you've lost half — basically $2.5 million. So to me, when I talk about diversifying your portfolio, but more importantly diversifying your storage, I think it's better to hedge your bet. At least you don't lose everything.
Since this hack has happened — oh, there was an email I got that I was supposed to talk about today. I'm going to read that email from somebody in Malaysia who lost everything. I'll read that to you and I think it's going to hit home. And then lastly, if anybody is a lawyer out there, especially specializing in crypto cases, reach out to me. I've got an interesting case for you. The link for my email is in the description.