Good morning. In 2008, a trader at Société Générale named Jérôme Kerviel racked up $6.9 billion in losses, one of the biggest rogue trading scandals in history.

He was supposed to be hedging. Instead, he was secretly doubling down. Always know who’s pressing the buttons.

-Pat Lewis, Jonathan Kibbler, Shaun A

MARKETS

Prices supplied by Google Finance as of 4:00am ET - stock prices as of close. Here is what the prices mean.

CRYPTO

On July 9, Bitcoin climbed over 2% to break through the $111,970 barrier set in May, entering uncharted price territory despite what appeared to be relatively unfavorable market conditions. This impressive rally didn't just defy expectations, it completely rewrote the rulebook on what drives cryptocurrency valuations in the current financial climate.

What makes this breakthrough particularly noteworthy is the backdrop against which it occurred. In the days leading up to the surge, market sentiment appeared decidedly bearish. Short interest had ballooned to $35 billion, with many traders betting against Bitcoin's momentum. Technical indicators flashed warning signs of potential pullbacks, while macroeconomic conditions seemed unfavorable, hawkish labor data and diminishing expectations for Federal Reserve rate cuts created headwinds for risk assets. Yet none of this mattered as Bitcoin charged forward, proving that the market's fundamental dynamics have undergone a profound transformation.

The driving force behind this unstoppable rally appears to be the tsunami of institutional money flowing into Bitcoin through exchange-traded funds (ETFs). The numbers tell a staggering story: spot Bitcoin ETFs absorbed 245,000 BTC in just the second quarter of 2025 alone. To put this in perspective, that represents nearly 1% of Bitcoin's total supply being vacuumed up by institutional vehicles in a mere three months. Standard Chartered analysts describe this as a "new flow regime," where institutional demand is outpacing new Bitcoin supply from miners by a factor of three to one.

This institutional dominance marks a sea change from previous Bitcoin bull runs, which were typically fueled by retail investor enthusiasm and narratives like the halving cycle. Today's market is being propelled by more durable, structural demand from corporations, asset managers, and institutional portfolios. Major public companies beyond just MicroStrategy have been quietly accumulating Bitcoin on their balance sheets, while traditional financial institutions are increasingly incorporating cryptocurrency exposure into their investment products.

The short sellers who piled into bearish positions ahead of the breakout found themselves caught in a perfect storm. As ETF inflows and corporate buying created a supply squeeze, these traders were forced to cover their positions, adding rocket fuel to Bitcoin's ascent. This dynamic created a textbook example of a short squeeze, where pessimistic traders essentially became unwilling accelerants to the rally they had bet against.

Interestingly, Bitcoin's surge occurred alongside gains in traditional equity markets, with the S&P 500, Nasdaq, and Dow Jones all posting positive numbers on Wednesday. This correlation challenges the conventional wisdom that Bitcoin operates as a purely speculative, high-beta asset. Instead, it suggests that institutional investors may be treating Bitcoin as something different, perhaps as a liquidity hedge in an increasingly capital-constrained global economy.

The macroeconomic landscape adds layers of complexity to Bitcoin's breakout. The June jobs report surprised to the upside with 147,000 new positions created and unemployment dipping to 4.1%. This robust economic data caused markets to dramatically scale back expectations for Federal Reserve rate cuts, with CME's FedWatch tool showing just a 5% chance of a July reduction, down from 24% earlier in the week. Typically, such a shift toward tighter monetary policy would pressure speculative assets, yet Bitcoin's resilience suggests its role in institutional portfolios may be evolving beyond simple risk-on/risk-off categorization.

Geopolitical developments added another dimension to the market environment. The Trump administration's announcement of steep new tariffs against several nations, including 30% duties on Algeria and Iraq, introduced fresh uncertainty into global trade flows. Historically, such protectionist measures trigger inflation concerns, supply chain disruptions, and equity market volatility. Yet Bitcoin's price action remained remarkably steady amidst these developments, at least in the immediate aftermath.

Market analysts offer differing interpretations of this calm. Some suggest that traders have become conditioned to expect last-minute deals that soften the impact of tariff threats. Others warn that the real test will come in August if these measures actually take effect. Nicolai Sondergaard of Nansen cautions that "Bitcoin's rangebound complacency could shatter" if trade tensions escalate further, reminding investors that cryptocurrencies remain sensitive to broader risk appetite despite their recent show of strength.

Looking ahead, Bitcoin's breakthrough into price discovery territory raises important questions about where the rally might find its next ceiling. With the $120,000 psychological barrier now clearly in sight, technical analysts are watching for signs of either continuation or consolidation. The sheer volume of institutional money flowing into the market suggests that pullbacks may be shallow and bought aggressively, as asset managers with longer time horizons continue building positions regardless of short-term volatility.

For investors like yourself, the lesson from this breakout may be that old paradigms about what moves cryptocurrency markets no longer apply. The combination of relentless ETF inflows, corporate adoption, and changing institutional behavior has created a new playbook where traditional technical warnings and macroeconomic headwinds can be overwhelmed by structural demand. As Bitcoin continues writing new chapters in its price history, one thing seems certain: the rules of the game have changed, and the market is still learning how to play by them.

-Pat Lewis

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TRADER INSIGHTS

Copper futures just broke records, but what does mean for metals, the market and the macro-outlook.

It’s in the headlines this week because the price spiked on another political tailwind provided again by President Donald Trump.

Yesterday, Donald Trump dropped another tariff bomb, a proposed 50% duty on imported copper, targeting key producers like Chile, Peru, and Canada.

The move is a way to ‘protect American miners’ according to the US President.

Copper futures spiked over 18%, touching all time highs as concerns over coppers supply was circulated.

Trump aims to boost domestic production of the metal to reduce the US’s reliance on imports. With such a strong tariff the US President aims to increase and encourage development of mining operations.

Whether this will encourage new mining operations will be yet to be seen.

The big question now, is copper’s explosive move the start of a sustained rally, or just a politically driven rally?

In the short term, momentum could hold as exporters rush to beat the tariff deadline and U.S. buyers scramble to secure supply.

But once the policy kicks in and stockpiles start to build, we may see demand soften and prices could pullback.

Traders should be wary of chasing stretched moves without confirmation.

If momentum fades, the post-tariff landscape could look very different.

-Jonathan Kibbler

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