Vanguard Bends the Knee

Good morning. The world’s second largest asset manager is opening up crypto ETFs to their 50M clients, starting today. See our first story for the details. Then, despite all this lackluster price action, a new Grayscale report predicts a Bitcoin all time high for 2026. 

All of that, plus . . . 

• Our Chart of the Day shows solid signal that the rest of retail is sleeping on BTC. 
• Silver is your Trade of the Day, and XRP (shorts) is your DEGEN Play of the Day. 
• And your Alpha Leaks. 

Chart of the Day

This is the yield on the US 10 year treasury inflation-protected security (i.e. “TIPS”, in blue) compared to Bitcoin (in orange). And we think this is some serious correlative signal that you need to be watching. 

So first, what’s the TIPS? Well, it’s the interest rate that the market demands from the US government on 10 year treasuries after adjusting for inflation. Or to put it another way, it shows the real or actual interest rate that bond holders receive on their 10 year bond, after subtracting out inflation. 

Now why should you be watching this metric? Because our research shows that the inverse correlation between the TIPS and Bitcoin is higher than both the regular US10Y (which doesn’t account for inflation) and the Fed Funds rate. And the reason for that is because the TIPS accounts for inflationary pressures, but it’s also more forward looking than the Fed Fund rate. 

But practically speaking, just look at the inverse relationship between these two. It’s stark. Now here’s the general rule: when the TIPS is going down, Bitcoin probably goes up. And when the TIPS is going up, Bitcoin is probably going down. 

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Trade of the Day

Silver (XAG). There’s most definitely a big trade here. The only question is to go long or short. 

It’s a tough one, but despite the general notion that longing at all time highs is dangerous (it is), we actually think longs here with an appropriately positioned stop-loss offer a great asymmetric risk reward trade setup right now. 

And the reason is because of this multi-decade chart. $50 has been silver’s final boss since before many of us were born. We’ve got two big double tops, but then silver decided to slice through that near the beginning of October. So given the major break on this multi-decade chart, what are the odds that $57 is the next big top? The odds are low. Silver probably goes higher. 

Perhaps a more reasonable target is $73. That’s where the 1.618 Fibonacci extension line is at. 

Want better breakdowns? Go Premium for TA reports, weekly market insights, and access to Lark’s personal portfolio.

Alpha Leaks

• Amazon Web Services’ [AMZN, Stock] re:Invent conference is happening now (i.e. Dec. 1-5th). Monitor for any major news or announcements. Past conferences showcase innovations across cloud and AI products and services. 
• CrowdStrike’s [CRWD, Stock] Q3 earnings gets released today at 4:00 pm EST. CrowdStrike is a cybersecurity company, and today’s report will highlight demand for the AI-driven “Falcon” security product. 
• Ethereum’s [ETH, Crypto] Fusaka upgrade launches tomorrow. Fusaka is one of Ethereum’s major hard fork upgrades, and it will ultimately help the network become more scalable and efficient. 
• Infinit [IN, Crypto] will soon be launching “Prompt-to-DeFi”, which is an AI agent that creates and executes DeFi strategies for users. 
• MegaETH’s [MEGA, Crypto] mainnet should launch either in December or January. MegaETH is a high-performance ETH L2. 
• VOOI [Crypto] is launching its native token sometime in early December. VOOI is a DeFi super-app that delivers a centralized exchange experience while users maintain full non-custodial control of their assets. 
• Salesforce [CRM, Stock] drops their Q3 earnings tomorrow at 4:00 pm EST. The earnings report will give investors a sense as to if the company’s “Agentforce” AI system is generating profits.  

News Roundup

Vanguard Bends the Knee

Breaking news from last night. Vanguard, the world’s second-largest asset manager with over $11 trillion in assets, has officially reversed its long-held resistance to crypto products. Starting today, the firm will allow its 50M clients to begin trading crypto ETFs on its brokerage platform. 

Here’s the reasoning, according to Vanguard’s head of brokerage and investments, Andrew Kadjeski: “Cryptocurrency ETFs and mutual funds have been tested through periods of market volatility, performing as designed while maintaining liquidity.” 

However, what’s more likely is that Vanguard made the change because they were (1) leaving money on the table, and (2) they realized that crypto is here to stay. 

Regarding the money, you’ll remember that when the spot Bitcoin ETFs debuted in early 2024, Vanguard blocked access to the ETFs entirely, citing crypto’s volatility and misalignment with long-term investing principles. Some clients were furious and switched to other competitors. So this move is Vanguard’s attempt to remain competitive and help preserve their client-base.  

Regarding crypto being here to stay, if Vanguard believed that the entire industry would die, then they wouldn’t be doing this. This company has a long-term perspective, so this change signals that they now think that crypto isn’t going anywhere. 

But ultimately, Vanguard’s decision couldn’t have come at a better time. Our industry needs fresh capital sources, and Vanguard’s are one of the biggest we could have asked for. 

Strategy’s mNAV Falls Below 1 for First Time Ever 

Strategy’s mNAV, which is the ratio between the company’s total value (i.e. market cap + debt – cash) to the value of its Bitcoin holdings, has fallen below 1. This is a first for the company. 

Now let me rephrase in case you don’t understand. Strategy’s current Bitcoin stack of 650K coins is now worth more than the net value of the company itself. This signals trouble for Strategy, and for Bitcoin, because (1) it shows a clear loss in investor confidence, and (2) makes the prospects for future BTC purchases (via ATM common stock sales) unfeasible, as mNAVs below 1 means there’s no juice left in the common stock squeeze. 

And speaking of ATM sales, yesterday the company announced that they’d raised $1.47B in cash through an $8.2M MSTR sale. The purpose was to build a $1.44B cash reserve, so that the company can cover the next 21 months of preferred share dividend payments. The company also announced the purchase of an additional 130 BTC at $89K each (i.e. pushing total holdings to 650K coins at an average cost of $74K). 

Finally, Strategy slashed their end-of-year Bitcoin price projections. They’re now expecting Bitcoin to be valued somewhere between $85K to $110K by the end of 2025, instead of the former $150K projection.

Strategy has been one of Bitcoin’s major tailwinds this cycle. Keep your eyes on the mNAV, as it’s an important indicator as to whether the company can keep buying Bitcoin. 

Grayscale Predicts New Bitcoin ATH in 2026

Grayscale thinks the four year cycle is dead, and that Bitcoin hits a new all time high next year. That’s according to a report released by the firm yesterday. 

In the report, Grayscale outlined three points to support the idea that the four-year cycle is no longer relevant. First, “there was no parabolic price increase during this bull market that might suggest overshooting”. Second, “Bitcoin’s market structure has changed, with new capital largely coming through ETPs and DATs”. And three, “the broad macro market backdrop still appears favorable to the crypto asset class”. 

Moreover, the report states that Bitcoin might have already bottomed at prices around $80K. Evidence for this are DAT mNAVs below 1, and put options currently being more expensive than call options. 

Finally, in alignment with Grascale’s prediction is Tom Lee. He was on CNBC again yesterday suggesting that Bitcoin could hit new all time highs in January 2026, due to more Fed rate cuts and the end of QT. 

Degen Play of the Day

Did you know that you can also short crypto? It’s true, and no one will come after you for it. So last week, we signaled the ZEC short (we got that one right, just saying). Now it might be time for an XRP Bread and Garlichouse short. You know you love to see it. 

Here’s the setup. XRP is just above the critical $2.00 support line right now. If you see a breakdown below $2.00, on high volumes, then you know what to do. Make sure to use a stop loss on this trade. 

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