Friday, October 23rd

• Bitcoin slips back under $82K as tech sells off

• JPMorgan models bitcoin returns for the first time

• Switzerland approves its first retail bitcoin ETF

• Strategy steps up STRC buybacks

• Bitcoin ETF flows flip positive for October

• Bitcoin miners shed 17% to 47% in October

Market Prices

Markets: Bitcoin hit about $84,600 on Wednesday after SpaceX's Q3 beat eased fears over AI spending, then fell back below $82,000 on Thursday as Meta's expanding AI investment plans hit tech stocks and Brent crude topped $110. Markets are pricing a Fed hold on Oct. 28 and a hike in December.

Market Updates

Strategy Buys Back Its Credit

Strategy spent $193.1M repurchasing STRC in the week ending Oct. 18, against $22.1M on bitcoin, and raised its buyback authorization to $3B. CEO Phong Le has said that "At prices below $100 per share, STRC repurchases represent an attractive allocation of capital."

• USD Cash fell to $447.3M from $833.4M three weeks earlier, and Strategy's $4.83B USD Reserve can't be used for STRC buybacks.

JPMorgan Puts a Number on Bitcoin

JPMorgan Asset Management added bitcoin to its Long-Term Capital Market Assumptions for the first time in the report's 31 years: "For the first time, we put a range on bitcoin returns, though we do not yet include bitcoin in our main covariance matrices."

• Its long-term assumption is 10% a year over 10 to 15 years, ahead of US large caps at 7.5% and gold at 5.5%, with 55% annualized volatility.

Switzerland Opens Spot Bitcoin ETFs to Retail

FINMA approved Switzerland's first spot bitcoin ETF for retail investors, while cautioning that approval "does not change the risks of investing in bitcoin."

• The fund can hold bitcoin directly and is exempt from diversification rules, which FINMA justified by bitcoin's longer trading history and higher volumes.

Why It Matters

Bitcoin exposure now comes in more financial structures. JPMorgan models it next to stocks and gold, Swiss retail investors can hold it inside a regulated fund, and Strategy offers it through preferred stock it is spending heavily to support. Each structure carries its own costs and capital requirements.

By The Numbers

$167.4M

US spot bitcoin ETFs are net positive $167.4M for October through Oct. 21. The month was $907.3M in the red as of Oct. 16 before Oct. 19 and Oct. 21 each brought in more than $520M.

$87.7K

Glassnode flags $87,700 as the key resistance level, the average cost basis of 6 to 12 month holders. Bitcoin fell by more than a third after reaching that cohort's cost basis in January.

10%

BlackRock's proposed iShares Bitcoin Managed Protection ETF (PBIT) would limit a new tranche's losses to roughly 10% before fees, in exchange for capped upside. It would be BlackRock's third US bitcoin-linked ETF.

The Deep Dive

Bitcoin Miners' AI Bet Gets Repriced

The Signal

Public bitcoin miners lost 17% to 47% of their value in just over three weeks, while BlackRock's bitcoin ETF slipped 2.7%.

Miners now trade as AI infrastructure. This month, investors started asking whether those buildouts will get financed, powered and paid for.

The Numbers

What Changed

• AI spending got a warning label. On Oct. 14, Gartner said more than $3.5 trillion of AI infrastructure spending could face impairment by 2030. The same day, a hot CPI print sent TeraWulf, Core Scientific, Cipher and IREN down more than 12% each.

• Financing got pickier. Cipher priced $850M of zero-coupon convertible notes on Oct. 14 to fund its HPC build-out. BlocksBridge Consulting says lenders "have become more selective about data center loans".

• Power showed up as an early constraint. Microsoft abandoned Nscale's planned UK AI site after grid power slipped to the early to mid-2030s. The 50MW site was set to house 23,040 Nvidia GPUs from 2027, and UK data center grid connection requests jumped from 41GW to 125GW in under a year.

The Read

• Gartner says AI revenue "will be insufficient to support profitable returns on all planned AI capital expenditures." Miners building AI capacity rely on the same tenants and lenders.

• Through June, nine public miners spent $5.11B on capex, including mining equipment, against $341.2M in AI and HPC revenue. CoinShares counts over 4GW contracted but only about 550MW billing. Contracts don't pay until facilities are built and running.

• Execution isn't being rewarded yet. CleanSpark is "fully funded through completion" at Sandersville, and Bitdeer's AI backlog rose to about $2.9B from $0.9B in a month. Both still fell more than 30%.

Watch Next

• Microsoft's earnings and the Fed decision on Oct. 28, for read-throughs on AI spending and borrowing costs

• The next difficulty adjustment around Oct. 29, currently estimated near +4.8%

• Miners' Q3 reports, the first update on AI revenue, capex and billing capacity since June

Maestro Updates

Bitcoin Yield From Mining Production

Bitcoin holders can already earn fixed yield paid in BTC by financing working miners. The current Sazmining facility is structured as senior secured credit against a first lien on the hardware plus pledged BTC, at 9% BTC APY. Debt and revenue are both in Bitcoin, so incentives stay aligned across price environments. Marvin’s summary.

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