• Strategy Sale Sparks Fear, Market Absorbs It Well: BTC continued to sell off this morning, likely aided by the news that MSTR moved 411 BTC to Coinbase Prime (~$30MM at the time), ostensibly to be sold. On-chain data from Arkham was the support for this rumor. Saylor signaled in the previous earnings call that he would do this, and so this is not surprising to me. However, this could support a view of “local peak fear.” Importantly, BTC initially sold off on the news and briefly made new local lows before recovering throughout the session. The market’s ability to absorb a BTC sale from its largest corporate holder may ultimately reinforce the “local peak fear” interpretation.

• STRC Recovers Ahead of Dividend Announcement: STRC and MSTR both traded well despite the early weakness in BTC. STRC recovered meaningfully from recent lows and finished above yesterday’s close, though it remains slightly below the breakeven level implied by its current dividend yield. With a new dividend declaration expected early next week, likely accompanied by an increase in the dividend rate, the market’s response to that announcement will provide an important signal regarding future demand for STRC and the durability of Strategy’s capital raising flywheel. I suspect that Saylor increases the dividend 25-50 bps and the market responds well (Meaning STRC trades higher, BTC trades higher, and MSTR does not sell off significantly). This could spark the renewal of the “STRC ex-dividend” trade into mid-month.

• Major Regulatory Development: We received big news out of the CFTC today. The Commission announced that it will permit the listing of perpetual contracts that reference the spot price of BTC by a designated contract market (DCM) as futures contracts. The guidance notes that, given the unique characteristics of perpetual contracts, the Commission will review listings on a case-by-case basis for assets beyond BTC. This is a major step forward in the onshoring of perpetual futures markets. COIN, HOOD, HYPE, and PURR all traded higher on the news.
• I have seen a number of voices in the space express concern about the competition this creates for crypto-native and fintech platforms. That view is fair to some extent. I would expect CME and other traditional exchanges to develop perpetual futures products that are secure, compliant, and integrated with existing investor workflows. However, my interpretation remains more constructive. Perpetual futures have demonstrated strong product-market fit globally and have become the dominant crypto derivatives instrument outside the United States. Bringing them into regulated U.S. markets should expand the addressable market rather than simply redistribute existing volume.
• It is also worth considering that investor liquidity is not entirely fungible. The investors trading on Robinhood are different from those trading on CME, and the investors trading on CME are different from those trading on Hyperliquid. As a result, I think the near-term consideration for price action should be focused more on TAM expansion than market-share concerns.
• Hyperliquid Continues to Lead: HYPE once again traded to a new all-time high. Concerns surrounding the unstaking queue continue to diminish as the market absorbs supply more quickly than previously expected. ETF activity remains robust, with Hyperliquid ETFs generating roughly $85M of aggregate trading volume today, potentially supporting additional inflows.
• Tactical Setup Improving, Medium-Term Risks Remain: Despite recent crypto underperformance versus equities, several factors argue for a tactical bounce in the majors. BTC is testing key technical support near the lower end of its trend channel and around the 100-day moving average. Fear surrounding Strategy’s sale appears largely absorbed, macro data remains relatively quiet until next week’s employment reports, and relative strength in ETH/BTC and SOL/BTC has been encouraging. That said, I continue to have some concerns about the medium-term backdrop. Positioning appears increasingly full, volatility measures remain subdued, and risk assets broadly exhibit signs of complacency. As we move deeper into June, hotter inflation data, Fed-related uncertainty, and broader liquidity considerations may become more important.

• Bottom Line: Today’s price action was more constructive than the headline returns suggested. Strategy’s BTC sale failed to trigger meaningful follow-through selling, STRC recovered, regulatory developments favored broader adoption of perpetual futures, and HYPE continued to demonstrate exceptional relative strength. While I remain cautious about the medium-term backdrop, the balance of evidence suggests the potential for a tactical bounce in the majors over the near term.
• Portfolio Note: The token portfolio allocation tables shown in the previous two notes were incorrect due to a clerical error and inadvertently reflected a rebalance that did not occur on 5/26. Today’s tables reflect the correct token portfolio allocations as of the 5/18 rebalance and the correct equity portfolio allocations as of 5/26. My apologies for any confusion this may have caused.

Tickers in this video: BTC-0.28%  ETH-1.06%  SOL-0.52%  HYPE5.44%  PURR19.06%  STRC0.39%  MSTR4.91%  COIN3.72%  HOOD11.64%  IBIT0.19%