🗞 FINRA-Regulated Access to STRC
🗳 Daily Dividends on the Ballot
💰 Yield Recap
📈 Weekly Market Review

This week we announced a major upgrade to USDh’s reserve infrastructure.

Hermetica integrated Clear Street, giving USDh direct institutional access to listed Bitcoin-backed credit such as STRC. Execution and custody now sit with a U.S. broker-dealer and FINRA member, with positions reflected on the Transparency Dashboard.

The integration comes at an opportune moment. Strategy is asking STRC shareholders to approve a move from semi-monthly to daily dividends, reducing reinvestment lag and smoothing income accrual. If approved, the new cadence will flow through to USDh automatically.

USDh now has direct institutional access to Bitcoin-backed credit.

Hermetica has integrated Clear Street, a U.S. broker-dealer and FINRA and SIPC member, giving the USDh reserve direct access to listed securities such as STRC. Execution, settlement and custody now sit within the same brokerage account.

Clear Street positions are reflected on the Transparency Dashboard and independently verified through USDh’s monthly attestations.

Clear Street supports more than 2,000 institutional clients and reports $31.3 billion in daily trading activity and $17.7 billion in interest-bearing client balances.

USDh now accesses Bitcoin-backed credit the way institutions do: directly.

STRC is one shareholder vote away from daily dividends.

Strategy has proposed moving STRC from semi-monthly to daily dividends, with each calendar day becoming a record date and payment following on the next business day. The annualized dividend rate remains unchanged.

Daily distributions would reduce reinvestment lag, smooth income accrual and make STRC better suited to financial products that operate continuously. Strategy also expects the change to improve price stability and keep STRC trading closer to its $100 target price.

If approved, the first daily dividend would accrue on November 1 and be paid November 2. The new cadence would flow through to USDh automatically, giving holders a steadier STRC-derived yield profile without owning STRC directly.

If you owned MSTR on September 25, 2026, you are eligible to vote. Voting closes October 28.

Cast your vote for daily dividends.

Seven days later.

hBTC: 1.0%
USDh: 8.0%

Turns out a week is plenty of time to make progress.

BTC fell to around $83,000 this week, roughly 4% below last week’s $86,500. The move lower was driven by selling from profitable short-term holders against relatively weak spot demand. Spot and ETF trading volume averaged $6.8B per day, below 90% of observations since January 2024, while profitable short-term holders accounted for 86% of exchange inflows on October 4. More BTC was arriving at exchanges to be sold while buying activity remained comparatively thin.

The selloff accelerated as renewed Middle East tensions pushed Brent above $102, the 10-year Treasury yield briefly reached 5.36%, and September’s Fed minutes reinforced the possibility of another rate increase before year-end. BTC later recovered toward $83,000 as oil prices fell and near-term geopolitical escalation risks eased, reducing some of the inflation and rates pressure that had weighed on markets.

Data Summary:

Simple Moving Averages (SMAs) in Figure 1:

Bitcoin has slipped below its 7-day SMA at $84,383, reversing last week’s reclaim. With BTC trading around $83,004, immediate support sits at the 30-day SMA near $82,106, followed by this week’s low around $80,500. Deeper support remains at the 360-day SMA near $78,445.

Resistance now sits at $84,383, followed by $85,000 and September’s highs near $87,500. Reclaiming $85,000 would improve short-term momentum, while a sustained break above $87,500 would strengthen the broader recovery. A move below $82,106 would bring $80,500 into view, with a further decline putting the 360-day SMA near $78,445 back in focus.

Net outflows totaled $702.23M so far this week.

U.S. spot Bitcoin ETFs recorded $487.07M of outflows on October 7, the largest daily outflow of the week, overwhelming Tuesday’s $118.86M inflow and reversing last week’s $241.09M net inflow. The reversal coincided with Bitcoin’s selloff, removing a major source of spot buying demand. Cumulative net inflows fell to $57.09B from $57.79B last week, while total net assets declined from $108.89B to $104.91B. October flows now stand at -$409.71M, following $2.65B of net inflows in September.

DVOL rose slightly to 36.70% from 36.17% last week, an increase of 0.53 percentage points despite Bitcoin’s sharp selloff and $520M in long liquidations. The index remains near the bottom of its one-year range, suggesting options markets have not treated the decline as the start of a sustained volatility shock. Much of the week’s turbulence came from leveraged positions being closed, while expectations for volatility over the next 30 days changed relatively little.

Short-dated at-the-money implied volatility fell toward 32% from roughly 36%, while December volatility remained near 37%. Short-dated puts still carried about a 2-percentage-point premium over comparable calls, showing continued demand for downside protection. Immediate volatility has eased, but investors are still paying more to hedge against further declines.

Bitcoin’s equal-weighted futures basis rose to 5.95% from 5.06% last week, driven mainly by short-dated contracts. October 16 leads at 7.23%, followed by October 23 at 6.29% and October 30 at 6.19%, while November through June remains clustered around 5.3%-5.8%.

The higher front-end basis points to stronger demand for near-term futures exposure, but it should not be read as a broad increase in leveraged long positioning. Annualized basis becomes more sensitive to small price differences as contracts approach expiry, while longer-dated premiums changed much less.

U.S. borrowing costs reached multi-decade highs this week as energy disruptions and persistent inflation kept pressure on bonds. The 10-year Treasury yield briefly touched 5.35% before retreating toward 5.22%. Demand remained solid, but investors required much higher yields to absorb new supply. The Fed’s September minutes also kept another rate increase before year-end possible, while the ISM Services Prices Index rose to 74.0, its highest since July 2022.

Energy remained a major inflation risk. Hurricane Isaias shut roughly 1.28M barrels per day of U.S. Gulf offshore production, while disruptions continued to restrict oil flows through the Strait of Hormuz. The G7 moved to release 100M barrels from emergency reserves, but the U.S. Energy Information Administration (EIA) still raised its fourth-quarter Brent forecast by $14 to $105 per barrel and reported East Coast distillate inventories 32% below their five-year seasonal average. Disruptions across production, transportation and refining keep fuel costs elevated and make inflation harder to bring down.

AI infrastructure is adding a separate source of demand for power and capital. Google signed a 20-year agreement supporting $4.3B in nuclear upgrades and 890 megawatts of additional generation, while the EIA expects wholesale electricity prices in PJM, the regional power grid covering much of the eastern United States, to rise 41% this year. The Federal Reserve also identified borrowing for AI infrastructure as a potential contributor to higher Treasury yields. Higher energy costs and heavy infrastructure spending can keep interest rates elevated, while Treasury yields above 5% increase the return available outside BTC.

Sincerely,
The Hermetica Team