🗞️ J.P. Morgan’s Bitcoin Forecast
🪙 Saylor’s Digital Money Thesis
💰 Yield Recap
📈 Weekly Market Review

Two things stood out to me this week.

J.P. Morgan Asset Management added Bitcoin to its Long-Term Capital Market Assumptions for the first time, forecasting 10% annual returns over the next decade. Long-term holders can also grow the amount of BTC they own through BTC-denominated yield, which is exactly what hBTC does.

Michael Saylor made the other side of the argument at ParaFi Investor Day. He described “digital money” as a dollar-pegged, Bitcoin-backed instrument earning 6% to 8%. That sounds exactly like USDh.

The institutional conversation is catching up to a thesis we've been building on: Bitcoin as an asset and the foundation for a new financial system.

J.P. Morgan is putting numbers behind the long-term Bitcoin case.

Only months ago, J.P. Morgan Asset Management was questioning Bitcoin’s role in strategic portfolios, citing its volatility and limited diversification benefits. Now, for the first time, its Long-Term Capital Market Assumptions include a ten-year return forecast for Bitcoin.

J.P. Morgan's base case projects Bitcoin returning 10% annually over the next decade, compared with 7.5% for U.S. large-cap stocks and 5.5% for gold. In its most optimistic case, Bitcoin could return 16.6% annually.

J.P. Morgan’s model looks at the return from owning Bitcoin over the next decade. Investors taking that long-term view have another variable to consider: how much Bitcoin they own at the end of it.

BTC-denominated yield increases the amount of Bitcoin held over time, adding to any appreciation in the asset itself. hBTC turns a long-term BTC position into one that earns in BTC.

A decade is a long time to leave Bitcoin idle.

Michael Saylor thinks Bitcoin’s next market is money.

At ParaFi Investor Day, Saylor described “digital money” as a dollar-pegged, Bitcoin-backed instrument with near-zero volatility, deep liquidity and a 6% to 8% yield.

In his framework, Bitcoin provides the capital base, digital credit sits above it, and digital money turns that credit into something people can hold, trade and use for payments or collateral.

What Saylor described is what USDh already is: a dollar-denominated asset built on Bitcoin capital markets, earning up to 8% APY from strategies including digital credit and distributing that yield to holders.

Watch Saylor explain the digital money thesis.

Yield printer go brrr.

This week's output:

hBTC: 1.0%
USDh: 8.0%

Unlike Uncle Sam's, this printer works for you.

Bitcoin failed to move above $85,000 despite more than $1B of spot ETF inflows, and is now trading around $81,479, below last week’s $82,368. Buying demand improved, but trading volumes remained relatively weak and BTC continued to meet heavy selling between $85,000 and $87,500, where the cost basis of recent buyers overlaps with concentrated sell orders. That supply has repeatedly stopped the recovery from extending higher.

Selling intensified on October 22 as concerns around AI infrastructure financing and technology earnings pushed the Nasdaq down 2.6%, while renewed Middle East tensions sent Brent above $113 per barrel. The broader retreat from risk assets triggered $397 million in cryptocurrency long liquidations over 24 hours on October 21–22, amplifying selling pressure.

Data Summary:

Simple Moving Averages (SMAs) in Figure 1:

Bitcoin is trading around $81,479, below its 7-day SMA at $82,223 and 30-day SMA at $83,360. Immediate support sits at $80,400, the lower boundary of the recent trading range, followed by $80,000, where buyers have repeatedly stepped in. Deeper structural support remains at the 360-day SMA near $77,363.

Immediate resistance sits at $82,223, followed by $83,360 and $85,000, where this week's recovery stalled. Stronger resistance remains at $86,700, where recent buyers have a concentrated cost basis, followed by $87,500. Reclaiming $83,360 would improve short-term momentum, while a sustained break above $87,500 would strengthen the broader recovery. Conversely, losing $80,000 would increase the risk of a decline toward $77,363.

Net inflows totaled $442.67M this week.

U.S. spot Bitcoin ETFs attracted $1.08B between October 19 and 21 before $635.49M of outflows on October 22 erased nearly 59% of those gains. Even so, flows reversed last week’s $228.58M net outflow. Institutional demand returned, but remained inconsistent, with the latest withdrawals coinciding with Bitcoin’s renewed decline.

Cumulative net inflows rose to $57.32B from $56.88B last week, while total net assets increased from $104.29B to $104.71B. October net outflows have narrowed to $174.50M, following $2.65B of inflows in September.

DVOL fell slightly to 37.13% from 37.33% last week, despite Bitcoin’s failed move toward $85,000 and renewed selling across markets. It briefly reached 38.65% before retreating and remains near the lower end of its one-year range. Options markets are therefore pricing only a modest increase in expected 30-day price swings, despite higher short-term uncertainty.

Short-dated implied volatility also remains low, with October 30 at-the-money volatility near 31%, versus roughly 36% for November 6 and December. October 30 puts still trade at a 1.8 percentage point premium to comparable calls, showing continued demand for downside protection. Around $11.1B of Bitcoin options expire on October 30, nearly 35% of Deribit open interest, making the expiry an important near-term event for positioning and hedging.

Bitcoin’s equal-weighted futures basis fell to 5.84% from 6.09% last week. The nearest contract, October 30, rose to 7.26%, but premiums further out declined. November 6 fell to 5.93%, with later November and December contracts around 5.5%.

AI infrastructure financing drove a repricing in technology stocks this week. Meta reported $34.91B in quarterly capital expenditure and narrowed its 2026 spending outlook to $135B–$145B, reinforcing concerns about the returns on increasingly capital-intensive AI projects. Meta fell 7%, the Nasdaq dropped 2.6%, and semiconductor stocks declined 6.7% on October 22. Investors moved into government bonds, pulling the 10-year Treasury yield from 5.09% to 4.96%, its first close below 5% in a month.

Energy added a separate inflation risk. Brent rose 4% to $113.17 per barrel on October 22 as renewed Middle East tensions raised concerns about supply disruption. At the same time, U.S. data remained mixed. Initial unemployment claims fell to 194,000, showing limited layoffs, while housing starts declined 5.2% as high borrowing and construction costs continued to weigh on activity. The Fed approaches its October 27–28 meeting with resilient employment, weak housing investment and renewed energy inflation.

Bitcoin did not benefit from lower Treasury yields. BTC traded around $81,500 despite $442.67M of weekly spot ETF inflows, while the selloff in technology stocks coincided with another failed move above $85,000. Lower yields are more supportive when they come from falling inflation or easier monetary conditions. This week they fell because investors were reducing risk. Sustained spot demand remains the more important requirement for Bitcoin to break out of its recent range.

Sincerely,
The Hermetica Team