Two things stood out to me this week.

First, Zest V2 is live, a step change in BTC lending risk controls that moves us closer to institutional-grade BTC yield.

Second, River’s latest Bitcoin ownership report. In 2025, businesses added 489K BTC, funds and ETFs added 205K, and governments added 135K. More BTC is landing on institutional balance sheets, yet under 1% of BTC earns today compared to 75%+ of corporate cash. Adoption is outpacing productivity. 

Now more than ever, the market needs institutional-grade yield products.

Bitcoin lending has a new look.

Zest V2 is live with upgraded risk pricing and liquidations. V1 placed every loan against collateral into one shared risk profile, which meant conservative limits whenever a single pair carried outsized liquidation risk.

V2 introduces pair-level risk groups, staged liquidations with partial and full thresholds; a clear path to institutional-grade BTC yield.

hBTC launches with basis, borrowing stables like USDh against BTC and deploying into high yield staking strategies, powered by Zest V2 risk controls.

With the pieces coming together, the waitlist is warming up. Subscribers will start receiving updates as we approach launch.

If you are allocating capital to institutional-grade BTC yield, join the waitlist for launch access.

Institutions continue to gravitate toward Bitcoin.

River reports that in 2025, businesses added 489K BTC, funds and ETFs added 205K, and governments added 135K. Supply is consolidating onto balance sheets.

Balance sheets don’t hold idle assets.

Over 75% of corporate cash earns yield in TradFi, less than 1% of Bitcoin supply does. ETFs and treasury programs solve exposure and custody, not capital efficiency. As Bitcoin moves into mandate-driven structures, the expectation is yield.

Institutions need a yield stack that is built for governed balance sheets, where custody, reserve verifiability, and risk control are non-negotiable. hBTC fits that requirement: self-custodial, full transparency, with daily yield.

If you are evaluating BTC yield, the waitlist is open.

7% APY this week.

By reading this, you’re agreeing to stop chasing narratives, stop bottom-calling, and let your stables do the work.

Bitcoin made a volatile round-trip this week, dropping to $62,800 on Monday, recovering to $69,500 briefly on Wednesday, and ending near $67,000 by Friday.

The S&P 500 closed Thursday at 6,908.86. NVIDIA shares dropped 5% despite a strong Q4 ($68.1 billion revenue, +73% YoY). Block laid off over 4,000 employees, about half its workforce, adding to the ongoing AI-driven repricing in SaaS. The VIX moved above 20 on Friday. Deribit’s $8.72B BTC and ETH options expiry is today, with 114,705 BTC contracts and max pain at $75,000.

Data Summary:

Bitcoin's technical structure remains bearish as price trades well below both the 50-day ($75,700) and 100-day ($83,400) Exponential Moving Averages (EMA). The 200-week EMA near $68,000 acted as a brief buffer midweek.

The weekly close relative to the 200-week EMA ($68,000) is important: a close above makes a potential move to $80,000 possible, while a close below keeps $60,000–$62,000 as the next support zone.

Below $60,000, $50,000-$55,000 is the next support zone, while resistance is at $70,000 and $76,000–$78,000. Bitcoin is down 47% from its October 2025 ATH and 23% YTD.

This week's inflows totaled $903M. U.S. spot Bitcoin ETFs ended a five-week net outflow streak totaling $3.8B, the longest since February 2025. YTD net outflows are $4.5B, with IBIT down more than $2.1B and FBTC down $954M. Total AUM fell from $170B, the October 2025 peak, to $84.3B.

Strategy (MSTR) announced its 100th Bitcoin purchase, buying 592 BTC for $39.8M. Total holdings are 717,722 BTC at an average cost of $76,020.

DVOL is 52.27% (87.7th percentile), down from the 90% peak during early February’s heaviest selling. The 25-delta skew recovered from -30 to -8/-9, signalling less acute hedging demand. Today’s expiry removes $8.72B in gamma exposure, which may allow for larger directional moves.

Basis spreads fell to a YTD low of 1.73%, equal-weighted basis across maturities. The curve remains in contango across most of the curve, except the front week. Perp funding is near zero after turning negative during the February 5 selloff.

The Producer Price Index (PPI) data released this week was high, which has shifted market pricing toward fewer near-term rate cuts. A stronger PPI reading can signal inflation pressure, prompting caution around rate cuts. Separately, on February 20, the Supreme Court invalidated IEEPA tariffs, after which the administration implemented a 15% global tariff.

U.S.-Iran developments remain in focus for markets. Indirect talks in Geneva concluded on Thursday, and some governments have issued travel guidance related to the region as tensions continue.

A Strait of Hormuz disruption would likely influence energy prices and inflation expectations. Gold is around $5,230, while broader risk assets have been less responsive. In prior geopolitical episodes, including the June 2025 twelve-day Israel-Iran conflict, Bitcoin initially sold off rather than trading as a defensive asset.

Sincerely,
The Hermetica Team