🛡️ H1 2026 Crypto Security Report
🗞️ STRCx Live in USDh
💰 Yield Recap
📈 Weekly Market Review

This week, my reading focused on DeFi security in H1 2026.

TRM Labs reported a record 207 crypto hacks in the first half, but total losses fell to $972 million from $2.3 billion a year earlier. Smart contract exploits remained the most common attack type, though the biggest losses came from operational and infrastructure compromises. Read on for our takeaway.

Closer to home, we upgraded USDh. STRCx is now integrated as a backing asset, giving USDh more direct exposure to Bitcoin-backed credit through tokenized STRC. Same product, a more direct route into the yield source.

Crypto security split in two unique directions in H1 2026.

TRM Labs recorded 207 hacks in the first half of the year, the highest six-month count in its dataset. Losses, however, fell to $972 million from $2.3 billion in H1 2025.

Smart contract exploits remained the most common attack type, accounting for 125 incidents. The biggest losses came from infrastructure and operational compromises, which made up only about 15% of incidents but roughly 76% of stolen funds.

The takeaway is operational as much as technical: DeFi security cannot stop at the contract layer. Audits are essential, but security also depends on key management, signing infrastructure, incident response, and broader operational controls.

That broader view shapes how we operate. Security and transparency come first.

You can inspect our reserves, backing assets, venue exposure, strategy performance, and protocol activity through the Transparency Dashboard as the system runs. Nothing important has to wait for a PDF.

At the protocol layer, Hermetica combines external audits, continuous internal review, and ongoing monitoring, including an Immunefi bounty program with rewards of up to $100,000.

We do not treat security as a one-time milestone or claim any system is beyond risk. We treat it as continuous work.

We invite responsible disclosure through our bounty. Review the terms on our page.

USDh now has direct exposure to Bitcoin-backed credit.

Hermetica has integrated STRCx as a backing asset for USDh, adding tokenized exposure to Strategy’s STRC preferred stock.

STRCx is issued by Backed Assets (JE) Limited, with the corresponding STRC position held through institutional-grade brokerage and custody arrangements. Kraken provides eligible access to xStocks and supports trading and transfer functionality.

Hermetica accesses STRCx through Kraken, with allocations reflected in real time through the Transparency Dashboard.

For users, the experience stays the same: hold USDh to earn from STRC and BTC basis.

Read the full update for what changed under the hood.

Our version of work-life balance: you handle life, your assets handle the work.

This week’s output:

hBTC: 1.7%
USDh: 8.0%

Bitcoin stabilized this week, reclaiming the 200-week SMA near $62,600 and trading back to $63,200. The move marks an improvement from last week’s support test, with price now above the 7-day and 30-day simple moving averages.

This week’s price action was split between macro pressure and ETF demand. Geopolitical tensions involving the U.S. and Iran pushed Brent higher, lifted yields, and weighed on risk assets, pulling Bitcoin back toward the low $62,000s after it traded above $64,000 earlier in the week. ETF demand limited the downside, with spot Bitcoin ETFs seeing three consecutive days of net inflows totaling ~$424 million.

Data Summary:

Simple Moving Averages (SMA) in Figure 1:

Bitcoin reclaimed its 200-week SMA near $62,608, the level that marked broad cycle bottoms in 2015, 2018, and 2022, after trading below it in late June. Price is now near $63,235, back above the 7-day SMA at $63,182 and the 30-day SMA at $62,672. 

The 200-week SMA now becomes near-term support. Holding the $62,600-$63,200 zone would confirm that support, while a move below it would make $60,000 and $59,100 the next downside levels. The broader structure remains weak until Bitcoin reclaims higher trend levels, with the 180-day SMA at $72,553 and 360-day SMA at $89,206 still acting as major upside resistance.

Net inflows totaled $423.99M this week.

ETF flows turned positive after last week’s redemption pressure. Spot Bitcoin ETFs saw inflows of $221.72M on July 2, $265.69M on July 6, and $21.44M on July 7, followed by a smaller $84.86M outflow on July 8. Total spot Bitcoin ETF net assets ended at $75.34B, with cumulative net inflows at $51.28B.

Issuer-level flows remain mixed, but the week-over-week total shows ETF demand improving from June’s sustained outflows.

DVOL fell to 37.08% from 39.19% last week as Bitcoin reclaimed the 200-week SMA and moved back above the short-term moving-average cluster. The decline leaves DVOL near the lower end of its one-year range, showing reduced demand for near-term downside protection even as higher trend resistance remains above spot.

The equal-weighted basis across visible maturities remains positive at 3.09% APR, with the curve gradually rising from the front end into March 2027. July 17 is the curve low at 1.97%, while March 26, 2027 is the curve high at 3.92%, leaving a low-to-high spread of roughly 2.0 percentage points.

Beyond the front maturities, the curve is much flatter. August 28 is at 3.25%, September 25 is at 3.66%, December 25 is at 3.79%, and March 26, 2027 is at 3.92%. The back end is modestly upward sloping, but the curve remains below the 5%-8% range typical of stronger bull-market carry conditions.

The June FOMC minutes, released July 8, confirmed a more hawkish Fed. The Committee held rates at 3.50%-3.75% but removed language that had implied an easing bias. Treasury yields stayed elevated, with the 2-year at 4.19%, the 10-year at 4.55%, and the 30-year at 5.05% in the Fed’s July 8 H.15 release for July 7.

There was no CPI print this week, but ISM Services remained in expansion at 54.0 and the Prices Index stayed high at 67.7, even after falling from 71.3. Initial jobless claims also fell to 215,000, keeping the labor market firm enough for inflation to remain the binding policy constraint.

Energy risk also returned. Renewed U.S.-Iran escalation around the Strait of Hormuz pushed Brent back into the high-$70s before prices eased as markets reassessed supply-disruption risk. Sustained oil strength would bring headline inflation risk back into the Fed’s reaction function and make cuts harder to justify.

AI remains a major capital-allocation force. The Fed minutes tied AI infrastructure demand to price pressure across technology products, electricity, equipment, and capital spending. Amazon’s reported move toward a $25B bond sale to fund AI infrastructure reinforced that dynamic: AI capex is still absorbing capital and may be keeping parts of the economy hotter for longer.

For Bitcoin, the setup is mixed. ETF flows and volatility improved, but rates, energy, and AI-led capital competition still keep macro conditions tight.

Sincerely,
The Hermetica Team