💸 Reliable USDh Pricing For DeFi Is Here
📰 Alpen’s Glock Now Duty-Free
💰 USDh Yield Recap
📈 Weekly Market Review

This week brought two infrastructure upgrades for Bitcoin DeFi.

USDh now uses a more accurate reserve-backed fair value feed from DIA, giving lending, trading, and liquidation markets pricing based on reserves rather than secondary market activity.

Second, Alpen Labs introduced Duty-Free Bits, a meaningful step toward cheaper Bitcoin-native protocol design by reducing garbled lock sizes and lowering deployment costs.

I, for one, appreciate seeing practical steps toward a more robust Bitcoin-powered financial system.

USDh should be priced from reserves. Now it is.

We’ve partnered with DIA to bring a reserve-backed fair value feed for USDh. Pricing is now more accurately derived directly from the assets that back USDh, rather than secondary market activity.

The feed compares total reserve value against USDh supply in real time. If reserves meet or exceed supply, USDh is priced at $1.00. If reserves fall below supply, the price reflects the actual backing ratio.

The result? A more reliable pricing for lending, trading, and liquidations.

There’s more:

Introducing Duty-Free Bits: a cheaper path for Bitcoin-native protocols.

Alpen Labs’ latest Glock upgrade reduces the size of state-of-the-art garbled locks by 20-45x, making Bitcoin-compatible protocols materially cheaper to deploy. In one example, encoding size falls from 22.16 MB to 500 KB. In another, it drops from 6.8 MB to 355 KB.

Duty-Free Bits makes Bitcoin-native systems cheaper to build, easier to scale, and more realistic to deploy by replacing large multiplicative overhead with a smaller additive one.

We have our eyes on Alpen, as they continue to build BTC-native, cost-efficient pathways to the BTC economy.

21M BTC. USDh yield.

Some things stay beautifully constant.

8% on your stables this week.

Bitcoin held steady this week as higher oil prices and geopolitics-linked equity selling dominated broader global markets. Bitcoin traded from $69,500 to $71,300 after starting near $70,500, a roughly 2.5% weekly range and lower volatility than other markets. Bitcoin’s 30-day rolling correlation with the S&P 500 fell from 0.55 to about 0.45, the widest divergence since the February selloff.

On Thursday, both the S&P 500 and the NASDAQ experienced declines, falling 1.52% to 6,673 and 1.78% to 22,312, respectively. Despite a significant 10% rise in oil prices and a 739-point drop in the Dow, Bitcoin remained relatively stable. This stability was supported by continued ETF inflows and a shift by some portfolio managers to reduce exposure, cover software and crypto shorts, and move toward cash.

Data Summary:

Simple Moving Averages (SMA) in Figure 1:

Bitcoin has traded above both short-term moving averages for a second consecutive week, the first sustained crossover in two months.

The 7-day and 30-day SMAs are converging near $68,000-$69,000, forming a base.  Price is below the 180-day and 360-day MAs near $92,000-$98,000. The 200-week SMA near $58,800 is a key structural support and has marked cycle bottoms since 2015.

Support levels are $68,000, $65,000, $60,000, and $58,800, while resistance levels are $74,000, $76,000, $80,000, and $86,000.

Net inflows total approximately $234M since last Friday.

The ETF complex has broken its five-week outflow streak that drained $3.8B. On Monday, March 10, net inflows totaled $251M, led by BlackRock’s IBIT at $186M. Gold ETFs saw record outflows over the same period, suggesting early rotation from precious metals into digital assets. Total ETF AUM recovered to approximately $88B. The average cost basis for ETF holders remains near $84,000, roughly 16% below current levels.

DVOL is 54%, flat from last week’s 54.7%. Despite Brent crude oil rising from $85 to above $100, Bitcoin implied volatility barely moved, contrasting with the move to 90% during February’s selloff. Geopolitical developments keep DVOL elevated, while institutions reducing exposures have limited price action.

DVOL is in the 87th percentile on a one-year basis. The post-selloff 50%-55% range sits above the pre-selloff 35%-42% range but below February’s levels, consistent with a structural regime shift in Bitcoin implied volatility.

The equal-weighted basis spread has risen to 2.68% APR from 2.49% last week, well above the 1.73% February trough. Basis is now positive across maturities with no front-month backwardation, indicating reduced derivatives stress.

The curve maintains normal contango with front-month below later maturities. Perp funding rates are neutral to slightly positive, and open interest has stabilized but is still below January peaks. Basis would need to return to the 5%-8% APR range seen in late 2024 to indicate fuller normalization in derivative markets.

The Fed remains at 3.50%-3.75% ahead of the March 17-18 FOMC, which includes the quarterly dot plot. February CPI came in at 2.4% on March 11. The VIX hit 27.29 on Thursday, the 10-year yield rose to 4.27%, and DXY climbed to 99.7. 

Tensions involving the U.S., Israel, and Iran entered a third week. Shipping through the Strait of Hormuz remained constrained amid closure, affecting a key energy route that normally carries around 20 million barrels of oil per day. Even with rerouting, over 15% of global supply is halted by the closure.

WTI rose 9.72% on Thursday to $95.73, and Brent settled at $100.46, its first close above $100 since 2022. WTI is up ~67% from its 2026 open of $57.42. Gulf production has been curtailed by 6.7 million barrels per day due to storage constraints, and even with bypasses at full capacity, 15.17 million barrels per day of production is expected to shut down. The IEA’s 400-million-barrel strategic reserve release on March 11, the largest in its 52-year history, did not materially move prices. Spillovers extend beyond crude: global LNG supply is down 20%, European and Asian gas prices have doubled, and fertilizer prices have risen ahead of the U.S. planting season.

Sincerely,
The Hermetica Team