A Global Bond Selloff Pushed Japanese 10-Year Yields to 1996 Highs

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In Today's Note

• Long-end sovereign yields reached multi-year highs across markets: the 30-year US Treasury its highest since 2007, French borrowing costs 2008 levels, German 10-year bunds 2011 levels, UK gilts above 5% and Japanese 10-year yields their highest since 1996. Semiconductors fell 4.98% and the Nikkei-225 3.16%.
• Crypto held up better, with BTC easing to an intraday low near $64,100 while ETH rose above $1,900. Seven-day BTC implied volatility stayed between 23% and 26%, still at year-to-date lows, with 25-delta skew close to neutral at -1.5% and ETH calls at a slight premium to puts.

Market Snapshot: Overnight Moves

Macro & Markets

• Risk-assets across the world sold off yesterday amidst a global rout in bond markets which has pushed government borrowing costs across countries to multiyear highs.
• In the US, the S&P 500 declined 0.69% alongside a deeper 1.68% drop in the Nasdaq-100. Losses were concentrated however in semiconductor firms and chipmakers, the Philadelphia Semiconductor sector index plunged 4.98% in Tuesday’s trading session.
• In Japan, the Nikkei-225 index ended today down 3.16% while China’s CSI-300 index fell 2.90%.
• The selloff was more muted in crypto prices with BTC falling from just under $65K to an intraday low closer to $64,100. ETH on the other hand traded higher, jumping above $1,900.

• In options markets, BTC and ETH’s short-tenor implied volatility continues to trade at year-to-date lows. 7-day BTC IV has hovered between 23% and 26% over the past week, in line with the seasonal summer volatility we’ve observed since 2023.
• 25-delta put-call skew for 7-day options however is trading close to neutral for BTC around -1.5%, while OTM call options for ETH are trading at a very modest premium to puts (0.04%).

• While the selloff in global bonds eased yesterday, one factor weighing down on equities is that long-end sovereign bond yields are currently hovering around multiyear highs.
• This past week alone, the yield on 30-year US treasuries rose to the highest since 2007, borrowing costs in France reached 2008-levels and German 10-year bunds traded at 2011 levels. In the UK, equivalent gilt yields are above 5%, while 10-year Japanese JGB yields jumped to levels not seen since 1996.

• In geopolitics, President Trump reiterated his hard stance on Iran via his Truth Social platform.
• There he wrote, “There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran” while also claiming that the Strait of Hormuz was “open and operating”.
• Earlier in the week he was asked by reporters whether the US was looking to extend the memorandum of understanding signed between both parties in June, which had technically expired on Monday. Trump simply responded “No”.

DeFi / Web3 / Altcoins / Crypto3

• Kalshi has filed with the Commodity Futures Trading Commission (CFTC) to list two perpetual futures contracts, tied to the MerQube US Large Cap Index and the spot price of copper.
• The proposed US500 contract would track the MerQube US Large Cap Index, an index of 500 large U.S.-listed companies, while the copper contract would reference the Pyth Network’s XCU-USD price feed and be quoted in dollars per pound.
• The filings follow the CFTC’s May approval of Kalshi’s BTC perpetual contract, although CME Group subsequently sued the regulator, arguing that its approval of perpetual futures for Kalshi and Coinbase violated the Commodity Exchange Act.

• Japan-listed Metaplanet is investing 2,100 BTC and $2.5M in Nasdaq-listed Super League Entertainment, giving it about 95.7% ownership and creating a U.S.-listed bitcoin treasury company that will be renamed Superplanet (SUPA).
• The 2,100 BTC contribution represents just under 5% of Metaplanet’s 43,000 BTC holdings, while Superplanet will retain Super League’s existing gaming-media business and hold the contributed bitcoin on its balance sheet.
• Superplanet also plans to use its bitcoin as collateral for potential preferred-stock offerings, with operating income intended to support dividend payments, extending Metaplanet’s strategy beyond holding BTC into bitcoin-backed financial products.

• Nasdaq-listed Cypherpunk Technologies has launched a Zcash (ZEC) mining operation with about 4.2 GSol/s of Equihash hashrate across the U.S., representing roughly 18% of the Zcash network’s total computing power.
• Cypherpunk plans to use ZEC generated from mining to fund expansion, acquire additional ZEC and invest in privacy technology, supporting its target of eventually owning 5% of ZEC supply, compared with its current 323,394 ZEC, or about 1.92% of circulating supply.

• Citi expects to launch bitcoin custody later this year through Custody+, a new platform that will place digital-asset custody alongside the bank’s existing traditional custody services.
• The platform also incorporates Citi’s tokenized-deposit capabilities, which allow digital representations of bank deposits to be transferred near-instantly, 24/7, across supported Citi markets.

• The US SEC has proposed “Regulation Crypto Assets,” a framework that includes a four-year registration exemption for digital-asset offerings up to $5M and a separate one-year exemption for fundraising up to $75M.
• The proposal also creates a safe harbor allowing qualifying digital assets to cease being treated as securities once specified conditions are met and managerial efforts have ended, with the rules now subject to a 60-day public comment period.

• White House crypto adviser Patrick Witt said he remains optimistic that the Clarity Act, a bill establishing a federal regulatory framework for crypto markets, can advance when the Senate returns from its August recess, with a procedural cloture vote scheduled for Sept. 15.
• Stablecoin rewards have re-emerged as a sticking point, despite an earlier bipartisan compromise that would prohibit platforms from paying rewards simply for holding stablecoins while allowing rewards linked to transactions and payments.
• Lawmakers also remain divided over crypto-related ethics rules for public officials, with President Trump considering a proposal from Sens. Ruben Gallego and Thom Tillis that would allow state attorneys general to enforce restrictions on officials and their spouses issuing or sponsoring digital assets.

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