Fed's Williams Signals One More Hike as Markets Await US CPI

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In Today's Note

• US stocks ended flat and Treasury yields eased as Fed officials backed one more hike this year without an aggressive cycle, while BTC slipped 0.2% to $83.4K and ETH fell 0.5% to $2,504 overnight ahead of CPI.
• Strive bought 3,311 BTC, DRW and Marex completed a swap on a tokenized benchmark, and Ledger confirmed tampered reseller devices stole recovery phrases.

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Market Snapshot: Overnight Moves

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Macro & Markets

• US equities bounced from their session lows to end the day almost flat (-0.023%) while BTC traded tightly between $83K and $84K after the New York Fed President suggested the Federal Reserve would not be forced into an aggressive rate hiking cycle. 
• In an interview with Bloomberg News, John Williams said “I haven’t changed my view that it may be appropriate to have one more rate hike” and when it comes to 2027, “I don’t think at this time I have any reason to believe that we would need to do more.”
• That suggested the NY President viewed one more increase appropriate for 2026, but does not believe it will be necessary for the central bank to increase rates again in 2027.

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• Williams added that there were signs inflation will slow “quite a bit” and approach the central bank’s 2% inflation target in 2027, as the impacts from tariffs and the current energy price shock fade away and overcome price pressures stemming from the build-out of infrastructure for artificial intelligence. 
• Williams said, “I still believe there’s disinflationary forces at play. We definitely had the effects of tariffs and the energy prices, and now with AI. But some of those are, I think, not indicating upward movement in underlying inflation. In fact, these measures of underlying inflation have come down.”
• Importantly, he added that “This is not an economy that is overheating overall” and there are no signs the labour market is out of balance and contributing to inflation. 
• US Treasuries gained as yields edged lower across the curve following Williams’ remarks, with the yield on the two-year note fell from 4.82% to 4.77%, while 10-year yields fell 3bps from 5.23% to 5.20%. 

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• Speaking at a Boston Fed banking conference yesterday, regional President Susan Collins mirrored Williams’ comments regarding the need for another rate hike before year-end. 
• Collins said she backed the September decision and currently expects "it will be appropriate to raise rates a bit further before the end of the year to ensure a timely and durable return of inflation to the Committee's 2% target."

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• Finally, also speaking yesterday, Federal Reserve Governor Christopher Waller suggested the surge over the past few months in long-term US Treasury yields is helping to slow down demand in interest-rate-sensitive sectors such as housing and automobiles, which is doing some of the work of tighter monetary policy for the Fed.
• “When yields go up, is that going to impact interest-sensitive sectors like housing and autos and other things? Yeah, of course it is,” Waller said at Bloomberg’s New Economy Forum in New Delhi. 
• While that isn’t the Fed’s intention, higher yields are “doing a little bit of the work”. 
• Like Williams, Waller also commented on the impact of AI which is putting upward pressure on prices. 
• “Obviously, if you’re building out several trillion dollars of investment in AI and you have to buy all that stuff, and your demand is perfectly inelastic, you’ll pay whatever price. You’re going to bid up the price of all semiconductors of all type, and that’s going to spill over to anybody else who uses those products. And that’s what we’re starting to see in the US.”

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Defi/ Crypto

• Strive, a publicly traded bitcoin treasury company, purchased 3,311 BTC for approximately $280M at an average price of $84,500 per bitcoin, bringing its total holdings to 32,773 BTC.
• The acquisition was Strive's largest since its merger with Semler Scientific, placing it among the five largest publicly traded bitcoin holders, approximately 2,804 BTC behind MARA and 11,227 BTC behind Metaplanet.
• Strive continues funding its bitcoin accumulation through equity offerings and SATA preferred shares, which carry a 13% annualized dividend rate, while its cash reserves increased to $310.3M and its holdings of Strategy's STRC preferred stock reached 505,000 shares.

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• DRW, a proprietary trading firm, and Marex, a global financial services and derivatives brokerage group, completed what S&P Dow Jones Indices and Kaiko described as the first over-the-counter (OTC) total return swap referencing a fully tokenized financial benchmark, using the S&P iBoxx USD Liquid Investment Grade Index on Derivnex, an institutional derivatives platform built on the Canton Network, a privacy-enabled blockchain for financial institutions.
• Kaiko, a digital asset market data provider, tokenized the index and supplied official benchmark values for ongoing swap valuation, while Canton's infrastructure enabled confidential coordination between counterparties.

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• Ledger, a cryptocurrency hardware wallet manufacturer, confirmed that devices sold by CryptoBilis, a Southeast Asian reseller, contained hidden implants that stole users' 24-word recovery phrases and transmitted them over LTE, although the devices' core security systems remained uncompromised.
• Researchers estimate losses exceeding $86M across Bitcoin, Ethereum and Tron, but Ledger has not verified the figure, while MediaMarkt Saturn, a European electronics retailer, suspended Ledger sales following reports of tampered devices in Germany.
• Ledger ordered CryptoBilis to suspend sales and shipments as investigations continue, while competing wallet manufacturers Trezor and OneKey restricted the reseller's authorization, with OneKey offering free replacements to affected customers.

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• Binance, a global cryptocurrency exchange, will shut down Binance Pool, Cloud Mining, Pool Savings and Transaction Accelerator on November 10, ending mining rewards and requiring users to redirect their mining equipment to alternative pools and redeem outstanding savings positions.
• The closure comes as Binance expands into AI-powered trading tools and traditional financial product offerings.

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• The UK High Court ruled that Chinese law will determine ownership claims over more than 61,000 BTC worth approximately $5B, seized from Zhimin Qian, who received an 11-year, eight-month prison sentence for laundering proceeds from a Chinese investment fraud scheme.
• Around 16,000 Chinese investors are seeking compensation through UK civil recovery proceedings, but must establish legal ownership of the bitcoin rather than simply demonstrate financial losses from the fraud.
• The ruling does not determine who ultimately receives the seized assets, although difficulties proving ownership under Chinese law could allow the UK government to retain a substantial portion, while lawyers representing investors are pursuing an appeal.

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• Catherine Chen, head of VIP and Institutional at Binance, a global cryptocurrency exchange, said traditional hedge funds are increasingly exploring arbitrage between crypto venues and conventional financial markets, attracted by deeper liquidity, 24/7 trading and weekend price discovery, although she expects institutional adoption to develop gradually over the next 12-18 months.
• Chen reported that traditional finance-linked assets under management on Binance increased from approximately $800M-$900M to $1.4B, while monthly trading volume in traditional finance perpetual futures climbed from $20B-$30B to roughly $400B, adding that regulatory clarity remains essential for broader institutional participation.

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This Week's Calendar

Charts of the Day

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Figure 1. Block Scholes BTC Risk-Appetite Index (white, left-hand axis) and BTC spot price (orange, right-hand axis).

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Figure 2. Block Scholes ETH Risk-Appetite Index (white, left-hand axis) and ETH spot price (purple, right-hand axis).

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Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

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Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

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Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

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Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

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