US-Aligned Nations Cut Their Treasury Purchases by More Than 60% to the Lowest Since 2021

In Today's Note

• US equities extended their rally on Tuesday, S&P 500 +0.60%, Nasdaq-100 +1.29%, as Meta's five-times oversubscribed $25B share sale and SK Hynix's seven-fold profit jump lifted the Philadelphia Semiconductor index 3.60%, while Brent rose close to 2% to around $115 and BTC climbed above $81,500 and ETH above $2,350 ahead of today's FOMC decision, where markets price a 90.6% chance of a hold.
• Ripple received final OCC approval to establish Ripple National Trust Bank and BNY expanded its partnership to custody XRP and RLUSD, while Galaxy Digital authorised a new $200M buyback after a $323M Q3 profit and the CFTC sued Utah over its attempt to prosecute Kalshi.

Market Snapshot: Overnight Moves

Macro & Markets

• US equities extended their recovery rally on Tuesday as a move higher in technology companies lifted benchmark stock indexes.
• The positive sentiment spread over to crypto markets too, with BTC moving from below $79,500 to over $81,500 earlier today, ahead of the Fed’s FOMC meeting where markets are pricing in a 90.6% of a pause.
• In the past 24 hours, BTC, ETH, SOL, XRP and BNB, which make up part of the top 10 crypto-assets by market capitalisation are all trading 2% higher.
• Spot Bitcoin ETFs also saw a second day of inflows, pulling in $176.0M, though spot Ethereum ETFs struggled, seeing outflows of $60.2M.

• Renewed optimism around the artificial intelligence trade helped drive the closely followed Philadelphia Semiconductor sector index up 3.60%, while the Nasdaq-100 added 1.29% and the S&P 500 closed up 0.60%.
• The sector was buoyed by Meta Platforms Inc. 's $25B share sale ending up being five times oversubscribed as well as an announcement from Oracle Corp. to expand a partnership with OpenAI.

• Tech shares climbed across Asia also, led by shares in South Korea, after blowout earnings from heavyweight SK Hynix Inc.
• The memory chipmaker announced plans to return about $45B more to shareholders after profit surged a stronger-than-expected seven-fold, reflecting the huge demand for chips crucial to the AI infrastructure buildout.
• As such, the Kospi Index, a strong barometer for the AI trade, climbed 6.63% while shares of SK Hynix have jumped close to 15% over the past five days.

• In geopolitics, Brent crude oil snapped a two-day losing streak after the Wall Street Journal reported that the US informed a number of Gulf countries to be prepared for a short but intense military campaign after the US midterm elections.
• As such, the global oil benchmark rose close to 2% to trade around $115 a barrel.
• Meanwhile, Iran’s Supreme Leader Mojtaba Khamenei reiterated the conditions his nation has for ending the war with the US, during a meeting with his security chief, including the US ending its naval blockade in the Strait of Hormuz.
• Khamenei met with Supreme National Security Council Secretary Mohsen Rezaee a day after Rezaee held talks with senior officials from Saudi Arabia, Turkey and Pakistan in Iran as part of an effort by the three powers to reduce tensions and prevent another round of US-Israeli strikes.

• According to Bloomberg analysis on data from the Treasury and State Department, countries and regions most aligned with the US bought a net $174.3B of Treasuries, excluding bills, in the first eight months of 2026.
• That marked the lowest for an equivalent period since 2021 and is down more than 60% from a year earlier.
• For example, Japan, the biggest foreign holder of Treasuries, bought $389M in the first eight months, down 99% from a year earlier.
• Meanwhile, South Korea sold $23.8B, the most for the period in records going back to 1977, while Taiwan was also a net seller.

DeFi / Web3 / Altcoins / Crypto

• Galaxy Digital's board authorized a new $200M share repurchase program for its Class A common stock, following the completion of its previous $200M buyback, which covered approximately 9.8M shares; the new authorization has no fixed expiration date, and the company is not obligated to repurchase the full amount.
• It reported $323M in Q3 net profit, reversing an $85M loss in Q2. Crypto trading volumes increased 12%, while its average lending portfolio grew 27% to $1.8B, supported by its DeFi-linked lending product, Galaxy Onchain Financing Rate (GOFR), which draws on Aave and Morpho lending markets.
• Galaxy's AI data center business generated $79M in adjusted gross profit, up from $20M, following the delivery of 133 MW of computing capacity to CoreWeave, while the company projected a $800M-$850M in annualized data center leasing revenue by the end of 2027.

• Zcash co-founder Sean Bowe has proposed ending the automatic allocation of 8% of Zcash block rewards to Zcash Community Grants (ZCG), arguing that its treasury has grown beyond the funding needs of the program, which supports ecosystem development. The proposal would instead redirect the 8% allocation to Zcash's Network Sustainability Mechanism (NSM).
• ZCG currently holds 91,452.98 ZEC and approximately $8.8M in dollar-denominated assets, worth over $125M combined, while its existing subsidy could generate more than $68M annually, far exceeding its reported quarterly expenses of $1.53M.

• Ripple, a blockchain payments company, has received final approval from the Office of the Comptroller of the Currency (OCC), the US banking regulator, to establish Ripple National Trust Bank, bringing its $2.5B RLUSD stablecoin under additional federal oversight.
• The new bank will manage RLUSD's reserve assets and provide institutional digital asset custody services, while Standard Custody & Trust Company, Ripple's New York-regulated subsidiary, will continue issuing the stablecoin.

• BNY, a global financial services bank, is expanding its partnership with Ripple to offer institutional custody of XRP and RLUSD, with plans to enable clients to mint and redeem RLUSD directly through the bank.
• The companies are also working with C2FO, a working capital financing platform, to test invoice financing on the XRP Ledger, allowing suppliers to receive payments in seconds against approved invoices.

• The Commodity Futures Trading Commission (CFTC), the US derivatives regulator, has sued Utah and Attorney General Derek Brown, arguing that the state's attempt to prosecute Kalshi for illegal gambling interferes with its federal authority over prediction markets.
• The lawsuit is the CFTC's tenth against a US state over prediction-market regulation, as federal and state authorities dispute whether event contracts fall under federal derivatives law or state gambling laws.

• Luxor Technology, a Bitcoin mining infrastructure provider, has raised $16M in a funding round led by CMT Digital, with participation from Canaan, MicroBT, Halo and Steelhead, to support its expansion into AI infrastructure.
• The company plans to invest in GPU and AI server trading, cloud computing services and cash-settled compute derivatives, including options and forwards that allow AI businesses to hedge computing costs, while expanding its workforce by approximately 12 employees.

This Week's Calendar

Charts of the Day

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

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

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

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

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

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

Block Scholes is an FCA-regulated institutional crypto derivatives analytics platform. Live data, IV surfaces, and backtesting available via blockscholes.com.

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