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It was a mixed week for markets. Progress is being made towards resolving the war in the Middle East and getting the global economy ticking over again. On the other hand, Kevin Warsh’s first FOMC meeting had a hawkish tone to it and rate hikes are still very much on the table for the second half of the year.

Meanwhile, amidst all the excitement surrounding SpaceX’s massive IPO, major developments have been happening in the AI space. The US government forced Anthropic to limit access to its most powerful frontier models, in what amounts to a fundamental shift: AI is no longer seen as a product; it’s now a weapon. Read on to learn more.

🤦 DAT’s a Terrible Idea 🤦

Digital asset treasury companies (DATs) were flavour of the month not so long ago. Big institutional buyers stacking crypto on their balance sheets and helping pump everyone’s bags. All well and good when prices were going up. Now that prices are going inexorably down… not so much.

Strategy in particular is feeling the heat, as the fallout from its (admittedly microscopic) sale of 32 BTC a couple of weeks ago continues. The company’s decision to pay off cheap debt has left it short of cash to cover dividend obligations on its STRC preferred stock and, as STRC’s price remains stubbornly below its $100 par and BTC remains stuck in the low $60Ks, the market is holding its breath. Will Strategy be forced to sell more BTC to raise the necessary cash? And, if it is, will that see BTC’s price fall still further?

In today’s video, we look at the hole Strategy has got itself into and assess whether the situation really is as serious as some are making out. We examine how there is still a bull case out there for crypto’s biggest DAT and ask whether the treasury company model was ever fit for purpose.

You can watch that video here.

📈 Crypto Market Forecast 📈

The Iran peace deal has been signed, though it remains on shaky ground. The Strait of Hormuz is reopening and oil prices are falling toward pre-war levels. These are the conditions under which inflation should begin to reverse, the Federal Reserve should find reason to pause, and risk assets should rally. (The word ‘should’ is doing a lot of heavy lifting there.) And yet Bitcoin is trading at around $63,000 - barely higher than it was before the deal was announced - and the macro picture remains more complicated than the headline relief suggests.

That’s in large part because the Federal Reserve's June meeting delivered the clearest statement of direction since Warsh took office. Rates were held unchanged, but the easing bias - the language that had subtly implied cuts were more likely than hikes - was removed entirely. The dot plot showed nearly half the committee projecting at least one rate hike by year-end. The median projection for 2026 rates moved from 3.4% to 3.8%. The chances of a hike in September jumped from 30% to above 50% in the 24 hours following the decision. Higher-for-longer US interest rates mean a stronger dollar, and a stronger dollar is historically one of the most reliable headwinds for Bitcoin.

The Iran deal is genuine though and the market knows it. Iranian oil tankers were already moving through the former naval blockade before the ink was dry. The deal includes an immediate oil sales waiver, frozen asset releases tied to performance, and a 60-day window to negotiate on Iran's nuclear programme. Iran could generate over $60 billion annually in oil revenue at pre-war production levels and current prices. That is deflationary for energy costs, which matters enormously for inflation. But things won’t get better overnight. Removing mines from Hormuz will take weeks, while shipping companies and insurance markets will take time to regain confidence. The first downstream effects on inflation data will not appear for months.

Interestingly, the two dominant macro forces of the week - the hawkish Fed pivot and the Iran deal - are pushing in opposite directions. The Fed is pricing in hikes; the Iran deal argues for eventual deflation. The bond market, which tends to lead equity and crypto markets at inflection points, is showing the 10-year and 2-year yield spread at its tightest since April 2025. That flattening typically signals the market believes the Fed will tighten further and that growth will slow. It is not an environment historically associated with sustained crypto rallies.

The Bank of Japan muddied the waters still further. It raised rates to 1% and the yen promptly fell to its weakest level since July 2024. Japan spent $73 billion on currency intervention last month to prevent this exact outcome. The intervention failed because the underlying driver is unchanged: the US-Japan rate differential is still enormous. Every additional BOJ hike, while good for yen stability in theory, risks accelerating the unwind of yen carry trades - borrowing cheap yen to buy higher-yielding assets globally. Those assets include equities and crypto. The August 2024 carry trade unwind sent Bitcoin from $65,000 to $50,000 in a week. Yen short positions are currently at a nine-year high.

On-chain, the picture remains broadly supportive of the view that February's $60,000 low was the cycle bottom. The realised cap has stabilised. The pattern of this correction differs from the 2014, 2018, and 2022 bear market reversals. SpaceX's Nasdaq index inclusion is underway, with passive fund buying now required within the next two weeks - though analysts have noted the actual price impact is likely to be modest, around 1.5-2%.

In sum then, the week just passed was the most eventful since the Iran war began, and it left Bitcoin essentially unchanged. That is neither a bullish nor bearish signal in isolation - it reflects a genuine tug of war between a deflationary peace deal and a hawkish Fed, with the carry trade risk from Japan adding further complexity. Our directional call remains cautiously constructive over a one to three month horizon. The recovery thesis is intact. But the near-term path runs through the Iran deal's 60-day nuclear negotiation window, the yen’s trajectory, and whether the Fed's stated higher-for-longer posture holds against softer economic data that may emerge as the oil shock abates. Watch this space.

🤖 Controlled Intelligence? 🤖

Last week marked a major turning point for the AI industry.

The US government issued an export control directive to Anthropic, ordering the AI company to suspend access to its latest frontier models by any foreign national, whether inside or outside the United States, including its own non-citizen employees.

The National Law Review described this action as the first known US use of export control authorities to regulate a particular AI frontier model on a national security basis. Specifically, it invoked the Commerce Department's deemed-export provisions to treat access by a foreign national as an export in itself.

Besides the use of these provisions essentially reclassifying Anthropic’s frontier model as a controlled munition, it also marks the first time the US has applied physical export-control and arms-trade directives to live, commercial API services rather than tangible hardware.

If that isn’t an innovative way to shut down an AI model in its entirety, we don’t know what is. You see, the problem with this directive is that the cloud infrastructure powering most AI service providers can only distinguish on the basis of geography, not nationality.

After all, to enforce the latter, AI companies would need to conduct KYC and identity verification on their customers. Given the impracticality of this, Anthropic had no choice but to disable Claude Fable 5 and Mythos 5 for every customer on earth, not just non-US citizens.

While the directive did not provide specific written details, the widely reported rumour and Anthropic’s own theory is that the directive follows the government’s discovery of someone who had found a method of bypassing Fable 5's safeguards. In tech circles, this is described as a “jailbreak.” To the government’s credit, this does warrant caution since a jailbreak essentially unlocks the complete cybersecurity capabilities of the underlying Mythos model, including its powerful ability to identify software vulnerabilities.

That said, Anthropic’s review of the supposed jailbreak reportedly revealed that the technique only surfaced a small number of previously known, minor vulnerabilities that other publicly available models could find anyway. The company has called the episode a misunderstanding, arguing that recalling a commercially deployed model over a narrow jailbreak would, if applied industry-wide, halt frontier deployments altogether.

While the government had been less than conciliatory during initial discussions, recent reports reveal that the ongoing remediation talks are progressing well. The Anthropic team has supposedly pledged to improve communication with the Trump administration and resolve any security concerns more quickly going forward. In other words, they seem to be promising the government greater influence and control over their products.

If you fancy putting on a tinfoil hat, we would say the latest action hints at the government’s ambitions to make AI usage a heavily controlled and regulated service. You see, as AI gets more powerful, governments around the world are realising that whoever controls the frontier models controls a great deal else besides - including the pace of scientific research, the offensive and defensive edge in cybersecurity, and the information that hundreds of millions of people now treat as a first port of call.

That is not a capability any state wants sitting wholly in private hands, beyond its reach. Reporting suggests the administration had intended Fable 5 to serve as the first test case for a forthcoming AI guardrails executive order. In other words, the Fable shutdown may indeed be a proof of concept for a permitting regime, where deploying a frontier model becomes something closer to exporting a weapons system than shipping software, licensed lab by lab, model by model, at the government's discretion.

That said, a permitting regime only works on the players who show up to ask permission – i.e., centralised AI service providers like Anthropic, OpenAI and Google. As AI consumers become increasingly cognizant of growing government surveillance, the demand for decentralised and open-source alternatives continues to rise. AI consumers are now starting to experiment with running their own models in a fully local setup.

Notably, we saw a volley of announcements from the open-weights ecosystem, just hours after the Fable and Mythos bans were announced. The first and biggest one was the release of GLM-5.2 – a fully open-weights model released by the Chinese lab ‘Z.ai’ under a permissive MIT licence.

Notably, the model reportedly ranks first among open-source models on long-horizon coding tasks and comes within a point of frontier proprietary systems. It also reportedly costs a sixth of what frontier models charge to run and could be self-hosted, although the hardware requirements are substantial. Similarly, we also saw Cohere ship North Mini Code and Moonshot ship Kimi K2.7-Code the very same day the order arrived.

While the capabilities of GLM-5.2 are yet to be independently verified, the point is that the open-weights ecosystem is grasping at every opportunity to overtake their fully centralised peers. Grayscale's head of research, Zach Pandl, also stated that the demand for permissionless alternatives should grow as a result of the Fable ban episode. Notably, Bittensor's TAO, the largest pure-play decentralised AI token, surged roughly 30% on the news of the Fable ban. Though, it’s also worth noting that TAO has had some controversy around its decentralisation claims.

That said, the field that benefits is broader than Bittensor. For instance, Venice, a privacy-focused platform built by ShapeShift founder Erik Voorhees, distributes inference across independent operators so that prompts are never logged, with its VVV token on Base staked for access rather than metered per request. Nous Research ships open Hermes models and runs Psyche, a network for genuinely decentralised training coordinated on-chain. Render and Akash supply the decentralised GPU marketplaces. NEAR pushes the agent layer. All of these projects keep the permissionless access layer alive. The more tightly Washington squeezes the centralised labs, the more it advertises why the decentralised alternatives exist.

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📖 Quote of the Week 📖

"Thinking is the hardest work there is, which is probably the reason why so few engage in it." - Henry Ford

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.