Make-it Capital Edition #56

Anyhow, The core idea of BPL is that Bitcoin’s price scales approximately as a power of its age (time since the Genesis Block on January 3, 2009). On a log-log plot (log price vs. log time), this appears as a roughly straight line. This relationship has held with high explanatory power across Bitcoin’s price history from 2010 onward.

Now, on to how it can be used to provide some guidance on where this market is going: analysts fit a central power-law trend (fair value) and add bands, often based on residual standard deviations in log space. Most live models place the central trend (fair value/median) in the $110,000–$141,000 range today, with the lower band touching $58,000 and the upper band reaching up to $285,000. Thus, according to BPL, Bitcoin is currently in an accumulation or deep-value zone relative to the long-term trend. In any case, following BPL, it appears Bitcoin is significantly undervalued right now. Here is a reminder from Elon Musk: “Bitcoin is based on energy, It is impossible to fake energy.”

Further, VanEck’s Head of Digital Assets, Matthew Sigel, recommends that his clients have full exposure to the crypto markets by October 2026. He’s hinting at what’s known as the four-year cycle, the idea that bull and bear markets revolve around Bitcoin’s halving cycle. The halving is when the amount of Bitcoin issuance is cut in half every four years. It’s an abrupt change to the asset’s scarcity, and the next halving is set to take place around April 2028.

The theory also suggests that markets bottom around 500–550 days before the halving. That would point to a window between the end of September and mid-November 2026. There are a few catalysts even before that, with the CLARITY Act (more on that later) being the elephant in the room. At the same time, there is so much development pushing the traditional financial system on-chain, and big asset management firms such as BlackRock and Apollo Global Management are already taking positions even in smaller-cap tokens. It seems the bear now prefers chasing salmon rather than scaring people.

Another price indicator that has proven valuable recently is Bitcoin options skew. Skew essentially tells us how much fear there is in the market. The higher the skew, the greater the fear and the higher the premium traders are willing to pay for downside protection. In other words, protection in the form of put options is relatively more expensive than optimism in the form of call options.

When Bitcoin closed near the lower band of the Bitcoin Power Law around $59,500 about one month ago, sellers were exhausted. They were running out of firepower. And more recently, we got a big signal from skew. That’s because for more than a year, skew has leaned bearish – puts were more expensive than call options. When skew flips to where calls are more expensive, after a long period like we’re seeing today, price begins a new trend. The last time we saw this was in January 2023. Price was below $20,000 per coin. Less than two weeks later, price started its march to break $100,000 per coin.

The options market is less defensive than it was in the first half of July. Volatility is compressed, short-dated put demand has unwound meaningfully, and traders are more comfortable holding bullish call exposure. However, pure pricing still shows a modest put premium rather than a full flip into call skew. It seems to only be a matter of time, though.

We are witnessing a fundamental shift in the crypto investor base, with the previously dominant retail participation becoming increasingly irrelevant. Thus, we should ask ourselves: Why has retail participation in crypto noticeably declined in recent years?

Retail investors seeking high-risk opportunities have shifted toward sports betting and prediction markets, as repeated cycles of hype followed by crashes have fostered caution and led to “crypto market fatigue.” Additionally, democratized access to public markets has made investing in cutting-edge sectors, such as artificial intelligence stocks, more attractive. These sectors offer similar narratives of innovation and growth potential, comparable risk profiles, and potential returns, but with easier access, lower perceived complexity, and less volatility stigma.

The crypto market now appears to have matured toward institutional-led dynamics. Spot Bitcoin ETFs and corporate treasuries drive much of the capital flow, with estimates suggesting that institutions account for approximately 95% of inflows in recent periods, while retail participation has dropped to 5%.

The monthly total net flow in US dollars to spot BTC ETFs has turned positive after two months of bleeding red, with July seeing inflows of roughly $172 million. The same is true for ETH, with monthly net inflows of roughly $365 million. By the way, the ETH/BTC ratio just powered through its 200-day moving average at 0,294, which historically has been very bullish for ETH. Will history rhyme?

Let’s move on to the now ever-present artificial intelligence and its influence on crypto markets. According to a study by DWF Ventures, as of April 2026 (unfortunately, these are the latest figures available), AI agents (including automated/agentic activity, bots, MEV/arbitrage automation, yield optimizers, stablecoin routing, and related machine activity – so not purely fully autonomous reasoning agents) accounted for approximately 19% of total on-chain activity across major blockchains. There were 1.4 million active AI agent deployments, which generated over $450 million in quarterly on-chain fees (Q1 2026 data). This 19% represents a sharp rise from near zero in late 2024, fueled by frameworks for agent wallets, cryptographic identities, and machine-to-machine payments (via stablecoins and protocols like x402). In any case, AI and its agents represent one of the cleanest “product-market fit” stories crypto has had in years: software that needs to transact autonomously maps almost perfectly onto programmable money. The infrastructure is maturing rapidly in 2026, and early real usage exists. That makes it a high-probability contributor to the next meaningful expansion phase – particularly for altcoins and application-layer activity.

Here is how AI itself views this development five years down the road: “It is plausible that machine/agent activity becomes the majority (50–80%+) of transactions on public blockchains in aggregate, especially if agentic commerce scales toward the multi-trillion-dollar range projected by some consultancies for the broader economy. Human activity remains important for high-stakes or novel decisions, but routine economic throughput is dominated by agents.” Mature agent economies emerge with identity, reputation, insurance, and dispute mechanisms. Agents hold, allocate, and compound capital; participate in markets; and form complex multi-agent systems. On-chain settlement becomes a default rail for a meaningful slice of machine-to-machine (and agent-mediated human) commerce.

Chains that win the agent traffic capture sustained fee revenue and network effects. Crypto’s role as “money for machines” is more established. Overall market size is larger, with less pure speculation and more usage-driven value. And: “The distinction between ‘AI crypto’ and the rest of crypto blurs; agent-native design becomes standard for new protocols.” The biggest upside is if agents drive genuinely new economic activity on-chain rather than just automating existing flows. The biggest downside is if reliability or regulatory issues keep most high-value agent activity off public networks. So, it boils down to regulatory issues again. Reason enough to draw attention to the latest developments with the digital asset market framework bill called the CLARITY Act.

About one year after the passing of the GENIUS Act, the CLARITY Act text went public on July 22. According to Ben Lilly, there was an immediate wave of telling responses falling into three camps. There are those who are generally optimistic and press a sense of urgency to move things along. There are the pessimists who say the current ethics language in the bill is insufficient. And then there’s camp three, which one might consider the realists.

Camp 1 is almost all the Republicans. Many echo the sentiment that there is a need to make America the home for innovation. They also point to the progress made in other countries in writing laws around digital assets well before the United States. Even Goldman Sachs CEO David Solomon came out in support of the bill. This came in addition to prior endorsements from Fidelity, BlackRock, Charles Schwab, and Grayscale among others. This marked a stark split from banking trade groups, which historically have been very much against the bill. One could have expected the Republican support, and now we have the added (and somewhat surprising) benefit of banking support.

Camp 2 is mostly represented by a bucket of Democrats who are against the bill. This includes the usual suspects, such as “anti-crypto army” Senator Elizabeth Warren and several others. These are the constant pessimists of the group, who have been fighting it tooth and nail every step of the way. Frankly, nothing will change their minds.

But there is a group of pro-crypto Democrats (Camp 3) who have generally favored a legislative framework for crypto and blockchain, but who have come out in opposition to the way the text is currently written. This is the main group to watch. They’re the swing votes and represent a group that is open to negotiations. They are the most likely to change their tune once the bill hits the floor.

Camp 3’s main issue is the proposed ethics language – a valid concern given some questionable ethical issues around some of the Trump family’s crypto dealings. The ironic part of all of this is that the Democrats no longer want the President to continue what he’s doing as it pertains to profiting off crypto, but there are currently no definitive laws against what he does now. Which is to say, if the CLARITY Act doesn’t pass, nothing changes here. It would almost be acting against their own interests not to vote in favor of it.

As such, as long as the President gives some leeway in relation to his family’s crypto activities, passage of the Act might even happen before the Senate summer break. I, for one, will keep my fingers crossed. May I leave you with Friedrich Nietzsche: “Whoever knows he is deep strives for clarity; whoever would like to appear deep to the crowd strives for obscurity.”

Brent briefly pushed back above $100/bbl (the first time in nearly two months) before slipping sharply on pause/ceasefire hopes. Forecasts were revised lower (S&P Global now sees Brent averaging about $87/bbl for 2026), but the market remains highly sensitive to any re-escalation that could disrupt the roughly 20% of global oil that normally flows through Hormuz. Refined products have been even more extreme in some periods (e.g. Russia importing refined products from India after sending raw oil there first). This has kept energy as the key driver of broader commodity and inflation narratives.

One cannot avoid the question: Why is gold not behaving as the safe haven investment it is perceived to be, especially given all the geopolitical tension? After hitting all-time highs above $5,500/oz earlier in the year, it fell sharply (roughly 25% from the peak) and has been range-bound around the $4,000 level for much of July. Reasons can be found in macro headwinds – particularly higher real yields, a stronger dollar, and shifting Fed expectations.

First, the US-Iran conflict pushed oil prices higher, reigniting inflation fears and boosting expectations for higher interest rates. Real (inflation-adjusted) yields rose – for example, 10-year TIPS yields moved from around 1.65% earlier in the year toward roughly 2.2%+. Gold pays no yield or dividend, so higher real rates increase its opportunity cost.

In addition, the Dollar Index (DXY) strengthened notably from early-year levels. Because gold is priced in dollars globally, a stronger USD makes it more expensive for overseas buyers and typically pressures its price. This pattern is not unprecedented. Similar dynamics appeared after the 2022 Russia-Ukraine invasion: an initial gold rally gave way to pressure once the energy and inflation shock pushed yields and the dollar higher.

Gold tends to perform best as a safe haven when real yields are falling and the dollar is weak – not automatically in every geopolitical episode, especially during supply-driven energy shocks that keep central banks hawkish. Many analysts view the current environment as one of consolidation or range trading near current levels (with $4,000 acting as a key psychological and technical area) rather than a permanent loss of safe-haven status. A shift toward lower real yields, a weaker dollar, or clearer evidence of economic deceleration could very well restore stronger upside for gold.

The Sprott Uranium Miners ETF (URNM) tracks an index of companies engaged in the exploration, mining, and production of uranium. It has fallen roughly 41% since the end of January as the stocks of uranium mining companies have sold off across the board. One might assume that the uranium market is weakening and that the prospects of a nuclear energy revival are in doubt. But you have to dig a bit deeper to understand what’s actually happening.

The long-term uranium contract price closed June at $94 per pound – its highest level in 18 years. That means utility companies are now willing to pay higher prices to lock in uranium supply years in advance. This is the clearest sign yet that buyers expect the physical market to stay tight (or get tighter), since the long-term price is set by actual utility contracting decisions, not day-to-day trading sentiment. So, the price of physical uranium is going up, but the stocks of uranium mining companies are going down. What gives?

Annual demand for physical uranium is around 180–190 million pounds U₃O₈ (roughly 69,000–73,000 tonnes of uranium / tU) and is expected to increase to over 300 million pounds by 2040. Yet current annual production is only about 160 million pounds globally. Given current stockpiles, the industry would need to roughly double annual production just to keep pace with rising demand. But given how difficult and time-consuming it is to bring new mines into production, such a production increase seems very unlikely. Therefore, it’s a good bet that the physical market is right and the equity market is wrong. I’d endorse the US entrepreuer Jim Rohn here: “Let the views of others educate and inform you, but let your decisions be a product of your own conclusions.”

While energy and precious metals have been chaotic, copper has shown relative resilience and underlying bullish fundamentals. Prices have recovered or held firm, supported by low inventories (especially in China), tighter physical markets, shipments related to potential tariffs, and long-term demand from AI data centers, electrification, and the energy transition. Supply constraints (lower grades, project delays, and indirect cost pressures from energy disruptions) remain a key theme, with some banks and analysts lifting 2026–2027 price forecasts. It stands out as a more “structural” story compared with the pure geopolitics of oil.

In fact, according to S&P Global, copper demand will rise 50% by 2040, putting annual demand at around 42 million metric tons. The reason is simple: conventional data centers require about 5,000 to 15,000 tons of copper, but an AI data center needs up to 50,000 tons per site – equal to the amount of copper in about 600,000 electric vehicles. Importantly, copper production isn’t expected to keep up. S&P projects production peaking at 33 million metric tons by 2030, leading to a deficit of about 10 million metric tons by 2040.

The top three commodities in July 2026 were Styrene (+19%), Urea (+16%), followed by Oat (+14%). The bottom three start with Natural Gas (-16%), followed by Lithium (-11%) and Orange Juice (-10%).

So, let’s turn to our current elephant in the room: the end of the AI boom. Chinese competitors such as DeepSeek and KimiK3 have swamped the scene with cheap and highly competitive models demonstrating near state-of-the-art (SOTA) performance on many benchmarks, calling into question the reasoning behind the hundreds of billions spent on infrastructure by their US counterparts. Add to that the phenomenon of circular investments, and all hell broke loose for AI-related investments in July.

Let’s dig in. First a definition: A circular investment (or circular/vendor financing) is a looped funding arrangement where one company invests capital in another, and the recipient then spends a significant portion of that money buying products or services from the original investor. Circular investments  in AI are a real and growing structural feature of the boom – not a pure scam, but not harmless either. They deserve serious scrutiny precisely because the scale is unprecedented and the interconnections are tight. So, let’s delve deeper, right after examining the current carnage.

In fact, approximately $2 trillion in market capitalization were lost for the core “AI trade” (primarily the Magnificent Seven) from the late-May 2026 peak to the recent trough in July 2026. Add to that another roughly $200 billion in losses at key data center suppliers in the same time frame. To put this into perspective, $2.2 trillion equals the total market cap of all cryptocurrencies right now. Thus, the recent AI bear market was as bad as if the entire crypto market had totally disappeared.

Back to our circular investment loops and to make things more concrete, here are some prominent select examples: Microsoft’s large stake in OpenAI plus OpenAI’s massive Azure commitments; Nvidia’s investments and stakes in OpenAI, CoreWeave, and others, combined with those entities buying (or being financed to buy) Nvidia GPUs, sometimes with Nvidia backstopping unused capacity; the recent acceleration, including Nvidia’s reported discussions around very large packages (up to $250 billion) tied to OpenAI compute and broader infrastructure with partners like SK Group (valued up to $500 billion); and similar loops involving Amazon/Anthropic, AMD/OpenAI (warrants plus chip purchases), Oracle/OpenAI data center deals, and others.

One gets the impression that Sam Altman’s OpenAI is most active in creating circular dependencies, along with all the related risks. Anyhow, this is classic vendor financing, amplified. It is distinct from pure fraudulent round-tripping (sham trades with no substance), but the economic substance can still be thinner than headline numbers suggest.

Then again, it is a well-known fact that AI training and inference are extraordinarily capital-intensive. Building the necessary data centers, power infrastructure, and silicon requires sums that exceed what most AI labs can raise or generate from end users in the near term. Circular structures accelerate the physical build-out, lock in supply, align incentives among a small set of players who depend on each other, and let big balance-sheet companies (Nvidia, Microsoft, Amazon, etc.) underwrite growth they believe in. Similar dynamics appeared historically with Intel Capital supporting the PC ecosystem or telecom equipment makers financing carriers in the late 1990s and early 2000s.

When the underlying technology delivers and end-user monetization eventually catches up, these loops can act as a flywheel. Real technical progress in models, real enterprise and consumer adoption, and genuine compute scarcity mean this is not pure vapor.

To wrap up: Circular investments are an efficient way to coordinate scarce capital and silicon in a frontier technology race, and they have helped push capability forward faster. They are also a leverage amplifier and a potential source of cascading losses if the gap between infrastructure spending and realized, profitable AI applications stays large for too long. The structure itself is not the bubble; the question is whether real economic returns materialize at the required scale and speed.

The healthy response is not blanket rejection or cheerleading, but continuous scrutiny of:

1. the quality and independence of the demand;
2. the actual cash economics behind the commitments; and
3. concentration risk around a few key nodes.

Markets price these things imperfectly until the cash flows either validate or refute the loops. In any case, the ice appears to be getting thinner. Be diligent, awake and aware out there. Here is Ralph Waldo Emerson: “In skating over thin ice, our safety is in our speed.”

Talking about thin ice: U.S. debt is about to hit $40 trillion around the beginning of September. If you were to stack $40 trillion worth of $100 bills, the stack would be more than 27,146 miles high. That’s also 130% of what the U.S. economy produced in 2025. For context, the Earth’s circumference is about 24,901 miles, so the stack would be taller than the distance around the planet.

It’s no wonder, then, that U.S. Treasury Secretary Scott Bessent is such an unspoken advocate of stablecoins. After all, he expects stablecoins to grow from their current $300 billion to $3.7 trillion by the end of the decade – and 99% of them ought to be backed by U.S. Treasuries: “A thriving stablecoin ecosystem will drive demand from the private sector for U.S. Treasuries, which back stablecoins. This newfound demand could lower government borrowing costs and help rein in the national debt. It could also on-ramp millions of new users – across the globe – to the dollar-based digital asset economy.”

A bit further south, to obtain $2.5 billion in financing from the International Monetary Fund (IMF), Bolivia was required to end its 15-year Boliviano (BOB) / US dollar peg. This forced move devalued the BOB by about 35% overnight (from 6.90 BOB for $1 USD to 10.65 BOB for $1 USD). To counter this, Bolivia is trying to figure out ways to attract dollars, and the most recent idea is to integrate Tether’s USDT into its national payment system. This would represent one of the most significant moments for stablecoin adoption. The ramifications would be that the USDT coin would circulate alongside bolivianos and U.S. dollars in the Bolivian economy. This is incredibly significant: stablecoins are becoming the currencies of countries. Such a move could be replicated by other high-inflation countries, clearly providing hefty tailwinds for Bessent’s goal of $3.7 trillion in U.S. Treasuries-backed stablecoins by 2030.

In closing, the top three major stock markets in local currency in Juli 2026 were HongKong (+13%), followed by Romania (+9%), and Singapore (+9%). The bottom three start with Vietnam (-13%), followed by Japan (-9%), and Venezuela (-6%).