CORECORE Price

The U.S. Treasury announced on August 19th an expansion of its liquidity support repurchase operations for long-term bonds. The single-operation limit for older, off-the-run nominal coupon securities in the 10-20 year and 20-30 year maturities will be increased from $2 billion to at least $4 billion, effective from September 9th until the end of the current quarterly refunding on November 4th. The market reacted positively to the news, with yields on 10-year and 30-year Treasury notes falling. This action is seen as a key relief for assets like tech stocks, long-term bonds, gold, and cryptocurrencies, as a lower long-end yield reduces discount rate pressure on valuations. However, analysts caution against interpreting this as a form of quantitative easing (QE). The operation specifically targets less liquid older bonds to improve market functioning, unlike QE which involves the Federal Reserve expanding its balance sheet. The move is viewed primarily as a signal that the Treasury is unwilling to let liquidity deteriorate in the long-end of the bond market, prompting short-covering and a relief rally. Its impact is constrained by the scale (a potential maximum of around $14 billion in additional repurchases this quarter), funding sources that may shift pressure to other maturities, and overarching macro factors like inflation and Fed policy. The sustainability of the resulting market rebound will be tested by the Treasury's November quarterly refunding statement. If it includes sustained repurchases and a slowdown in long-term net issuance, the valuation support for long-duration assets could persist. If not, the operation may prove to be merely a tactical measure to reduce short-term volatility without altering the long-term pressures from deficits and inflation.

A Bitcoin Core developer, John Atack, who has lived in El Salvador since 2022, shared a concerning anecdote about Bitcoin adoption in the country. While dining at El Zonte, a region known as "Bitcoin Beach," he paid with Bitcoin and was told it was the first such payment the establishment had received in a month. Staff explained Bitcoin payments, once common, have now virtually disappeared, with nearly all customers using cards. An employee even declined a Bitcoin tip, stating she had forgotten how to use her wallet and declaring "It's already dead." Atack emphasized this was a single observation but noted the employee had witnessed the payment evolution over three years. His comments sparked mixed reactions. Some disputed his experience, with one user confirming successful Bitcoin payments in the same area. However, Bitcoin reporter Juan Galt acknowledged an underlying "economic problem," arguing that expecting price appreciation makes using Bitcoin for everyday transactions counterintuitive to economic incentives needed for a circular crypto economy. Despite the concerning report, Atack also reflected that El Salvador remains a global leader in cryptocurrency adoption and progressive legislation, sometimes causing locals to take these advancements for granted. The story highlights the ongoing challenges of mainstream Bitcoin adoption for daily commerce, even in pioneering nations.

Core Lightning (CLN) developers have issued a critical security alert, urging users to immediately disable CLN nodes. A serious vulnerability has been discovered, with signed binaries for a fix expected within 48 hours and full disclosure within two weeks. While no fund losses or real-world exploits have been reported, developers strongly recommend taking nodes offline. This news coincides with a significant, ongoing decline in the Bitcoin Lightning Network's public channel capacity, which has dropped by 1,893 BTC (approximately 32%) over eight months, falling to 3,998 BTC. The vulnerability disclosure is part of a broader trend of AI-powered software uncovering critical bugs across the industry, including a recent firmware flaw in Coldcard wallets linked to the loss of nearly 2,000 BTC. The situation follows the recent closure of the Boltz swap platform due to sustained AI-based attacks, which disrupted services for other platforms like Aqua and Zeus. These events have heightened anxiety within the crypto community regarding the security of essential infrastructure.

**Summary:** The article argues that Bitcoin is the essential asset for navigating an era of unconstrained U.S. dollar debasement, driven by unsustainable American debt. The U.S. national debt, now exceeding $40 trillion and 123% of GDP, has entered a phase where its interest burden is mathematically unsustainable. With political constraints preventing real fiscal tightening, the only historical solution for a reserve currency nation is "financial repression"—suppressing real interest rates to slowly erode the debt's value through inflation. Gold has already demonstrated this playbook. Global central banks have made it their largest reserve asset, completing its transition from a peripheral hedge to a core holding. Bitcoin, operating on the same scarcity and monetary debasement thesis, lags significantly. Its market cap is only 5% of gold's, and its price relative to gold is at historical lows. However, the fundamental drivers are intensifying, institutional adoption channels (like U.S. spot ETFs) are now established, and major investors like Ray Dalio and Larry Fink acknowledge its role as a hedge against monetary instability. While short-term volatility is expected, the author posits that Bitcoin represents a generational opportunity akin to gold's repricing in the 1970s. The asymmetric bet lies in the vast gap between Bitcoin's current market size and the potential allocation from global institutional portfolios seeking protection from a deteriorating monetary system. The investment firm NDV presents its multi-year track record as validation of this thesis's investability.

Pre-Market Report Summary, September 7: Storage and equipment stocks were standout gainers on September 4, driven by sector-specific fund rotation, while broader indexes fell on rising rate expectations ahead of Friday's key CPI data. Market Recap: Major U.S. indices mostly declined on September 4 despite strong August job numbers (162K new jobs vs. 55K expected). The robust data pushed 2-year Treasury yields to a one-year high, increasing market expectations for a September rate hike. This raised the discount rate, weighing on long-duration tech stocks. The Russell 2000 rose 0.25%, while the Dow (-0.51%), S&P 500 (-0.38%), and Nasdaq Composite (-0.29%) fell. Top Performer: KLA Corp (KLAC) surged 7.32% to $185.60, adding $16.5B in market cap. Its five-dimensional score showed a perfect 100 for peer ranking, but only 44 for "trend position," indicating it's rallying from the lower half of its 52-week range ($90.67-$307.37). Volume was in line with its 30-day average, suggesting repositioning, not a volume-driven breakout. Sector Rotation: Gains were concentrated upstream in the semiconductor supply chain. Storage stocks (e.g., Micron/MU +6.10%, SanDisk +11.9%) led the move, with funds flowing to equipment makers like KLA and Lam Research (LRCX +5.12%). Downstream players (e.g., HPE -4.48%, Synopsys/SNPS -5.40%) declined, highlighting a chain-internal rotation, not broad buying. Nvidia (NVDA +0.84%) saw muted gains due to its already high price level. Key Insight: KLA's move was not driven by company-specific news but by expectations of future orders from storage expansion. Similarly, Constellation Energy (CEG +4.88%) rose on the theme of "locking in future output" via long-term contracts. Earnings Spotlight: In retail, Lululemon (LULU) plunged 17.4% despite beating quarterly profit estimates because it slashed full-year EPS guidance. Conversely, Abercrombie & Fitch (ANF) gained 4.3% after raising its annual EPS outlook. This underscores that stock prices react more to future guidance than past quarterly results. Week Ahead - CPI Focus: All eyes are on the August CPI report due Friday, the last major inflation data before the September 16 Fed meeting. July's readings were: Headline CPI +3.4%, Core CPI +2.5%. The key driver for the headline figure was energy (gasoline +24.6%), while core inflation is largely dictated by housing (+3.2%). The core reading's ability to hold at or below 2.5% will be critical for interest rate expectations and asset pricing.