Oil, The Fed, Strategy, And The Bear Market

— Macro conditions driving Bitcoin weakness: strong US dollar, rising Treasury yields, and insufficient fiat liquidity in global markets. Oil pricing under $75/barrel after US lifted 60-day Iranian oil sanctions; Strait of Hormuz remains operationally constrained despite MOU between US and Iran.

— Federal Reserve under new chair Warsh adopts hawkish rhetoric on inflation, but Mallers predicts rate hikes unlikely given fiscal constraints; US government structurally insolvent on baseline spending without currency debasement.

— MicroStrategy's preferred equity issuance creates capital structure misalignment in bear market: either Bitcoin must be sold, MSTR common shareholders diluted, or preferred dividend payments paused. Recent $335M capital raise using MSTR stock (not Bitcoin sales) bore dilution cost to common equity holders.

— Non-standard financial metrics introduced by Bitcoin treasury companies (proprietary MNAV threshold of 1.22x, custom Sharpe ratio using effective yield instead of total return) obscure true economic dilution; company earnings guidance repeatedly violated within weeks.

— Bitcoin's bear market persistence reflects insufficient systemic liquidity; price action tied primarily to US dollar strength, not Bitcoin fundamentals.

— Dollar strength is the primary driver of Bitcoin bear market conditions; monitor DXY chart as leading indicator for sustained downside or catalyst for policy reversal. Mallers predicts eventual rate cuts or stimulus once dollar strength threatens systemic solvency, though timing unknown.

— If holding MSTR or Bitcoin treasury equities, recognize that bear market capital structures systematically burden common shareholders while protecting Bitcoin holdings and preferred coupons. Dollar-cost averaging into Bitcoin in cold storage removes this structural asymmetry and avoids counterparty dilution risk.

— Fiscal dominance—not Fed policy—determines financial outcomes; near-term inflation transitory narrative likely precedes eventual currency debasement. Prepare for extended bear market until policy reversal signals renewed liquidity, but remain positioned via recurring purchases rather than attempting bottom timing.