Research Reports

The U.S. economy still shows late-cycle resilience, labor markets are cooling gradually rather than breaking, and elevated asset prices continue to support activity. But the memo argues a more difficult phase is forming as inflation re-emerges through energy and producer prices while markets reprice toward higher rates rather than cuts. This sets up a potential late business cycle "checkmate" for the Federal Reserve, in which supply-driven inflation and softening employment begin pressuring both sides of its mandate at once. The recommended posture is defensive positioning with tactical deployment into periods of weakness, since the cycle is more likely to end through a gradual, drawn-out process than an imminent recession.

Bitcoin has dropped roughly 50% from its late-2025 peak of ~$126k to the mid-$70k range, the memo argues this is only a partial reset of a late-cycle environment defined by restrictive liquidity, weak participation, and narrow market breadth. The recommended posture is capital preservation with selective tactical deployment, since the adjustment is more likely to continue through prolonged consolidation ("time-based capitulation") than a single decisive move lower.

The macro environment reflects a late-stage business cycle with tightening liquidity and rising financial fragility. Speculative excess in crypto has been unwinding for several years as retail participation declined and altcoins underperformed Bitcoin. Recently, risk has started spreading to traditional markets, with equities weakening significantly relative to gold. Additional pressures, such as a stronger dollar and higher oil prices, may further tighten financial conditions. However, the labor market has not yet shown the sharp deterioration that usually signals the start of a recessionary feedback loop.

The macro environment in early 2026 reflects restrictive digestion rather than early-cycle expansion. Quantitative tightening concluded in December 2025, yet liquidity conditions remain constrained by elevated real yields, a policy rate that remains above market-implied neutral, and the potential for renewed dollar strength. Markets can rally on the belief that tightening is over, but sustained risk expansion typically requires a meaningful easing impulse. At present, the slope of liquidity has flattened, yet the conditions that historically support broad speculative leadership are not clearly in place

Bitcoin appears to have completed its 2023–2025 market cycle and entered a late-cycle digestion phase similar to mid-2019. Liquidity, participation, and on-chain dynamics suggest that rallies are more likely to be tactical than the start of a new sustained bull market.

This report develops an asymmetric quantile framework for Bitcoin's long-run price distribution and uses it to place a familiar observation, diminishing returns across cycles, on a formal statistical footing. After documenting that the dominant power-law and stock-to-flow models have carried systematic optimistic bias out of sample, the paper asks whether allowing the upper and lower tails of the price distribution to curve differently better describes Bitcoin's history. It finds a statistically significant asymmetry: the upper tail compresses meaningfully across cycles while structural support remains close to a straight-line power law. The estimate is a full-sample distributional summary across four halving cycles, intended as a characterization of how Bitcoin's conditional price distribution has evolved, not a forecast, a price floor, or a measure of portfolio loss risk.

This report was written in early 2020, during a period when Bitcoin’s price action was still largely driven by retail and before Bitcoin began to be evaluated seriously within institutional portfolio frameworks. Rather than attempting to forecast short-term price action, this report focused on understanding Bitcoin from a risk-management perspective, emphasizing diminishing returns, volatility compression, and changes in market structure across different phases of the market.

Ethereum Letters was written in early 2020, when Ethereum’s market role, economic design, and long-term relevance were still highly uncertain. Ethereum had a shorter trading history than Bitcoin, greater narrative dispersion, and significantly higher volatility. The objective of this report was not to make strong directional claims, but to examine whether a risk-aware, macro-style framework could be applied to an asset with more complex and changing drivers.