Canary in the Coal Mine 🇯🇵

Edited by Aubrey Jesseau

Good day Bitcoiners!

Welcome back to the Beaver Bulletin, three minutes of Bitcoin signal in your inbox every week.

The biggest headline this week: President Trump nominates Kevin Warsh as the next Fed Chairman to replace Jerome Powell. X

Kevin Warsh himself has said: “I guess if you’re under 40, bitcoin is your new gold.” X

Not bad, Kevin. We give this comment a solid B+.

Though we would argue age has nothing to do with it. Saylor is well over 40 and is buying bitcoin like it’s the best form of money the world has ever seen. Wait a minute..

Politics aside, Trump seems determined to get lower rates and won’t stop until he does. As readers of this bulletin know, lower rates are good for bitcoin.

Enjoy another Saturday edition ☕

---

⚖️ Market

• Bitcoin dips back down to CA$114K. Beaver Bitcoin BTC-CAD
• Yesterday, $10 trillion was wiped out from Gold and Silver in 24 hours. This is the largest liquidation event in human history. Truly wild times. X
• Bitcoin’s Fear and Greed Index shifts further to Extreme Fear. X

🇺🇲 USA

• The US Senate Agriculture Committee advances the Digital Commodity Intermediaries Act. It’s the first time crypto market structure legislation has cleared a Senate committee. X
• President Trump: “We should be paying the lowest interest rate of any country in the world.” Kevin has his marching orders. Powell’s term expires in May 2026. X
• Powell confirms that rake hikes are off the table. Nothing stops this train! X

🌇 Institutions

• Eric Trump tweets: “American Bitcoin Corp is leading the charge, building America’s Bitcoin infrastructure faster than anyone. From #30 → #18 in just 4 months and 22 days.” The race among institutions accumulating Bitcoin’s scarce supply is on and if you are Donald Trump’s son you can run faster. X
• Steak n Shake’s “Burger-to-Bitcoin” transformation continues. They increased their Bitcoin exposure by $5 million in notional value this week. Delicious. X
• CZ says: “Binance handled $14 billion in outflows. No bank can handle that much.” This is honestly impressive. X
• BlackRock has filed for the iShares Bitcoin Premium Income ETF, a proposed “sequel” to its IBIT ETF. The product aims to generate monthly income by using a covered-call strategy, selling options on BTC futures to earn yield. X
• Strategy acquired 2,932 BTC for $264 million at US$90,061 per bitcoin. As of today, they hodl 712,647. Business as usual. X

Merch drop! Shoutout to Joel. Fix the money, fix the world.

---

With Beaver you have four ways to buy bitcoin, whether you’re buying for the first time or going all-in.

• Instant Buy: from $150 to $20,000 via Interac e-Transfer.
• Recurring Buy: a fully automated buy from your bank account.
• Large Buy: up to $100,000 via bill payment or wire.
• OTC: for more than $100K there’s, Beaver Plaid.

---

This was an interesting article by James Lavish, a former hedge fund manager and CFA with over 25 years on Wall Street, titled “Is Japan About to Blow Up the Global Financial System?”

He’s generally writing for a more macro-educated audience, while over here we like to (at least try to) keep things simple. Let’s close out with a short summary of James’ piece 💪

---

For decades, Japan kept interest rates near zero, making it the cheapest place in the world to borrow money. Big investors took advantage. They borrowed yen for almost nothing, converted it to dollars, and invested it in higher-returning assets like US stocks and bonds. Trillions of dollars flowed through this trade, propping up markets around the world.

Now Japan has a problem it hasn’t faced in 40 years: inflation. Prices are rising over 3% annually. And when there’s inflation, lenders don’t want to lend at 0% (they’d be losing money). So they’re demanding higher interest rates.

This puts Japan in an impossible position.

Japan’s government debt is over 250% of GDP, the highest in the developed world (for comparison, the US is around 120%). When you owe as much as Japan does, even small increases in interest rates are devastating. James Lavish estimates that every 1% rise in rates adds 2.5% of GDP to Japan’s annual interest bill.

Here’s the rub..

This week, Japan’s bond market started to crack. The yield on Japan’s 40-year government bond spiked above 4%, the highest in over 30 years. This is the market demanding more compensation for the risk of lending to Japan.

So what happens next? Japan is stuck between a rock and a hard place. They can’t default without collapsing their financial system. They can’t cut spending enough to matter. The most likely path is they print more money to pay their bills, which devalues the yen, destroys purchasing power and increases their debt even more.

Why should we care? Because if Japan’s bond market blows up, it won’t stay contained. Anyone who borrowed cheap yen will have to sell assets to pay back those loans. That means massive selling pressure on stocks, bonds, and real estate, everywhere.

More importantly, Japan is a warning sign. Every heavily indebted country, including Canada and the US, is on the same path. Japan is just further down the road.

When governments can’t pay their debts, they print. When they print, currencies lose value. And when currencies lose value, people flee to hard assets like gold and bitcoin.

And as we know, Bitcoin is the new gold.

Have a great weekend 🙏

Shravan

---

The information provided in this bulletin is for informational purposes only and does not constitute financial advice.