Stormrake - Insights #BTC

Miner Capitulation and the AI Energy Pivot

Thu, 13 Aug 2026 14:34:35 +1000

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MARA Holdings, the world’s largest publicly traded Bitcoin miner, disclosed in its August 6 filing that it sold 23,093 BTC for approximately $1.63 billion across the first half of 2026, at an average price of $70,631. The sale reduced MARA’s Bitcoin holdings by 34%, from 53,822 coins at the end of 2025 down to 35,577 by June 30. The money went toward paying off debt and funding a move into AI and data centre infrastructure, including a $1.5 billion deal and a $600 million Texas project. MARA also dropped its old policy of never selling Bitcoin, in favour of a more flexible approach.

Worth noting, this selling isn’t happening right now - it already happened, spread out gradually over five months with the biggest chunk sold back in March. The market has already absorbed it and moved on. MARA isn’t alone either, miners across the industry sold more Bitcoin in the first three months of 2026 than they did across the whole of 2025. Several major mining companies have signed multi-billion dollar deals to host AI computing instead, showing this is an industry-wide shift, not just one company’s decision.

Evolving Economics and Infrastructure Diversification

Mining simply became less profitable this year. It cost miners close to $90,000 on average to produce one Bitcoin, while Bitcoin itself was trading between $65,000 and $70,000, a losing trade for a lot of operators. Some estimates suggest 15% to 20% of miners worldwide were losing money.

Rather than shutting down, most public miners are turning into broader energy and computing businesses. Several expect to earn most of their revenue this year from renting out computing power to AI companies rather than from mining Bitcoin itself. Think of it less as miners giving up on Bitcoin, and more as miners finding a second business line to stay afloat while conditions are tough.

Capitulation Signals Versus Network Security Realities

Miners being forced to sell at a loss is something that’s happened before, and it has usually shown up close to the bottom of a bear market rather than the start of something worse. Bitcoin mining got roughly 20% easier this year as struggling miners switched off their machines, one of the biggest easing periods on record. The two times this has happened before, in 2018 and after China banned mining in 2021, both turned out to mark a floor rather than a collapse. Weaker miners dropping out while stronger ones keep going is simply the system clearing itself out.

The total computing power protecting Bitcoin did drop by around 12% from its peak, but that’s a small dip by historical standards. When China banned mining in 2021, roughly half the network’s computing power disappeared overnight, and Bitcoin still recovered and went on to hit new highs. A gradual 12% dip spread across several months is a minor bump in comparison.

Algorithmic Recalibration

Here’s the clever part of how Bitcoin works. Roughly every two weeks, the network automatically checks how fast blocks are being produced and adjusts the difficulty of mining up or down to keep things running on schedule. When miners switch off, mining gets easier automatically, no one needs to step in and fix anything. That’s already happened this year, and it’s made mining more profitable again for the miners who stuck around.

An easier mining environment is also good news for smaller operators. As big US mining companies redirect their energy toward AI instead, mining is spreading out to other countries with cheap power, places like Paraguay, Ethiopia, and Oman have all become significant players this year. The US used to account for well over 40% of all mining, and that share is now levelling off. Spreading mining out across more countries and energy sources, rather than having it concentrated in one place, is a good thing for the network’s long-term stability, even though it’s worth keeping an eye on how much power sits with a handful of big mining groups.

Capitulation, Not Collapse

Put simply, this looks like a healthy reset rather than a warning sign. The $1.63 billion in Bitcoin sales happened months ago and the market has already moved past it. History shows that miners being forced to sell like this tends to happen near the bottom, not before something worse. Miners branching out into AI and energy is a sign of an industry adapting under pressure, not one that’s in trouble.

To navigate these shifts and secure your own position in digital assets, contact your dedicated Stormrake broker today.

Stormrake Spotlight: Pax Gold (PAXG) ($4,392)

PAXG continues to move sideways for the day, hovering just below the $4,400 mark but still in the green today by less than 1% as volatility starts to slow down. Continuation of the move would be a break above $4,400, however if the top wick of today’s daily candle is any indication - a retest of $4,300 - $4,200 may still be on the cards before it continues to trend higher.

BTC/USD Key Levels and Price Action:

Bitcoin bears continue to wrestle the price below our short-term resistance of $63,861, currently placing BTC in the low $63,000 range this morning. If bears can maintain selling pressure, a sweep below $62,000 would be prime opportunity for further entries, although a move above the short-term resistance with conviction could spell for sustained higher prices. For now, the tug-of-war continues to define trend over the next few weeks.

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*All prices are denominated in USD unless stated otherwise*

Written by James Ryan

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Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

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By the Time It's Confirmed, You've Already Missed the Best Part

Wed, 12 Aug 2026 14:35:58 +1000

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This range is showing the same level of choppiness we saw only once before, right after the generational cycle low was set in November 2022. Look back at that period and Bitcoin sat in a similarly directionless range for around two months before the trend finally shifted. The current range has now run for roughly two months as well. That similarity matters more than it might first appear, because of what happened next in 2022, and because of how long it took the market to actually believe it.

What 2022 Actually Looked Like From the Inside

Bitcoin bottomed near $15,500 in November 2022, at the tail end of a long, grinding, choppy stretch that gave almost nobody a clean signal to act on. There was no bell that rang, no single candle that stamped the low as official. What followed that subtle, unremarkable floor, forming well before anyone expected it to solidify, was one of the strongest multi-year rallies in the asset’s history, carrying price to $126,271 by October 2025, a gain of roughly 716% from that low.

Here is the part worth sitting with. The people who captured that entire move were not the ones who waited for confirmation. Confirmation, in the sense most participants actually wait for, a clear established trend, positive headlines replacing negative ones, general agreement that the bottom had held, did not arrive until price had already recovered a large share of that eventual gain. By the time the story felt safe to believe, a significant portion of the best returns were already behind, not ahead.

Why Choppy Ranges Are the Setup, Not the Warning

Ranges like the current one get read by most participants as a warning sign, an absence of direction treated as an absence of opportunity. Read against 2022, the opposite framing holds up better. A prolonged, directionless chop with low volatility is precisely the environment that has preceded the sharpest subsequent trend shifts, not despite the uncertainty but because of it. Uncertainty is what keeps the crowd on the sidelines long enough for the actual move to begin without them.

This current range has almost matched the rough two month duration of its 2022 predecessor. The 52-day duration from 2022 isn’t measure from the absolute low to a higher low in price either - rather from absolute low to the confirmed breakout. In other words; confirmation of the move after it’s happened, where gains are being captured by the accumulation buyers already.

This similarity alone is not a guarantee of an identical outcome. It is, however, a genuine echo of the exact conditions that sat directly beneath one of Bitcoin’s largest rallies to date, and echoes like this are worth taking seriously rather than dismissing as coincidence, especially since we’ve mirrored the 2022 bear market eerily closely thus far.

The Cost of Waiting for Certainty

Waiting for certainty feels like the safe choice. It rarely is the free choice. Certainty, once it exists, is retroactive. It shows up only after price has already moved far enough that the outcome looks obvious in hindsight, and by definition, that movement has already happened by the time it arrives. Every point of that move captured before the crowd feels safe to believe it is a point of return that conviction earned and hesitation did not.

That is the real lesson sitting inside the 2022 comparison. The setup that produced a 716% rally did not look like a setup at the time. It looked exactly like this: choppy, tiring, directionless, easy to dismiss while the crowd chased assets that had already captured a significant portion of their moves. The reward went to those willing to act inside that discomfort rather than waiting for it to resolve into something that felt obvious.

History does not hand out clean signals in real time. It hands them out in hindsight, once the move is already priced in and the crowd has caught up to what conviction holders already acted on. The current range matches the shape and duration of the exact setup that sat beneath a 716% rally last cycle. Waiting for that to become undeniable before acting has a cost, and that cost is measured in precisely the gains that occur between the subtle bottom and the point everyone agrees it was one.

Stormrake Spotlight: Pax Gold (PAXG) ($4,362)

PAXG has started that small correction we mentioned may be a possibility yesterday, reaching a local peak of $4,425 throughout the day with a small pullback from profit-takers beginning. Bulls may defend the line at either $4,320, or they’ll want to see cheaper prices around the $4,200 mark. Either way, that last rally has begun to confirm a breakout, so trend is on your side to be bullish for Gold as it stands currently. Invalidation would be an entirely new swing low below $3,900.

BTC/USD Key Levels and Price Action:

The bears have come in at the nick of time to get BTC below the aforementioned $63,861 support, now flipped short-term resistance. This means the market is providing more time to accumulate at these cheaper prices, as opposed to a renewed and prolonged cascade lower. Accumulation is a range, and being able to execute on the lower end, closer towards $62,000-$61,000 is a gift, rather than a given. Accumulation is time to do exactly that - accumulate. Bitcoin’s history demonstrates the cost of opportunity for those that hesitate in these ranges is far greater than the price to enter at these levels.

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*All prices are denominated in USD unless stated otherwise*

Written by James Ryan

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Bear Markets End When Bad News Stops Moving Price Lower

Tue, 11 Aug 2026 14:44:39 +1000

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An established principle across financial markets holds that bull markets peak when positive catalysts fail to push valuations higher, while bear markets conclude when negative headlines no longer drive prices down. Observing this dynamic unfold in real time provides an invaluable gauge for market sentiment, especially when a severe headline tests the market’s structural integrity.

That exact scenario unfolded recently. Between late July and early August 2026, a five-year-old firmware vulnerability in Coldcard hardware wallets was exploited to drain roughly $100 million in Bitcoin across more than 5,000 addresses. This event represented a severe headline for self-custody proponents, as a silent, undetectable defect compromised holdings that owners believed were entirely secure. Under the market dynamics of the 2022 bear market, an exploit of this magnitude would have triggered widespread panic and aggressive liquidations. Instead, Bitcoin absorbed the headline and maintained a structure of printing higher lows in price.

The Structural Parallel to FTX

A compelling historical parallel exists in the collapse of FTX in November 2022. The downfall of that $32 billion exchange stands as one of the most damaging events in digital asset history, occurring near the trough of the previous cycle bear market. Looking back after Bitcoin subsequently reached fresh record highs, the collapse of FTX appears as the failure of a specific human institution rather than a structural failure of Bitcoin.

During the 2022 crisis, the Bitcoin protocol operated flawlessly, validating transactions and enforcing programmatic scarcity without interruption. The failure resided entirely within a centralised corporate entity misusing customer deposits outside the rules of the blockchain. The market panic reflected a temporary loss of confidence in human intermediaries rather than the underlying monetary asset.

Distinguishing Third-Party Failures from Protocol Integrity

Analysing the Coldcard exploit through the same lens reveals an identical pattern. Bitcoin’s consensus mechanism, blockchain ledger, and 21 million coin supply cap functioned precisely as designed. The vulnerability existed within device firmware code introduced in March 2021 that compromised random number generation. This was a manufacturer code defect rather than a flaw in Bitcoin’s cryptography.

Every major loss event across digital asset history, including Mt. Gox, BitGrail, FTX, and Coldcard, represents a failure of centralised human infrastructure built around the network. Bitcoin’s open ledger remains completely uncompromised, with zero double-spends or falsified balances since the genesis block in 2009. Blaming the base protocol for a hardware vendor’s firmware bug resembles blaming physical gold for a faulty lock on a bank vault.

Hindsight is Twenty - Twenty

Looking back at any prior bear market bottom from the comfort of a subsequent bull run, the price trajectory appears clean and almost inevitable. Retrospectively, market participants easily declare that the bottom was in, panic was overdone, and accumulation was the obvious choice. That clarity exists entirely because the ending of the story is already known.

During November 2022, the collapse of FTX did not feel like a discounted buying opportunity disguised as a short-term crisis. It felt like an existential event with no immediate guarantee that market structure would not deteriorate further. Acting with conviction in the middle of genuine fear and headlines predicting systemic failure remains extraordinarily difficult.

If executing during maximum fear were simple, every market participant would capture generational returns, eliminating the premium rewarded for taking that risk. Investors who accumulated through the depths of the 2022 panic without knowing the future outcome captured the full scale of the subsequent recovery. That financial reward reflected compensation for tolerating severe psychological discomfort rather than possessing superior market information.

The Coldcard exploit represents this cycle’s live test of that exact principle. Nobody enjoys the luxury of knowing the eventual outcome in real time. Bitcoin ultimately awards each investor the exact entry price their conviction and risk tolerance earned. Selling into fear yields a price that reflects hesitation. Accumulating through severe headlines yields an entry that reflects long-term discipline. Experiencing the discomfort of uncertainty remains an inescapable prerequisite for capturing macro market rewards.

Desk Take and Strategic Execution

When severe negative headlines fail to break market price structure, it signals that sell-side exhaustion has reached an advanced stage. Coldcard’s firmware defect represented a serious operational failure for hardware self-custody, yet Bitcoin’s order books demonstrated remarkable resilience.

To navigate market volatility and mitigate single-point-of-failure risks across digital asset holdings, connect with your dedicated Stormrake broker today to discuss our institutional-grade custody solution and disciplined spot execution frameworks.

Stormrake Spotlight: Pax Gold (PAXG) ($4,391)

PAXG continues it’s reign of dominance right now, as this breakout continues to move higher. Another green day totalling +1.47% currently is a good sign momentum has built in favour of the bulls now. Small corrections, and retests of support are healthy and to be expected on the rise up. If we see profit taking come in and PAXG retests the $4,200 range, this would be a great opportunity to accumulate if you missed the boat at our Key support zone between $3,900 and $4,000.

BTC/USD Key Levels and Price Action:

Bitcoin has made that small correction from our aforementioned Local trend resistance in yesterday’s morning note, however we’ve come right into our $63,861 support level this morning - still a higher low in price. This area for avid morning note readers will remember how much confluence this level has had over the last two months. Staying above this level means trend is in-tact to the upside, whereas below means further possibility of slightly cheaper prices in the short-term. The tug-of-war between bulls and bears over the next few days will be important in deciding that short-term direction over the coming weeks ahead.

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*All prices are denominated in USD unless stated otherwise*

Written by James Ryan

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BIP-110: The Fight Over Bitcoin's Block Space, Explained Simply

Mon, 10 Aug 2026 14:20:18 +1000

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BIP-110, formally called the Reduced Data Temporary Softfork, is a proposed change to Bitcoin’s rules that would temporarily limit how much non-financial data can be stuffed into a transaction. It targets things like images, text, or other files directly onto Bitcoin’s blockchain rather than using it purely for payments. Supporters say this data clutters the network, raises costs for people running nodes, and pulls Bitcoin away from its core purpose as sound, permissionless money. Critics say restricting what counts as a valid transaction sets a dangerous precedent, and that Bitcoin has no business deciding whose transactions matter more than others as long as the fee is paid.

What’s Actually Going On

Picture Bitcoin’s blockchain as a big shared filing cabinet where every drawer costs money to use. Most people use it to store simple, important paperwork, who owns what money. A smaller group has started using the same drawers to store photos, artwork, and other large files, because nothing in the rules stops them. BIP-110 is a proposal to put a temporary size limit on what can go in those drawers, so the cabinet stays focused on the paperwork it was built for.

The tricky part is who gets to decide. Bitcoin has no CEO and no head office. Changes only happen if enough of the people running the network, mainly miners, agree to switch the rules at the same time. Almost none of them did. A smaller group of committed supporters went ahead and enforced the new rule anyway, simply by refusing to accept blocks that didn’t follow it. That disagreement is what actually played out over the past two days.

What Happened This Weekend

Almost nobody backed this change. Heading into the weekend, only about 2.5% of miners were on board, nowhere near the 55% needed to make it official. None of the big mining companies wanted a bar of it.

On Saturday, the disagreement turned real. Two groups mined a block at the exact same spot in the chain, one following the old rules, one following the new BIP-110 rules. Bitcoin’s main network went with the old rules and kept moving. The small group backing BIP-110 broke off onto their own separate version.

Since then, it hasn’t been close. The main Bitcoin network has powered ahead, now more than two dozen blocks in front. The BIP-110 side, with only a tiny sliver of miners behind it, has barely moved. In plain terms, Bitcoin carried on as normal, and a small breakaway group is now sitting off to the side on their own, largely ignored version.

Where This Leaves Things

BIP-110 did not fail in the shadows. It failed publicly, in the most direct way possible, by attempting to force a rule change without the broad agreement Bitcoin has always required for this kind of change, and watching the vast majority of the network simply continue on without it. The proposal isn’t necessarily gone for good, its supporters may well try again, but this specific attempt has already played out, and the result is about as clear as these things get. Bitcoin’s main chain, secured by the overwhelming majority of the network’s mining power, never missed a beat.

What This Means for Stormrake Clients

None of this affected client holdings with Stormrake, and none of it required any action on our part.

Custody comes down to who controls the keys, and that never changed. What matters in a situation like this is simple: which version of Bitcoin does everyone, exchanges, businesses, other holders, actually agree is the real one. That was always the main chain, the one that kept working normally the whole way through. Stormrake watched this closely as it played out so clients didn’t have to think about it.

This is, in a smaller way, the same argument covered in earlier notes on Bitcoin’s protocol reliability. Governance disputes like this happen at the edges of Bitcoin, among developers, miners, and node operators arguing about optional rule changes. They do not touch the core ledger itself, which kept settling transactions exactly as it has every day since 2009, without pause, while this entire disagreement played out around it.

Reach out to your dedicated Stormrake broker today if you would like to discuss protocol governance, network security, or review your general digital asset holdings.

Stormrake Spotlight: Pax Gold (PAXG) ($4,337)

PAXG’s “bull hammer” candle that we identified in our Friday morning note just over a week ago has held true in being a bullish signal - this simple setup has seen PAXG rally, nearing +7% in just the last week. Strong bullish momentum off key support zones are what we expected to see, hence why the accumulation and choppiness leading up to this point at such levels - is in-fact actually a great signal of a healthy and stable market, despite feeling “boring” in the moment. Trend is starting to reverse back up now, whilst bears expecting lower might become disappointed their over-extended downside targets don’t hit…sounds familiar, doesn’t it?

BTC/USD Key Levels and Price Action:

Bitcoin is about to decide. This cycle’s bottoming FUD narrative, being the ColdCard Crisis came and went. Instead of making a lower low like the FTX collapse, BTC made a higher low around $62,200 instead. Now bulls and bears are fighting it out at the top end of the current range (green box), deciding whether we break through now or more accumulation in this price range over the last few months is required. Either way though, the market is looking healthy and primed on all timeframes now. Risk to reward continues to favour the bulls day by day as we grind closer to a breakout towards the upside. If we clear $67,000, bears will be punished and will need to FOMO in at higher prices eventually. Not ideal considering they’ve had two months to buy a clean bottoming accumulation pattern before the next generational run begins.

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*All prices are denominated in USD unless stated otherwise*

Written by James Ryan

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Mirror Mirror On the Wall

Fri, 07 Aug 2026 10:26:11 +1000

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We’ve discussed timing of bear markets before, and we remain just a couple of months out from what we estimate to be the end of this one. But what about price? The current cycle low sits at $57,800, a 54% drawdown from the October all-time high near $126,000. We’re sure many of you who were around for the previous bear have felt it’s been eerily similar.

The saying goes: history doesn’t repeat, but it often rhymes. That’s exactly what we’re seeing again.

Line this cycle up against 2021-22 and the resemblance is hard to ignore. Same shape, same rough proportions of euphoria and grind, but each time round the mirror is a little less brutal. 2021-22 saw Bitcoin fall from just under $69,000 to $15,500, a 77% peak to trough drawdown. This cycle’s 54% drawdown is shallower again, and shallower still than 2018’s 84% collapse. Each bear market has done less damage than the one before it.

What’s missing this time is the final leg. 2022’s bear market didn’t grind quietly to its low. It fell off a cliff when FTX collapsed in November, ripping another 20-odd percent off the price in days on the back of genuinely catastrophic news. That capitulation event is the piece some are waiting to see repeated before they’ll call a bottom, the “surely we get one more flush to $40-50k” crowd.

Whilst price isn’t at as large a drawdown as it was in 2022, the structure is nearly identical to what it was before the FTX collapse. Whether or not we get a catalyst for that final sharp spill over, it’s safe to say this bear market has echoed the previous one yet again.

We’d push back on the idea that we need that flush to call a low. Bear markets don’t end on a calendar date or a technical level. They end when the market stops falling on bad news. That’s the tell, not a chart pattern. Worth watching closely right now: CLARITY Act uncertainty, choppy macro data, an Extreme Fear reading on sentiment, plenty of ingredients for a scare this week, and price has largely shrugged. ETFs have been net buyers through it. That’s not nothing.

We’re not going to pretend we know whether $57,800 is the low. But the setup rhymes more with exhaustion of selling than with a market waiting for its FTX moment. Those sitting in cash for a sub-$50k print run the real risk of being the ones left on the sidelines when the news stops mattering.

More on this Monday. We’ll dig into exactly what “price stops falling on bad news” looks like in the data, and what it’s told us at past cycle lows.

Stormrake Spotlight: Pax Gold (PAXG) ($4,247)

Yesterday was constructive for PAXG despite closing red on the day. The fact it didn’t undergo a large pullback after the breakout is a strong signal that bulls are looking to build on this move. This is the first step in sustaining the breakout.

BTC/USD Key Levels and Price Action:

Momentum looks to be fading for bulls to build on the break above the key resistance level of $63.8k. We’d expect price to retest that level, and from there it’s anyone’s game.

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*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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Two Roads for Crypto Regulation: Moscow Legislates, Washington Waits

Thu, 06 Aug 2026 11:14:53 +1000

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Vladimir Putin signed Russia’s “On Digital Currency and Digital Rights” law yesterday, creating the country’s first fully regulated cryptocurrency market. From September 1, licensed exchanges, brokers, custodians and depositories, all supervised by the Bank of Russia, will let both retail and qualified investors trade approved crypto assets, with retail buyers capped at roughly $3,800 per year per intermediary after passing a competency test. Crypto is classified as an investment asset, not currency; domestic payments in crypto remain banned. Firms have until July 2027 to bring existing operations into compliance.

The framing matters as much as the mechanics. This is not deregulation for its own sake, it’s state capture of a market Russians were already using at scale. In the fortnight after the 2022 invasion, peer to peer ruble to Bitcoin trades tripled as the currency cratered under sanctions. That was never a blip: Chainalysis puts Russia’s crypto inflows at $379 billion between July 2024 and June 2025, up 48% year on year, overtaking the UK as Europe’s largest crypto market. Russia had already carved out an experimental regime for crypto in cross border trade back in 2024. This new law formalises and expands that channel into permanent market structure, the exact route Western sanctions have spent years trying to close.

Iran has followed a similar playbook. Following years of US sanctions, Tehran began accepting Bitcoin and other digital assets for safe passage through the Strait of Hormuz via a state run maritime insurance scheme called Hormuz Safe. Different execution to Russia, same underlying logic: crypto as the workaround once conventional banking access is cut off.

The contrast with Washington is stark. The Digital Asset Market Clarity Act, the most advanced US market structure bill in history, cleared the House in July 2025 and the Senate Banking Committee in May, will not get a Senate floor vote before the August 7 recess. Majority Leader Thune has confirmed there isn’t time left for debate, amendments and cloture before the chamber breaks. Polymarket odds on 2026 passage have collapsed from 82% in February to roughly 28% today; Kalshi’s “before Dec 1” market has fallen sharply over the past fortnight too, from around 60% in late July down to 17% as of this morning. Miss the window and the bill waits until at least September, with Senator Lummis warning a slip this year could push comprehensive US legislation out as far as 2030 once midterm cycle gridlock sets in.

Two sanctioned economies have moved faster on crypto policy than the country whose currency crypto still largely prices against. That irony is real, but it doesn’t change the setup in front of us. Bitcoin is trading around $65,000, roughly 50% below its October 2025 all time high of $126,000. Every 40 to 50% correction in Bitcoin’s history since 2014 has been followed by a new all time high, and this drawdown is already shallower than the 73 to 84% washouts of prior cycles, a sign of a maturing, more institutionally anchored market rather than a broken one.

Clarity delays don’t remove the long term case, they just push the window out. Sovereign demand isn’t waiting on Washington. Russia and Iran are proof that states will find their own rails with or without US legislation, and that same institutional and sovereign appetite is still queued up behind Clarity, ready to move the moment it lands. Drawdowns like this one, deep enough to shake out weak hands but shallow enough to reflect real structural maturity, have historically been the best entry points in Bitcoin’s history. They do not last. The dominoes are lining up. Whether you’re positioned before they fall is the only question that matters from here.

Stormrake Spotlight: Pax Gold (PAXG) ($4,266)

The move we have finally been waiting for, and the bulls are the ones smiling. PAXG up 5% yesterday and finally breaking the month long consolidation. All we need to see is this move sustain itself and it will be safe to say the bulls are back in control of the momentum. Price needs to create a new high above $4,374 to get the structure in their favour too.

BTC/USD Key Levels and Price Action:

The bulls are looking to take advantage of the momentum and the bounce from the retest of the key support level at $63.8k. We have our eye on $65k as the very near term price level, as if BTC breaks this then the bulls will firmly be in control.

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*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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Leverage Doesn't Care How Smart You Are

Wed, 05 Aug 2026 10:41:05 +1000

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If you have been within the investment space or finance over the last few days to weeks, you may be familiar with the name Leopold Aschenbrenner. A 24 year old former OpenAI researcher took the investment world by storm after writing a 165 page essay titled “SITUATIONAL AWARENESS: The Decade Ahead,” and named his hedge fund after it. Since launching in July 2024, the fund posted gains of over 1,000%, at one point managing as much as $45 billion in assets. Then, within the space of a few weeks, it was worth $10 billion.

The assets that took him to the top were the same assets that took him down. Aschenbrenner’s fund was concentrated in AI infrastructure names, chip makers and data centre plays like SK Hynix, CoreWeave, Nebius Group, Sandisk and Micron. When the AI trade was running, those positions were printing. But the fund had also layered in leverage of up to 400% on these positions, meaning every dollar of capital was controlling four dollars of exposure. When the AI rally stalled and volatility returned, the same leverage that turbocharged the gains turbocharged the losses. Bearish bets on software names like Adobe went the wrong way at the same time, compounding the damage. It was safe to say he was early to the AI rally. But being early and being right on direction means nothing if the structure underneath you cannot survive a drawdown.

As the saying goes: when the tide goes out, it exposes who has been swimming naked.

It is also worth noting Aschenbrenner’s background before he ever ran a fund. Before Situational Awareness, he worked with Sam Bankman-Fried at FTX, helping run the FTX Future Fund, a charity operated out of a Bahamas penthouse. FTX, of course, was one of the largest leverage and risk management blowups of the previous bear market.

We have seen this story before, and not just in AI stocks. Think back to October 2025, when the crypto market saw close to $20 billion USD of leveraged positions wiped out in a single day. At the time, it was treated as the most violent deleveraging events in the asset class’s history, a headline that dominated crypto media for weeks. Compare that to Aschenbrenner’s fund alone shedding roughly $35 billion, more than the entire crypto market’s worst day, in a matter of days, and it barely registered outside of financial media as a footnote to the broader AI stock correction. The pattern is identical: capital piles into a winning thesis, leverage gets added to amplify the returns, and the position becomes a forced seller the moment the market turns. The difference is scale. What was a seismic, market-defining event for crypto was, for traditional finance, a single fund’s bad month. That gap is the point. Crypto is still a fraction of the size of the market it is set to disrupt, and there is a long runway of growth still ahead of it.

It shows you that even those considered to be at the top of the game eventually lose to leverage. It is a tale as old as time, and one we have seen again and again, from Long-Term Capital Management to Archegos to now Situational Awareness.

That is why at Stormrake we advocate for spot holdings of Bitcoin. Leverage is a major danger and does not help preserve wealth. If anything, it adds danger to the very thing you are trying to protect.

Stormrake Spotlight: Pax Gold (PAXG) ($4,069)

PAXG had another flat day and still remains within the consolidation range. Nothing to report until the range is broken.

BTC/USD Key Levels and Price Action:

Bitcoin broke above the key resistance level at $63.8k after a few attempts over the last couple of days but now looks to be ready to retest after stalling out at $64.5k. If this level can now be flipping into support and the bulls succeed in sustaining this move then we could look to higher prices and $66.8k once again…

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*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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The ISM Keeps Firing. Bitcoin Buyers Should Be Paying Attention

Tue, 04 Aug 2026 10:59:12 +1000

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Back in February we flagged the ISM Manufacturing PMI’s breakout above 50 as one of the more reliable macro tells for Bitcoin. Five months on, the signal hasn’t just held, it’s strengthened. Yesterday’s print gives us reason to revisit it.

A quick refresher: what is the ISM?

The ISM Manufacturing PMI is a monthly survey of US purchasing and supply executives, covering new orders, production, employment, inventories and supplier deliveries. A reading above 50 signals expansion in the manufacturing sector; below 50 signals contraction. It’s one of the oldest and most closely tracked leading indicators in US markets, and as we noted back in February, historical analysis shows Bitcoin has displayed its strongest correlation with the ISM out of all macro data releases, ahead of inflation prints and every other release we track.

Where we are now?

July’s print came in at 55.6%, well above the 54.0% consensus and the highest level in four years. That alone would be a solid headline. The more important detail sits underneath it.

The PMI hasn’t just poked above 50, it has now held above 52 for seven consecutive months:

January: 52.6
February: 52.4
March: 52.7
April: 52.7
May: 54.0
June: 53.3
July: 55.6

Before January, the index had spent roughly 40 months below 51. US manufacturing was in contraction for the better part of two years. That drought is now firmly behind us, and the pace of expansion is accelerating rather than flattening out.

Why does the 52 threshold matter more than the standard 50 line? Because holding above it for a sustained run has only happened twice before in recent history, in January 2017 and September 2020, and both instances were followed by extended, multi-month rallies across stocks and crypto. In the 2017 case, the index went on to climb above 60, its highest level since 2004.

It’s also not a US-only story. Japan’s manufacturing PMI printed 54.5 on the same day, also its seventh straight month of expansion and the fastest pace of output growth since 2014. Two of the world’s largest manufacturing economies are now expanding at the same time.

Why this matters for Bitcoin

The mechanism is fairly intuitive once you follow the chain through. When factories see more orders, that revenue doesn’t stay with the large manufacturers, it moves through the whole supply chain: suppliers, parts makers, logistics firms, and the small businesses around them. Payrolls rise, margins improve, and a portion of that extra cash doesn’t sit idle. Some goes back into hiring and expansion. Some finds its way into markets. That’s the basic reason sustained manufacturing expansion has tended to lead risk assets rather than follow them.

This is also the piece that lines up with the timing we’ve been consistent on. That “extra cash” doesn’t show up in markets the same month the PMI print crosses the line, it takes time to move through payrolls, margins and eventually into capital markets. Given expansion has now been running since January and is still building momentum, that lag points toward the flow-through landing later this year rather than earlier. That’s consistent with the case we’ve made for a while: the bear market being complete by the back half of 2026, with this kind of macro backdrop providing the fuel once it arrives rather than acting as an instant switch.

The bottom line

None of this is a call for an immediate move higher. Bitcoin is still trading well off its October 2025 high, and ISM strength alone won’t override near-term positioning or liquidity conditions specific to crypto markets. But as a macro backdrop, seven straight months above 52, accelerating rather than fading, with only two precedents in recent history and both preceding sustained rallies, is about as constructive as this signal has looked in years. It continues to build the case we’ve been making since February: expansion now, cash later, and a bear market that’s complete by the timing this lag points to rather than against it.

We’ll keep tracking this one closely as the September print approaches.

Stormrake Spotlight: Pax Gold (PAXG) ($4,052)

A quiet day for PAXG. It lost just 0.50% over the last 24 hours as it continues to sit within the consolidation range between the 21 exponential moving average and the key support zone.

BTC/USD Key Levels and Price Action:

The key level of $63.8k is acting like a magnet for Bitcoin price action. We saw the bears attempt to send BTC lower, with a low of $62.3k printed before price shot back up to the key resistance level.

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*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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Safe Custody> Self Custody

Mon, 03 Aug 2026 12:02:37 +1000

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Saturday’s PSA on the Coldcard breach was a reminder of a principle at the core of how we think about custody at Stormrake.

Bitcoin gave everyone the option to hold their own keys and remove counterparty risk entirely. That’s real and it matters. We’re advocates for self-custody as a principle. But holding that right doesn’t mean everyone is equipped to exercise it safely.

“Not your keys, not your coins” is one of the most repeated lines in this industry, and there’s truth in it. But it’s also become a piece of toxic ideology, repeated as gospel to people who aren’t ready to self-custody. This weekend showed exactly why. People adopt the mantra because it sounds principled, not because they’ve done the work to back it up. That gap between conviction and competence is exactly what gets exploited, and when it is, the coins simply move to someone else’s wallet.

Self-custody demands real operational discipline: generating your own entropy properly, understanding how to transact and move Bitcoin without relying on another party, secure seed storage, firmware hygiene, and constant vigilance against an evolving attack surface.

Coldcard isn’t the first wallet to face scrutiny over this, and it won’t be the last. Trust Wallet has faced its own entropy-related vulnerabilities in the past, the same category of flaw that hit Coldcard this weekend. Different vendors, different timelines, same underlying lesson: even trusted wallets carry risk that sits outside the user’s control, and often outside their visibility entirely.

So ask the question directly. The case for self-custody rests on sovereignty, on removing trust in third parties. But sovereignty only has value if the coins are still there. If your stack is drained by a firmware flaw you never knew existed, the principle didn’t protect you, it cost you. Self-custody doesn’t remove risk, it transfers it onto the user and onto every piece of hardware in that chain. For most people, that’s a risk they can’t see, in exchange for a slogan that offers no protection once the coins are gone.

Safe custody doesn’t ask anyone to give up on sovereignty as an idea. It asks a more practical question: is the ideological win worth the position size? For most holders, the honest answer is no.

If you have any doubt at all about whether your storage has been exposed, don’t take the risk. Contact your Stormrake Broker today.

Stormrake’s Custody offer for August is live for new deposits into custody. Get in touch with your broker to learn more.

Stormrake Spotlight: Pax Gold (PAXG) ($4,067)

PAXG looks to resume the month long consolidation between the key support level and the 21 exponential moving average. It has lacked any volatility to break in either direction, but once the volatility does come, the move will be decisive. The downside zone is visible on the chart, whilst the resistance is $4,064, which needs a sustained break above to shift the structure.

BTC/USD Key Levels and Price Action:

Bitcoin spent the weekend consolidating just under the key resistance level of $63.8k. Whilst momentum leans slightly bearish, this week is up for grabs. A slow weekend of price action means the first sign of volatility will be decisive. The bears are targeting $60k, whilst the bulls look to break the moving averages and key resistance level at the price mentioned above.

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*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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EMERGENCY PSA: Coldcard Firmware Flaw Has Drained $38M: Here's What To Do

Mon, 03 Aug 2026 11:56:41 +1000

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A critical firmware vulnerability in Coldcard hardware wallets has come to light, and it is serious. Roughly 594 BTC, worth around $38 million, was swept from approximately 500 single-signature wallets in a 25 minute window on 30 July. The root cause was a firmware error dating back to March 2021 that caused affected devices to bypass proper hardware randomness during key generation, leaving predictable, crackable seeds.

We know a meaningful number of our clients hold Coldcard devices for self-custody. This is not a minor bug. If your seed was generated on a vulnerable firmware version without additional entropy, your keys may already be compromised, even if your coins have not moved yet.

Who is at risk?

Mk3 devices running firmware 4.0.1 or later are the worst affected. Mk4, Q and Mk5 devices were subject to a separate, less severe flaw. Coinkite has released fixed firmware (Mk4 and Mk5 to version 5.6.0 or later, Q to version 1.5.0Q or later), but a firmware update does not retroactively fix a seed that was already generated insecurely. Coinkite has indicated that a meaningful amount of additional entropy, at least 50 dice rolls, is needed to be confident your seed sits outside the vulnerable range. If you did not add that level of entropy or a passphrase when you set up your device, you should treat your existing seed as potentially exposed.

Be on High Alert for Scams

No legitimate party will ever ask for your seed phrase. Not a manufacturer, not a custody provider, not us. A request for your seed words is by itself proof that the request is fraudulent, however it is branded. Do not enter your seed phrase into any website offering to check whether you are affected. That is a scam.

Events like this always attract opportunists within hours. Treat any unsolicited message, tool or “checker” site asking for your seed as hostile by default.

What this means practically

This is not a Bitcoin problem. It is a self-custody execution problem, and it is exactly the kind of tail risk that sits quietly under the surface of “not your keys, not your coins” until it does not. Firmware, chip design and randomness generation are layers most holders never interact with directly, and this event is a reminder of how much trust that requires.

This is not the first breach of a self-custody solution, and it will not be the last. Stormrake custody takes that risk off the table.

Stormrake’s Custody Solution

Whether you are running an affected device or simply want somewhere safe to move your coins while you figure out your next step, Stormrake’s custody solution is a top tier way to store your Bitcoin. It takes the whole question of seed generation, firmware risk and device security off your plate, no drawer, no single point of failure, no guessing whether your setup was done right.

If you want to talk through moving your holdings across, reach out to the team directly. We are moving through client queries on this today.

To receive the Morning Note in your inbox, subscribe here: https://stormrake.substack.com/

*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.