TLDR:

• A 300bps rate drop could erase nearly $234B in annual MMF income.
• Even 5% MMF rotation may release $390B into higher-yield alternatives.
• STRC’s 11.25% yield positions it for institutional inflows during easing.
• New STRC issuance could translate into large-scale Bitcoin purchases.

Yield Tsunami Bitcoin is gaining attention after investor Adam Livingston projected a sharp capital rotation toward Bitcoin-linked yield vehicles.

In a detailed post on X, Livingston argued that ongoing Federal Reserve rate cuts could erase hundreds of billions in annual income from U.S. money market funds.

He contends that falling short-term yields may push pensions, insurers, and endowments toward higher-yielding listed structures tied to Bitcoin exposure.

Rate Cuts and the Projected $234 Billion Income Compression

Livingston stated that U.S. money market funds hold roughly $7.79 trillion as of mid-February 2026. He noted that current yields near 4.5% to 5% reflect the prior hiking cycle.

However, he argued that an additional 75 to 100 basis points of cuts could reduce front-end rates toward 3% or lower.

According to his calculations, a 300-basis-point decline across $7.79 trillion equates to about $233.7 billion in lost annual income. He described this as a large-scale compression event for conservative capital pools. As yields fall, institutions dependent on fixed income cash flows may reallocate capital.

In his tweet, Livingston called this shift a “trillion-dollar yield tsunami” moving toward Bitcoin-aligned assets. He referenced historical data from the post-2008 and 2020 easing cycles. During those periods, alternative credit and private structures experienced accelerated asset growth.

He further cited estimates suggesting that even a 5% rotation from money market funds could release nearly $390 billion. A portion of that capital, he argued, may seek liquid high-yield instruments offering double-digit returns.

STRC Structure and the Bitcoin Treasury Feedback Loop

Livingston identified Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, trading under STRC, as a potential beneficiary.

The security reportedly pays 11.25% annualized, distributed monthly. It trades near $100 par value and includes a rules-based monthly reset feature.

He reported that STRC has a notional value of about $3.46 billion with average daily trading volume near $128 million.

According to the post, dividend coverage is supported by cash reserves and the strategy’s Bitcoin treasury. The company currently holds more than 717,000 BTC.

Livingston estimated that a 0.5% capture of projected alternative inflows could generate $2 to $4 billion in new STRC issuance.

At Bitcoin prices near $68,000, he calculated that each $1 billion raised could acquire roughly 14,700 BTC. Larger inflows would increase that figure proportionally.

He also modeled broader scenarios. A 5% rotation from money market funds with a 10% STRC capture rate could imply $39 billion in inflows.

That level, based on his figures, would represent hundreds of thousands of additional BTC purchases. Yield Tsunami Bitcoin remains central to his thesis that rate compression may indirectly expand institutional Bitcoin exposure through listed yield vehicles.

TLDR:

• • A single $618,000 BTC-to-USDC swap on THORChain exposed every transaction detail to the public in real time.
    
  • GemWallet’s 50 basis point fee was written directly into the transaction memo, visible on-chain to anyone worldwide.
    
  • THORChain allows users to swap assets without creating an account, submitting an ID, or seeking any permission.
  • Every swap ever executed on THORChain remains permanently traceable, dating all the way back to its first transaction.

THORChain recently showcased blockchain transparency through a live transaction on its network. A user swapped 8.99 BTC, worth roughly $67,393, for 611,637 USDC in under 17 minutes.

The swap totaled approximately $618,000 moving across chains. Every detail of this trade remained publicly visible to anyone with an internet connection.

What the Transaction Revealed About On-Chain Visibility

THORChain shared the transaction publicly, noting that every detail was traceable without any permission required.

The sending wallet address, destination address, exact amounts, fees, and processing time were all recorded permanently on a public blockchain. No compliance department or regulatory body controls access to this data.

The transaction memo also showed that GemWallet processed the swap and charged 50 basis points as a service fee.

That fee was written directly into the transaction instructions, not buried in a terms of service document. Anyone on earth could verify this at the moment it happened.

THORChain posted about the event, stating: “There is no compliance department to call, no freedom of information request to file, no company deciding what data you are allowed to see.”

This reflects a core design principle of public blockchain infrastructure. The data exists on-chain and remains accessible indefinitely.

This level of auditability extends beyond a single transaction. Every swap ever executed on THORChain traces back to the network’s first transaction, all publicly accessible without creating an account or submitting identification documents.

How THORChain Contrasts With Traditional Financial Systems

THORChain draws a direct comparison between its model and traditional finance. In conventional systems, users cannot meaningfully audit the infrastructure they trust with their money.

Access also requires clearing increasingly complex identity verification processes before any transaction can occur.

According to THORChain, opacity and gatekeeping come bundled together in traditional finance. Users are told this is simply how financial infrastructure must function. The protocol presents itself as evidence that this assumption does not hold.

The protocol operates under a model where full transparency and permissionless access coexist by default. A user can make a swap without asking anyone for permission, without creating an account, and without submitting any identification. Both features run simultaneously within the same system.

THORChain noted: “Full transparency and no gatekeepers are not mutually exclusive. They can coexist, and on a public blockchain they do by default.”

This positions the network as a functional alternative to systems where financial data remains controlled and access remains conditional. The transaction itself serves as a working example rather than a theoretical argument.

TLDR:

• USDT 60-day market cap change has fallen below -$3B for only the second time in crypto market history.

• The first instance occurred in late 2022, aligning precisely with Bitcoin’s cycle bottom near the $16,000 level.

• Three single-day USDT outflows exceeding -$1B have each coincided with local bottoms or sharp Bitcoin volatility.

• Historical data shows Bitcoin entered strong recovery phases once USDT outflows stabilized after peak liquidity stress.

USDT is flashing a rare on-chain signal that has only appeared twice in crypto market history. The stablecoin’s 60-day market cap change has dropped below -$3 billion.

This level was last reached in late 2022, when Bitcoin bottomed near $16,000. That period marked one of the most severe liquidity contractions in the digital asset market.

Now, this same metric is triggering again in early 2026, with Bitcoin trading between $65,000 and $70,000.

USDT Outflows Mirror Patterns From the 2022 Cycle Bottom

The 60-day USDT market cap contraction has only breached -$3 billion on two occasions. The first came during the late 2022 market collapse, a period of forced selling and maximum fear.

The second is occurring now, in early 2026, after Bitcoin’s recent all-time high run.

On a daily basis, USDT has recorded three separate instances of single-day outflows exceeding -$1 billion. Each of those episodes lined up with either local market bottoms or sharp Bitcoin volatility clusters. That pattern is difficult to ignore given the current market conditions.

Analyst CrptosRus qouting MorenoDV_ flagged this development on X, noting the historical weight of the signal. “The 60-day Market Cap Change has dropped below -$3B, on only two occasions,” the post read. “The first occurred in late 2022, precisely as Bitcoin was carving its cycle bottom near $16K.”

Large-scale USDT redemptions at this rate typically reflect institutional or major holder exits from the broader crypto ecosystem.

Historically, these exits tend to cluster near exhaustion points rather than at the start of prolonged downtrends.

Liquidity Conditions Now Determine Bitcoin’s Next Move

Stablecoins function as the dry powder of the crypto market. When USDT supply grows, it points to fresh capital entering the ecosystem. When it contracts sharply, it reflects risk-off behavior, liquidity withdrawal, or forced redemptions.

For Bitcoin, a liquidity-sensitive asset, USDT supply trends carry measurable weight. The current 60-day contraction points to sustained capital outflows and structural tightening in crypto-native liquidity. That creates a fragile environment for price stability.

However, past cycles offer some useful context here. Once forced deleveraging completed and USDT flows stabilized, Bitcoin moved into strong medium-term recovery phases. The normalization of liquidity conditions preceded meaningful upside in prior cycles.

The current setup presents a conditional risk-reward scenario. If USDT contraction continues, downside pressure may extend further.

If flows flatten or reverse, the asymmetry shifts rapidly toward upside potential. Extreme liquidity stress has historically marked opportunity, but only once selling exhaustion is confirmed by stabilizing on-chain flows.

Digital asset company New Frontier Labs has partnered with BitGo Bank & Trust National Association, the entity that crypto infrastructure company BitGo will use to issue and provide custodial services for the FYUSD stablecoin, a dollar-pegged token for Insitutional investors in the Asia region.

BitGo’s announcement said FYUSD is compliant with the GENIUS Act stablecoin regulatory framework. The regulations include 1:1 backing with cash deposits held by a custodian or short-term US government debt instruments, anti-money laundering (AML) requirements and know-your-customer (KYC) checks.

The company also developed “Fypher,” a suite of stablecoin infrastructure tools that provides a “programmable settlement” layer for the FYUSD token that allows it to be used by autonomous AI agents for commercial transactions.

US Treasury Secretary Scott Bessent has touted stablecoins as a way to preserve US dollar dominance by reducing settlement times, transaction costs and democratizing access to US dollars for individuals without access to traditional banking infrastructure. 

Related: 21Shares taps BitGo for expanded regulated staking, custody support across US, Europe

Stablecoins are down from the market cap peak of over $300 billion

The total market capitalization of stablecoins is over $295 billion at the time of this writing, according to RWA.XYZ, down from the peak of over $300 billion recorded in December.

Stablecoin issuer Tether, the issuer of the USDt (USDT) dollar-pegged token, is on-track for the steepest monthly drop in USDt circulating supply since the collapse of the FTX crypto exchange in 2022. At time of writing, circulating supply was 183.64 billion USDT, CoinMarketCap data showed.

While USDt remains the world’s largest stablecoin by market capitalization, its circulating supply is down $1.5 billion so far in February, data from Artemis shows. This is shaping up to be the second month of ramped up user redemptions, following a $1.2 billion drop in January.

Stablecoin redemptions could signal a broader contraction in the crypto market, as investors liquidate their positions and move their holdings off-chain, potentially into other investments.

However, spokespeople for Tether told Cointelegraph that the data represent short-term positioning, rather than a long-term trend of sustained outflows and market contraction.

Magazine: Bitcoin payments are being undermined by centralized stablecoins