Uploaded April 2025 | Updated September 2026, 2 weeks ago
In this episode, Nik Bhatia is joined by Demian Schatt to break down one of the most volatile 48-hour stretches in recent bond market history. As Treasury yields spiked 60 basis points and the MOVE Index surged, Nik unpacks the hidden mechanics behind the dislocation—explaining how a highly leveraged basis trade began to unwind, triggering forced selling and market-wide panic. He walks through the role of China’s currency devaluation, the impact of new 125% tariffs, and how synthetic credit in the swaps market amplified the chaos. With bond volatility ripping, Nik explores what it means for the Fed’s reaction function, financial stability, and bitcoin’s surprising strength. Holding steady at $80,000 through it all, bitcoin is beginning to look like the safe haven asset markets weren’t expecting.
📚 Bitcoin Age is here, order yours today: https://a.co/d/5gau08H
📊 The Bitcoin Layer is a bitcoin and global macroeconomic research firm.
🔓 The Bitcoin Layer is proud to be sponsored by Unchained, the leader in Bitcoin financial services. Unchained empowers you to take full control of your Bitcoin with a collaborative multisig vault, where you hold two of three keys, and benefit from a Bitcoin security partner. Purchase Bitcoin directly into your cold storage vault and eliminate exchange risks with Unchained's Trading Desk. Unchained also offers the best IRA product in the industry, allowing you to easily roll over old 401(k)s or IRAs into Bitcoin while keeping control of your keys. Don’t pay more taxes than you have to. Talk to us today.
Visit thebitcoinlayer.com/unchained and use code TBL for $100 off when you create an account.
🔨 Try Stamp Seed, a DIY kit that enables you to hammer your seed words into a durable plate of titanium using professional stamping tools. Take 15% off with code TBL. Get your Stamp Seed today! stampseed.com/shop/titanium-seed-phrase-storage-kits.html?utm_source=substack&utm_medium=email
▶️ Subscribe and turn on notifications for TBL on YouTube.
📚 Subscribe to TBL’s research letter: thebitcoinlayer.com/subscribe
🎧 Subscribe to The Bitcoin Layer on your favorite podcast platform.
📱 Follow TBL on X: twitter.com/TheBitcoinLayer
📩 Join the official TBL channel on Telegram: https://t.me/thebitcoinlayerofficial
🧢 Use code TBLYT10 for 10% off all The Bitcoin Layer Merch at TheBitcoinLayer.com/merch
⛓️ ₿lock Height 891,705
⚡ Contribute to The Bitcoin Layer via Lightning Network: thebitcoinlayer@zbd.gg
Nik Bhatia's Twitter: twitter.com/timevalueofbtc
Creative Director Matthew Ball's Twitter: twitter.com/matthewrball
Researcher Demian Schatt's Twitter: https://x.com/demianschatt
❗ The Bitcoin Layer and its guests do not provide investment advice.
Chapters:
00:00:00 Understanding Recent Treasury Market Fluctuations
00:05:34 Understanding Treasury Yields and Stock Market Correlation
00:10:54 Understanding Long Duration Treasury Strategies
00:16:28 Understanding Basis Trades and Swap Spreads
00:21:44 Impacts of Treasury Market Changes
00:27:06 Synthetic Credit and Market Instability
00:32:07 Understanding Financial Instability and the MOVE Index
00:38:00 Market Volatility and Fed Interventions
00:43:40 Impact of Tariffs on Market Volatility
00:48:51 Insights on Market Weakness and Stocks
In this episode, Nik Bhatia is joined by Demian Schatt to break down one of the most volatile 48-hour stretches in recent bond market history. As Treasury yields spiked 60 basis points and the MOVE Index surged, Nik unpacks the hidden mechanics behind the dislocation—explaining how a highly leveraged basis trade began to unwind, triggering forced selling and market-wide panic. He walks through the role of China’s currency devaluation, the impact of new 125% tariffs, and how synthetic credit in the swaps market amplified the chaos. With bond volatility ripping, Nik explores what it means for the Fed’s reaction function, financial stability, and bitcoin’s surprising strength. Holding steady at $80,000 through it all, bitcoin is beginning to look like the safe haven asset markets weren’t expecting.
📚 Bitcoin Age is here, order yours today: https://a.co/d/5gau08H
📊 The Bitcoin Layer is a bitcoin and global macroeconomic research firm.
🔓 The Bitcoin Layer is proud to be sponsored by Unchained, the leader in Bitcoin financial services. Unchained empowers you to take full control of your Bitcoin with a collaborative multisig vault, where you hold two of three keys, and benefit from a Bitcoin security partner. Purchase Bitcoin directly into your cold storage vault and eliminate exchange risks with Unchained's Trading Desk. Unchained also offers the best IRA product in the industry, allowing you to easily roll over old 401(k)s or IRAs into Bitcoin while keeping control of your keys. Don’t pay more taxes than you have to. Talk to us today.
Visit thebitcoinlayer.com/unchained and use code TBL for $100 off when you create an account.
🔨 Try Stamp Seed, a DIY kit that enables you to hammer your seed words into a durable plate of titanium using professional stamping tools. Take 15% off with code TBL. Get your Stamp Seed today! stampseed.com/shop/titanium-seed-phrase-storage-kits.html?utm_source=substack&utm_medium=email
▶️ Subscribe and turn on notifications for TBL on YouTube.
📚 Subscribe to TBL’s research letter: thebitcoinlayer.com/subscribe
🎧 Subscribe to The Bitcoin Layer on your favorite podcast platform.
📱 Follow TBL on X: twitter.com/TheBitcoinLayer
📩 Join the official TBL channel on Telegram: https://t.me/thebitcoinlayerofficial
🧢 Use code TBLYT10 for 10% off all The Bitcoin Layer Merch at TheBitcoinLayer.com/merch
⛓️ ₿lock Height 891,705
⚡ Contribute to The Bitcoin Layer via Lightning Network: thebitcoinlayer@zbd.gg
Nik Bhatia's Twitter: twitter.com/timevalueofbtc
Creative Director Matthew Ball's Twitter: twitter.com/matthewrball
Researcher Demian Schatt's Twitter: https://x.com/demianschatt
❗ The Bitcoin Layer and its guests do not provide investment advice.
Chapters:
00:00:00 Understanding Recent Treasury Market Fluctuations
00:05:34 Understanding Treasury Yields and Stock Market Correlation
00:10:54 Understanding Long Duration Treasury Strategies
00:16:28 Understanding Basis Trades and Swap Spreads
00:21:44 Impacts of Treasury Market Changes
00:27:06 Synthetic Credit and Market Instability
00:32:07 Understanding Financial Instability and the MOVE Index
00:38:00 Market Volatility and Fed Interventions
00:43:40 Impact of Tariffs on Market Volatility
00:48:51 Insights on Market Weakness and Stocks
