🥛 Oil picked up. Bitcoin is feeling it. 😩

GM. This is Milk Road, the crypto newsletter that reads the bond market so you don’t have to.

Here’s what we’ve got for you today:

✍️ Oil picked up. Bitcoin is feeling it.
🎙️ The Milk Road Show: The Perps Market Could Grow 100X - Here’s How Lighter Plans to Win.
🍪 BlackRock is launching tokenized investment portfolios powered by Ondo's infrastructure.

Securitize is the company quietly powering BlackRock, Apollo and KKR's move onchain. Here's what you need to know about Securitize.

Prices as of 2:00 p.m. ET. Powered by CoinGecko.

WE GOT OUR ANSWER 😩

Yesterday we left you with a fork:

If oil stays below ~$95, the Bitcoin rally continues, a break above ~$100, and the rally faces headwinds.

Then Iran's President Masoud Pezeshkian told the UN General Assembly that his country "will not surrender".

That was enough for the oil traders to decide their next move. Brent crude oil closed at $103.08, up ~4% and snapped a five-day losing streak. Bitcoin fell 2.1% to ~$84.4K, the Nasdaq dropped 1.13%, and the bond market lost it.

10Y yields rose to 5.125%, its highest level since 2007 and the biggest one-day jump in 18 months.

Source: U.S. 10Y and 30Y Bond Yields, TradingView

Here’s why you should be paying attention to this:

The 10Y yield is what the U.S. government pays to borrow money for a decade, and nearly every other loan in the economy prices off it. A widely watched daily gauge of 30-year mortgage rates just hit 7.26%, the highest since January 2025.

Source: Hedgeye

Oil explains part of the move:

Expensive energy → stickier inflation → a Fed that keeps squeezing. Traders now put the odds of another hike by the Fed above 70%, six weeks after the Fed hiked for the first time since 2023.

The economy isn't helping either. S&P Global's flash PMI (a monthly survey of purchasing managers, basically a temperature check on business) came in at 58.4, the strongest reading since July 2021, with input costs rising at the fastest pace since October 2022.

Which is quite odd since high borrowing costs often lead to a cooler economy.

All of this sounds like a very American story, until you look at the rest of the world. Germany's 10-year yield is at its highest since 2009, France's since 2008, and Japan's just hit a 30-year high above 3%.

We also pointed out yesterday that the 30Y had barely moved since mid-August, because the long end didn’t believe you can hike your way out of an oil shock. It rose 11 bps yesterday.

And before anyone reaches for the word "default," insuring U.S. debt against one costs about 0.33% a year (five-year credit default swaps), roughly half the ~0.69% it cost during the 2023 debt-ceiling standoff. Lenders fully expect America to pay them back, they just want more interest for waiting.

Which leaves one question: who's going to keep buying all this debt at the old price?

For decades America’s lenders were foreign governments and central banks, buying Treasuries by the truckload because they needed the dollar. That group has started to buy less and the folks stepping in are American pension funds, insurers and investment funds.

Source: U.S. Treasury

On Sep 15, the government auctioned ~$13B of 20Y bonds at 5.42%. Foreign buyers took 52.5%, the weakest on record. In their place, American institutions stepped in for a record 30.7%. So the buyers still exist, but they’re asking for a bigger premium.

America’s federal interest payments on debt crossed ~$1T for the first time last month. And every dollar the government borrows from here costs more than the one it's replacing.

Now back to the odd part, because the interest payments are the reason this economy won’t cool down…

THE COMPANY BRINGING $400T OF TRADFI ONCHAIN

$400 trillion in stocks, bonds, funds and private credit sits in traditional finance.

Someone has to bring it onchain.

Securitize is already doing it and in July 2026, they went public on the NYSE under ticker $SECZ.

Few facts about Securitize:

$4.6B+ in tokenized assets under management
Works with BlackRock, Apollo, KKR, Hamilton Lane, BNY and VanEck
Partnered with the NYSE to build tokenized securities markets
Tokenized their own stock at IPO

One of the largest tokenized money market products in the world (BlackRock's $BUIDL fund) runs on Securitize rails.

Here's what you need to know about Securitize.

WE GOT OUR ANSWER (P2) 😩

At 1:40pm ET today, the Treasury will buy back $6B of its own 20 to 30-year bonds, the exact stretch foreign buyers walked away from. Against $40T of debt, that's nothing.

The real squeeze is slower. Lock in a 2.8% mortgage in 2020 and your payment doesn't budge when rates hit 7%. You feel it when you’re at the bank trying to refinance the loan. The U.S. government is in the same spot, the difference is they refinance constantly.

For all debt issued by the U.S. across time horizons, it pays an average 3.45%, because so much was borrowed when money was free. New borrowing costs are north of 5%.

Source: U.S. Treasury

$1T in interest payments is just the start. Reprice the whole $40T at 5% and it's $2T a year, or more than a third of every tax dollar collected by the U.S.

That $2T goes to bondholders, which gets cycled back into the economy, keeping it warm, which keeps the Fed hiking, which makes those interest payments bigger still.

High rates are supposed to be the brake but today they’re more like a gas pedal.

Zoom out and you’ll see this is exactly the world Satoshi built Bitcoin for. A government can’t tax its way out of a growing interest bill, when the interest itself is the stimulus. The story usually ends with the devaluation of the currency.

But the real catch here is timing. The same rising yields building the case for the ‘debasement trade’ are acting against it which caused BTC to fall ~2.1% yesterday.

So here's the new fork:

Watch if Bitcoin holds above its May high of ~$82.8K on the weekly close which is a strong signal that the breakout survives.
The October 14 inflation data is the next key data point that decides the Fed’s next move.

Until then, keep a close eye on the price of oil - anything below ~$100 takes the pressure off.