Good morning everybody.
It’s Friday, September 11th, 2026. And if you’re old enough to remember September 11th, congratulations. That’s your checkpoint to go touch grass. We’re getting old.
Bitcoin started this morning around $76,000, and there were plenty of reasons for number to go down. Producer inflation came in hot. Consumer inflation came in hot. Oil is above $100 a barrel. The 10-year Treasury yield is knocking on 5%. Markets are increasingly expecting another Fed rate hike.
Then, while I was recording this podcast, Bitcoin suddenly jumped back above $78,000.
I don’t know what to tell you.
Sometimes the data tells you one thing and the market does another. My best explanation is that some uncertainty disappeared when CPI confirmed what markets were already beginning to expect. But that’s an interpretation, not something I can prove.
Inflation Is Back in the Driver’s Seat
Yesterday’s Producer Price Index gave us the first warning.
The official BLS report showed that PPI increased 0.4% in August and 5.4% over the previous 12 months, up from a 0.1% monthly increase in July. Goods prices increased 1.1%, while services rose 0.1%. Bureau of Labor Statistics PPI report
Then CPI dropped this morning while I was recording.
Headline CPI increased another 0.4% in August, while annual inflation remained at 3.4%. Core CPI, excluding food and energy, increased 0.3% for the month and 2.4% year over year.
So both major inflation reports are telling us that price pressures haven’t disappeared.
And this is why I keep saying markets don’t simply trade on whether a number “beats” or “misses” some economist’s forecast. They care about what that number means for what the Fed does next.
Before these reports, markets were already leaning toward another rate increase. After CPI, that probability moved higher.
The next Fed decision is September 16.
I don’t see much of a case for lowering rates right now. You’ve got unemployment around 4.1%, producer inflation at 5.4%, headline consumer inflation at 3.4%, oil above $100 and Treasury yields approaching 5%.
The question isn’t really whether the Fed cuts anymore. The question is whether it holds or raises.
And the market is increasingly betting on a hike.
$100 Oil and 5% Treasury Yields Are the Bigger Macro Problem
The second pressure is the bond market.
The 10-year Treasury yield has pushed to roughly 4.95%, while the 30-year has reached levels not seen in almost two decades. Bond yields have been rising across the G7 as markets price persistent inflation and tighter monetary policy.
I’ve been talking about 5% on the 10-year for weeks.
That’s the number I don’t want to see.
At the same time, oil has become an inflation problem again.
Brent crude surged above $100 this week and was trading around $104 Friday morning, while WTI was around $99.50after Thursday’s spike. Brent had reached nearly $110 before pulling back.
And this isn’t just traders speculating.
Saudi crude supply fell to roughly 6 million barrels per day in August, which the International Energy Agency estimates was its lowest level in more than three decades. Attacks on Saudi energy infrastructure and shipping have contributed to the decline.
The Houthis have also taken control of Perim Island and the nearby coastal town of Dhubab, strengthening their position around the Bab el-Mandeb Strait. Satellite imagery reportedly showed smoke near Saudi Arabia’s East-West oil pipeline, although Saudi officials had not confirmed a pipeline attack at the time of reporting.
That’s an important distinction because I said during the podcast that a major pipeline had been knocked out. I can’t independently confirm that. What is confirmed is that the conflict has expanded, Saudi energy infrastructure has been attacked, shipping has been disrupted and Saudi oil supply has fallen dramatically.
That’s enough to create a real energy problem without exaggerating what we know.
If you’re disrupting Iran, Saudi Arabia and two of the world’s most important oil shipping corridors at the same time, $100 oil isn’t difficult to understand.
And $100 oil feeds right back into inflation.
Inflation feeds into Fed policy.
Fed policy feeds into bond yields and liquidity.
And all of that eventually gets back to Bitcoin.
Bitcoin Is Still in the Same Price Block
Here’s the strange part.
Bitcoin actually rallied after CPI.
When I started recording this morning, Bitcoin was around $76,000. By the time I finished, it had moved above $78,000, gaining roughly 1% in an hour.
Why?
Maybe the market simply wanted certainty.
Before CPI, investors were wondering whether it would confirm yesterday’s PPI report. Now we know. Inflation is still a problem, and the probability of another Fed hike has increased.
Markets can sometimes rally on bad news when the bad news removes uncertainty.
But I’m not going to pretend I know that’s exactly what happened.
More importantly, I don’t think the move from $76K to $78K fundamentally changes anything.
I’ve been saying this repeatedly: $76,000, $78,000, $80,000 and even $81,000 are basically the same price right now.
Think in price blocks.
Bitcoin is still trading inside the same broad range. Until we decisively leave it, I don’t care about every $1,000 or $2,000 move inside that range.
Coinbase CEO Brian Armstrong reportedly said this week that he believes Bitcoin may already have established its cycle low and could trend higher over the next two years.
Maybe he’s right.
But if the traditional four-year cycle remains intact, we still have the possibility of another low around October.
Could Bitcoin take a 30% or 35% haircut and end up in the $50,000s?
Absolutely.
I’ve seen Bitcoin do crazier things.
A geopolitical shock or unexpectedly aggressive Fed action could change market psychology very quickly.
That’s why I don’t think we can confidently say we’re in a bull or bear market yet. Sometimes you don’t know until you look backward.
Spot Bitcoin ETF flows have also become less supportive this week. According to the figures discussed today, approximately $46.6 million left the funds on September 8 and another $120 million on September 9, following the huge $730.8 million inflow on September 3 and another $174.6 million on September 4.
So institutional demand hasn’t disappeared, but it isn’t providing the same tailwind every day.
Quantum Risk Is Getting Cheaper
There’s another story today that I think matters considerably more than people realize.
Researchers have reduced by more than 50% a benchmark for the quantum resources required to perform a key operation involved in a future attack against the cryptography used by Bitcoin and Ethereum.
The researchers produced a circuit requiring 1,151 logical qubits and roughly 1.3 million Toffoli gates for the particular operation they optimized. Another design reduced the logical-qubit requirement to 813, but at the cost of considerably more computation.
This does not mean somebody can crack Bitcoin today.
Nobody has a quantum computer capable of executing the complete attack.
It also doesn’t mean that 1,151 logical qubits automatically equals a broken Bitcoin network. The researchers optimized one major component of a Shor’s-algorithm attack, not the entire attack, and real hardware would still need physical error correction and the ability to sustain a massive computation.
But here’s why I think it’s important.
We’ve spent the past week talking about quantum hardware getting better.
Now researchers are simultaneously making the attack more efficient.
That’s the other side of the equation.
The hardware doesn’t necessarily need to reach yesterday’s estimate if researchers can keep reducing the computational resources required.
And AI agents were heavily involved in this particular research effort, helping with implementation, testing and optimization alongside human researchers.
That’s exactly the convergence I’ve been talking about.
AI gets better.
AI helps researchers improve quantum algorithms.
Quantum hardware gets better.
The resource requirement for attacking existing cryptography gets smaller.
Meanwhile, Bitcoin and Ethereum developers have to migrate enormous decentralized networks toward post-quantum security.
Again, don’t panic.
But prepare.
The problem isn’t that Bitcoin gets cracked tomorrow. The problem is that a secure migration could take years, and once the technology exists, it’s too late to start asking what we should do.
There’s also a much simpler security lesson today. Trezor says a breach involving a third-party service provider allowed attackers to send phishing emails that appeared to come from a legitimate company domain. According to the transcript, the underlying hardware-wallet technology itself wasn’t compromised.
The cryptography can work perfectly and you can still click the wrong link.
You are the weak link.
Crypto Prices
Bitcoin is now around $78,035, up approximately 1.3% over 24 hours and sharply higher from where it was when I began recording.
Ethereum is approximately $2,513, up around 3.5%.
BNB is around $722, up approximately 2.2%.
XRP is approximately $1.36, up around 0.6%.
Solana is around $101, up approximately 2.3%.
TRON is approximately $0.336, down around 0.7%.
Hyperliquid is approximately $82.05 after jumping roughly 4% in an hour.
Zcash is around $1,162, after gaining approximately 6.2% in the previous hour.
Total Crypto Market Cap: approximately $2.64 trillion, up around 0.5%.
Fear & Greed: 68, Greed.
My Take
This morning is a perfect example of why I don’t want to overreact to every $1,000 move in Bitcoin.
The macro setup looks worse.
PPI is hot. CPI is hot. Oil is above $100. The 10-year Treasury is knocking on 5%. The probability of another rate hike has increased.
And Bitcoin went up.
Maybe that’s because the market finally has more certainty about the Fed. Maybe something else is happening underneath the market. I don’t know yet.
What I do know is that Bitcoin remains inside the same broad price block I’ve been talking about. Until we break decisively out of that range, I don’t think $76K versus $78K versus $80K tells us very much about the longer-term direction.
Meanwhile, the quantum story keeps getting more interesting. Better hardware is only one side of the risk. If researchers and AI can simultaneously reduce the computational resources needed to attack existing cryptography, those two curves are eventually moving toward each other.
Nobody knows exactly where they meet.
That’s why Bitcoin and Ethereum should be preparing now.