Bitcoin Drops Below $107,000, 24-hour Loss of 11%

Israel’s largest bank, Bank Leumi, announced it will offer crypto asset trading services to clients starting early 2027, becoming the first Israeli bank to launch such services. Clients of Leumi and its mobile banking arm Pepper will be able to buy, hold, and sell Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) via the Leumi Trade app. Galaxy Digital will provide trading and related services through its GalaxyOne Institutional platform, which is tailored for banks and asset management firms. Bank Leumi also signed an agreement with Galaxy to use the latter’s digital asset custody infrastructure—formerly known as GK8—to support the business. Maya Ravia, Bank Leumi’s head of strategy, noted that digital assets are increasingly becoming an important part of the global financial system. Lior Lamesh, CEO of Galaxy Israel, added that banks entering this space early will help shape the direction of the financial system’s transition to open, programmable infrastructure. The two sides have not yet disclosed the partnership’s commercial terms, transaction fees, or client eligibility requirements.

According to South Korean media reports, to address the growing demand for artificial intelligence (AI) storage, SK Hynix significantly boosted its equipment investment and R&D spending in the first half of this year. Cash outlays for acquiring tangible assets surpassed 18 trillion won, rising more than 70% year-on-year. Per SK Hynix’s semi-annual report disclosed on the 14th, on a consolidated basis, the company’s cash expenditure for tangible asset purchases in H1 totaled 18.3288 trillion won, an increase of 72.7% from 10.6157 trillion won in the same period last year. R&D investment also saw a sharp jump: total R&D expenditure hit 6.0428 trillion won in H1, up 98.4% from 3.0456 trillion won year-on-year, with 5.8163 trillion won allocated to ongoing development costs. Driven by growing demand for AI-specific high-bandwidth memory (HBM), server DRAM, and enterprise-grade solid-state drives (SSD), SK Hynix is accelerating the expansion of its production facilities.

As US stocks continue to hit new all-time highs, investors’ primary concern has shifted from market declines to fear of missing out (FOMO). The S&P 500 has rallied roughly 23% since late March, driven by strong corporate earnings, easing inflation pressures, and market bets that the Federal Reserve will cut interest rates. Institutional funds are notably increasing allocations to call options. Castle Securities data shows that demand for call options on at least 170 S&P 500 constituents has outpaced demand for options betting on market volatility, with the gap hitting its highest level since at least 2016. Scott Rubner, head of stock and equity derivatives strategy at Castle Securities, said the chase for upside is approaching record highs. Steve Sosnick, chief strategist at Interactive Brokers, dubbed these trades "fear of missing out insurance"—investors reluctant to directly chase the underlying stock buy call options to retain exposure to potential gains. Meanwhile, market implied volatility remains low: the VIX index has fallen to its lowest level since January this year, and the equal-weighted VIX index has also hit a low since March 17, making downside protection relatively cheap. On Thursday, a large institutional investor spent $23.4 million on a massive put option combination, betting that if the S&P 500 plummets by 38% by December 18, the hedge position will generate huge returns. Sosnick noted that the current market sees both strong upside chasing and low-cost downside protection, allowing some institutions to participate in the rally via call options while establishing tail risk hedges at a low cost.

U.S. consumer confidence fell for the first time in three months as households grew concerned about deteriorating business conditions and rising inflation. According to survey data released Friday by the University of Michigan, the preliminary August consumer sentiment index dropped to 51, lower than July’s final reading of 55.2. The median economist forecast stood at 55. Consumers expect prices to rise 4.3% over the next year, a slight uptick from last month and notably higher than levels before the February outbreak of the Iran conflict. They also project prices will climb at an annual rate of 3.3% over the next 5 to 10 years. After two consecutive months of improvement, consumers’ confidence in both short- and long-term economic outlooks has weakened. Since the start of the year, consumers’ expectations for the labor market have changed little. The survey found consumers are growing more worried about inflation, while concerns over unemployment have eased. The survey period covers responses collected between July 28 and August 10. During this time, the U.S. national average gasoline price hovered above $4 per gallon. Another report released Friday showed U.S. retail sales in July posted their largest decline in over a year, driven by reduced consumer spending on automobiles and online purchases. (Jinshi)

Preliminary data shows the U.S. August 1-year inflation rate expectation stands at 4.3%, with the market consensus forecast at 4.2% and the prior reading at 4.20%.

Michael Burry, the prototype of *The Big Short*, has disclosed his latest investment holdings. His long positions are mainly concentrated in Adobe, MercadoLibre, Zoetis and JD.com, each accounting for around 8% of his portfolio; Lululemon, PayPal, Veeva, Flutter, Molina Healthcare and HCA Healthcare each take up approximately 7%; Fannie Mae, Freddie Mac and Sprouts each make up roughly 5%. On the short side, Burry currently holds short positions in descending order of size: iShares Semiconductor ETF (SOXX), Micron Technology, Nebius, NVIDIA, Oracle, Palantir and Caterpillar, alongside Invesco QQQ Trust put options which account for about 6% of his portfolio. In terms of position adjustments, Burry has fully closed his short positions in Tesla and Applied Materials, noting both trades were profitable. He also sold all his SOXX put options, instead establishing a larger QQQ put option position. Additionally, he reduced his short in Caterpillar, increased his short in Micron, and raised his cash proportion to 12%. Per the disclosed adjustments, his shorting focus has shifted from pure bets on semiconductor sector declines to increased bets on the overall Nasdaq market decline.