If ever there were a make or break week for markets, this certainly feels like the one. On Wednesday, Trump’s deadline for tariffs approaches, and on Friday we get new jobs numbers and a speech from Fed Chair Jay Powell.
Bitcoin and the rest of crypto are looking as shaky as ever in the short-term, with Ethereum returning to lows not seen since 2023 over the weekend at $1,775. Luckily one buyer, Strategy CEO Michael Saylor, remains undeterred as he scoops up another $1.9 billion in Bitcoin.
“Despite the good news we are seeing come out… the price doesn’t care,” said author of the Crypto is Macro Now newsletter, Noelle Acheson, who joined us on this week’s show. “I’m looking at rates, expectations, economic data — because that’s the driver right now.” Let’s dig in…
Things are weird in crypto right now because conviction among those in the space has arguably never been higher — and yet short-term price movements over the next few weeks has never been less clear.
For example, as economic data has worsened and inflation picks back up, consumer sentiment is unraveling. As Trump ratchets up tariff talk, that has a vicious flywheel effect that can become self-fulfilling. More pressure on prices, leads to more inflation, leads to higher interest rates, leads to recession. Odds of a recession are steadily climbing — but Trump can seemingly blink first and change all of that with announcements on Wednesday. Or, if he holds firm, perhaps it’s the Fed who blinks first if they suspect things have gotten so bad in the market that they signal more rate cuts may be warranted this year.
One thing is for certain, people don’t feel good right now. In fact, consumer expectations for business conditions tanked in the latest University of Michigan survey to a historic low. Lower than the pandemic. Lower than 2008. Like, lowest… ever. So yeah, considering that, actually kind of crazy that a digital gold on the internet is still holding at $82,000.
The CEO of BlackRock, Larry Fink, is an interesting guy. As the head of one of the world’s largest asset managers, what Larry Fink says definitely matters. That’s part of the reason why BlackRock making the decision to get into Bitcoin ETFs buoyed the whole class of funds in 2024. But it was actually just a few years ago that Fink was singing a very different tune. In one interview in 2017 he said crypto and bitcoin were “an index of money laundering.”
Now, in a new investor letter, Fink is floating the idea that Bitcoin could continue to chip away at the U.S. dollar as the preferred global reserve asset. While I think he could have a point (because U.S. debt continues to stack up beyond any measure of sustainability, Noelle respectfully took issue with the idea of Bitcoin living up in times of economic uncertainty (like right now.) “I say this with respect — what is he smoking on this?” she said.
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