Note: There were some technical difficulties processing today’s video, which led to subpar audio quality in certain spots. Below, I provide more detailed written commentary to pair with the charts referenced in the video. Thank you for your understanding.
- Crypto markets traded mostly sideways to slightly lower today across both our token and crypto-linked equity portfolios. The primary exception remained bitcoin miners and Galaxy, which continued to outperform as investors gained confidence in the ability of these companies to monetize power and compute capacity through AI-related use cases. Outside of that cohort, today’s price action was best characterized as consolidation rather than deterioration.
- The intraday volatility we saw was driven by political headlines rather than any change in underlying fundamentals. During a press conference, President Trump suggested he would be “very upset” if Kevin Hassett were to leave the National Economic Council to become Fed Chair, noting Hassett’s value as a media-facing spokesperson and the fact that the Fed Chair role is far less public-facing. Prediction markets reacted forcefully to these comments, interpreting them as a signal that Hassett may be removed from the shortlist.
- That interpretation drove a sharp but brief risk-off move. Bitcoin sold off quickly, wicking from roughly $95.6k to around $94.3k in a matter of minutes, while broader crypto underperformed equities. Importantly, prices recovered just as quickly, retracing back to pre-comment levels shortly thereafter. In my view, this snapback is telling and suggests the market ultimately treated the remarks as less definitive than prediction markets initially implied.
- Some observers have pointed to higher yields as evidence that Trump’s comments should be taken seriously. However, yields had already been trending higher over the prior 24 to 48 hours, and today’s move largely represents a continuation of that trend rather than a new macro signal. My interpretation is that the President’s remarks were off-the-cuff and consistent with his typical communication style, and that markets, particularly prediction markets, likely overreacted in the moment.
- Stepping back, uncertainty around the Fed Chair transition remains elevated, especially given the broader legal and institutional questions surrounding Chair Powell. On the margin, this uncertainty has contributed to a modest repricing of rate expectations, with markets pricing out some cuts later this year. That said, I do not view today’s episode as structurally meaningful for the crypto outlook.
- From a flow perspective, the setup continues to improve. Over the past 30 days, aggregate ETF and stablecoin flows have turned positive, marking the first time since early November that we’ve seen both channels trending positively. One caveat worth noting is that as stablecoins become more integrated into payments, treasury management, and broader TradFi infrastructure, their signal value as a pure proxy for speculative demand may diminish over time.
- U.S.-led spot demand is also showing signs of improvement. The Coinbase/Binance spread has moved back into premium territory, with the 7-day moving average now positive after a deep discount through much of Q4. In parallel, digital asset treasury stocks have begun to trade better, with the MSTR/BTC ratio up meaningfully since early January. This points to improving risk appetite within that cohort and raises the likelihood of incremental corporate bitcoin demand near term.
- The one area where confirmation remains lacking is spot volume. While aggregate spot volumes appear to have bottomed and are moving higher, they remain muted on an absolute basis relative to levels typically associated with durable trending markets.
- Bottom line: today’s price action looks like healthy consolidation amid headline-driven volatility. Despite the noise around Fed Chair speculation, improving flows, better U.S. spot demand, and stabilizing positioning keep the tactical outlook constructive.
Tickers in this video: BTC
