STX Remains Compelling Beta Exposure, Miners to Outperform in Lower Rate Environment
Rate Expectations Moving Lower
Last week, we discussed how rate expectations were a barrier to crypto moving higher and that we anticipate continued non-recessionary but soft economic data will help spur flows. Fast forward to this week, and we have seen a cool manufacturing PMI, a soft JOLTS report, and a services PMI in which the price component was below market expectations. The remaining important data for this week includes non-farm payrolls and the unemployment rate on Friday.
There is clearly a new impulse of demand in this Goldilocks (slowing but non-recessionary economy plus disinflation) environment. As rate cuts slowly start to get priced back in, we can see the Coinbase premium moving higher.
Additionally, there have been massive inflows into spot Bitcoin ETFs, with nearly $900 million on Wednesday.
Stablecoin data has also turned positive, with the rolling 7-day change in aggregate stablecoin market cap moving conclusively higher.
This combination of lower rate expectations and improving market data suggests a more favorable environment for crypto assets in the near term.
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