Adding BNB to Core Strategy (Core Strategy Rebalance)
Our Verdict: Powell Nailed It
Yesterday, Powell did exactly what risk assets wanted him to do—their actions were dovish, with a 50-bps cut and guidance for two more by year-end, but their economic commentary remained reassuring. Many bears point to this as hawkish, and since it's hawkish, it's implicitly bad for risk assets (including crypto).
In our view, if Powell had taken a significantly more dovish stance than he did, markets might have priced in a higher probability of a hard landing. This would likely have pushed bonds to rally further, while risk assets would have faced a tougher road ahead.
Since August, the market has been walking a tightrope between expectations of a hard landing and a soft landing. We've recently said that for BTC to get a sustained bid, the market would need to more fully price in either scenario.
Our money was on the latter due to the largely non-recessionary economic data. However, the market had been wary about job numbers, and our view was that it would take a combination of (1) stronger economic data to trickle in and (2) a dovish but reassuring Fed to more fully price in a soft landing.
We think that recent GDP revisions and retail sales numbers have taken care of the former, and the Fed's actions and commentary have taken car...Reports you may have missed
CORE STRATEGY: REMAINING TACTICALLY CAUTIOUS, TGA RUNDOWN + EARLY JAN FLOWS COULD PRODUCE NEEDED SPARK In our view, this cycle is far from over. However, until bonds find a bottom and the USD peaks, it’s prudent for more tactically-minded crypto investors to remain nimble and ready to capitalize on opportunities once a trend reversal is confirmed. While this could happen as early as next week due to early-January inflows, additional...
CORE STRATEGY: FOCUS ON MAJORS, KEEP HEAD ON SWIVEL UNTIL BONDS/DXY RELENT We think it's right to expect a bounce into year-end, potentially starting tomorrow if PCE data comes in soft. In our view, this cycle is far from over, but until bonds find a bottom and the USD tops, it’s likely best for the more tactical investor to stay nimble and prepared for opportunities upon confirmation of this trend...
CORE STRATEGY Our base case assumes that the macro environment will remain accommodative for crypto through year-end. However, in light of recent market action, we remain alert for signs of a local top (not a cycle top). That said, it is difficult to justify a risk-averse stance at this stage and think it is right to lean into this altcoin rally. Source: TradingView, Fundstrat Source: TradingView, Fundstrat STRONG DOLLAR +...
Today's employment numbers broadly met investor expectations, placating a nervous market. Risk assets rallied, aligning with our view that yesterday's de-risking would not persist through today. Yields continued their downward trajectory, and Fed funds futures also declined, reflecting the market's adherence to the Fed's dovish messaging. Yields Falling: Source: TradingView Fed Funds Futures Showing More Cuts: Source: TradingView Oil prices nearing YTD lows likely assisted in alleviating near-term concerns about...
