Also a ten billion bet on Bitcoin and a stabilization of the labor market

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	Forwarded this email? Subscribe here for more Bitcoin Is Up After The Rate Cut Also a ten billion bet on Bitcoin and a stabilization of the labor market Ecoinometrics Sep 27   READ IN APP   Welcome to the Friday edition of the Ecoinometrics newsletter. Every week we bring you the three most important charts on the topics of macroeconomics, Bitcoin and digital assets. Today we'll cover: Bitcoin is up after the rate cut A ten billion bet on Bitcoin A stabilization of the labor market Each topic comes with a small explanation and one big chart. So let’s dive in. In case you missed it, here are the other topics we covered this week: What Does The FOMC Meeting Mean For Bitcoin? Ecoinometrics · Sep 23 Read full story Bitcoin's Price Is Rising, On-Chain Activity Isn't Ecoinometrics · Sep 25 Read full story If you aren’t subscribed yet, hit the subscribe button, to receive this email every week directly in your inbox: Upgrade to paid Bitcoin Is Up After The Rate Cut The FOMC meeting on September 18 didn't reveal any surprises: The Fed announced a 50 basis point cut. They plan to make gradual cuts going forward. The expected terminal rate is just under 3%, higher than pre-COVID levels. It's unclear if the Fed will stick to this plan. But this guidance isn't new, they've been hinting at it since early this year. Even though this information should have been priced in, it was positive enough to spark a Bitcoin rally. Or more accurately, a risk asset rally, since Bitcoin and the stock market are moving in tandem. However, zooming out, Bitcoin is still in a drawdown. It needs to climb above $65,000 to break the downtrend channel. While there are reasons for optimism, the market hasn't fully shifted yet. This is especially clear when you look at on-chain activity. A Ten Billion Bet On Bitcoin MicroStrategy bought another 7,500 Bitcoins last week. That's 40 Bitcoin purchases in four years, bringing their total investment to $10 billion. This bet is paying off in two ways: They're up more than 60% on their Bitcoin position. Their stock is tied to Bitcoin's performance, creating a double effect in both good and bad times. I'll be honest: at the start of the year, I thought MSTR might struggle due to the new Bitcoin ETFs. Before ETFs, investors wanting Bitcoin exposure without direct ownership had limited options like proxy stocks. Now, ETFs solve this problem. Yet many still choose MicroStrategy's more leveraged position. It seems ETFs haven't just reshuffled existing money. The cash going to MicroStrategy isn't simply moving to ETFs. Instead, the pie is growing. ETF investors and those betting on MicroStrategy are different groups. New ways to invest in Bitcoin are expanding the market, not just dividing it. A Stabilization Of The Labor Market Continued unemployment claims are stabilizing. This is good news, as we saw a persistent uptrend from April to July. Such uptrends often precede recessions... not the kind of warning you want to ignore. But the fact continued claims are leveling off probably gives hope to the Fed that they can still achieve a soft landing.   Two possible macro scenarios: The Fed achieves a soft landing. Financial conditions ease. Economy stays stable. A recession hits. The Fed restarts QE. Tough at first, but risk assets recover. For Bitcoin, a soft landing is better. Some think full QE is needed for the next big wave. But Bitcoin will grow as government debt increases and the Fed monetizes it.  As we have seen in recent years the US government doesn’t even pretend they need a recession to considerably expand the debt. In times of economic growth they still manage to grow the national debt by several trillions every year. Just wait and watch. That’s it for today. I hope you enjoyed this. We’ll be back next week with more charts. Cheers, Nick P.S. We spend the entire week, countless hours really, doing research, exploring data, surveying emerging trends, looking at charts and making infographics.   Our objective? Deliver to you the most important insights in macroeconomics, Bitcoin and digital assets. Armed with those insights you can make better investment decisions.  Are you a serious investor? Do you want to get the big picture to get on the big trades? Then click on the button below. Upgrade Now Invite your friends and earn rewards If you enjoy Ecoinometrics, share it with your friends and earn rewards when they subscribe. Invite Friends   Like Comment Restack   © 2024 Ecoinometrics 548 Market Street PMB 72296, San Francisco, CA 94104 Unsubscribe