Good morning Readers! Welcome to TBL Weekly #115 — grab a coffee, and let’s dive in. Unchained empowers you to fully control your Bitcoin with a collaborative multisig vault, where you hold two of three keys and benefit from a dedicated Bitcoin security partner. Purchase bitcoin directly into your cold storage vault and eliminate exchange risks with Unchained's Trading Desk. Unchained also offers the best IRA product in the industry, allowing you to easily roll over old 401(k)s or IRAs into Bitcoin while keeping control of your keys. Don’t pay more taxes than you need to. Use code TBL for $100 off when you create an account. Weekly Macro MonitorWeekly AnalysisMonday: We started the week with some cooler-than-expected inflation prints in China, which has increased pressures on the Chinese government to roll out more stimulus to re-ignite economic activity. Remember that China already has targeted the stock market, primary mortgage market, and has indicated a willingness to issue about $1 trillion (USD) worth of government bonds (6 trillion CNY). After a powerful September, October’s headwinds are proving strong for Chinese equities, down nearly 7% since October 8th. Perhaps some profit-takers amidst a natural correction after September’s sharp rally, or perhaps negative economic outlooks. Conversely, on the other side of the world, US equities and bitcoin appear to be benefiting from highly anticipated “Uptober” historical patterns. With earnings season at its peak right now, we continue to see strong momentum in tech as a result of positive productivity outlooks given the AI boom—Nvidia is at all-time highs, battling with Apple for the title of Wall Street’s most valuable company. Tuesday: Tuesday saw bitcoin’s price test the resistance line of our consolidation wedge, which continued knocking as the week closed. These tests higher in risk-assets have been accompanied by a sell-off in Treasury markets (higher interest rates), leading us to believe in a regime shift wherein the seemingly omnipotent positive correlation of the past couple years between risk assets and Treasury prices is finally losing steam. In other words, investors have been increasingly absorbing the textbook theory of moving out of safety (Treasuries) to buy risk (equities and bitcoin) since mid-June. Wednesday: Taking a look at European markets, the UK received a cooler-than-expected CPI print on Wednesday. Apparently, every other economy is struggling, while the US remains resilient as its election approaches. Cooling data has added pressure for the Bank of England to press the gas pedal on rate cuts—much like its ECB counterparts did later in the week. The wave of global rate cuts we promised you earlier this year has delivered and gathered steam. Thursday: Going back to the US, Thursday was undoubtedly the most important economic day of the week with a much hotter-than-expected retail sales print. While the monthly number impressed the market, the annual trend tells the tale of a consumer in growth, but subdued, below 2%. This caused a bear steepener in the US rates market on higher growth expectations, building on that new regime shift of bullish stocks, and bearish Treasuries. We want our readers to understand that a curve only steepens when the future expectation for growth and inflation extends beyond where the forward policy rate is. That’s what’s happening now—the Fed is finally willing to cut to 3.5%, and that is supporting the expectation for growth several years from now. The opposite, an inverted curve, happens when a policy rate too high stunts those same growth expectations. Now you can see why rate cuts un-invert the curve. Friday: Following the bullish theme, gold’s price reached all-time highs on Friday. Gold is on an incredible run, and we could tell that the breakout would send gold to a 3-handle. It’s only a matter of time, and all of this recent price action has occurred with a US dollar that is sharply spiking on higher US rates relative to the rest of the world. Are the lagged effects of monetary policy arriving soon? US economic data refuses to say so. Efani delivers premium mobile service with unparalleled protection against SIM swaps and privacy invasions. Safeguard your bitcoin and personal data with the industry's most advanced security measures. Protect Yourself Now. If you value your privacy and security, Efani Secure Mobile is the answer. Don’t wait until it’s too late, protect yourself today. Use code TBL at checkout for $99 off the Efani SAFE Plan. In case you missed it: TBL on YouTubeGlobal Macro Update: Bitcoin Surges as China Stimulates and Trump's Trade War 2.0 Looms In this video, Nik dives into what could be a perfect storm brewing in global markets. He unpacks Bitcoin's sudden 5% surge due to major economic shifts. To do so, he explores China's massive 6 trillion yuan bond stimulus and its global ripple effects, alongside the potential return of Trump's aggressive trade policies. Nik discusses the shocking scope of Trump's proposed tariffs and what that might mean. As the US and China continue clashing, this video explains the overall effects this will have on bitcoin and global markets. Here are some of the key insights:
Bitcoin’s Power Law Path to $1 Million In this video, Nik dives into the mathematical heart of Bitcoin's future with statistical wizard Stephen Perrenod. They unravel the complex relationship between power laws and Bitcoin's market, and explain why bitcoin's growth isn't exponential, but follows a fascinating power law pattern that could push its value to $1 million by 2033. From the diminishing impact of halvings to the mysterious Lindy effect, this deep-dive analysis compares bitcoin's volatility with gold, explores market bubbles, and reveals how simple mathematical models can predict trajectory. Here are some of the key insights:
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Take 15% off with code TBL. Get your Stamp Seed today! TBL on SubstackEvery week, we bring you our global events recap TBL Thinks. This week we covered the pinch that US households are feeling given borrowing delinquencies, the potentially higher deficits under a Trump administration, and what Congress is doing to remain crypto-friendly. Check out TBL Thinks here: What TBL Pro Is ReadingMean, Median, Mode—a weekly quantitative report summarizing bitcoin price analysis and global macro narratives to position investors and bitcoin watchers with the data that matters. Read more by going TBL Pro:
Next Week with NikEconomic data always lightens up towards the last week of the month, but we aren’t short on interest given the levels at which markets head into the weekend. Bitcoin rests slightly above descending trendlines in place for the past several months, making any pop in its price a potential trigger for big-time momentum. Stocks are at all-time highs, as is gold, all while economic data suggests the Fed shouldn’t be in any rush. The goldilocks scenario for risk assets—supportive liquidity as the US stays deep in deficit, falling interest rates as the worst of inflation is conquered, and no big buyers cut off from liquidity, creating no shortage of asset buyers—marches on. We have our eyes on falling levels of the Fed’s reverse repo program and repo rates to indicate any need to abruptly stop QT, but those hiccups aren’t manifesting into anything troublesome either. TBL readers, above all else, will be watching the bitcoin price. Flirting with these levels near $70,000-$75,000 for three years, bitcoin is preparing long-term holders for the elusive sixth digit. Sometimes, the only catalyst needed is price itself, so our eyes remain on one trendline. On Tuesday, I’ll be joining Voltage for a webinar on Lightning Network:
Our videos are on major podcast platforms—take us with you on the go! Keep up with The Bitcoin Layer by following our social media! Unchained empowers you to fully control your Bitcoin with a collaborative multisig vault, where you hold two of three keys and benefit from a dedicated Bitcoin security partner. Purchase bitcoin directly into your cold storage vault and eliminate exchange risks with Unchained's Trading Desk. Unchained also offers the best IRA product in the industry, allowing you to easily roll over old 401(k)s or IRAs into Bitcoin while keeping control of your keys. Don’t pay more taxes than you need to. Use code TBL for $100 off when you create an account. Thanks for reading The Bitcoin Layer — for access to all content, upgrade to paid! |
Saturday, October 19, 2024
Bitcoin Strength, Chinese Struggles, and Uptober Delivering: TBL Weekly #115
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