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- 🟣 Trying for a bounce, but how high?
🟣 Trying for a bounce, but how high?
December inflation below expectations has crypto investooors playing the happy music this Friday
Happy Friday!
December’s core inflation print this morning in the US came in 0.1% below estimates at 2.9% year-over-year. It marks six out of the last seven months in which inflation is below the Fed's 2% annualized target.
That’s music to bitcoin traders’ ears, and the top crypto asset has rallied nearly 5% in the past 8 hours. Not too shabby.
Macro analysts like Darius Dale at 42 Macro are increasingly calling for a “soft landing,” and a FOMC rate cut is still on the table for March.
Both households and corporations are “flush with cash” and 2023 fiscal stimulus blunted much of the effects of rising rates, but these tailwinds are similar fading, Dale said.
“Janet Yellen has been doing a masterful job of running fiscal policy, in my opinion,” he said.
She and Fed Chair Jerome Powell have both been “threading the needle” when it comes to tweaking the economic levers of federal policy. That shows up as a reduction in the total job openings in the economy — a cooling effect — even as the unemployment rate has remained at historic lows.
“This has been a very bizarre business cycle,” Dale said. Many models of past cycles have needed to be tossed by the wayside.
Inflation has been waning, but Dale told Blockworks Macro that so too are expectations of a “Goldilocks regime” which have prevailed for the last quarter. That leads him to curtail risk in his investment portfolio.
“There are elements of inflation that are very concerning when you look out over the medium term,” Dale said. “We are seeing emergent signs of what we would call ‘sticky inflation,’” he noted, with core inflation possibly remaining around 3% YoY.
So, there are not yet lights flashing red, but some are turning from green to yellow.
A Dune dashboard now tracks known addresses of Bitcoin ETFs on-chain, illustrating how BlackRock and Fidelity are neck and neck, well ahead of the rest of the pack.
Source: Hildobby Dune dashboard
A handful of AI projects already exist that are quite highly valued, but there is definitely more potential left, especially if the market continues to turn increasingly bullish overall.
2023 was an incredible year for Synthetix, as it was able to come out of the grueling bear market and create and scale a brand new offering to find product market fit in a short amount of time.
Yet more proof that we’re living in a simulation. So much of Bitcoin lore is built around memes.
Underfunded researchers have increasingly been leveraging crypto for academic crowdfunding.
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.
