source: CNBC
Finally, the most recent data point, just on Tuesday the Fed came out with their real GDP forecast for the third quarter of 2.9%, up from 2.5% previously.
If you’re confused, so is the market!
Taking in the totality of the recent data, I think the takeaway is that the market narrative has been aggressively flip-flopping without sustained evidence in either direction. Think about it — in the space of two weeks, we went from concerns over economic re-acceleration and inflation to calls for emergency rate cuts!
In fact, I think you can make the argument that this “too hot, nevermind too cold” economy is exactly what the fabled “soft-landing” should look like. I know, I know, famous last words…
Quote of the Week
“In addition, we’re one of the few companies in the world that have access to a 3-nanometer fab. Bitmain is producing chips that are 6-nanometer. So we can build a far better product that’s far more reliable, far more open and configurable. And this is super attractive to every single miner that we’ve talked to, and you’re seeing the result of that within one of the deals we just announced, and we have a very strong pipeline behind it as well. So I’m fully confident and have no doubt that this is going to be a significant business for us, and we’re going to take a majority of the market share.”
— Jack Dorsey, CEO, on Block’s Q2 2024 earnings call when asked about the opportunity he sees in bitcoin mining.
Market Update
As of 8/7/2024:
Source: Onramp, Koyfin. 3-, 5-year figures annualized.
A late week sell-off in global risk assets accelerated on Monday as the VIX index, a measure of stock market volatility and widely thought to be a fear gauge, spiked to its highest levels ever outside of the market events of 2008 and 2020. A surprise 15 bps rate hike by the Bank of Japan, coupled with weak employment data and recession fears in the US, are thought to be the drivers of the sudden repricing of risk. Bitcoin led the way lower, wicking down to $49,000 on Sunday night before recovering to $55,000 as of Wednesday at 4pm. The repositioning going on under the hood of the market is illustrated by the one month and year-to-date performance of the Nasdaq 100 vs. the Russell 2000, with the QQQs still up 6.2% ytd despite a 12.4% drawdown in the last month, while the small cap index is about flat over the last month and ytd. Gold, typically a safe-haven bid, also fell 2.5%. After a long period of underperformance, bonds reminded investors of their historical place in a 60/40 portfolio this week, rallying 0.8% as stocks slid.
Podcasts of the Week
The New Frontier E001: Bitcoin And The Middle East
Subscribe to Onramp MENA’s YouTube channel to catch new episodes of The New Frontier podcast! A dynamic, bitcoin-centric podcast that bridges the gap between the transformative world of Bitcoin and the unique financial landscape of the Middle East, covering both conventional and Islamic finance.
Wake Up Call (8.5.24): Contextualizing the Global Market Selloff with Jackson Mikalic
Wake Up Call is a weekly show that will be streamed live on LinkedIn every Monday morning. To catch the premier of each episode, follow Onramp’s LinkedIn page and add Wake Up Call events to your calendar. Hosted by Mark Connors, Onramp’s Head of Global Macro Strategy, and Rich Kerr, Onramp’s President of Managed Wealth, this show seeks to provide financial professionals the “wake up call” they need, prompt them to have an open mind with respect to bitcoin, rethink their prior assumptions, become more educated on the topic, and learn from others who are already farther down this path.
Closing Note
Onramp provides bitcoin financial services built on multi-institution custody. To learn more about our products for individuals and institutions, schedule a consultation to chat with us about your situation and needs.
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Until next week,
Zack Morris
