The Bitcoin Layer

The Bitcoin Layer

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The Bitcoin Layer
The Bitcoin Layer
Prepare yourself for what's coming

Prepare yourself for what's coming

Soft landing? Try persistent inflation and a souring labor market.

Nik Bhatia's avatar
Nik Bhatia
May 02, 2024
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The Bitcoin Layer
The Bitcoin Layer
Prepare yourself for what's coming
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Dear readers,

Before settling in to write you these letters, I usually spend several hours preparing charts and bullet points so that I can deliver to you a cohesive picture of what matters in bitcoin and global macro. Generally, five to seven narratives speak the loudest from across our wheelhouse. Today, I listed out a dozen but had to stop myself after one of the busiest markets days in memory—a function of either luck, the calendar, or the building of a volatility event. We’ll only know if it’s the latter as time progresses.

Bitcoin finally dipped 20% in another bout of extremely high correlation with the stock market, Treasury told us how much long-term debt will be issued, Powell did an Irish jig and waved a magic wand hoping everyone would applaud, and Japan intervened in the USDJPY cross—but that barely scratches the surface of today’s signal. Also, included are my deep and unfortunately dark thoughts about the oppressively soul-sucking financial repression being imposed on society by today’s governments—is there a light at the end of the tunnel, setting aside the interim solution of holding seizure-resistant property such as bitcoin in self custody?


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Today’s topics

  • Bitcoin’s price decline

  • IBIT discount to NAV

  • QRA: Treasury keeps pressure on the market

  • Big question: does monetary policy bring lagged effects 9 or 24 months later?

  • Powell refused to introduce another hike and fought off a 3% target

  • Fed denied the financial conditions having an immediate effect on inflation

  • Remembering the wise words of Harley Bassman on cut pricing

  • QT surprise as Powell cites ample reserves

  • Bank of Japan currency intervention

  • Bad economic data

  • Stock market reaction, oil sending a warning

  • Corporations are worried about consumers

Bitcoin

Trendlines matter a lot. We flagged two levels of support last week so that you wouldn’t be surprised by the price action below $62,000:

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