Bitcoin Whales Accumulate at $80K While Small Investors Exit Market

The manager turned first to an overview of broad market developments during the intermeeting period. Market participants did not materially change their macroeconomic outlooks and continued to interpret data made available over the intermeeting period as consistent with a resilient economy. Investors' expectations for the path of the policy rate, whether market based or survey based, were little changed, on net, over the period. Market participants and respondents to the Open Market Desk's Survey of Market Expectations (Desk survey) generally expected a 25 basis point reduction in the target range for the federal funds rate at the December FOMC meeting, and the modal outlook from the survey as well as from options pricing implied two additional rate cuts next year. The manager turned next to developments in Treasury markets and market-based measures of inflation compensation. Treasury yields rose a little over the intermeeting period, on net, but remained within recent ranges. Inflation compensation moved lower over the period, particularly for shorter tenors. The manager attributed the decline in inflation compensation at shorter tenors to lower energy prices as well as a reassessment by some market participants of the likely effect of tariffs on near-term inflation. In contrast to market-based measures of inflation compensation, survey- and model- based measures of inflation expectations were little changed over the intermeeting period. Broad equity price indexes were volatile but changed little, on net, over the intermeeting period. Equity prices showed sensitivity to economic data and policymaker communications. Developments regarding artificial intelligence (AI) also contributed to the volatility of the stock prices of the largest technology companies. The manager noted that capital expenditures on equipment and infrastructure related to AI by a set of large technology companies accelerated this year and that these firms were increasingly relying on debt to finance such expenditures. Regarding international developments, the trade-weighted dollar index was little changed over the intermeeting period. Outside forecasters continued to expect that the dollar would depreciate modestly next year. Many of these forecasters expected a larger reduction in policy rates in the U.S. than in other advanced-economy jurisdictions, though their confidence in this view appeared to diminish somewhat in light of the resilience of the U.S. economy. The manager noted that money market conditions continued to tighten over the intermeeting period and that the staff assessed that conditions were consistent with the level of reserves having declined to the ample region. Rates on Treasury repurchase agreements (repo) remained relatively elevated and volatile over the intermeeting period. Investors attributed firmness in repo rates to a decline in available liquidity and continued large Treasury debt issuance. Higher repo rates, along with a lower level of reserves, continued to contribute to upward pressure on the spread between the effective federal funds rate (EFFR) and the interest rate on reserve balances. The manager noted that the correlation between this spread and the level of reserve balances had risen Fed Minutes: Most participants supported loweringthe Fed funds rate, though some preferred leaving rates unchanged. Fed Minutes: Some of those who supported cutting rates indicated the decision was finely balanced, or they could have supported leaving rates unchanged. Fed Minutes: Most participants judged further rate cuts would likely be appropriate if inflation declined over time as expected. FED MINUTES: SOME PARTICIPANTS SUGGESTED UNDER THEIR ECONOMIC OUTLOOKS IT WOULD LIKELY BE APPROPRIATE TO LEAVE RATES UNCHANGED FOR SOME TIME AFTER DECEMBER CUT

Admittedly, it's not looking good for Bitcoin right now. The world's most popular cryptocurrency is down more than 7% for the year, and currently trades for just $87,000. Getting back to the $100,000 price level may not be easy, but I'm predicting that Bitcoin will soar in value by 75% in 2026 and hit a price of $150,000. Here's why. For most assets, a 75% ...

Why Is Luke Gromen Pulling Back on Bitcoin Now? Luke Gromen still expects governments to rely on inflation and weaker currencies to deal with heavy debt loads. That core view has not changed. What has shifted is his near-term view on Bitcoin. In recent comments, he said Bitcoin looks fragile enough that a move toward the $40,000 area in 2026 is possible. ...