Another BTC cycle or a historic run?

The markets have been on a white-knuckle ride this year, ignited from the Trump Administration’s bold opening moves.

Tariffs on April 2 kicked off a trade war, U.S. backed Israel-Iran tensions spiked oil, a wobbly USD bruised exports, while the Fed, ever the contrarian, has held rates firm while global banks slashed. Yet, U.S. consumers have kept the party going by drawing down on their Covid stimulus savings and maxing out their credit cards.

The first half was absolute chaos – the VIX spiked and investors braced for the next financial crisis or, worse, World War III. But then, all of a sudden, Trump’s deal-making mojo actually started to work – closing more landmark deals with Japan and the E.U. this past week.

Allies have rallied, trade partners are playing ball and BRICS have retreated back into the shadows (for now).

The markets have responded with pure jubilation, as Trump’s trade war is starting to look a lot less scary! Wall Street’s practically salivating on Q2 earnings, while major indices are breaking new highs, some even daily.

M2 money supply has ballooned past $22 trillion, as Japan, China and the EU are also printing cash like it’s going out of style. The Fed is getting ready to cut rates again, at this meeting or (more likely) the next!

The U.S., with 26% of global GDP, now commands a ludicrous 60-70% of global equity market cap, propped up by the Magnificent Seven – Apple, Microsoft, Nvidia, Amazon, Meta, Tesla, Alphabet – whose forward P/E ratios could make even Tom Lee wince.

These tech giants, hogging 30% of the S&P 500, echo the dot-com mania of Cisco and Yahoo, when the Nasdaq 5x’d on hype alone. Today’s titans have real profits, but AI-fueled valuations are flirting with bubble territory – the markets are priced for perfection.

The Buffett Indicator’s at 212%, surpassing the Dot-Com and 2008 pre-GFC highs! But Trump’s out here playing market cheerleader, dropping lines like “Buy stocks, don’t bet against America!”

New paradigm or ticking time bomb?

Keynes said it best: “The market can stay irrational longer than you can stay solvent.”

Not investment advice: enjoy the buzz, but don’t lose your head!

In the midst of market euphoria, truth be told, Bitcoin is still a wild card! Once a loner with zero market correlation, it’s now a risk-on thrill, peaking at a 0.8 correlation with the S&P 500 in 2022, it’s now down to 0.55 with equities, 0.50 with gold, 0.15 with bonds, but tracks global M2 money supply at 0.65.

The real question that really matters now is: will Bitcoin repeat another 4-year cycle or break free for a historic run? Only time will tell.

Market sentiment has held strongly in: Greed

Crypto market moves:

Selling pressure from the Galaxy Digital whale offloading pushed Bitcoin down to $114.5k on Friday, but it quickly recovered to continue consolidating below $120k.
ETH led the major Alts recovery rally +1.6%, as the others are sluggish: XRP -12.1%, SOL -12%, and DOGE -17.2% in the last 7 days.
Nearly $1 billion worth of ETH shorts will be liquidated at $4k!
Ethereum ETFs recorded $1.9 billion of inflows last week while Bitcoin ETFs flatlined.
BTC dominance is holding above the 60% level as the ETH to BTC ratio has climbed back above 3% (from a recent low of 1.8%).
Total crypto market cap is sitting just below the $4 trillion high as the BTC RSI key momentum indicator has stalled out on the shorter term timeframes.
Fear and Greed index has remained above the 70 level (everyday), but Google Search volume paired back on the dip.
The big winner of the week is ENA (Ethena) +12%, as its synthetic dollar stablecoin has seen strong growth – the protocol is offering >10% yield farming incentive.
Surprise mover of the week is BCH (Bitcoin Cash) +7.6%.
The big loser of the week is BONK down -23.1%, as MemeCoins took the biggest hit.

View all top gainers: Visit the top gainers page to find out more.

Highlights from the crypto space:

Galaxy Digital sold 80,000 BTC worth over $9 billion for a Satoshi-era investor, causing a short lived market dip on Friday, followed by a slow grind and consolidation below $120k.

Bitcoin’s resilience was impressive as it grabbed back some market liquidity from Altcoins in the process.

CNBC investing guru Jim Cramer sounded the alarm on U.S. government debt as it crossed $37 trillion, saying “I don’t want that debt. I’m worried about my kids… why don’t you buy some Bitcoin, buy some ETH.” Let’s hope it’s not another “inverse-Cramer” call!

And famed billionaire asset manager Ray Dalio has argued that investors should allocate at least 15% of their portfolios to gold and Bitcoin, as a hedge against macroeconomic risks.

Christie’s International Real Estate, one of the largest luxury real estate brokerages in the U.S., is starting a dedicated division to allow buyers to make transactions exclusively with digital currencies – and not reliant on any bank.

The Ninth Circuit Court of Appeals ruled that the NFTs are “goods” that can receive trademark protection – ending a longstanding dispute between Yuga Labs, creators of the Bored Ape Yacht Club, and Ryder Ripps, an artist who intentionally sold copies of NFTs.

BlackRock’s iShares Ethereum ETF (ETHA) has reached $10 billion in assets under management, becoming the third-fastest exchange-traded fund to ever hit that milestone!

Bitcoin hashrate (difficulty to mine) hit another new high above 1 zetahash per second:

Pantera Capital published a letter titled “The Great Onchain Migration”, outlining industry progress on Tokenisation: More than $24 billion in real-world assets now exist on public blockchains, up more than 3x since the start of 2023. Nearly 200 issuers have placed real capital on-chain.

Fintechs aren’t satisfied with being modern interfaces for legacy rails anymore; they’re building the new rails themselves.

Goldman Sachs and BNY Mellon launched tokenized money market funds, targeting the $7.1T industry with backing from BlackRock and Fidelity.

Solana-based memecoin platform Pump.fun is facing a class action lawsuit alleging that it operates an illegal “Meme Coin Casino,” which has resulted in losses of over $4 billion for retail traders while generating over $722 million in revenue – causing a sharp price drop for their new token. Get the popcorn ready!

Despite growing institutional adoption and government support, most Americans still view cryptocurrency as “too risky” and say they’re unlikely to ever own it, according to a new Gallop survey. Perceptions of risk remain the biggest hurdle.

In other crypto news…

The SEC granted accelerated approval for the Bitwise 10 Crypto Index ETF last week, only to reverse the decision hours later – sounds like a move from the Gensler playbook!

Justin Sun and the TRON team rang the bell at Nasdaq last week to mark Tron Inc.’s public debut following a $100 million reverse merger with SRM Entertainment.

A wallet linked to Ripple co-founder Chris Larsen sent 50 million XRP to exchanges – he still holds $2.5B which could create further selling pressure.

Grok 4 Heavy, the most advanced AI model in the world, predicts Bitcoin will hit $400,000 in 97 days (on 2 Nov). Not financial advice!

A little-known Canadian vape company called CEA Industries saw its shares surge nearly 550% after announcing a plan to enter the crypto treasury game. Watch out Michael Saylor!

PayPal launched a new payment option that will allow smaller U.S. merchants to accept Bitcoin and more than 100 cryptocurrencies.

150 blockchain leaders. One packed summit.

It’s your chance to connect with top experts, regulators, and builders as they unpack the big ideas shaping crypto’s next era – from real estate tokenisation to cross border payments and the next wave of DeFi.

👉View the agenda | Buy tickets here

🌎 Macro news TLDR: Competitive devaluation

President Trump and Fed Chair Powell are both caught between a rock and a hard place.

The U.S. dollar has already tanked by -10% in 2025 (per the DXY index) as tariff-fueled trade wars, policy flip-flops and a ballooning $37 trillion national debt spark a flight to safety.

Trump’s hammering the Fed for lower interest rates to refinance that debt at cheaper levels – think locking in a 3% rate on a trillion-dollar bond versus 5% – which will likely further weaken the dollar, potentially by a further estimated 3-5%.

Lower interest rates make sense, but why a cheaper dollar?

A cheaper dollar makes U.S. exports more competitive abroad while fueling domestic production and drawing in more tourists and foreign investment. It’s like a double shot of economic stimulus!

But it’s not just the U.S. playing this game. Competitive devaluation is an old trick and seasoned players like Japan, China and the Eurozone, all drowning in their own debt, are also seeking the same benefits.

The catch? This race to the bottom risks reigniting inflation.

A weaker dollar hikes the cost of imports, pushing up prices across the board. With essentials like housing, groceries, gas, utilities, healthcare and clothing already gobbling over 65% of pre-tax average household income, inflating away the debt only tightens the vise on families.

The Fed’s stuck – cut rates to ease debt and boost growth, or hold firm to tame inflation. It’s a high-stakes decision with no clean way out.

Economic news from the Americas

President Trump met with Fed Chair Powell last week in what many think may be a last ditch effort to force a rate cut. The highlight, an incredibly awkward spat (caught on video) about the cost of construction at the Fed site – Powell was looking very sheepish and the tension was palpable!

Tesla reported a second straight drop in earnings revenue and came up short of Wall Street estimates – the stock dropped 8% last Thursday. After buying $1.5 billion of BTC in 2021, Tesla sold three-quarters of its holdings that following year when the market was tanking – ouch!

U.S. M2 money supply grew by +4.5% YoY in June to a record $22 trillion – marking the 20th consecutive monthly increase and more inline with the 2000–2025 average annual growth rate of 6.3%.

President Trump announced an American AI action plan that included calls to reduce “woke” bias in AI models and support the deployment of U.S. tech overseas.

China responded by releasing a global action plan for artificial intelligence, calling for international cooperation. The global tech race just intensified!

Further U.S.-China trade talks in Stockholm this week have concluded without a deal – the 12 Aug deadline looms large.

The FOMC will make the call on Thursday morning (NZT) whether to lower rates – the market is still strongly favouring “no change”, but expect the usual window of price volatility.

Over in Europe & the Middle East…

President Trump struck a historic deal with the E.U., agreeing to lower their tariffs from 30% to 15% if the 27-member bloc purchases $750 billion worth of U.S. energy and makes an additional $600 billion worth of investments. A big win for the U.S.

E.U. and China relations have also soured at a one-day summit in Beijing, as Commission President von der Leyen said “as our co-operation has deepened, so have imbalances” and went on to warn about ties with Russia. China’s President Xi responded saying “the current challenges facing Europe do not come from China”.

Despite the trade uncertainties, the European Central Bank held interest rates steady at 2% last week after the recent run of cuts down from 4%. ECB President Christine Lagarde described policymakers as being in “wait and watch” mode.

As the Russia-Ukraine war drags into its fourth year, President Trump is growing visibly frustrated, saying on Monday that he is going to reduce the 50-day deadline for Putin to agree to a deal to “10 or 12 days.”

And in Asia Pacific…

President Trump announced a “massive” trade deal with Japan last week, including a reduced 15% tariff rate and $550 billion of investment into the U.S., saying “there has never been anything like it. Perhaps most importantly, Japan will open their country to trade including cars and trucks, rice and certain other agricultural products, and other things.”

India has surpassed Japan to become the 4th largest economy in the world!

An escalating border dispute between Thailand and Cambodia led to a series of serious clashes – after 5 days of fierce fighting, a ceasefire agreement was reached between the two tourism-dependent economies.

Australian exporters could face tariffs of 15-20 per cent, with President Trump flagging a new and higher baseline, and the Albanese government yet to strike a deal.

In NZ, ANZ economists are now predicting that house prices should increase moderately over the next couple of years, expecting the OCR to be cut three more times to 2.5% by February.

RBNZ chief economist Paul Conway says there is still scope to cut interest rates, with tariffs posing mostly downside risks to the economy and June inflation coming in as expected.

Stats NZ put out its Q2 employment indicators, while the headline rate increased marginally (0.1%), the reading is grim if you are a young person, work in construction or live in Wellington.

That’s a wrap for this week!

Stay tuned for the next update.

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