I. August: Healing from a Turbulent Month

Aug 5 BOJ Hike: Triggers Yen Un-wind

The USDJPY has dropped significantly over the past four weeks from nearly ¥162/$ to around ¥142/$, aligning with our bearish outlook. This sharp decline was triggered by the Bank of Japan’s rate hike and the Japanese government’s intervention to buy JPY on July 11 and 12. While some doubt the effectiveness of forex intervention, we support its ability to shift market trends by altering supply and demand. The recent USDJPY movement echoes similar drops in 1990 and 1998, though it’s notable that such movements haven’t always signaled a long-term trend reversal for USDJPY, unlike EURJPY and AUDJPY, which merits further consideration.

Aug 5 Panic Selling: Global Market Melt-down

BOJ’s surprising hike saw TOPIX -20% in one day — as investors panic sell to cover their positions. Equity markets fell sharply over several sessions due to rising recession risks and concerns that large moves in the yen would trigger broader de-risking. Weaker-than-expected ISM data, rising jobless claims, and disappointing NFP figures painted a gloomier US macro-economic outlook, raising fears of an impending recession. Our economists indicate that rising unemployment and ISM weakness may already signal the start of a recessionary cycle.

In the absence of any true event risk over the weekend, S&P futures dropped nearly 5%, NDX more than 6%, and the VIX surged above 60. FOMC messaging hinted at potential rate cuts in September, and while the earnings season has been mixed, it has not been particularly weak.

Crypto Panic-Selling: ETH hit 2,100 USD

The high leverage in the system, especially among crypto, mega-cap names, contributed to the market’s size and volatility. Notional activity was three standard deviations above the norm, marking the largest volume in the US market for a non-index rebalance day since February 2022. Investor activity was mixed, with S&P bullish positioning down and Nasdaq positioning relatively unchanged despite the volatility. We expect Friday’s large new shorts to significantly impact Nasdaq’s net long status in forthcoming sessions.

Markets Whiplash: Positive Macro Triggers Risk-On

After wiping out leveraged investors, markets whiplash and saw a V-shaped rebound led by Topix. Last week’s positive macro releases fueled a return of bullish investor flows across US indexes, with over $16bn added to the S&P, driving positioning to increasingly extended levels. Nasdaq and Russell 2000 saw moderate increases, and Nasdaq long position losses eased. Positive sentiment spread globally, with nearly all European and Asian indexes seeing rising notional levels. DAX and FTSE turned net positive, while KOSPI and Nikkei saw extended bullish levels. Nikkei flows were the strongest in Asia, while KOSPI reached near three-year highs. In contrast, the China A50 remained bearish, with limited positioning risks.

II. Macro Pivot: Rate Cuts = Super-Cycle

The minutes of the July FOMC meeting reveal that Fed officials were increasingly considering lowering rates even before the recent weaker employment data emerged.

The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.

Developments in inflation and employment since then have only strengthened this dovish stance. The minutes suggest a rate cut at the next meeting in September is highly likely, with the majority of Fed officials supportive of easing policy if the data remained as expected. Chair Powell’s acknowledgment of discussions around a rate cut in July, and several officials supporting a 25 basis points cut at that time, indicate a growing inclination toward a possibly larger 50 basis points cut by September. Officials expressed confidence in slowing inflation due to factors like easing wage growth and consumer resistance to high prices, noting that the risks to inflation have diminished while the downside risks to employment have increased.

The minutes also highlighted concerns about the labor market, with participants noting that further easing could lead to more serious deterioration. This concern has likely intensified following the rise in the unemployment rate and payroll job growth revisions. While August employment data will be crucial in determining the September rate cut’s size, the minutes suggest convincing many officials of a larger 50 basis points cut may not be difficult. Additionally, the balance sheet was briefly discussed, with expectations that balance sheet reductions might end in December if the labor market continues to deteriorate, but could extend through Q2 of 2025 otherwise. The BLS payroll revisions, indicating an 818,000 job reduction over the past 12 months, reinforce the softening labor market, keeping caution high ahead of the September 6 payroll data, which will significantly influence market sentiment and FOMC pricing.

BLS data raises the importance of 6-Sep payrolls. We think that event risk is too low:

Jackson Hole is significant but limited, with labor data next month and July FOMC minutes indicating a “vast majority” support a September rate cut. Chair Powell is expected to signal this likelihood, with inflation and job data determining the cut’s size. Any suggestion of no cut in September is very unlikely and would negatively affect equity markets. Chair Powell probably won’t commit to larger cuts before the August payrolls and another CPI print. While stocks might initially react positively to such dovishness, it would raise concerns about the Fed’s growth worries. Citi US Economics expects Powell to guide toward a September rate cut.

III. US Election: Bi-Partisan Support for Crypto

Republicans: Trump Supporting Crypto

The upcoming US presidential race sees both Republican and Democrat candidates supporting crypto to attract voters, particularly crypto-friendly younger voters. This bipartisan backing is evident in recent cryptofriendly legislation, with notable Democrats like Chuck Schumer and Nancy Pelosi emerging as allies. Candidates are even accepting crypto for campaign funding. In contrast, Trump criticizes Biden’s anti-crypto stance, including efforts to oust Bitcoin mining companies and potential tax hikes, and highlights opposition from the administration and SEC Chair Gary Gensler to the FIT21 bill for regulatory clarity. Republicans are increasingly aligning with the crypto industry, with figures like Trump accepting crypto donations and pledging support for digital asset traders.

Democrats: Kamala Supporting Crypto

Democrats are increasingly embracing cryptocurrency, recognizing the importance of appealing to crypto-enthusiastic voters in a tight race. Democratic presidential candidate Kamala Harris plans to endorse policy initiatives that promote the growth of the cryptocurrency industry, as confirmed by her senior policy advisor, Brian Nelson. During a Bloomberg roundtable at the Democratic National Convention in Chicago, Nelson highlighted Harris’s dedication to supporting policies that enable emerging technologies to flourish. Furthermore, Harris has begun engaging with cryptocurrency executives to better understand and advocate for the industry’s advancement.

A Contrarian View: Time to Short BTC

Crypto experienced a robust recovery in 2023 after a dismal year marked by a 60% average loss, outshining other assets on a volatility-adjusted basis (Figure 1). The year was characterized by significant regulatory developments within the industry, replacing the 2022 theme of institutional breakdowns. The legal landscape, from allegations against key crypto exchanges to rulings on exchange offerings and ETFs, presented both challenges and opportunities for digital assets. However, the sector saw progressive regulatory shifts, notably towards a potential Bitcoin ETF approval, fostering optimism throughout the year. Despite irregular crypto price trajectories, the strength of the risk-adjusted returns for digital assets was noteworthy, especially as crypto volatility dipped to multi-year lows at one point (Figure 2). We now focus on several significant topics anticipated to gain attention in the upcoming year.

Theme 1: Macro Matters

There was a substantial shift in crypto correlations despite a prosperous year for equities, gold, and digital assets. Even with specific crypto-related adverse events in 2022, such as the collapse of 3AC, Celsius, and FTX, the correlation between crypto and equities remained relatively stable and the crypto-gold correlation grew more positive, both starting 2023 at a historical high. Justifiable direct relationships emerged, supported by the perception of crypto and equities as risky assets influenced by monetary policy, and crypto and gold as non-interest-bearing inflation hedges that thrive in weaker USD environments. However, a deviation began around March 2023 as fears of a regional banking crisis grew, possibly increasing interest in decentralized finance. The correlation increased in September with the clearer regulatory outlook for crypto following the SEC-Grayscale court ruling, only to decrease lately despite major rallies in both asset classes. The positive crypto-gold correlation remained sturdy as fears of financial crisis decreased, but fell near zero as the anticipation for a Bitcoin ETF approval grew. Although historically crypto had not been an effective portfolio diversifier due to its strong correlation with equities, it has recently gained diversification power due to the shift in market drivers to more individualized stories.

Equities and USD continue to be critical macro drivers, though their relationships with crypto in 2024 remain uncertain (Figures 4 and 5). The relationship between crypto and traditional financial assets is cloudy due to various reasons including potential changes in regulatory frameworks, varying global growth and inflation projections, and potential changes in monetary policies. These factors could significantly affect the performance of risky assets like crypto, especially in the event of a recession.

The impact of crypto risk on traditional financial markets may remain minimal, but the converse might not hold true. Crypto markets, being relatively new, have limited experience with major market events triggering a spillover into larger risk markets. Increased volatility in equity markets often coincided with volatility in crypto prices, but the reverse wasn’t necessarily true (Figure 7). While the global crypto market capitalization remains small compared to other financial assets, the influence of crypto-related crises on wider financial markets should be minimal. However, increased adoption of crypto might further intertwine the worlds of DeFi and TradFi, potentially exposing crypto to crises in global financial markets.

The correlation between crypto and gold ceased its decline, though it remains negative. Amid regulatory changes in the crypto space and fluctuating rate predictions for leading central banks, the crypto-gold correlation saw a sharp dip. However, as easing cycles begin in developed markets, this correlation might see a temporary increase, especially as the US dollar gains strength.

At present, only crypto volatility is above its one-year average. Crypto volatility has risen due to significant events such as the SEC’s approval of spot Bitcoin ETFs (Figure 20). For other financial assets, the market anticipates a relatively smooth landing, leading to decreased volatility. Though 3-month crypto volatility has steadily increased (still subdued historically), equity volatility has resumed its decline (Figure 21). Interestingly, while ETH has generally been more volatile than BTC, this trend has not held since early 2023.

这一重大决定意味着美国证券交易委员会（SEC）与基金经理们 （Blackrock，Vanguard 等）之间长期僵持结束。这也代表着加密货币行业的胜利。SEC引用了去年的法院判决，即拒绝现货ETF与批准期货ETF不一致，澄清这并非对加密货币的背书，因为涉及多项固有风险。该批准引起了混合反应，尽管整个加密货币市场经历了一场涨势，但比特币的表现却落后于以太坊。这与首次推出黄金ETF时的商品价格行动相似。尽管得到了开创性的批准，但其他加密货币的ETF仍有待解答的问题。分析这个批准对比特币流入意味着什么，以及它在投资组合中可能的作用至关重要。这个批准为巨大的潜在市场敞开了大门。

批准后交易急剧增加

SEC的批准导致11个现货比特币ETF的推出，交易立即开始。仅第一天就见证了超过20亿美元的交易。决策的期待导致了比特币期货和现货的交易量增加，同时还出现了交易所交易产品流入的激增。这突显了市场的渴望，尽管比特币表现不佳，但整体而言仍在大幅上涨。加密货币市场正在热切期待其他加密货币的ETF推出。

加密货币分配：资产管理人快速购买BTC进行投资组合

批准后，比特币可能在投资组合中的地位将更加突出。然而，广泛包含在投资组合中仍是一个遥远的现实。ETF批准方便了大型金融机构使用比特币。但为了这项新兴技术能够完全成熟，还需要更广泛的应用。人们对于为去中心化资产发行中心化投资工具的推出充满期待。随着加密货币市场的不断发展，它可能仍然是一个周期性的资产，很大程度上受到风险情绪的影响。

尽管SEC已经批准，但比特币在投资组合中的广泛包含仍需时日。虽然批准扩大了比特币的潜在市场，但大规模冲进这个资产类别是不太可能的。财务顾问需要对ETF工具和加密货币作为一种资产类别进行广泛的尽职调查。比特币的周期性，以及它由于高额股权和弱势美元（低利率）而受益的倾向，也削弱了“数字黄金”的叙述。比特币的采取和使用以及其与传统金融服务的整合将继续成为关注的焦点。在我们看来，这个行业最实用的方面是区块链技术的基本用例。

2024展望：看涨ETH

像最初的黄金ETF推出一样，BTC在表现上落后于ETH，尽管整体上加密货币表现良好。在新年的第一周里，出版了一篇研究报告，列举了SEC不太可能批准现货ETF的原因，此后加密货币大幅抛售（见图6）。许多人视为加密货币事件的“经典”串联中，推动市场的下一条新闻来自SEC在X（原Twitter）上的账户，发布了已经获得现货ETF批准的消息。

然而，SEC的人员很快出面反驳这个说法，声称委员会的账户已经被破坏，但在不到24小时后，他们再次出来确认黑客发布的信息。在最初的“错误”帖子发布的几天之内，虽然比特币的表现大大落后于以太坊，但加密货币已经开始反弹。

这种价格行动类似于2004年首次推出黄金ETF时贵金属的情况 — 尽管后者的时间表更长 — 我们在这里进行过比较。在我们看来，加密货币市场已经转向下一个叙事，ETH比BTC上涨更多，可能是因为期待加密货币的第二大代币也可能获得ETF批准。因此，我们将密切关注ETH流入的进度，以及与BTC相比，大型altcoin的情况，并在尘埃落定后，我们的双周报告中深入研究新的ETF流入和流动性。

2024年宏观展望：经济对比特币的利好

科技股利润回吐：黄金开局

年初，科技股股东开始实现利润，他们推迟了销售，直到2024年才开始回避在2023年产生的资本利得税。我们的团队处理的投资组合交易中可以看到这种趋势。

较好的经济数据：对联邦利率 hike 保持中立

上周目睹了大量数据的涌入，为市场讲述了一个积极的故事。经济正在以稳定的“金洛克斯”速度前进，既不强劲到需要联邦储备（Fed）实施紧缩政策，也不弱到触发利润放缓。在强劲的失业申请和有利的劳动市场报告中，经济增长的迹象令人鼓舞。尽管报告的结果积极，但是工作时间的小幅下降稍微抵消了实际影响，这意味着总工作时间的下降。

市场反应与通胀

市场对预期中的平均小时工资略高的反应，导致了一开始的债券抛售。工资上涨通常被误认为是通胀的标志。实际上，工资和通胀之间的差距代表了生产力的增长，这一点非常强劲。预计的通胀压力可能会受到中东冲突以及可能影响通过红海的货船的影响。尽管有这些担忧，但石油行业以外的影响微乎其微，其他商品保持稳定或下降。上周发布的消费者价格指数（CPI）和生产者价格指数（PPI）报告显示，通胀主要与预期一致 — — 我们正在看到降温的迹象。

利率削减与持续增长

接下来的焦点是联邦储备对利率削减的政策。十二月联储公开市场委员会（FOMC）的会议突出了鲍威尔主席在经济疲软时对利率削减的灵活性。如果实际经济增长保持强劲，联储可能会维持利率，从而导致强劲的股票市场。由于鲍威尔的灵活性，经济衰退的可能性较低，持续增长或软着陆的机会较高。

市场前景和比特币优势

对于2024年，预计标准普尔500指数将有8–10%的增长，预计小市值股票将升值约15%。2024年以后的债券市场的长期前景指向将联邦基金利率稳定在3% — 3.5%，并有正面的50–75个基点的期限溢价。

市场趋势与比特币的潜在优势结合起来，这种加密货币可能会看到显著的升值。经济增长可能推动比特币的使用和价值的提高，因为更多的企业和个人将其用于交易。除了作为一种独立的资产，比特币作为传统法定货币的替代品的潜力也可以大大从持续的经济增长中受益。随着对比特币的教育和认知的提高，其接受度和对经济增长作出有意义的贡献的潜力也会提高。随着越来越多的人接受并使用比特币，这种数字货币的价值就会进一步提高，从而导致更广泛的使用和更大的整合到主流经济市场。因此，强劲的经济增长和比特币的使用增加的情景相结合，为比特币的价值提升创造了有利的环境

The Securities and Exchange Commission (SEC) made a landmark declaration by endorsing 11 spot Bitcoin ETF applications. This momentous decision marked the end of a prolonged stalemate between the SEC and fund managers, signifying a triumph for the cryptocurrency industry. The SEC, referencing the previous year’s court ruling that the refusal of spot ETFs was inconsistent with the approval of futures-based ETFs, clarified that this was not an endorsement of cryptocurrency, considering the numerous inherent risks. The approval drew mixed reactions, with Bitcoin’s performance lagging behind Ethereum’s, even though the overall cryptocurrency market has experienced a rally. It draws parallels to the commodity price actions around the first gold ETF launch. Despite the groundbreaking approval, questions remain about ETFs for other cryptocurrencies. It is crucial to analyze what this approval implies for Bitcoin inflows and its potential role in portfolios. This approval opens doors to a massive potential market.

Surge in Trading Post-Approval

The SEC’s approval saw the launch of 11 spot Bitcoin ETFs, with trading kicking off immediately. The first day alone witnessed trading over $2bn. The anticipation of the decision resulted in increased futures and spot volumes of Bitcoin, alongside a surge in exchange-traded product inflows. It highlights the market’s eagerness, with Bitcoin underperforming yet rallying overall. The cryptocurrency market awaits the introduction of ETFs for other cryptocurrencies in bated breath.

Crypto Allocation: Asset Managers Rapidly Buying BTC for Portfolio

Post-approval, the potential inclusion of Bitcoin in portfolios is set to become more prominent. However, widespread inclusion in portfolios is still a distant reality. The ETF approval facilitates the usage of Bitcoin by larger financial institutions. Still, more widespread adoption is necessary for this emergent technology to fully mature. Anticipation surrounds the launch of centralized investment vehicles for decentralized assets. As the crypto market continues to develop, it will likely remain a cyclical asset, largely influenced by risk sentiment.

Despite the SEC’s approval, the widespread inclusion of Bitcoin in portfolios is still a while away. While the approval enlarges the potential market for Bitcoin, wholesale rush into the asset class is unlikely. Financial advisors need to conduct extensive due diligence on ETF vehicles and crypto as an asset class. Bitcoin’s cyclicality, its tendency to benefit from higher equities and a weaker USD (lower rates), also diminishes the “digital gold” narrative. The adoption and usage of Bitcoin and its integration with traditional financial services will continue to be a focal point. The most practical aspect of the industry, in our view, remains the underlying use-cases of blockchain technology.

2024 Playbook: Bullish on ETH

Resembling the initial gold ETF launch, BTC has underperformed ETH, though crypto is performing well overall. In the first week of the new year, crypto sold off substantially following the publication of a research report citing reasons that the SEC would be unlikely to approve spot ETFs (see Figure 6). In what many view as a “classic” string of crypto events, the next market-driving news story came from the SEC’s account on X (formerly Twitter), which posted that the Commission had granted spot ETF approval.

However, SEC personnel quickly came out and refuted the story, stating that the Commission’s account had been compromised, only to come out less than 24 hours later and affirm the message in the hacker’s posting. In the couple days since the original “erroneous” post, crypto has rallied, though Bitcoin has significantly underperformed Ethereum.

This price action is analogous to that of precious metals near the launch of the first gold ETF back in 2004 — though the latter was on a longer time scale — which we had drawn comparisons to here (also see Figure 7). In our view, the crypto market has already moved to the next narrative, with ETH rallying more than BTC, likely on the expectation that crypto’s second largest token could also see an ETF approval. Accordingly, we will be keeping a close eye on the progression of ETH flows, along with those of large altcoins, relative to BTC in the near-term, and will dig deeper into the new ETF flows and liquidity in our bi-weekly once the dust has started to settle.

2024 Macro Outlook: Economic Tailwind for BTC

Tech Stocks Profit Taking: A Golden Start

The year commences with tech stockholders realizing profits, having delayed sales until 2024 to circumvent capital gains tax incurred in 2023. This trend was visible in the portfolio trades handled by our team.

Positive Economic Data: Neutral for Fed Rate Hike

Last week witnessed an influx of data, telling a positive story for the market. The economy is moving ahead at a steady, “Goldilocks” pace, neither too strong to nudge the Federal Reserve (Fed) for tightened policies nor too weak to trigger a profits slowdown. Amid strong jobless claims and favorable labor market reports, the signs of economic growth are encouraging. Despite reported positive outcomes, the actual impact was slightly offset by a slight drop in hours worked, implying an overall decline in total hours worked.

Market Reactions and Inflation

The market reacted to the slightly higher than expected average hourly earnings, leading to an initial bonds selloff. Rising wages are often misconstrued as indicative of inflation. In reality, the gap between wages and inflation represents productivity growth, which has been exceptionally robust. Anticipated inflationary pressures are likely to be influenced by conflicts in the Middle East and potential impacts on cargo ships passing through the Red Sea. Despite these concerns, there is minor impact outside the oil industry, with other commodities remaining stable or declining. The release of Consumer Price Index (CPI) and Producer Price Index (PPI) reports last week shows that inflation is mostly in-line with expectations — and we’re seeing signs of cooling down.

Interest Rate Cuts and Continued Growth

The focus ahead is on Fed policy regarding rate cuts. The December Federal Open Market Committee (FOMC) meeting highlighted Chairman Powell’s flexibility toward rate cuts in case of economic weakness. If real economic growth stays strong, the Fed could maintain rates, leading to robust equity markets. There’s lower probability of recession and higher chances of continued growth or a softer landing due to Powell’s flexibility.

Market Prospects and Bitcoin Advantages

For 2024, the S&P 500 is projected to have an 8–10% price gain, with smaller-cap value stocks expected to appreciate around 15%. Long-term prospects for the bond market beyond 2024 point to settling the Fed funds rate around 3% — 3.5% with a positive 50–75 basis points term premium.

Combining the above market trends with the potential benefits of Bitcoin, the cryptocurrency could see significant appreciation. Economic growth could drive an increase in the use and value of Bitcoin as more businesses and individuals adopt it for transactions. In addition to being an independent asset, Bitcoin’s potential as an alternative to traditional fiat currency can also greatly benefit from continued economic growth. As education and awareness regarding Bitcoin improve, so too does its acceptance and potential to contribute to economic growth in a meaningful way. As more adopt and use Bitcoin, the digital currency’s value is set to appreciate further, leading to more widespread use and greater integration into the mainstream economic market. Therefore, the combined scenario of robust economic growth and increasing Bitcoin adoption creates a favorable environment for the appreciation of Bitcoin.

美联储已经第三次保持利率不变，这标志着其积极的加息行动的结束，并预测从2024年开始的一系列降息。在一致的决定中，官员们同意将基准联邦基金利率保持在5.25%至5.5%，这是自2001年以来的最高水平。自2021年3月以来，首次没有进一步的上升利率预期。

降息 = 股市大涨

降息通常被视为市场的燃料。其实，可以回顾2020年疫情期间降息至0%的情况。 在Fed完成一系列降息动作之后，引发了标普指数的大涨。更低的利率使借款成本更低，从而鼓励企业进行投资和消费者进行消费。

联储2024年的降息计划：明年75个基点

美联储预计明年将利率降低75个基点，这比9月的预期快得多。对2024年底联邦基金利率的中值预测为4.6%，尽管个别预期波动较大。八位官员预测明年的降息次数将少于三次，而五位官员预期的降息次数更多

鲍威尔： 2024 大概率终止加息

主席杰罗姆·鲍威尔明确表示，这些预测并不构成预设的计划。他一直保留了根据需要进一步提高利率的可能性，以控制价格压力的激增。然而，他确实证实，在本周的会议中有考虑降息的讨论。

在12月初，鲍威尔警告市场不要对明年第一季度降息持有期待，他表示现在判断政策立场是否足够收紧，以及预测何时可能放松政策还为时过早。鲍威尔和其他政策制定者都同意，实现2%的通胀目标将是艰难的。政策制定者们承诺将利率保持在足够高的水平足够长的时间，以确保价格通胀回归目标，这导致市场参与者预期降息可能最早在三月出现。

在预测今年和明年的通胀水平将下降的同时，美联储优先的价格衡量指标（排除食品和能源）预计在2024年将增长2.4%。对于明年的经济增长稍有向下修正，而失业预测保持不变。

对国债收益率的影响

近几周来，国债收益率已大幅降低，有效地抹去了整个夏季到十月份的增长。金融条件的显著收紧可能会降低进一步提高利率的需要。利率的下降已经开始影响经济，降低了房贷利率，并触发了近期再融资和购房需求的上涨。

三大利好：BTC和ETH

美联储降息对传统金融市场以及加密货市场产生重大影响，尤其是比特币和其他加密货币。

我们看到BTC和ETH的三大利好：
1. ETF批准
2. BTC减半
3. Fed 降息

在低利率环境下，投资者往往寻找高收益资产以实现所需的回报。这种环境可能有利于比特币，这是一种非利息资产，由于其高回报的潜力，它成为了一种吸引人的投资替代品。

历史上，比特币在低利率条件下表现良好，因为其去中心化的特性和重大价格升值的潜力。 2020年利率剪刀至0%，这是对COVID-19大流行的反应，比特币的价格飙升，因为它被视为对抗通货膨胀的对冲工具，在不确定的经济环境中储值。

降息=做多风险资产

较低的利率也对其他风险资产有利。公司可以以低利率借款，从而增加资本投资和增长。这种情况可以刺激股市，提升风险资产的价值。相反，被视为更安全的资产，如债券，可能会看到需求减少，因为他们相对较低的收益变得不那么有吸引力。

总结来说，尽管美联储在2024年可能的利率剪刀将对一系列金融市场产生广泛的影响，但它可能特别有利于比特币和其他风险资产，因为它创造了一个有利的投资环境。

Powell: We are Near or are at Peak Rates

The Federal Reserve has for the third time maintained its interest rates, indicating an end to its aggressive rate hike campaign, and forecasting a sequence of cuts starting in 2024. In a unanimous decision, the officials consented to retain the benchmark federal funds rate at 5.25% to 5.5%, marking the highest level since 2001. For the first time since March 2021, no further increases in interest rates were projected, based on median estimates.

Beginning of Rate Cut = Beginning of Market Rally

An interest rate cut is generally considered as fuel for the market. To understand this, one can look at the 2020 rate cut to 0% during the COVID-19 pandemic which subsequently led to a rally in the S&P Index. Lower interest rates make borrowing cheaper, thereby encouraging businesses to invest and consumers to spend.

Fed’s 2024 Rate Cut Plan: 75 basis points next year

The Federal Reserve expects to cut rates by 75 basis points next year, a significantly faster pace than what was suggested in September’s projections. The median forecast for the federal funds rate at the end of 2024 was 4.6%, although individual expectations varied widely. Eight officials predicted fewer than three quarter-point cuts next year, while five foresaw more.

Fed Chair’s Remarks: Rate Hike Likely Over

Chair Jerome Powell made it clear that these projections do not constitute a pre-set plan. He kept open the possibility of further interest-rate hikes, if needed, to control any surge in price pressures. Nevertheless, he did confirm that interest rate cuts were considered during this week’s meeting.

In early December, Powell cautioned against market expectations for a rate cut in Q1 of next year, stating it would be too soon to determine if the policy stance is restrictive enough or to predict when policy might ease. Both Powell and other policymakers agree that the journey to achieve a 2% inflation target will be rocky. Policymakers have pledged to keep rates high long enough to ensure price inflation returns to target, leading market participants to expect rate cuts as early as March.

Alongside lower inflation forecasts for this year and the next, the Fed’s preferred price measure (excluding food and energy) is predicted to rise 2.4% in 2024. Economic growth for next year was slightly revised down, while unemployment projections remained the same.

Impact on Treasury Yields

Treasury yields have been reduced significantly in recent weeks, effectively wiping out the increase seen throughout the summer and into October. The significant tightening of financial conditions may reduce the need for further interest rate hikes. The drop in rates has begun to impact the economy, lowering mortgage rates and triggering an uptick in recent demand to refinance and purchase homes.

3 Tailwinds for Bitcoin & ETH

The potential interest rate cut by the Federal Reserve could have a significant impact on not just traditional financial markets but also digital asset markets, particularly Bitcoin and other cryptocurrencies.

We see 3 Tailwinds for BTC & ETH:

1. ETF Approval
2. BTC Halving
3. Fed Rate Cut

In a low interest rate environment, investors often search for assets with higher yields to achieve the required returns. This environment could be beneficial for Bitcoin, a non-interest-bearing asset, as it becomes an attractive investment alternative due to its potential for high returns.

Historically, Bitcoin has performed well in low interest rate conditions because of its decentralized nature and potential for significant price appreciation. The 2020 rate cut to 0%, a reaction to the COVID-19 pandemic, saw Bitcoin’s price skyrocket as it was seen as a hedge against inflation and a store of value in an uncertain economic climate.

Rate Cuts = Long Risk Assets

Lower interest rates also bode well for other risk assets. Companies can borrow money at low rates, leading to increased capital investment and growth. This situation can stimulate the stock market and boost the value of risk assets. Conversely, assets seen as safer, such as bonds, may see less demand, as their comparatively lower yields become less attractive.

In conclusion, while the Federal Reserve’s potential interest rate cut in 2024 will have broad implications for a range of financial markets, it could particularly benefit Bitcoin and other risk assets by creating a favorable investment environment.

The surge in the S&P500 has somewhat subsided in December, but the expansion of larger cap equities is evident, as the RTY and SPW have outperformed the SPX (313bps and 69bps) and QQQ (304bps and 59bps) this month.

The NFP data from last Friday confirmed the robustness of the labor market (see the assessment of our US Economics team here). However, holiday-related seasonal adjustments might conceal certain weak spots in the underlying market. Regardless of these potential risks, the investor community interpreted the strong employment data coupled with the payroll figures as an indication of a robust economy, thereby reducing the likelihood of Fed rate cuts. This was reflected in the 10Y yield’s 8bp increase on Friday alone, although risk assets were unfazed, with the SPX, NDX, RUT, HYG, and the Magnificent 7 all trending upward. Also, the VIX closed at its post-COVID low of 12.35, which stands at the 12th percentile relative to its historical record.

Strong NFP and unemployment pushed out the probability of rate cuts

Source: Citi Global Markets, Bloomberg, gray lines indicate probabilities for each meeting between Dec-23 to Dec-24

Macro Perspectives: Seasonal Tailwind for Small Caps

Although the impending CPI and FOMC events will be monitored keenly, we assert that seasonal factors significantly contribute to the year-end optimism, more so for small-cap stocks. Since 2002, the IWM ETF has averaged a return increase of +114bps during the last three weeks of December. This year, the said ETF saw a decline of -18% between July 31st and October 27th. Nonetheless, the recent upticks (+12% within the last month) have merely brought the index back in line with its historic trend, as illustrated in the chart below. This could potentially indicate a bullish sentiment as we approach year-end, all other factors being equal.

IWM averages +1.1% return in the final 3 weeks of the year between 2001–22

Source: Citi Global Markets, Bloomberg, gray lines indicate individual annual returns between 2001–2022

如果美国成功软着陆，比特币的增长得以蓬勃发展，尤其叠加2024年的减半效应。这种有序的经济放缓为预期的价格修正提供了空间，并为BTC提供了更大的增长空间。并且，更为缓和的量化宽松策略强调了BTC等稳健资产的价值，鼓励了战略性的投资行为。

联邦储备委员会的展望：预测软着陆

根据今天发布的会议纪要，联邦储备委员会预计将走向软着陆。尽管会议纪要显示出乐观和决心将通胀拉回到目标水平，但由于通胀数据放缓和对经济增长的下行风险加大，Fed可能会对大幅度政策转变保持谨慎。这种立场不太可能削弱金融条件。

当前，联邦储备委员会的政策倾向于对抗通胀的风险和金融稳定，预计不会有太大变化。

即使对经济增长的关注加强，也可保证对联邦双重任务中的两个方面都给予等同的注意。随着通胀数据的软化使这种平衡变得更容易，未来更强的通胀可能会带来挑战，可能会破坏这种平衡，因为对联邦来说，在经济增长风险增大的情况下，降息变得更难卖。

美国股市：预计S&P 500在2024年创新高

美国银行的策略师预测，到2024年，S&P 500将创新高，因为美国公司有效地应对了提高利率和宏观经济的动荡。上涨归功于美联储以前的行动，而不是未来的削减。在强劲的经济和利润衰退结束的推动下，S&P 500今年已经上涨了18%。策略师Savita Subramanian建议，即使经济增长放缓，盈利也可以增加。由于大多数投资者仍然是看跌的，其他分析师看到了进一步的上行潜力，预计持续上涨。

Fed备在经济顾虑中维持立场

尽管经济增长和通胀风险上升，美国联邦储备目前仍在维持其对利率的立场。最近的数据显示，失业申请和失业率呈上升趋势，这表明更高的利率对经济活动产生了预期的抑制效果。然而，预计明年将出现经济衰退，通胀率预计将超过其目标。尽管存在这些情况，最新的官方立场并未显示出任何进一步提高或削减利率的意图，直到出现更大幅度的经济活动放缓。通胀预期的逐渐脱钩对美联储官员来说是一个担忧。

经济放缓和通胀加速的迹象出现

新出现的迹象表明，经济活动可能出现放缓，与当前稳健的活动数据（预计第四季度实际GDP增长2.2%）形成对比。联邦储备委员会官员将这种强劲的活动和较软的通胀结合起来，认为这是对经济软着陆持乐观态度的原因。然而，这些条件可能是同时出现，而非预示一个稳定的宏观经济结果。已经观察到房价大幅上涨，尽管过去两个月有所放缓，可能是由于提高的抵押贷款利率抑制了需求。

首次申领失业福利人数比预期下降得更多，从11月18日的233k下降到209k。总体来说，4周首次申领失业保险的移动平均仍处于低位，没有出现裁员速度明显加快的迹象。连续领取失业保险的人数在大约两个月内首次下降，从11月11日的1862k下降到1840k。季节调整后的持续申领人数减少的一半是由于波多黎各申领人数的异常下降，这在未来几周应该会反弹。

联邦通信：没有更多的利率上调

在不远的将来，数据和美联储的通信预计将证实本周期不会再有进一步的利率上调。预测的10月份核心PCE较软增长与这种观点一致。也预期由于抵押贷款利率较高，新房销售将会回落。相反，由于供需失衡，现有住房市场可能会继续对房价施加压力。预计制造业采购经理人指数将反弹，部分原因是因为11月份汽车工人罢工得到解决。预计美联储主席鲍威尔不会提供太多新的信息，但可能会强调美联储的谨慎态度，以及在必要时提高政策利率的准备情况。

FOMC会议纪要：美国国债收益率上升=鸽派立场

美联储在2023年11月1日召开的联邦公开市场委员会（FOMC）会议的会议纪要中揭示，联邦公开市场委员会对美国国债收益率的上升及其可能对增长和金融稳定的影响表示担忧。政策制定者承诺保持“足够限制性”的金融条件，但其策略是谨慎的。这意味着他们的目标是避免金融条件的快速紧缩，但不会抵制放松。尽管预计在来年通货膨胀将继续超过目标，但预测本周期不会有更多的利率上调。在会议前，美联储官员曾表示，十年期美国国债收益率的上升，接近5%，将会重新考虑在今年晚些时候实施的25个基点的利率上调计划。

会议纪要进一步表明，国债收益率上升被视为对金融稳定的威胁，特别是对银行在其固定收益资产组合上可能出现的损失。对长期收益率上升的反应在美联储官员中存在分歧。他们承认最近的通胀放缓，但需要更多的数据来确认通胀是否会回归到2%的目标。虽然官员们同意劳动力市场正在变得更加平衡，但他们对劳动力供应是否会成为一种持续趋势表示不确定。一些人还指出，工资增长超过了与2%的物价通胀相符的水平。最后，联邦公开市场委员会一致认为，政策利率应谨慎变动，提高政策利率的可能性很低。

Fed says Recession is no longer on the cards

A soft landing scenario favors Bitcoin’s growth by providing a stable macroeconomic environment, which is particularly beneficial during events like the anticipated 2024 Halving. This controlled economic slowdown allows for expected price corrections and reduces extreme volatility, offering a predictable landscape for BTC’s performance. Furthermore, softer Quantitative Easing approaches emphasize the value of reliable assets like BTC, encouraging strategic investing. Therefore, a soft landing promotes BTC’s valuation and growth stability.

Fed Outlook: A Soft Landing Anticipated

The Federal Reserve is expected to steer towards a soft landing according to the minutes released today. While the minutes indicate optimism and determination to bring inflation back to target, the officials are likely to remain cautious about a drastic policy shift due to slower inflation readings and growing downside risks to growth. This stance is unlikely to dampen the financial conditions.

The Fed’s policy, which currently leans towards managing growth risks and financial stability over inflation, is not expected to alter significantly.

Even with a heightened focus on growth, there is an assurance that equal attention is given to both aspects of the dual mandate. As softer inflation readings make this balance easier, forthcoming stronger inflation may pose a challenge, potentially disrupting the balance as rate cuts become a harder sell for the Fed amidst growing risks to growth.

US Equity: Sees SP500 Rallying to Record Levels in 2024

Bank of America strategists forecast a record high for the S&P 500 in 2024, as U.S. companies effectively navigate increased rates and macroeconomic disruptions. The rise is attributed to the Federal Reserve’s previous actions, rather than future cuts. Boosted by a resilient economy and an end to profit recession, the S&P 500 has rallied 18% this year. Savita Subramanian, leading the strategists, suggests that earnings can increase even if economic growth decelerates. With most investors still bearish, other analysts see further upside potential, predicting a continued rally.

Federal Reserve Maintains Stance Amid Economic Concerns

The US Federal Reserve is currently maintaining its stance on interest rates, despite rising risks to growth and inflation. Recent data show an upward trend in jobless claims and unemployment, suggesting the intended dampening effect of higher interest rates on economic activity. However, an anticipated recession looms for the following year, and the inflation rate is expected to exceed its target. Despite these circumstances, the latest official stance does not signal an intent to either hike or cut rates until a more significant slowdown in economic activity occurs. The increasing detachment of inflation expectations poses a concern for Federal Reserve officials.

Indications of Economic Slowdown and Inflation Acceleration

Emerging signs point to a potential slowdown in economic activity, contrasting with currently resilient activity data (estimated 2.2% Q4 real GDP growth). Federal Reserve officials interpret this combination of strong activity and softer inflation as reasons for optimism towards a soft economic landing. However, these conditions may coincide rather than indicate a stable macroeconomic outcome. A significant rise in housing prices has been observed, although there has been a slowdown over the last two months, possibly due to increased mortgage rates dampening demand.

Initial jobless claims declined by more than what was expected to 209k from 233k during the week of November 18. Overall, the 4-week initial claims moving average remains at low levels and points to the pace of layoffs not picking up much. Continuing claims declined for the first time in about two months, down to 1840k from 1862k during the week of November 11. Half of the decline in seasonally adjusted continuing claims was due to an abnormal drop in Puerto Rico claims which should rebound in coming weeks.

Fed Communications: No Further Rate Hikes

In the near future, data and Federal Reserve communications are expected to affirm the prediction that no further rate hikes will occur in this cycle. An anticipated softer increase in core PCE in October aligns with this view. Also anticipated is a pullback in new home sales due to elevated mortgage rates. Conversely, the supply-demand imbalance in the existing homes market will likely continue to exert pressure on home prices. The ISM Manufacturing index is expected to rebound, partially due to the resolution of autoworkers strikes in November. Federal Reserve Chair, Powell, is not expected to bring much new information to the table but will likely underscore the cautious approach of the Federal Reserve alongside a readiness to raise policy rates if necessary.

FOMC Minutes: Rising Treasury Yields = Dovish Stance

The minutes from the Federal Reserve’s FOMC meeting on November 1, 2023, reveal that the Federal Open Market Committee is apprehensive about the rising Treasury yields and their potential impact on growth and financial stability. Policymakers have pledged to maintain “sufficiently restrictive” financial conditions, but their strategy is cautious. This means they aim to avoid a quick tightening of financial conditions, but won’t resist easing. Despite inflation expected to remain above target in the coming year, no further rate hikes are anticipated in this cycle. Before the meeting, Fed officials had indicated that the increasing ten-year Treasury yields, nearing 5%, would be cause to reconsider a planned 25 basis point rate hike later in the year.

The minutes further suggest that the rising Treasury yields are perceived as a threat to financial stability, with banks in particular facing losses on their portfolios of fixed-rate assets. The reaction to the rise in long-term yields varies amongst the Fed officials. They acknowledge the slowing of recent inflation, but require more data to be confident that inflation is on track to return to the 2 percent target. While officials agree that the labor market is becoming better balanced, they are uncertain if the rising labor supply will be a sustained trend. Some have also pointed out that wage growth is faster than what is consistent with 2% price inflation. In conclusion, the FOMC agrees that policy rates should move carefully, with the likelihood of an increase in policy rates being low.

币安及其首席执行官赵长鹏承认对反洗钱和违反美国制裁的指控，这导致了与美国达成的高达43亿美元的巨额和解，这是公司历史上最大的一笔。赵长鹏本人将支付5000万美元的罚款并辞去CEO职务。这些决议结束了对交易所未能防止与恐怖组织进行可疑交易以及允许美国和伊朗的客户进行交易的长期调查。

2019年，Binance是全球最大的加密货币交易所，它及其首席合规官Samuel Lim承认，该平台被用于将资金输送至哈马斯等恐怖组织。美国商品期货交易委员会针对该公司及其CEO Changpeng Zhao提起诉讼，导致43亿美元的罚款和Zhao对未能遵守反洗钱法律的认罪。根据和解，Binance将被要求在未来报告可疑交易，并审查过去应状告的活动。美国金融犯罪执法网络(FinCEN)将获得Binance支付的罚款中的34亿美元，这是FinCEN历史上的最高罚款

新任CEO：看涨 BTC

Zhao辞去CEO的职务，Richard Teng接任CEO，标志着Binance新纪元的开始，它强调合规性。现在法律问题已经解决，为改善合规道路开辟了清晰的道路，加密市场的风险感知已经降低。这次洗除一个重大的阻力可以被认为是对比特币的看涨，可能会增加投资者的信任和市场稳定性。

“BTC减半”：看涨比特币至 220K USD

比特币的“减半”，大约每四年发生一次，是投资者的关键事件。这个过程，降低了比特币的供应通货膨胀，通常对比特币的价格是一个强烈的看涨信号。Bitcoin Archive预测，在未来18个月内，比特币会超过220,000美元，这基于之前“减半后”价格的六倍增长。但是，由于每次减半后看到的价格涨幅在减小，这种预测必须谨慎对待。总的来说，虽然比特币的减半事件通常是个看涨信号，市场的波动性以及以往减半中看到的收益减少应当对预期进行适度的调整。

加密货币与S&P关联性：分道扬镳

本年度加密资产和股权关联性的尖锐下降始于Silvergate的失败后，加密资产和股权的分歧。这可能导致对DeFi领域的兴趣增加。当前1m关联性远低于九月初，BTC和ETH与S&P的关联性现在为负。尽管更广泛的银行业压力已经下降，但3m的关联性仍无法与2022年底和2023年初的水平相媲美。

多项资产的波动都有所增加，而加密货币似乎不例外。尽管波动性调整后，加密货币尤其是altcoins，一直表现突出。这种上涨与改善的指标相吻合 — — 比特币的交易量，谷歌的搜索兴趣和稳定币的市值在经历数月的下跌之后都在上升。此回暖也伴随着比特币ETP流入的飙升。因为黄金和比特币存在一些相似之处，因此我们找准时机开始深入研究GLD — — 第一款黄金ETF — — 对宝贵金属的影响，其中一个相似之处是（或者在黄金的情况下）现在）对投资者来说难以获取

方便拥有比特币的影响

比特币和黄金这两种非计息资产之间存在几个相似之处，这可能导致相关的市场影响。这两种都被视为对大多数投资者的获得阻力，但对此的渴望无疑是存在的。对黄金（特别是实物金条）来说，这种情况在黄金ETF上市后发生了变化，它准确地跟踪了宝藏金属的现货价格，并为机构和零售投资者社区提供了轻松的入股机会。目前大概率会上市比特币现货ETF，因此我们正在分析第一家黄金ETF对相应资产的影响。

黄金ETF流入 vs. 相对表现

2004年11月18日，学士金ETF，SPDR Gold Shares（GLD）发行。发行后的一周内，黄金略微跑赢了银，但这种走势很快就被逆转。随后，黄金表示经过了大幅的超额表现，但该举动也很快就被逆转了。尽管黄金的相对表现可能令人失望，但流入GLD的资金却非常巨大，导致了整个贵金属行业的走高。自成立以来的第一年，GLD的市值几乎增长了500％。因此，尽管相对价格表现可能并没反映出来，但流入显然表明了黄金敞口的需求，GLD的上市（至少部分）满足了这种需求。

对现货比特币ETF审批的市场乐观情绪

当6月份开始有ETF审批的猜测时，流入比特币交易所交易产品（ETP）的资金额度大幅加快。对SEC审批的新一轮乐观情绪引发了另一轮的资金流入，这些流入的增长速度甚至比上一轮更快。值得注意的是，资产经理购买比特币期货的速度已明显提升。这在ETH期货活动中也得到了证实。对比特币ETF的需求也在SEC ETF批准的错误报道后加密货币的急剧上涨中得到了证明。然而，基于ETF审批将解锁的比特币需求的范围是高度不确定的。这种不确定性只会在审批进一步延迟的情况下增加。有可能已经有能力获取BTC的投资者正在为批准做准备，一旦SEC获得批准，就将出售他们的比特币。