Macro Minute – 2 Apr 24

– The market is starting to price down 3 rates cuts for 2024 (lower now to 2.75 cuts) for a few reasons:
1. Both Powell and Waller said the Fed was in “no rush to cut rates”
2. PMI numbers came in above 50, showing an expanding economy (and therefore no need to cut rates).
3. Energy prices heading higher with US gasoline close to 2023 summer highs (making it dangerous to cut rates).

– USD and US yields have moved higher, equities are trading soft and Bitcoin has been under pressure.
– If the Fed cuts continue to get priced out, will we see a full-on risk off hitting asset prices hard across the board?
– The answer is a likely ‘yes’ but we still think that BTC is a ‘buy-on-dip’ because:
a. The desk continues to see consistent buying of calls in the long end up to Dec 24 – Mar 25 (indication structural bullishness in BTC)
b. Increasing institutional participation and demand for spot ETFs, which could mean traditional finance is just getting started

One of the best ways to buy the dip
– Deploy an Accumulator which would allow you to buy BTC spot at 55.5k (15.3% discount to spot) for the next 12 weeks.
(spot ref: 65,500, upper barrier at 70k)