Bitcoin tail-wagging
February 25, 2025
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–Bitcoin has broken out of its three month sideways consolidation to the downside, with the Feb future now at 88200, down nearly 5800. Range had been approx 92.5 to 105. Trapped longs suggest further downside, and NQH being down 89 at 21331 is a potential spillover indication. MSTR is in the red by 6% pre-open at 266 and SMCI which faces a filing deadline today (or could be de-listed by Nasdaq) is down 3.7% at 49.69. NVDA reports tomorrow.
–Yesterday featured slightly lower yields with 10s down 2.3 bps to 4.393%, getting very close to the current SOFRRATE of 4.34% (EFFR is 4.33%). New lows in near 1-yr SOFR calendars. For example, SFRH5/H6 settled -48.25, down 3.5 on the day (9570.25/9618.5). FFJ5/FFJ6 settled -55.0 (9568/9623). So, we’re back to pricing in the idea of 2 or more cuts over the next year, or, equal odds of 0 or 100. Peak contract on the SOFR strip is still SFRU6 at 9621.5; it appears as if reds (2nd year forward) want to press toward 3.5% as the next consolidation area. Interest rate futures are strongly suggesting weaker forward growth.
–WSJ headline (might have been from yesterday):
The U.S. Economy Depends More Than Ever on Rich People
The highest-earning 10% of Americans have increased their spending far beyond inflation. Everyone else hasn’t.
