Market update | June 12th, 2026

Inflation in focus: navigating the macro backdrop

Last week's payrolls data confirmed the US economy remains on a solid footing. This week, the spotlight shifted to inflation. Core CPI (ex-energy) came in below expectations — a reassuring signal. The complication, however, is energy: the gasoline component alone accounted for 60% of last month's CPI print, pushing headline inflation to 4.2% — more than double the Fed's 2% target.

Despite the optics, I'm not convinced the market's current pricing of one to two rate hikes this year is correct. The incoming Fed Chair, Kevin Walsh, takes the helm on the 17th, and his recent comments point to a more nuanced reading of the current environment — notably the deflationary impact of AI and the transitory nature of energy-driven inflation. I'd expect a more measured tone from him than the market anticipates, though his reluctance to offer forward guidance means we won't have full clarity until he speaks.

Bitcoin and digital asset flows

The macro environment continues to weigh on digital asset sentiment. Global industry flows year-to-date are essentially flat to slightly negative,  a dynamic that echoes the 2022–2024 period of Fed tightening. A large portion of outflows is attributable to the unwinding of basis trades, with iShares notably affected. Investors are battening down the hatches.

There's a broader attention problem too: AI is absorbing liquidity and mindshare. In client conversations, the overwhelming message is that focus has shifted — the crypto opportunity is being set aside for now in favour of AI plays. Bitcoin has repeatedly tested and failed to break above the $80k level, which aligns closely with the 200-day moving average. I don't see a sustained break higher until we get a more dovish Fed and lower inflation expectations.

The tail risk to watch

The Iran conflict deserves attention. Oil prices appear artificially suppressed by effective Chinese demand rationing — but that snap-back risk is real. If crude were to move to $140–150 (arguably the fair level given current geopolitical conditions), the inflationary and recessionary implications for the developed world would be severe. In that stagflationary scenario, Bitcoin would likely face short-term headwinds. But it's precisely that environment — central banks impotent in the face of supply-driven inflation — where Bitcoin's fixed-supply properties make the most compelling long-term case.

Niche bright spots

Beyond the macro noise, there are pockets of genuine innovation worth noting. Hyperliquid continues to post impressive volumes and is seeing real adoption for pre-IPO price discovery (SpaceX pricing on-chain being the most visible example). This speaks to a durable use case for blockchain infrastructure — enabling trading in assets that don't yet exist in traditional markets, and at weekends when conventional markets are closed.

No strong near-term tailwinds for Bitcoin. But equally, no credible signal of material further downside from here. Patience remains the trade.