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The market is highly sensitive to inflation data and policy uncertainty. Just last week, the expected timing for rate cuts shifted from June to December, then back to September after lower-than-expected PPI data. This reflects ongoing uncertainty around inflation and the balance between fiscal stimulus and austerity under Trump’s administration.
Last week, nearly $1 billion flowed into markets during the first half, but following strong economic data and a hawkish Fed stance saw $940 million exit earlier this week. Since then, we have seen a dramatic rebound following weaker than expected macro data, with YTD inflows now sitting at US$1.7bn. While macroeconomic data is once again driving asset prices, the approach of the President-elect Trump’s inauguration looks to create a new momentum.
Rising business optimism, higher food producer prices, and tariff-related buying have led to higher CPI and retail sales figures despite missing lofty expectations. In December 2024, the U.S. Producer Price Index (PPI) rose by 0.2%, slightly below economists’ expectations of a 0.3% increase. This moderation suggests the downward trend in inflation is intact. Services prices remained flat in December, as increases in transportation and warehousing costs were offset by declines in other areas. Notably, airline fares rose by 7.2%, contributing to the stability in the services sector. 
These CPI figures suggest that inflationary pressures persist but are gradually moderating, which could influence the Federal Reserve’s monetary policy decisions in the coming months. Although futures market expectations for the first rate cut of the year currently point to June, they have fluctuated dramatically—from as early as March to as late as December—underscoring the markets’ uncertainty about the interest rate trajectory. This uncertainty has been reflected in real time by Bitcoin’s recent sharp price swings.
Short-term Sentiment Highlights:
BTC’s price remains highly sensitive to macroeconomic data (e.g., PPI).
Howard Marks and Michael Saylor are drawing attention to market trends.
Coinbase is trending in app stores, rising to the first place among financial apps
Equity markets are focused on Nvidia’s performance.
Long-term Bitcoin holders are selling to short-term holders, historically a signal of market peaks.
While Bitcoin’s short-term momentum may depend on regulatory developments after the Jan. 20 inauguration or unexpected economic growth misses, we believe these short-term factors won’t derail Bitcoin’s longer-term trajectory as a competitor to gold.
