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PLUS: Inflation cools
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GM to all 84,827 of you. Crypto Nutshell #535 blowin’ minds… 🤯🥜
We're the crypto newsletter that's more turbocharged than a racing car with a heart of gold... 🏁🚗💨
What we’ve cooked up for you today…
🏦 It’s all coming together
❌ Everyone is wrong about this cycle
⚡️ Supply shock
💰 And more…
Prices as at 1:50am ET
IT’S ALL COMING TOGETHER 🏦
BREAKING: Unexpected Decline in Core CPI Sends Bitcoin Price Higher
There it is…
Bitcoin is once again above $100,000 (At the time of writing).
What caused the sudden jump up in price?
Well, recent data shows that year-over-year core inflation slightly dipped…
And no one saw this coming.
According to the report, Consumer Price Index (CPI) increased by 0.4% in December. This was slightly higher than the previous months 0.3%.
On a year-over-year basis, CPI was up 2.9% which aligned with expectations. (Also slightly higher than Novembers 2.7%)
Core CPI, which excludes food and energy, rose 0.2% in December. This also aligned with analyst expectations.
However…
Core CPI year-over-year dipped to 3.2% versus forecasts for 3.3% and November’s rate of 3.3%.
(This is also the first dip this metric has seen since July 2024)
With CPI holding steady at 2.9% and core CPI easing to 3.2%, many are expecting a dovish pivot from the Fed.
Which means, there’s rekindled expectations for rate cuts in 2025. (Bullish for risk assets like Bitcoin)
But…
We’ll still have to wait a couple of months before we see them.
According to CME FedWatch, there’s a 2.7% chance that the Fed cuts interest rates at their upcoming January 29th meeting.
Favourable inflation data, Trumps inauguration, pro-crypto policies and a friendly SEC…
It’s all coming together. 😎
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EVERYONE IS WRONG ABOUT THIS CYCLE ❌
All indicators are currently pointing to the same conclusion:
This cycle is going to go longer & higher than everyone expects.
That’s the latest message out of Raoul Pal.
You’ve surely heard of Raoul by now, but if you haven’t he’s a macroeconomic expert with decades of experience in finance.
He also has one of the best track records in crypto.
In a livestream update today, Raoul broke down many economic indicators.
But the most interesting?
The ISM vs Bitcoin:
ISM vs. Bitcoin
Now if you haven’t heard of the ISM, it measures how busy & healthy businesses are in the U.S.
Each month, it has a score:
Above 50 means businesses are growing 📈
Below 50 means they're slowing down 📉
In simple terms, the ISM is one of the best indicators as to how the economy is doing.
Why do we care about the ISM?
Because as you can see from the graph, the ISM & the price of Bitcoin are very correlated.
“Bitcoin is actually correlated to the ISM.”
Raoul then explained that, based on current indicators, we are still at the bottom of the ISM cycle:
“We’re only at the bottom of the ISM cycle… We are nowhere near the top. We haven’t even started the cycle yet. It’s all to play for.”
This means one thing:
“We’re nowhere near the top. So what it tells me is the probability is this cycle is going to go longer or later than certainly last cycle.”
Bitcoin is nowhere near the top of its cycle.
The common consensus is that the current cycle will continue until about the 3rd quarter of this year.
Raoul disagrees:
“It’s going to be longer and back-end loaded. It may go into 2026.”
We have to agree with Raoul on this one.
Until this is looking a bit less lopsided:
We’re nowhere near the top. 🌕
SUPPLY SHOCK ⚡️
Today we’ll be taking a look at Ethereum’s supply side dynamics.
(Spoiler alert: They’re super bullish)
First up, we’ve got the amount of Ethereum currently being staked.
Quick Note: Ethereum staking is the process of locking up ETH to support the blockchain's security. Users earn rewards for staking.
If you’d like to learn more about staking, checkout this article.
As of today, there is 55,930,058 ETH being staked.
Here’s the crazy part though…
That’s 46.61% of the ENTIRE CIRCULATING SUPPLY.
Which means that 46.61% of the Ethereum supply is in the hands of long-term holders.
If you can remember back to last week, we broke down the amount of Ethereum sitting on exchanges.
And we found out that there’s only ~10.23% of the total supply available on exchanges.
So here’s the current situation:
46.61% of the entire supply is locked for staking
The Ethereum ETF flows are starting to tick up (2025 is expected to be bigger than 2024)
And only 10.23% of the supply is available for sale on exchanges
That sounds like an EXTREMELY bullish set up to us. 😎
CRACKING CRYPTO 🥜
Accounting rule changes have turned Bitcoin from risky venture to corporate must-have. According to Matt Hougan, the demand from this companies could impact the Bitcoin market in a positive and significant way.
SEC postpones listing decision for Bitwise crypto index ETF. The ETF aims to give investors exposure to a diverse basket of cryptocurrencies such as SOL, XRP and ADA, among others.
HashKey predicts bitcoin to break through $300,000 in 2025. HashKey Group has set out 10 crypto predictions for 2025, including bitcoin and ether to surpass the $300,000 and $8,000 levels, respectively.
Spot Bitcoin ETFs Exceeded Expectations in 2024, but Just Wait for 2025. Gary Gensler has described crypto as the Wild West and one observer said markets are likely to see just that under new leadership in D.C.
WHAT WE’RE READING 📚
Want to get even smarter? Check these out.
p.s. all completely FREE (one click subscribe link)
Raremints (link) - Daily crypto news
Bitcoin Breakdown (link) - Twice weekly Bitcoin news
Techpresso (link) - Daily tech news and insights
The Hustle (link) - Get Smarter on Business and Tech
Your Next Breakthrough (link) - Personal growth with Mark Manson
The Neuron (link) - AI trends and tools to keep you ahead
CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
Which public company currently holds the most Bitcoin? |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: D) MicroStrategy 🥳
MicroStrategy stands out as a leading advocate for Bitcoin, holding the largest number of Bitcoin among publicly traded companies.
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DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.
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