💰 Bitcoin Breaks $81k: New Bull Run Started!

Good Morning!

In a classic case of market expectations vs. reality, Asian stocks took a hit today with Hong Kong's Hang Seng diving 2.5%. Beijing's latest 10 trillion yuan stimulus package left investors wanting more, especially with Trump's tariff threats looming. Meanwhile, Bitcoin's writing its own story, surging to an all-time high of $81,756 – thank Trump's pledge to make the US "the crypto capital of the planet" and a increasingly crypto-friendly Congress for that rally. All eyes are now on Wednesday's U.S. inflation data, with markets pricing in a 65% chance of a December rate cut.

In today’s email:

• Inflation: All eyes on CPI data this Wednesday  

• Bitcoin: The rocketship is back above $81k! 🚀

• MicroStrategy: Sitting on $20B+ of BTC 

• Gold: Around $2670 now with risk-on rally following Trump’s win

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THE BIG IDEA

Wall Street's response to Trump's victory shows market confidence in his economic agenda, but short-term inflation concerns and Fed's next moves keep traders on their toes

The market reaction to Trump's landslide victory has been about as dramatic as watching paint dry – and that's exactly what's turning heads. While everyone and their goldfish had been war-gaming scenarios for months, the predictability is, ironically, the biggest surprise.

Wall Street's already pricing in Trump's sequel: expanded tax cuts, beefed-up tariffs (especially for Europe – sorry, not sorry), and a Fed that'll need to keep its hawkish feathers ruffled. The dollar's strutting higher, yields are climbing, and traders are acting like they've read the script beforehand.

But here's where it gets spicy: December's still a wild card

Next week's inflation numbers could come in hotter than a jalapeño, with both new and used car prices revving up. The Fed's eyeing a potential rate cut, but with core CPI potentially hitting 0.3% and the headline at 0.2%, Powell might need to reconsider his Christmas presents to the market.

Speaking of the Fed, Powell's latest "we don't speculate, we don't assume" mantra feels a bit rich. The jobs market's showing cracks, consumer surveys are getting jittery, and we've still got 53 days of 2024 to navigate. Plus, let's be real – when was the last time campaign promises translated perfectly into policy?

The billion-dollar questions: Are these European tariffs Trump's actual endgame or just bargaining chips? Do tax extensions really count as stimulus? And could those same tax cuts trigger a bond yield spike that sends the economy into a tailspin?

For now, markets have made up their mind about 2025 and beyond. But 2024's final chapter? That story's still being written, and plot twists are practically guaranteed.

MARKETS AT A GLANCE

TOP NEWS

Bank of Japan's latest meeting minutes reveal a cautious stance on rate hikes amid political pressure and market uncertainty post-Trump victory

Japan's central bankers are playing their cards close to the chest. While most economists bet on a rate hike by January, the BOJ's October meeting summary suggests they're in no rush to follow through. With the yen weakening post-Trump victory and PM Ishiba's shaky political footing, the path to policy normalization looks increasingly complex.

Elon Musk throws his weight behind controversial proposal to end Fed independence following Trump's victory, setting up potential power struggle with Powell

The Fed's independence saga just got spicier. Fresh off Trump's win, Elon Musk backed Sen. Mike Lee's "#EndtheFed" proposal with a simple "100" emoji – speaking volumes about the looming battle. Meanwhile, Powell's already drawing lines in the sand, firmly stating he won't resign if Trump asks. Game theory suggests this monetary policy chess match is just beginning.

Quants are revolutionizing private market performance analysis with sophisticated mathematical models, potentially disrupting traditional PE valuation methods

Wall Street's math wizards are cracking private equity's black box using "direct alpha" – a new way to measure true PE performance against public markets. Led by Barry Griffiths, these quants found buyout funds' impressive 12.3% returns might not be so spectacular after all. With PE expected to hit $25.1 trillion by 2033, this transparency push could reshape the industry's future.

CRYPTO

Bitcoin surges past $80k as Trump's victory sparks optimism for crypto-friendly regulations and potential policy shifts

The crypto world's having a moment – Bitcoin just smashed through $80k, riding high on Trump's victory wave. With promises to fire SEC's Gensler and create Bitcoin reserves, the president-elect's pro-crypto stance has sent digital assets soaring. While some promises might face legal hurdles, Binance's CEO is already calling it crypto's "golden era."

Solana joins the elite $100B club as its price surges to $212, sparking "flippening" talks with Ethereum amid the post-Trump rally

Solana's crushing it – up 34% this week and now worth $100B+, joining the crypto big leagues with BTC, ETH, and USDT. After surviving the FTX drama, SOL's become retail crypto's darling and DeFi's rising star. With analysts calling this the "banana zone" of the bull run, that $260 all-time high looks temptingly close.

a16z crypto sees a favorable regulatory shift for blockchain projects following Trump’s re-election, encouraging crypto founders to explore token-based products

In a post by its policy team, a16z suggests clearer rules and constructive engagement with agencies are forthcoming. They aim to advocate for frameworks promoting innovation while advising projects to minimize centralized features to avoid scrutiny. The firm plans new guidance on Decentralized Unincorporated Nonprofit Associations to support compliant, U.S.-based crypto projects.

MicroStrategy’s Bitcoin holdings now surpass $20 billion, with a 104% ROI as Bitcoin hits $81,617

Accumulating BTC at a dollar-cost average of $39,292, the firm plans to raise an additional $42 billion for future investments. Meanwhile, El Salvador’s 5,930 BTC is valued at over $482 million, reflecting an 80% gain amid continued daily acquisitions. Bhutan’s holdings also exceed $1 billion, leveraging Bitcoin as a strategic reserve.

GOLD

Gold's substantial rally this year, recently peaking at $2,802 per ounce, has reversed following Trump’s election win, triggering strong equity market gains and weakening gold’s appeal

According to analyst Mark Mead Baillie, Trump’s return may continue pressuring gold due to potential economic and trade policies that could support the dollar and raise interest rates. While short-term corrections in gold are likely, Baillie anticipates that gold will eventually recover, maintaining its long-term upward trend amidst economic and currency fluctuations.

DAILY ECONOMIC CALENDAR (ET)

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