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Stocks fall, Bitcoin rises: What’s driving the market divide?

Stocks fall, Bitcoin rises: What’s driving the market divide?

The overnight markets have been anything but calm lately, with major US benchmarks finishing lower, though they managed to recover somewhat from their steepest declines. The Russell 2000 dropped 3.47 per cent, the S&P 500 fell 2.61 per cent, the Nasdaq declined 2.47 per cent, and the Dow also shed 2.47 per cent over the past week.

It’s a rough picture, but the fact that these indices clawed back from their worst levels suggests a flicker of resilience—or perhaps just a pause before the next storm. Growth-related sectors, the engines of recent market optimism, were broadly lower, and the so-called Mag-7 stocks—Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla—all took a hit.

Apple, in particular, saw a sharp 3.0 per cent drop, a decline pinned squarely on tariff concerns tied to President Trump’s latest trade rhetoric. Investors, however, seem to be growing numb to his tariff announcements, increasingly convinced that these threats are more noise than substance, likely to fade away as quickly as they flare up.

But that doesn’t mean the market is shrugging off all the turbulence. Big investors are quietly shifting gears, diversifying their bond portfolios and looking beyond US borders for opportunities. Trump’s trade war and the ballooning US deficits are making them jittery, and for good reason. Bond market volatility is spiking, a loud warning to governments that borrowing money isn’t going to come cheap anymore. The widening risk premiums on lower-rated junk bonds are another red flag, hinting at deeper cracks in the US economy.

Meanwhile, major US banks like JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are mulling a bold move: teaming up to launch a joint stablecoin. It’s a bid to speed up transactions and fend off the crypto industry’s growing threat, with talks involving co-owned entities like Early Warning Services (behind Zelle) and the Clearing House. The financial world, it seems, is bracing for a seismic shift.

Growth sectors and tariff fears: The Apple effect

Zooming in on those growth sectors, the picture gets murkier. The Mag-7 stocks, long the poster children of market strength, stumbled in unison. Apple’s 3.0 per cent slide stands out, not just for its size but for what’s driving it: Trump’s tariff threats, particularly a proposed 25 per cent levy on iPhones unless their manufacturing shifts back to US soil.

It’s a direct hit to a company that’s built its empire on a global supply chain, and it’s rattling investors. Yet there’s a growing sense that Trump’s bark might be worse than his bite. Market players are starting to tune out his tariff proclamations, betting that these policies won’t stick—or at least won’t hit as hard as advertised.

That skepticism hasn’t stopped the unease from spreading, though. Big investors are hedging their bets, pouring money into bond markets outside the US as a buffer against Trump’s trade wars and the fiscal mess piling up in Washington.

The bond market itself is flashing warning signs. Volatility is up, signalling that debt financing costs are on the rise—a headache for governments already stretched thin. And those widening risk premiums on junk bonds? They’re not just a technical blip; they could be an early distress signal about the US economy’s health. It’s a tense moment for growth sectors, caught between innovation’s promise and the grinding uncertainty of trade policy.

Central banks: Steady hands in a shaky world

Central banks, meanwhile, are trying to keep their footing amid the chaos. In the US, a Supreme Court order suggests the Federal Reserve might be insulated from Trump’s attempts to meddle with independent agencies, a rare bit of good news for those hoping for stability.

Across the Pacific, China’s lowering deposit rate ceilings to shield bank profits, a pragmatic move to keep its financial system humming. Japan’s central bank governor, Kazuo Ueda, is playing it cool, offering no hints of intervention even as yields on super-long-dated securities hit all-time highs.

And in Europe, ECB official Yannis Stournaras is sketching out a cautious plan: a rate cut in June, followed by a pause to see how the dust settles. These institutions are navigating uncharted waters, balancing domestic pressures with the global fallout from Trump’s policies.

Tariffs: Trump’s high-stakes gamble

Speaking of Trump, his tariff threats are escalating into a full-blown global standoff. He’s declared negotiations with the European Union a dead end, threatening a jaw-dropping 50 per cent tariff on EU goods starting June 1. That’s no small potatoes—trade with the EU accounted for about 4.9 per cent of US GDP in 2024, with pharmaceuticals, cars, and machinery leading the charge.

Then there’s the iPhone gambit: a 25 per cent tariff unless Apple brings manufacturing home. It’s a bold play, but the EU isn’t blinking. They’ve made it clear they won’t budge on VAT, food safety standards, or regulations governing digital services and social media. This deadlock crushed any lingering hope that Trump’s trade wars would wind down.

Japan’s taking a different tack, signaling it’s ready to strike a tariff deal with the US by June, perhaps sensing an opportunity to dodge the worst. Meanwhile, US importers are reeling from a record US$16.5 billion tariff bill for April alone, a staggering cost rippling through supply chains.

Southeast Asian nations are feeling the squeeze too, caught in the crossfire of the US-China trade war and pressured to pick a side. It’s a high-stakes game of chicken, and the global economy is holding its breath.

Economic pulse: Bright spots and warning signs

Amid all this, economic indicators are a mixed bag. The UK’s retail sales surged 1.2 per cent in April, defying forecasts and marking four straight months of gains, thanks to some unusually good weather. Consumer confidence there ticked up to -20 in May, better than the expected -22 and a leap from -25 a month earlier, though inflation worries haven’t gone away.

Germany’s GDP surprised with a 0.4 per cent rise in Q1, fuelled by exporters rushing shipments ahead of US tariffs. Japan, though, is grappling with core inflation spiking to 3.5 per cent in April, driven by sky-high rice and energy costs—a reminder that not all growth is painless.

Back in the US, Trump’s “big, beautiful bill” is hitting snags in the Senate, and even if it passes, it might boomerang on Republicans. The combo of deep tax cuts and soaring debt could turn off voters and spook investors, undermining the very gains Trump’s touting. It’s a precarious moment, with economic signals flashing both opportunity and peril.

Bitcoin’s rise: A political and economic wildcard

Then there’s Bitcoin, quietly stealing the spotlight. Support for the cryptocurrency is surging among US policymakers, with 59 per cent of Senators and 66 per cent of House Representatives backing Bitcoin-friendly policies. What started as a niche interest among libertarian and tech-forward lawmakers has gone mainstream, cutting across party lines.

They’re waking up to Bitcoin’s potential—not just as a financial disruptor, but as a tool for economic freedom and a hedge against a wobbly US Treasury market. With bond yields climbing amid fears of fiscal instability and inflation, Bitcoin’s hitting new highs—US$109,507 as of late—defying the gloom gripping traditional markets.

Pakistan’s jumping on the bandwagon too, allocating 2,000 megawatts of surplus electricity to power Bitcoin mining and AI data centers. It’s a savvy move by a country wrestling with high tariffs and excess energy capacity, especially as solar power gains traction. Spearheaded by the Pakistan Crypto Council, this initiative aims to cash in on idle resources, create tech jobs, and lure foreign investment. It’s a glimpse of how nations might adapt to a digital-first future, even as the old economic order frays.

Tying it all together: A fragile balance

So where does this leave us? The overnight markets are a jittery mess, with US benchmarks down but not out, growth sectors wobbling, and investors second-guessing Trump’s tariff bluster. Bond markets are screaming caution, central banks are treading carefully, and global trade is a tangle of threats and counter-moves.

Economic data offers some hope—UK retail, German exports—but the risks are piling up, from Japan’s inflation to America’s debt woes. And in the midst of it all, Bitcoin’s carving out a new role, embraced by Washington and innovated on by countries like Pakistan.

I see a world teetering on the edge—between chaos and opportunity, tradition and transformation. Trump’s tariffs might fizzle or ignite a firestorm; Bitcoin could falter or redefine finance. What’s certain is that adaptability will be the name of the game. For investors, policymakers, and everyday folks, the challenge is clear: navigate the storm, eyes wide open, ready for whatever comes next.

 

Source: https://e27.co/stocks-fall-bitcoin-rises-whats-driving-the-market-divide-20250526/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Crypto thrives as traditional markets falter: What’s driving the divergence?

Crypto thrives as traditional markets falter: What’s driving the divergence?

The recent retreat in global risk sentiment, spurred by escalating concerns over the rising US deficit, has sent ripples across various asset classes, from US equities and Treasuries to commodities and cryptocurrencies, painting a vivid picture of a market grappling with uncertainty.

The implications are profound, and the data tells a compelling story of shifting investor priorities and economic pressures. Let’s dive into this multifaceted topic, exploring how the US deficit is reshaping global markets and what it means for the future.

The growing unease about the US deficit is at the heart of this shift in risk sentiment. For months, economists and investors have voiced concerns about the ballooning federal deficit, but recent events have brought these worries to a boiling point.

A Bloomberg report from May 22, 2025, underscores this tension, noting that a proposed tax bill could add trillions to the deficit, further straining an already stretched fiscal framework. This has rattled investors, who fear that unchecked borrowing could lead to higher interest rates, persistent inflation, or even a loss of faith in the US economy’s long-term stability.

The bond market, often a bellwether for such concerns, is flashing warning signs—most notably through a weak 20-year Treasury auction and a pronounced bear steepening of the yield curve. This dynamic, where long-term yields are rising faster than short-term ones, reflects a market bracing for tougher times ahead.

Take US equities, for instance. The S&P 500, a broad barometer of American corporate health, plummeted by 1.6 per cent on Wednesday, marking its worst day in a month. The Dow Jones Industrial Average and Nasdaq Composite followed suit, shedding 1.9 per cent and 1.4 per cent, respectively.

This wasn’t a isolated stumble but a broad-based sell-off, signaling that investors are pulling back from riskier assets. Why? The rising deficit fuels fears of higher borrowing costs down the line, which could squeeze corporate profits and dampen economic growth.

Higher Treasury yields also play a role—when bonds offer better returns, stocks lose some of their luster, especially for those seeking steady income. It’s a classic flight from risk, and the numbers bear it out: the equity market is feeling the heat of this deficit-driven anxiety.

The US Treasury market offers even more insight into this unfolding narrative. On Wednesday, Treasuries experienced an aggressive bear steepening, a term that might sound arcane but simply means that long-term interest rates are climbing faster than their short-term counterparts.

Yields on tenors beyond 10 years surged by more than 10 basis points, while the 2-year yield, tethered to expectations of Federal Reserve policy, edged up a more modest 4.9 basis points to 4.019 per cent. This divergence is telling. The Fed might still be poised to cut rates in the near term—hence the relatively stable short-end yields—but the long end of the curve is screaming concern about the future.

Investors are demanding higher compensation for locking their money into longer-dated Treasuries, likely anticipating inflation or a flood of government borrowing to finance the deficit. The weak 20-year auction only amplifies this sentiment; when demand for these securities falters, it’s a clear sign that confidence is waning.

Interestingly, the US Dollar Index didn’t follow the script you might expect. Despite rising Treasury yields, which typically bolster the dollar by attracting foreign capital, the index fell 0.5 per cent to 99.60, marking its third consecutive day of declines. This counterintuitive move suggests that deficit worries are overshadowing the yield advantage.

If investors are losing faith in the US economy’s fiscal health, the dollar’s appeal dims, even with higher rates on offer. It’s a fascinating twist—while yields climb, the currency weakens, hinting at deeper structural concerns that could ripple globally.

Amid this turmoil, gold has shone brightly, rising 0.8 per cent to close at US$3,315 per ounce—its third straight day of gains. This isn’t surprising. Gold thrives in times of uncertainty, serving as a safe haven when faith in paper assets falters.

With the deficit stoking fears of inflation and economic instability, investors are flocking to this timeless store of value. It’s a hedge against the unknown, and right now, there’s plenty of that to go around. The data backs this up: gold’s steady ascent mirrors the retreat in risk sentiment, a textbook response to the current climate.

Oil, on the other hand, tells a different story. Brent crude slipped 0.7 per cent to settle at US$65 per barrel, pressured by a report showing US crude inventories at their highest since July. This drop reflects a broader worry: if the global economy slows under the weight of deficit-driven uncertainty, demand for oil could soften.

Rising inventories suggest an oversupply might already be in play, compounding the downward pressure on prices. It’s a stark contrast to gold’s rally—while one asset benefits from fear, another suffers from faltering growth expectations.

Beyond the US, global responses are adding layers to this saga. Bank Indonesia, for example, cut its benchmark interest rate by 25 basis points to 5.50 per cent, aligning with market expectations. The Deposit Facility and Lending Facility rates also dropped to 4.75 per cent and 6.25 per cent, respectively.

This move could be a preemptive strike to bolster domestic growth amid a shaky global backdrop, though it risks weakening the rupiah if risk sentiment continues to sour. It’s a delicate balancing act—stimulus now might cushion the blow, but it could also expose vulnerabilities later. For now, it’s a sign that central banks worldwide are watching the US deficit drama closely, adjusting their own playbooks accordingly.

Asia’s equity markets offer a mixed picture. While Wednesday saw broadly positive performances, early Thursday trading tracked Wall Street’s decline, suggesting the US slump is casting a shadow. Yet US equity index futures hint at a potential rebound at the open, a glimmer of optimism amid the gloom. Markets are volatile, reacting to each new headline about the deficit and its fallout. Investors are on edge, and rightly so—the stakes are high.

Then there’s the cryptocurrency angle, which has turned heads with its defiance of traditional market trends. Bitcoin rocketed to US$110,730 on Wednesday, a fresh all-time high, before settling just below US$110,000. This surge, a 47.82 per cent climb from its April 6 low of US$74,434, coincided with Bitcoin Pizza Day—a nostalgic nod to May 22, 2010, when Laszlo Hanyecz traded 10,000 Bitcoins for two pizzas, then worth US$41.

Today, those coins would fetch millions, a testament to Bitcoin’s meteoric rise. The timing feels symbolic, but the rally’s roots run deeper. Strong buying pressure and a shrinking supply on exchanges suggest investors are piling in, viewing Bitcoin as a hedge against the chaos in traditional markets.

Ethereum’s story echoes this resilience. Up two per cent in Thursday’s early Asian session, it reclaimed the US$2,500 level, buoyed by whale buying. Exchange supply has dwindled to 18.73 million ETH, the lowest since August 2024, with over 1 million ETH flowing to private wallets since late April.

This hoarding signals confidence in future gains, and it’s paying off—Ethereum’s upward trajectory holds firm despite the broader market wobble. Unlike equities or Treasuries, these digital assets seem to thrive on uncertainty, drawing in those disillusioned with fiat systems strained by deficits and debt.

So, what does it all mean? The rising US deficit has unleashed a cascade of effects, eroding global risk sentiment and reshaping asset valuations. Equities and Treasuries are reeling, gold is basking in safe-haven demand, and oil is buckling under growth fears.

The dollar’s weakness underscores a crisis of confidence, while cryptocurrencies like Bitcoin and Ethereum soar as alternative refuges. It’s a tale of divergence—traditional markets buckle under fiscal strain, while digital ones chart their own course.

Looking ahead, the implications are vast. If the deficit continues to swell, Treasury yields could climb further, squeezing equities and amplifying economic headwinds. Gold might keep rising, but oil could languish if growth stalls. Central banks like Bank Indonesia will face tough choices, balancing stimulus with stability.

And cryptocurrencies? Their trajectory hinges on whether they can sustain this momentum as viable hedges. For investors, the key is vigilance—understanding how these pieces fit together will be crucial in navigating what’s shaping up to be a turbulent road.

In my view, this moment is a wake-up call. The US deficit isn’t just a domestic issue; it’s a global fulcrum, tilting markets in ways we’re only beginning to grasp. The data—from yield curves to crypto wallets—paints a picture of a world in flux, where old assumptions are tested, and new opportunities emerge.

I’ll keep digging, tracking the numbers and the narratives, because this story is far from over. For now, the retreat in risk sentiment is a stark reminder: in finance, as in life, uncertainty is the only certainty.

 

Source: https://e27.co/crypto-thrives-as-traditional-markets-falter-whats-driving-the-divergence-20250522/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Fed’s caution vs market optimism: What’s the real story? Could Bitcoin to US$120K be it?

Fed’s caution vs market optimism: What’s the real story? Could Bitcoin to US$120K be it?

I reflect on the whirlwind of economic and market developments from last week and cast an eye toward what’s coming, and it’s clear we’re in a fascinating moment. The financial world feels like it’s teetering on the edge of something big—optimism tempered by uncertainty, bold moves shadowed by lingering risks.

Let’s dive into what happened last week, what it means, and what we might expect in the days ahead, weaving together the threads of global trade, monetary policy, housing, and even the wild ride of Bitcoin. This is my take, grounded in the facts and data at hand.

Last week: A rally fuelled by trade relief and resilience

Last week kicked off with a bang. Markets opened with a decisive gap above the 200-day moving average—a technical signal that traders love to see, often interpreted as a sign of sustained bullish momentum. The catalyst? A breakthrough in the US-China trade saga. After months of tension, the two economic giants agreed to a 90-day suspension of most tariffs.

US duties on Chinese goods dropped from a staggering 145 per cent to a more manageable 30 per cent, while Chinese tariffs on US imports fell from 125 per cent to 10 per cent, with some categories excluded. This wasn’t a full resolution—those exclusions hint at sticking points yet to be ironed out—but it was a lifeline for markets that trade war fears had battered. Investors exhaled, and you could almost feel the relief rippling through Wall Street.

The numbers back this up. The S&P 500 and Nasdaq logged their strongest single-day gains since early April, and the Dow surged over 1,100 points on Monday alone. By Friday, major indexes were trading within five per cent of their all-time highs. That’s no small feat when you consider the headwinds of the past year—supply chain disruptions, inflation spikes, and geopolitical uncertainty. The tariff truce, announced after negotiations in Geneva, seemed to flip a switch, turning fear into opportunity.

Tuesday added fuel to the fire. A cooler-than-expected Consumer Price Index (CPI) print hit the wires, suggesting that inflation might not be the runaway train some had feared. Lower inflation readings ease pressure on the Federal Reserve to slam the brakes with aggressive rate hikes, and that’s music to investors’ ears. The rally accelerated, with stocks climbing higher as the week progressed. It wasn’t all smooth sailing, though.

Later in the week, Fed Chair Jerome Powell threw a bit of cold water on the party. His tone was neutral at best, hawkish at worst, as he pointed to persistent supply shocks and hinted at a higher long-run rate path. In plain English, he’s saying the Fed might need to keep rates elevated longer to tame inflation and stabilise the economy. That could’ve rattled markets, but it didn’t. Risk appetite held firm, which tells me investors were more focused on the trade win than the Fed’s cautious outlook. It’s a testament to the momentum at play—bullish sentiment was too strong to be derailed.

Looking ahead: Housing, Fed signals, and global pulse points

Now, let’s shift gears and look forward. The coming week feels like a crossroads. We’ve got a slew of data and events that could either cement this bullish run or throw a wrench into it. One area I’m particularly curious about is housing.

Earnings from Home Depot and Lowe’s, coupled with April home sales data, are due out soon, and they’ll be a litmus test for the real estate market. Housing is a huge piece of the economic puzzle—when it’s strong, it signals consumer confidence and spending power; when it’s weak, it can drag everything else down. Interest rates have been a rollercoaster, and buyers have been skittish.

If these reports show resilience—say, steady sales or upbeat guidance from the home improvement giants—it could bolster the case that the economy’s on solid footing. But if they disappoint, it might spark worries about a slowdown. Traders will be watching closely, and so will I.

The Federal Reserve isn’t stepping out of the spotlight either. We’ve got a packed lineup of Fed speakers this week, and their words could move markets. Powell’s recent comments already stirred the pot, and now his colleagues have a chance to elaborate—or pivot.

Then there’s Thursday’s flash Purchasing Managers’ Index (PMI) data, which gives a snapshot of business activity. Strong PMIs could reinforce the bullish vibe; weak ones might signal trouble ahead. These events can reset expectations; in a market, this jittery is no small thing. We’ll see some volatility as investors parse every word and number.

Monday’s spotlight: A glimmer of economic hope?

Let’s zoom in on Monday, May 19, 2025. At 14:00 GMT, April’s US Conference Board Leading Economic Index (LEI) drops. This is one of those forward-looking indicators that economists love—it’s designed to predict where the economy’s headed over the next six to twelve months. It fell by 0.7 per cent in March, which wasn’t great news; a decline signals contraction. The forecast for April is a smaller drop of 0.2 per cent. That’s still negative, but the narrower slide caught my eye.

Could it mean the pace of economic deceleration is slowing? Maybe. If the data comes in as expected—or better—it might suggest recessionary pressures are easing. I think stronger corporate earnings or loosening credit conditions could be at play here, giving businesses and consumers more breathing room. The LEI’s still in the red, so we’re not out of the woods, but a less-bad number could lift spirits. I’ll be checking that release at 2:00 PM GMT with interest.

On the earnings front, we’ve got Diageo and Trip.com reporting. Diageo’s a heavyweight in the alcoholic beverages world, and its results could tell us how consumers are spending on discretionary items like a bottle of Johnnie Walker. Trip.com, a big name in China’s online travel scene, might shed light on whether travel demand is holding up amid economic shifts. These aren’t make-or-break for the broader market, but they’re pieces of the puzzle—clues about how people feel and spend.

Tuesday’s global view: Rates, inflation, and trade

Tuesday, May 20, brings a trio of international events worth watching. First up, at 04:30 GMT, the Reserve Bank of Australia (RBA) announces its interest rate decision. The current rate sits at 4.1 per cent, but the buzz is they’ll cut it to 3.85 per cent. That’s a notable shift. Australia’s economy has been grappling with slowing growth, weaker consumer spending, and cooling inflation.

Recent data showing a softening labor market and sluggish wage growth backs this up—households are stretched, and the RBA might see a rate cut as a way to juice demand and fend off a deeper slump. If they go through with it, it could ripple beyond Australia, maybe nudging other central banks to rethink their own stances. Global markets will take note.

Later, at 12:30 GMT, Canada’s Inflation Rate Year-over-Year hits the docket. Inflation’s been a hot topic everywhere, and this number will tell us if Canada’s price pressures are easing or digging in. A lower reading could ease fears of aggressive rate hikes from the Bank of Canada, while a stubborn one might stoke them.

Then, at 23:50 GMT, Japan’s Balance of Trade data rolls out. Japan is a trade powerhouse, and this shows how its exports and imports are stacking up. With global supply chains still shaky, a surplus could signal resilience; a deficit might hint at trouble. Together, these data points paint a picture of the world economy—interconnected and complex.

Bitcoin’s big moment: US$120K in sight?

Now, let’s talk Bitcoin, because it’s impossible to ignore. On May 18, 2025, it was trading at US$103,895, with a market cap of US$2.064 trillion. That’s a colossal figure, hovering near all-time highs, bouncing between US$102,771 and US$104,002 in a tight consolidation range.

As I write this, it’s ticked up to US$104,826. The 24-hour trading volume—US$19.865 billion—shows plenty of action. What’s driving it? Bitcoin’s got this uncanny knack for thriving whether markets are in risk-on or risk-off mode, a point Bitcoin Suisse has flagged. Its Sharpe ratio, a measure of risk-adjusted returns, sits at 1.72, second only to gold. That’s a big deal—it’s saying Bitcoin’s maturing, delivering solid gains without wild swings.

The market’s buyer-heavy right now, with institutional players and retail investors piling in. That could tighten supply and push prices higher. I’m starting to think the odds of Bitcoin cracking US$120,000 in May are climbing. And it’s not just market dynamics—there’s news fuelling this too.

Ukraine is planning a National Bitcoin Reserve, with lawmaker Yaroslav Zhelezniak finalising the legislation. That’s a bold move, mirroring US efforts to do the same, and it screams adoption. Then there’s American Bitcoin, the Trump family’s crypto venture, announcing plans to go public via a Nasdaq merger. Love them or not, the Trumps bring attention, and this could legitimise crypto further. If these dominoes fall right, we might see a rally that takes Bitcoin to new heights. 

My take: Optimism with eyes wide open

So, where does this leave us? Last week was a shot in the arm for markets—trade relief sparked a rally that held up against Fed hawkishness. The bullish momentum feels real, with indexes knocking on the door of record highs.

Looking ahead, I’m cautiously optimistic. Housing data and Fed signals will be key—if they hold steady, this run could keep going. The LEI’s smaller drop and the RBA’s potential rate cut suggest economies adapt, not collapse. And Bitcoin? It’s a wild card that might steal the show.

But I’m not blind to the risks. Powell’s warnings about supply shocks and rates aren’t idle chatter, and a stumble in housing or PMIs could shake things up. For now, though, the data’s tilting positive, and the vibe is upbeat.

I’ll be watching Monday’s LEI, Tuesday’s global releases, and Bitcoin’s next move like a hawk—because in this market, every moment counts. What do you think—am I onto something, or is there a curveball I’m missing? Let’s keep the conversation going.

I must emphasise again that Bitcoin at US$120,000 is just my humble prediction.

 

Source: https://e27.co/feds-caution-vs-market-optimism-whats-the-real-story-could-bitcoin-to-us120k-be-it-20250519/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j