October 31st, 2025

Macro reality check: Why US$4,000 gold and falling BTC go hand in hand

Risk sentiment has retreated sharply, not due to a sudden economic contraction, but rather to growing investor unease over the sustainability of surging artificial intelligence-related capital expenditures and a surprisingly hawkish pivot from the US Federal Reserve.

Despite delivering a widely anticipated 25-basis-point rate cut to a target range of 3.75 per cent to 4.00 per cent, Chair Jerome Powell used the post-decision press conference to push back firmly against expectations of further easing, warning that inflation remains sticky and that the labour market, while cooling, still shows signs of underlying strength. This messaging effectively neutralised the dovish implications of the cut itself, triggering a repricing across asset classes.

Equity markets responded with a clear rotation out of high-duration tech names. The Nasdaq fell 1.6 per cent, significantly underperforming the Dow Jones, which declined only 0.2 per cent. This divergence underscores a market increasingly sceptical of the lofty valuations underpinning the AI trade, which had been a primary driver of the year’s gains. The repricing was mirrored in the bond market, where yields edged higher.

The benchmark 10-year Treasury yield climbed by two basis points to settle at 4.097 per cent, while the two-year yield rose one basis point to 3.608 per cent. This steepening of the yield curve, albeit modest, signals that traders are now pricing in a more prolonged period of elevated rates than previously expected. The US Dollar Index capitalised on this shift in sentiment, rising 0.3 per cent to 99.53, its highest level in three months, as global capital sought the relative safety of the greenback.

This risk-off environment spilt over into commodities and, more acutely, into the cryptocurrency market. Gold, often a haven during uncertainty, surged by 2.4 per cent to close at an extraordinary US$4,023.20 per ounce, a level that speaks to deep-seated anxieties about long-term monetary debasement and a potential flight from traditional financial assets. In the oil market, Brent crude was relatively stable, gaining just 0.1 per cent to settle at US$65 per barrel.

This calm, however, belies a complex backdrop. The market is digesting news that OPEC+ is poised to approve another modest output increase of 137,000 barrels per day for December, a move that would continue its gradual unwinding of production cuts. This potential supply boost is being counterbalanced by new US sanctions on Russia, which have stoked uncertainty about the reliability of global oil supply, creating a tense equilibrium that has so far prevented a major price move in either direction.

Against this macroeconomic tapestry, the cryptocurrency market has entered a period of pronounced weakness. Over the past 24 hours, the total market capitalisation has fallen by two per cent, extending a monthly decline of 6.46 per cent. The current market cap stands at approximately US$3.67 trillion, a figure that has broken below both its seven-day and 30-day simple moving averages, signalling a clear deterioration in its technical structure. This downturn is not a simple market correction but the result of a confluence of powerful, bearish forces operating in unison.

The most significant driver of this weakness is a sudden and substantial exodus of institutional capital from Bitcoin spot ETFs. On October 30, these funds recorded a net outflow of US$488 million, the largest single-day withdrawal since June 2025. The selling was led by the market’s two heaviest weights: BlackRock’s IBIT saw US$291 million flee its coffers, while Ark Invest’s ARKB bled a further US$65.6 million. This synchronised institutional retreat is a critical development.

For much of 2025, the steady inflow of capital into these ETFs had been the bedrock of Bitcoin’s price stability and its primary source of new demand. The abrupt reversal suggests that large, sophisticated players are either taking profits after a strong run or, more ominously, are repositioning their portfolios in anticipation of a more challenging macro environment ahead. With total ETF assets now at US$143.9 billion, the market is now on high alert for November’s flow data, which will be the key indicator of whether this is a temporary pause or the beginning of a sustained institutional withdrawal.

Compounding this problem is a sharp contraction in the derivatives market. Total open interest, a measure of the total value of outstanding leveraged bets, has plummeted by 4.4 per cent, falling from US$848 billion to US$812 billion. At the same time, average funding rates on perpetual futures contracts have turned negative, settling at -0.0018 per cent. This combination is a classic sign of market deleveraging.

Traders are actively closing their long positions, often at a loss, to reduce their risk exposure. While this process of forced liquidation removes the immediate threat of a cascading crash, it also strips the market of its bullish momentum. The negative funding rate confirms that the short-term sentiment is firmly bearish, as those holding short positions are now being paid to do so by the longs who remain in the market.

From a technical perspective, the picture is equally grim. The market has not only broken key moving averages but has also seen its Relative Strength Index (RSI) fall to 40.9, entering oversold territory. The Moving Average Convergence Divergence (MACD) indicator remains in negative territory, suggesting that the bearish momentum is still in control.

This creates a precarious situation where the market is technically primed for a bounce, but the underlying trend remains firmly down. The next major support level appears to be the US$3.6 trillion mark, a 78.6 per cent Fibonacci retracement level, which will be a critical test of the market’s resilience.

The prevailing sentiment is one of fear. The market’s Fear and Greed Index has plunged to 31, a level categorised as Extreme Fear and the lowest it has been in a week. This psychological state is further amplified by a rising Bitcoin dominance index, which now sits at 59.3 per cent.

When Bitcoin’s share of the total crypto market cap increases during a downturn, it typically indicates that investors are fleeing from riskier altcoins and rotating into what they perceive as the safest asset in the space. This dynamic suggests that if the current pressure continues, altcoins could face even more severe selling than Bitcoin itself.

In conclusion, the crypto market’s current malaise is a direct reflection of a broader macroeconomic shift. The trifecta of institutional caution, derivatives deleveraging, and a broken technical structure has created a formidable headwind. While the oversold conditions may eventually attract bargain hunters, the market is in desperate need of a catalyst to reverse its course.

That catalyst could come in the form of a renewed wave of ETF inflows, signaling that institutions have regained their confidence, or from a more dovish signal from the Federal Reserve that eases the pressure on risk assets. Until then, the path of least resistance remains lower, and all eyes will be on whether Bitcoin can hold its October low near US$105,000 as the ultimate test of its underlying support.

Source: https://e27.co/macro-reality-check-why-us4000-gold-and-falling-btc-go-hand-in-hand-20251031/

Anndy Lian

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

September 23rd, 2025

Survive the chop, ride the wave: Why Q4 could deliver a surge in tech and digital assets

Recent announcements from major tech players, such as NVIDIA’s massive commitments to OpenAI and Intel, have sparked widespread enthusiasm about AI’s potential to drive economic growth. These deals, totalling over US$100 billion in some estimates, underscore a broader trend where companies pour resources into AI infrastructure, expecting transformative returns in efficiency and innovation.

This wave of investment has lifted equity markets, particularly in Asia and the US, where tech-heavy indices lead the charge. Investors see AI as a catalyst that could sustain rallies even amid economic uncertainties, fuelling a risk-on environment that extends beyond traditional stocks into commodities and digital assets.

Fed’s first rate cut of 2025

The Federal Reserve’s recent actions add another layer to this positive sentiment. Last week, the Fed lowered its benchmark rate by 25 basis points to a range of 4.00 per cent to 4.25 per cent, marking the first cut of 2025 and signalling a pivot toward easing. This move came after months of speculation, with markets pricing in the change well in advance.

In his post-meeting press conference, Chair Jerome Powell described the adjustment as a precautionary step to bolster the labour market, emphasising that inflation risks have diminished while employment concerns grow. He noted a curious balance in the job market, with unemployment at 4.3 per cent and slower job gains, but stressed that the cut aims to prevent further weakening without reigniting price pressures.

Today, Powell delivers another speech on the economic outlook, which traders anticipate will provide clues about the pace of future easing. His comments could either reinforce the bullish mood or introduce caution if he highlights persistent challenges like tariff impacts or global tensions.

Diverging voices within the Fed

Divergent views among Fed officials highlight the nuanced path ahead. Newly appointed Governor Stephen Miran, in his inaugural policy speech, argued forcefully that current rates remain overly restrictive, potentially risking higher unemployment if not lowered aggressively. Appointed by President Trump, Miran positions himself as an outlier, suggesting the benchmark rate sits far above neutral levels and calls for swift reductions to stimulate growth.

In contrast, St. Louis Fed President Alberto Musalem endorsed the recent 25-basis-point cut as a safeguard for the labor market but warned of limited scope for additional moves. He views the economy as resilient, with inflation trending toward the two per cent target, and advocates a measured approach to avoid overstimulating demand.

These contrasting stances reflect internal debates at the Fed, where the dot plot from the latest meeting shows a split on 2025 projections. Some officials foresee one more cut, while others expect two, but many anticipate a pause thereafter. Markets will scrutinise Powell’s remarks for resolution, as his guidance often sets the tone for asset prices.

Wall Street rides the momentum

Wall Street captured this optimism on Monday, extending its rally with tech stocks at the forefront. The Dow Jones Industrial Average rose 0.14 per cent, the S&P 500 climbed 0.44 per cent, and the Nasdaq advanced 0.70 per cent, reflecting broad-based gains driven by AI enthusiasm. Treasury yields ticked higher amid the Fed’s cautious rhetoric, with the 10-year note up 1.9 basis points to 4.147 per cent and the two-year yield increasing 3.1 basis points to 3.603 per cent.

This slight uptick suggests investors temper expectations for deep easing, focusing instead on balanced growth. The US dollar index slipped 0.31 per cent to 97.341, easing pressure on exports and commodities. Gold surged 1.7 per cent to a record US$3,746.70 per ounce, benefiting from sustained rate-cut bets and a weaker dollar.

Brent crude, however, dipped 0.2 per cent to US$66.57 per barrel, as oversupply fears overshadowed geopolitical risks in Russia and the Middle East. Asian equities showed mixed results on Monday but opened higher today, though Japanese markets closed for the Autumnal Equinox holiday. US futures point to a flat open, indicating a pause as participants await Powell’s insights.

Crypto pullback amid heavy liquidations

The cryptocurrency market presents a stark contrast, enduring a sharp pullback on Tuesday that erased recent gains. The total crypto market capitalisation fell two per cent to around US$3.9 trillion, with Bitcoin dropping toward US$112,000 amid heavy liquidations.

Over the past 24 hours, US$1.7 billion in positions liquidated, mostly longs, marking the year’s largest such event and accelerating the sell-off as leveraged trades unwound. Bitcoin traded down 1.8 per cent near US$112,561, Ethereum slid 3.3 per cent to US$4,197, BNB declined four per cent to US$991.3, and Solana tumbled 6.2 per cent to US$219.03. This downturn followed an initial boost from the Fed’s rate cut, which propelled altcoins over the weekend, but momentum faded quickly.

The announcement from the defunct FTX exchange about starting its third distribution of US$1.6 billion to claim holders on September 30 likely contributed to the cooling sentiment, as it introduces potential selling pressure from recipients cashing out. Despite the dip, macro signals remain supportive, with the Fed’s easing cycle expected to enhance liquidity and attract risk capital back into digital assets.

ETF inflows highlight institutional confidence

Bright spots emerge in crypto fund flows, offering a counterpoint to the volatility. Last week, spot Ethereum ETFs recorded US$556 million in net inflows, boosting total net assets to US$29.6 billion, according to data from SoSoValue. Spot Bitcoin ETFs drew US$886.6 million, elevating assets to US$152.31 billion.

These inflows, continuing a four-week streak totalling US$3.9 billion for crypto funds overall, demonstrate sustained institutional interest even as prices fluctuate. Bitcoin ETFs alone saw US$887 million in the week ending September 19, underscoring confidence in the asset as a hedge against traditional market risks.

Ethereum funds outperformed in some sessions, with US$307 million in one day, suggesting rotation toward alternatives as Bitcoin consolidates. This capital influx aligns with broader trends, where lower rates make yield-generating crypto strategies more appealing compared to fixed-income options.

Bitcoin’s role in corporate balance sheets

Corporate developments further illustrate Bitcoin’s growing role as a treasury asset. Strive, Inc. and Semler Scientific announced a merger in an all-stock deal, valuing Semler at a 210 per cent premium, or approximately US$90.52 per share, based on the closing prices of September 19.

Semler shareholders receive 21.05 Strive Class A shares each, combining their Bitcoin holdings into a post-merger treasury exceeding 10,900 coins. Strive added 5,816 Bitcoin at an average US$116,047 per coin, totalling 5,886, enhancing the entity’s balance sheet with digital reserves. Separately, Bitcoin miner CleanSpark expanded its credit facility with Coinbase Prime by US$100 million, backed by its holdings.

With a market cap of US$3.84 billion and shares up 48 per cent year-to-date, CleanSpark plans to use the funds for energy portfolio growth, mining expansion, and high-performance computing. CEO Matt Schultz highlighted the move as a step toward diversifying data centre uses, supported by a strong liquidity position with a current ratio of 4.37.

Outlook: Resilient but volatile

In my view, the current landscape points to a resilient yet volatile path forward for global markets. The Fed’s easing, coupled with AI-driven investment fervour, creates fertile ground for risk assets to thrive, potentially propelling equities and crypto to new heights in the fourth quarter.

Mixed Fed signals introduce short-term uncertainty. Miran’s aggressive stance could embolden bulls if adopted, while Musalem’s caution tempers over-exuberance. Crypto’s recent dip, fuelled by liquidations and FTX news, feels like a temporary flush amid strong ETF inflows and corporate adoption trends.

Companies like Strive and CleanSpark are treating Bitcoin as a core asset, signalling maturing institutional confidence, which could stabilise prices over time. Overall, I remain optimistic: survive the chop, and the liquidity wave from policy shifts might ignite a sustained bull run, rewarding those who position early in tech and digital innovations.

Source: https://e27.co/survive-the-chop-ride-the-wave-why-q4-could-deliver-a-surge-in-tech-and-digital-assets-20250923/

Anndy Lian

www.anndy.com

j j j

September 15th, 2025

S&P at record highs, Bitcoin at US$115K: Why this convergence signals a new market era

As markets wrap up the weekend on September 15, investors face a pivotal moment that blends traditional equity strength with cryptocurrency resilience. The S&P 500 sits near record highs around 6,584, a level that reflects robust corporate earnings and lingering optimism about economic policy shifts, yet technical indicators hint at an impending pullback. Bitcoin hovers steadily at about US$115,000, recovering from a brief dip after touching US$116,800 last Friday, and analysts such as Fundstrat’s Tom Lee fuel speculation of a surge to US$200,000 by year-end.

I see this convergence as a sign of maturing markets where risk assets increasingly move in tandem, driven by shared sensitivities to Federal Reserve actions. While the broader economy shows signs of cooling inflation and steady growth, the interplay between Wall Street giants and digital currencies underscores the need for thoughtful positioning. Households build cash reserves, bond markets price in rate relief, and global trends favor the United States, but short-term volatility looms large. In my view, this setup rewards patient diversification over concentrated bets on high-flyers, as corrections could test even the strongest performers.

The S&P 500 has delivered impressive gains through much of 2025, climbing over 14 per cent year-to-date and pushing past 6,500 in recent sessions. Companies in the index continue to surprise on the upside during earnings seasons, with the second quarter of 2025 marking the 15th out of the last 16 periods where results exceeded analyst forecasts.

Earnings growth hit around 7.6 per cent for the quarter, led by technology and financial sectors that capitalised on resilient consumer spending and easing macro pressures. Tech firms, in particular, drove much of this momentum, with cloud computing and artificial intelligence investments paying off in higher revenues. I find this pattern encouraging because it demonstrates corporate America’s adaptability in a high-interest-rate environment that persisted longer than many anticipated. However, the index’s concentration in a handful of names raises red flags for sustainability.

The so-called Magnificent Seven stocks, including Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta, and Tesla, now account for over 30 per cent of the S&P 500’s total weight, up sharply from just 12 percent eight years ago. These leaders propelled nearly half of the index’s returns in 2024 and continue to dominate in 2025, with Nvidia alone serving as a cornerstone for many portfolios due to its explosive growth in AI chip demand.

Nvidia’s role stands out as both a boon and a cautionary tale. The company reported stellar quarterly results that reinforced its position in the AI boom, with revenues surging due to increased demand for data centers. Investors flock to it for its momentum, but I advocate spreading exposure because over-reliance on one stock amplifies risks from sector-specific headwinds like supply chain disruptions or regulatory scrutiny on tech monopolies. The Magnificent Seven’s profit growth, while strong, has not matched their market cap expansion, creating a valuation stretch that could unwind in a downturn.

Enter the “Next 20” stocks, the subsequent largest companies in the S&P 500 by market cap, which span more balanced sectors such as industrials, healthcare, and consumer goods. These names have lagged the top tier but offer compelling alternatives with steadier earnings profiles and lower volatility. For instance, firms in utilities and materials beat earnings expectations at rates above 70 per cent in the recent quarter, signaling broad-based health.

In my opinion, shifting some allocation here makes sense for long-term stability, especially as AI adoption remains nascent among S&P 500 companies. Surveys show only about 11 per cent of these firms plan to implement AI tools in the next six months, leaving room for gradual productivity gains but also highlighting that the hype has outpaced reality in many boardrooms.

Technically, the S&P 500 appears overstretched after its rally, with moving averages and momentum indicators flashing warning signs. The index trades in a rising channel on medium-term charts, but negative divergence in the MACD suggests weakening upside momentum relative to price action. Key support levels cluster around 6,144 and 6,000, near the 200-day moving average, where buyers could step in during a correction.

Recent sessions show a slight pullback of 0.05 per cent to 6,584, but broader patterns point to a five to 10 per cent dip as funds rebalance and profit-taking intensifies. Historically, September ranks as the weakest month for the index, averaging negative returns since 1950, often exacerbated by fiscal year-end adjustments and seasonal liquidity drains.

I expect this tradition to hold, particularly with the Federal Open Market Committee meeting just two days away on September 17. Traders price in a near-certain 25 basis point cut, lowering the federal funds rate to 4 to 4.25 percent, followed by two more reductions in October and December.

Such moves typically spark initial volatility, as markets digest the “sell the news” reaction before embracing looser policy. US households, flush with cash from prior savings, position well to weather any turbulence, and widening bond spreads indicate that much of the anticipated relief already factors into prices.

Defensive sectors face heavy short interest as capital chases growth and momentum plays, but I believe a rebound awaits if drawdowns materialise. Investors pile into technology and consumer discretionary, where AI and e-commerce thrive, yet utilities and staples trade at discounts that could attract value hunters.

Globally, the US asserts dominance in equities, bolstering the dollar’s strength against peers and drawing inflows from emerging markets grappling with slower recoveries. AI’s low penetration rate among S&P firms tempers the narrative of an immediate revolution, but projections from analysts such as those at Morgan Stanley suggest it could unlock nearly US$920 billion in annual value through efficiency gains and innovation. Tech giants plan to pour US$371 billion into data centers this year, a figure that underscores the sector’s forward momentum.

Still, broader adoption lags, with only 20 per cent of S&P 500 boards featuring AI expertise, per recent disclosures. In my assessment, this gradual rollout favours diversified portfolios that capture upside without betting the farm on unproven technologies. The US equity market’s primacy reinforces a pro-risk environment, but global themes, such as European energy transitions and Asian manufacturing shifts, offer complementary opportunities beyond the Magnificent Seven.

Turning to Bitcoin, the cryptocurrency maintains poise around US$115,000, a level that reflects institutional maturation amid traditional market parallels. After peaking at US$116,800 on Friday, it settled with minimal fluctuation over the weekend, underscoring stability in a high-volatility asset class. Technical charts reveal solid support at US$114,000, tested but held firm, while resistance looms at US$116,200 and US$116,500.

The relative strength index hovers overbought at 81.7, signaling potential consolidation as traders book profits from the seven-day rally. I view this as a healthy breather in an otherwise bullish setup, especially with the broader crypto market up 5.25 per cent weekly despite a 0.9 per cent daily dip. Institutional interest surges, evidenced by robust inflows into Bitcoin exchange-traded funds, which saw US$642 million net additions on Friday alone and over US$2.3 billion for the week.

This marks the largest weekly haul in two months, contrasting with earlier outflows and highlighting a rotation toward Bitcoin from other assets. Ethereum ETFs, meanwhile, pulled in US$624 million, but Bitcoin dominates the narrative as companies add it to balance sheets and forecast higher allocations for 2025.

Tom Lee’s bold call from Fundstrat captures the optimism swirling around Bitcoin. In a recent CNBC appearance, he linked the asset’s trajectory to monetary policy, noting its sensitivity to rate cuts and its historical strength in the fourth quarter.

Lee predicts Bitcoin could double to US$200,000 by December, a move he deems feasible given easing Fed actions and supply dynamics from the halving cycle. I appreciate his data-driven approach, drawing on past rallies where Bitcoin gained 20 to 35 per cent in Q4 bull years, but tempering enthusiasm with realism. Profit-taking pressures mount, as derivatives volume drops 27 per cent, and events like the YU stablecoin depeg to US$0.20 after a US$30 million hack inject caution across the sector. Macro jitters ahead of the Fed decision could trigger a “sell the news” event, even with 93 per cent odds of a cut.

Institutional rotations exhibit nuance, with US$3.8 billion in Bitcoin ETF outflows over 30 days offset by gains in Ethereum, suggesting diversified crypto interest. Yet, Bitcoin’s correlation to the S&P 500, around 0.3 to 0.6, implies shared downside risks in a correction. Social media buzz on platforms such as X echoes this sentiment, with traders eyeing a US$110,000 to US$130,000 range by month-end but warning of September’s historical weakness, during which Bitcoin has averaged five to seven per cent losses in seven of the last ten years.

Structured products linked to select Magnificent Seven names remain attractive for targeted exposure, offering leveraged upside with defined risks. Investors should diversify into the Next 20 and global equities to mitigate concentration dangers, as no major black swans lurk but sharp corrections persist.

Key events demand attention: the FOMC on September 17, where Chair Powell’s tone could sway sentiment, and the Bank of Japan meeting on September 19, potentially influencing yen flows and carry trades. From my perspective, the macro tailwinds favor risk assets, but overextension in equities and crypto calls for prudence. US dominance and AI’s promise sustain the bull case, yet low adoption rates and seasonal patterns urge balance.

Households’ cash hoards provide a buffer, and rate cuts, largely priced in, set the stage for volatility followed by relief. Bitcoin’s institutional embrace cements its role as a portfolio diversifier, potentially catching up to gold and stocks in a catch-up trade. Overall, I remain constructively optimistic, viewing dips as opportunities to build balanced positions that weather near-term storms and capture year-end rallies. Markets evolve, and those who adapt thrive.

Source: https://e27.co/sp-at-record-highs-bitcoin-at-us115k-why-this-convergence-signals-a-new-market-era-20250915/