It is Thursday the fifth. Good morning. On today's agenda, the tech selloff expands.The shiny stuff slumps again and it's another blockbuster earnings day. Okay, Tom, let's talk about the volatility we're seeing. It continues in some so many asset classes and you wonder whether or not this starts to connect, whether or not the overall volatility story becomes a problem for markets.So it was down 11% completely, reversing some of the positions we saw earlier on in the week as we bounced back. Bitcoin's appro ...

Core Insights - Bitcoin has experienced a decline for five consecutive sessions, struggling to maintain levels above $92,000 [1][9] - The decline is attributed to profit-taking and a shift towards risk aversion due to political and macroeconomic uncertainties [3][6] Market Dynamics - Despite the pullback, market damage appears limited, with low futures liquidations indicating a lack of panic and suggesting a consolidation phase [4] - There are signs of underlying demand, as US spot Bitcoin exchange-traded funds recorded their strongest week of net inflows since October, following a $20 billion futures liquidation event [5] - On-chain metrics show an increase in addresses holding between 1,000 and 10,000 BTC, rising by 28 over the past week [5] Leverage and Sentiment - Crypto futures open interest has decreased by approximately $9 billion from January highs, reflecting reduced leverage and a shift towards spot buying [6] - Renewed "risk-off" sentiment is limiting Bitcoin's rebound, primarily due to concerns surrounding the Federal Reserve's political turmoil [6][9] Institutional Impact - Reports of a criminal investigation involving Fed Chair Jerome Powell have raised questions about the central bank's independence, affecting market sentiment [6][7] - Analysts suggest that a perceived erosion of Fed autonomy could weaken confidence in US assets, prompting a diversification towards decentralized assets like Bitcoin and hard assets like gold [7][8]

Market Sentiment & Risk Aversion - Markets are in risk-off mode, influenced by potential Federal Reserve dovishness and crypto market risk aversion signals [1] - Algorithms are trading off Bitcoin as a proxy for risk aversion, with risk sentiment declining [4][9] - A backup in Japanese bond yields and a rise in the yen's price contribute to risk aversion, making carry trades more difficult [5] Interest Rates & Fed Policy - Markets had priced in a potential rate cut, with Fed funds expectations improving significantly [2][7] - The rally in the market was initially driven by improved Fed rate cut expectations, increasing from approximately 30% to over 80% [7][8] - The market is trading off the probability of a rate cut at the next Federal Reserve meeting [10] - Concerns may arise regarding a rekindling of inflation if the Fed pursues a policy of lower rates indefinitely [9] AI & Technology - There's a reassessment of whether AI is bringing bottom-line efficiencies to end-users, not just producers and hyperscalers [12] - The market is becoming more discriminating about AI investments, focusing on the end results [12] - Enthusiasm for the AI trade may be temporarily diminished, but the underlying mentality remains strong due to its dominant force in the market [11][12] Market Catalysts & Outlook - The upcoming Federal Reserve meeting and incoming economic data will be significant catalysts [13] - The market will likely enter a low-volume period, with seasonality and Santa Claus rallies becoming a focus [14] - Window dressing occurred at the end of the month, contributing to market movements [3][4]

Group 1 - Retirement investors shifted their savings from equities to fixed-income options, indicating a cautious investment mood in August [1][2] - Trading activity in retirement accounts was notably low, with no above-normal trading days, and investors moved from US equity funds to conservative bonds and money market funds [2][3] - There is a growing demand for private equity and private debt investments among retirement savers, with nearly half expressing interest if available in their plans [4][5] Group 2 - Recent executive orders aim to facilitate the inclusion of private assets in workplace retirement plans, aligning with fiduciary requirements [6] - A significant number of plan sponsors are considering adding alternative assets to their offerings, reflecting a potential shift in investment strategies [8] - Goldman Sachs is investing up to $1 billion in T. Rowe Price to enable access to private assets for US retirees by mid-2026 [8]

Market Sentiment & Risk Aversion - The market exhibits risk aversion, prioritizing loss prevention over potential gains [1] - The market avoids chasing "fish tail" opportunities (late-stage rallies) due to the high risk of subsequent significant declines [1] Altcoin Season Analysis - "Fish tail" rallies often indicate potential altcoin season or late-stage rallies [1] - Altcoin rallies are followed by substantial corrections, with some experiencing near 50% declines [1] Historical Performance - A previous altcoin rally around December 9th experienced a downturn, leading to near 50% losses by December 20th [1] - The cycle concluded with a "Trump coin" event approximately one month later [1]

Another asset that we're keeping an eye on is bit Bitcoin that was briefly falling below $100,000 for the first time since May. Mackenzie Sagallos is here. She's got more on the move.Hi Mac. Hey Morgan. So that's right.Bitcoin was trading below that key $99,000 threshold today. Its lowest level in over a month after President Trump confirmed that US bombers struck three of Iran's nuclear sites over the weekend. Now those strikes sparked a wave of risk aversion across crypto.At its worst point today, Ether w ...