Our Everything Rally Thesis Remains Intact
No, Bitcoin’s bull market is not over. The Everything Rally thesis remains our base case despite marginal economic shifts creating temporary noise in the market. Three consecutive months of below-trend wage growth is concerning, but we expect this weakness to bottom out as easier monetary policy begins to boost the economy. August’s higher inflation data confirmed sticky inflation as the Fed’s biggest problem, especially with Wall Street already expecting more interest rate cuts. We remain convinced that we’re in the middle of a Fourth Turning where fiscal dominance will override the Fed’s price stability mandate, likely forcing the next Fed chair to abandon their arbitrary 2% inflation target next year. This shift would be structurally bullish for all asset prices, but Bitcoin stands to benefit the most as the ultimate hedge against dollar debasement and unchecked policy responses.
TLDR: These shifts confirm Bitcoin as the highest-beta beneficiary when fiscal and monetary policy trumps economic fundamentals.
Markets Will Remain Risk-On Long-Term
The top-down market regime remains in a GOLDILOCKS regime, but we’re starting to see cracks that smart money should monitor over the next quarter. We remain in a risk-on environment with stocks, gold, and Bitcoin showing BULLISH momentum while the dollar remains in BEARISH momentum, though our indicators suggest Bitcoin is currently oversold and the dollar overbought. This setup historically resolves in Bitcoin’s favor, but the more important tension lies between conflicting signals across timeframes. Our bottom-up macroeconomic indicators point toward STAGFLATION over the next 3 to 6 months, with declining growth with rising inflation that could temporarily challenge risk assets. However, we believe the Federal Reserve will eventually adopt yield curve control if the Treasury market continues selling off, which would be massively supportive of risk assets including Bitcoin. Our advice: don’t lose sight of the end game.
TLDR: This setup makes Bitcoin compelling both as an oversold bounce play and a structural hedge against the policy responses we expect even as stagflation risk builds in the short term.
Below, we’ll get into the on-chain data supporting our views on Bitcoin:
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