HargaRumah: Trump on BTC & Powell on Inflation 🦅

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My tasty, tasty friends…we meet again. Some volatility in the crypto markets this week. But that's ok, because it's Saturday morning, which means it's time for your self-affirmational crypto pillow talk session with Mad Mike.

Are You feeling better? Good.

In this week's edition, we discuss the Fed & Trump's newfound love of Bitcoin.

But first, here's where we ended the week:

Bitcoin (BTC): -5%
Ethereum (ETH): -6.5%
Solana (SOL): -11% (ouch)
Bernstein's 10-Year BTC Forecast: $1M

Snakes in the Water

Five miles from nowhere, and between reeds taller than Shaq on either side of us, we made our way down a forgotten road in the Indiana Dunes National Park last weekend. Large ponds of knee-high, translucent brown water began to take over the trail as we went deeper in, which we waded through slowly.

It was Anna who saw them first—the black/greenish snakes that had us literally surrounded. A few of them had managed to contort their slippery bodies so that they stood ten inches straight up out of the water, looking at us like so many periscopes.

Anna's face blanched, her legs turned to rubber, and through an instantly parched throat, she cracked out, "Snakes. There are snakes everywhere."

I traced her gaze down to the dirty water, but when I met the reptiles' dead black eyes, an epiphany came over me.

"Politics!" I said to Anna, "That's next weekend's newsletter theme, politics!"

Let's ease our way in with a look at what old man Powell said this week.

Buy Bitcoin Now

Dovish CPI and Hawkish Fed?

After a hopeful CPI report, the Fed maintained its benchmark interest rate of 5.25%-5.50%. It projects only one rate cut of 25 basis points this year, citing "modest" progress towards its 2% inflation goal.

But the hawkish Fed wasn't enough to sober up traders buzzed on a muted CPI report.

That was my very first meme. I've also been thinking about what my first post on Twitter should be for two years now. I feel I'm getting close. You can follow me here. But I should warn you: It may be another decade before I'm ready. But when it comes - oh boy.

Moving on...

Powell's press conference on Wednesday provided an insightful perspective. He revealed that the committee's policymakers do not usually change their positions even after the release of the CPI data, which was notably positive this time.

This implies that the surprisingly good CPI report released just a few hours before Powell's speech had zero effect on their stance.

Why? Was the line at Dunkin' Donuts too long? Or do they believe that one data point is irrelevant?

In the cast of the latter, maybe they're right. When we look at CPI data with a wide lens, it paints a chaotic picture.

Sure, we've come down, but that little squiggly line doesn't convince me prices are going down. 👇

This starkly contrasts the trends of unemployment reports (below), which are beginning to unnerve me a bit. 👇

Of course, businesses have overhired in the past few years, but how many jobs are really being lost to AI? Will we ever see a 3.4% unemployment print again? I don't believe we will.

BTC: The Ultimate Hedge

Trump LOVES Bitcoin

As we go to market on this lovely Saturday morning, Trump loves Bitcoin. Indeed, his position has evolved since 2019.

But he likes Bitcoin now. However, the situation is fluid and may change by the time this newsletter gets published.

Biden hates Bitcoin. At least, that's what people tell him.

But Trump now loves Bitcoin so much, he wants Americans to mine it. How much? ALL the Bitcoins.

Trump's newfound love affair of Bitcoin is threefold:

Bitcoin will defend against a central digital currency.
Mining will help the U.S. become "energy dominant."
Embracing bitcoin will help the U.S. against its domestic and foreign enemies.

Does he really believe in Bitcoin? Probably not.

But it's great politicking.

Why?

Crypto enthusiasts care deeply about political stances on crypto, while naysayers are generally indifferent. This means a pro-crypto stance won't lose votes from the indifferent but will gain support from passionate crypto advocates.