U.S. economic data last night was actually good, but U.S. stocks did not rally as a result. The Nasdaq fell 1.07%, the S&P 500 dropped 0.51%, Intel slid 8.8%, and Oracle fell nearly 9%. Concerns about returns on tech companies’ AI investments are still growing. For BTC and ETH, this shows that risk appetite has not quickly recovered just because the economic data was positive.
① U.S. manufacturing beat expectations, but inflationary pressures have not disappeared. The ISM Manufacturing PMI for October, released early this morning Beijing time, came in at 55.5, above the market forecast of 54.5, while the production index rose to 59.0. However, although the price index fell from 77.9 to 75.2, it remains elevated. My take is that the U.S. economy is resilient, but the Fed may have little reason to rush into easing. If price pressures continue to ease, that would be good for risk assets; if inflation accelerates again, Treasury yields and the dollar could continue to weigh on crypto.
② AI tech stocks continued to pull back, which could indirectly affect BTC. Last night, Oracle came under pressure from its financing plan, and semiconductor stocks also fell sharply. The issue is no longer just whether companies are making money; the market is starting to recalculate the returns on massive AI investments.
If technology stocks continue to be repriced lower, leveraged funds may also reduce their exposure to other risk assets. But that doesn’t mean BTC will necessarily fall in tandem; the key factor is still spot buying demand in the crypto market itself.
③ A security incident at an exchange has entered the trust-rebuilding phase. On November 2, the exchange involved published proof of reserves for some of its assets, saying that the relevant assets were backed at least 1:1 and that about 95% of the losses had been covered.
This is positive progress, but proof of reserves, actual solvency, and user trust are not the same thing. What’s more important to watch next is whether withdrawals continue to proceed normally and whether outflows slow down.
Three things to keep an eye on today: the U.S. JOLTS job openings data, due out at 11:00 p.m. Beijing time, to see whether the labor market is cooling; whether U.S. tech stocks can stop falling; and the latest full-day fund flows for BTC and ETH spot ETFs.
I think what the market is most conflicted about right now is that stronger economic data could actually weaken expectations for rate cuts. What BTC really needs may not just be good data, but an improvement in liquidity expectations.
What do you think will have a greater impact on BTC going forward: Federal Reserve policy or capital flows within the crypto industry?