No, PPI is not the third shock. The first two shocks, Nvidia's CEO resignation and Strategy's MSCI removal, are already real and have pushed Bitcoin below $72,000. PPI is more like the straw that could break the camel's back, but the main move has already happened.
Nvidia announced the immediate resignation of CEO Jensen Huang on November 11. The stock fell about 13% at the open, and Bitcoin slid from $74,700 to a low of $71,670. That was shock number one.
Shock number two came the same day. MSCI confirmed Strategy will be removed from the MSCI USA Index and, as a result, from the MSCI World and ACWI, effective at the close on November 30. Index funds have to sell MSTR shares, not Bitcoin. But the damage is indirect. A weaker stock price makes it harder for Strategy to raise capital for Bitcoin purchases because the mNAV premium shrinks. MSTR fell about 7% at the open.
The October PPI is due November 13, with consensus at +0.4% month-over-month and +6.6% year-over-year. The previous reading was +1.3% monthly, a new high since March 2022. A hot PPI would reinforce expectations of further Fed hikes. The 10-year yield is already at 5.07%, and the dollar index hit a yearly high of 103.08.
But the more important indicator is stablecoin supply. It has fallen $14.2 billion in the last 30 days, the largest decline since 2022. That means money is leaving the crypto system, not just Bitcoin. Without stablecoin inflows, there is no fuel for a sustained rally.
Nvidia announced the immediate resignation of CEO Jensen Huang on November 11. The stock fell about 13% at the open, and Bitcoin slid from $74,700 to a low of $71,670. That was shock number one.
Shock number two came the same day. MSCI confirmed Strategy will be removed from the MSCI USA Index and, as a result, from the MSCI World and ACWI, effective at the close on November 30. Index funds have to sell MSTR shares, not Bitcoin. But the damage is indirect. A weaker stock price makes it harder for Strategy to raise capital for Bitcoin purchases because the mNAV premium shrinks. MSTR fell about 7% at the open.
The October PPI is due November 13, with consensus at +0.4% month-over-month and +6.6% year-over-year. The previous reading was +1.3% monthly, a new high since March 2022. A hot PPI would reinforce expectations of further Fed hikes. The 10-year yield is already at 5.07%, and the dollar index hit a yearly high of 103.08.
But the more important indicator is stablecoin supply. It has fallen $14.2 billion in the last 30 days, the largest decline since 2022. That means money is leaving the crypto system, not just Bitcoin. Without stablecoin inflows, there is no fuel for a sustained rally.