PPI came in below expectations, yet yields rose—and Bitcoin fell along with them. This week, the market didn’t follow the textbook.
U.S. October PPI rose 0.3% month over month, well below the expected 0.4%, which should have been a relief. But year over year, it was up 6.5%, the highest in nearly four years, and the bond market wasn’t buying it: the 10-year Treasury yield closed at 5.15%, after reaching 5.17% intraday. It rose 29 basis points for the week, its biggest weekly gain in 19 months. The 2-year yield, by contrast, fell to 4.87%. Long-term yields up, short-term yields down—the curve grew steeper.
Right after the data came out, $BTC briefly climbed back to $70,200, squeezing about $39 million from short sellers. But it couldn’t hold on, and is now back around $67,000, down about 11.5% this week. $ETH also fell below $2,000, to around $1,930—the first time since August.
The most interesting figure: according to 10x Research, from November 5 to 12, Bitcoin fell 5.9% while the Nasdaq 100 rose 6.4%. Market pricing tells the same story: the odds of a rate hike at the December 9 meeting are close to 100%, with a 25-basis-point hike priced at around 89%.
How this whale sees it: Bitcoin wasn’t tracking tech stocks this week—it was tracking interest rates. A non-yielding asset is naturally at a disadvantage when yields are at 5.15%. A lower-than-expected monthly PPI reading can’t undo the reality of 6.5% annual inflation. Before December 9, unless the 10-year yield gets back below 5% and ETF outflows stop, treat any bounce as just a bounce. Wait for PCE to cool on November 25 and yields to turn lower before talking about catching our breath. Take it one bite at a time—there’s no need to rush.
U.S. October PPI rose 0.3% month over month, well below the expected 0.4%, which should have been a relief. But year over year, it was up 6.5%, the highest in nearly four years, and the bond market wasn’t buying it: the 10-year Treasury yield closed at 5.15%, after reaching 5.17% intraday. It rose 29 basis points for the week, its biggest weekly gain in 19 months. The 2-year yield, by contrast, fell to 4.87%. Long-term yields up, short-term yields down—the curve grew steeper.
Right after the data came out, $BTC briefly climbed back to $70,200, squeezing about $39 million from short sellers. But it couldn’t hold on, and is now back around $67,000, down about 11.5% this week. $ETH also fell below $2,000, to around $1,930—the first time since August.
The most interesting figure: according to 10x Research, from November 5 to 12, Bitcoin fell 5.9% while the Nasdaq 100 rose 6.4%. Market pricing tells the same story: the odds of a rate hike at the December 9 meeting are close to 100%, with a 25-basis-point hike priced at around 89%.
How this whale sees it: Bitcoin wasn’t tracking tech stocks this week—it was tracking interest rates. A non-yielding asset is naturally at a disadvantage when yields are at 5.15%. A lower-than-expected monthly PPI reading can’t undo the reality of 6.5% annual inflation. Before December 9, unless the 10-year yield gets back below 5% and ETF outflows stop, treat any bounce as just a bounce. Wait for PCE to cool on November 25 and yields to turn lower before talking about catching our breath. Take it one bite at a time—there’s no need to rush.
