MAD Macro - Tulips
Tulips Don’t Live Forever
Please! I Need More Cash for the Bonfire
Bitcoin broke down sharply yesterday. Kool-Aid Mike Saylor didn’t seem to be bothered by the decline. He posted one word on X, HODL. Then he held his earnings call. No problems at all, just hold bitcoin forever. During the earnings call Kool-Aid Mike said that bitcoin is going higher because Trump will make it go higher. He said that Trump is bitcoin’s super power. Good luck with that one. Remember what Kool-Aid Mike says, bitcoin is going to $21 million. I’m not so sure. Bitcoin is bouncing this morning after making a new low of $60,000 overnight. On the charts I have a near term price target of $52,000, but we are due for some consolidation and maybe a bounce to $70,000. What was supposed to be a good thing, institutional buying, is now a problem. Most of the bitcoin ETF buyers are now underwater. Some of the ETF buyers might have a problem remembering why they own bitcoin. I will probably be wrong, but I think the bitcoin market is broken. The DAT model is also broken. All of the DATs in existence are now underwater and trading at a discount to their crypto currency holdings. Eric and Don Trump Jr. have big losses on their bitcoin holdings in American Bitcoin, their mining and DAT company. At the current bitcoin price miners are not making money. So Eric and Don Jr. are losing on both the DAT and the mining business.
One factor in this week’s tech/AI market selloff has been investor worries that all of the big capex spending might not generate the expected returns on investment. Sam-I-Am-AI Altman has been working on a new funding round. But so far we don’t know how that is going. I assume the bankers must know. Maybe it’s not going so well. Maybe that’s why the market pulled back this week. Nvidia said they were in for $20 billion and Amazon is supposed to be negotiating a $50 billion investment. This OpenAI funding round is very important for market sentiment. Google and Amazon were both punished this week because of the bigger-than-expected spending plans announced for 2026. Between just the two companies it’s almost $400 billion. Sam-I-Am-AI wants another $100 billion for his cash bonfire.
Markets have stabilized overnight after making new lows for the decline after Amazon’s earnings release. The market was spooked by Amazon’s $200 billion capex number. Equities are recovering some of yesterday’s losses. Bitcoin is also higher this morning, trading at $66,000. Gold and silver are also higher this morning. Today’s monthly employment report is delayed until next Wednesday.
I updated the U.S. Dollar Index, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, NY copper, spot gold, spot silver, NYSE Arca Gold Miners Index, bitcoin, bitcoin weekly, Strategy, S&P futures, NASDAQ 99 futures and DOW futures charts below.
The dollar is close to unchanged. Interest rates are slightly higher after falling yesterday in response to the equity market selloff.
Crude oil and copper are close to unchanged. Gold and silver are a little higher. Bitcoin is higher after yesterday’s sharp decline. I included a longer-term weekly bitcoin chart. I think we are in the third down wave in a five wave bear market. Strategy is due to open higher on the higher bitcoin prices.
S&P, NASDAQ 99 and DOW futures are all higher and sharply higher from the overnight lows.
