Bad news

PLUS: What just happened?

GM everyone. This is 2036.

Bitcoin is back over $64,000 - up from $57,000 last week.

All your favorite memecoins are up +30-50%.

Sentiment is turning positive again - almost as if the Arthur Hayes email was good timing.

So what happened?

The labor market is cooling 扒

US employers added fewer jobs in April than expectedjust 175,000 against an expected 243,000. Wages also grew just 3.9% annually, the slowest pace since 2021.

These are all technically bad news.

But bad news can be good news.

Last week, Fed chairman Jerome Powell explicitly said that a weak labor market could be a reason for the interest rate cuts everyone eagerly expects.

Remember, lower interest rates are great for risk assets like crypto because they lower the returns of bonds and force investors to seek higher returns further out on the risk curve.

And now, investors think multiple interest rate cuts could be back on the table this year.

As a result, investors turned bullish. The market loves cheap money.

After the labor data was published, Friday saw massive inflows into the Bitcoin ETFs for the first time in a while.

And the trend could continue higher from here.

The amount of overextended leverage in crypto was largely reset last week to levels not seen since Bitcoin was at $29,000:

So what can we learn from all this?

  • Anytime the crowd agrees that its over - its typically an indication that the bad news is over and that its time to move higher.

  • Sometimes, bad news is good news (no wonder people find finance complicated)

Ill keep monitoring this and keep you in the loop.

Until then, enjoy the green.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.