Bonds reflect monetary regime change, yet crypto supports USD

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Friends and associates,

September witnessed crypto strength with Bitcoin (BTC) rallying by 8.4% from $25.8K to $28K. Equity markets faced headwinds due to the strengthening USD. The divergence between equities and crypto underscores the noteworthy shift in correlation dynamics, affirming that Bitcoin is charting an independent course. In this month's article, our spotlight turns to an indicator of monetary regime change presented by global bond markets. TLDR: While crypto transitions us through the ongoing monetary regime change, it simultaneously reinforces USD dominance through stablecoins

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KEY INSIGHTS

• Crypto strength in the face of equity weakness

• Bonds fail to reflect recessionary risks seen in PMI

• Shifting bond dynamics point towards monetary regime change

• Crypto supports USD through monetary transition via stablecoins

• Stablecoins prominence within crypto and tradfi is astounding

• US government will eventually support stablecoins, similar to eurodollars

• Stablecoins present major risks for Emerging Market currencies

• Macro conditions continue to keep a lid on risk appetite

• Bitcoin fundamentals are strengthening ahead of potential spot ETF approval

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Sound Money Capital is an actively managed fund for HNWs & family offices. Fund specific commentary and factsheet available on request

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On a personal front, we are in New York for the month of October connecting with clients, the broader network and soaking up the city for the first time. Reach out with your recommendations and people to connect with.

Have a great month ahead

Rob Price, CFA

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