BITCOIN POSTS WORST SINGLE-DAY DROP SINCE FTX COLLAPSE: INFINITYHEDGE

BITCOIN DROPS BELOW $60,000

In the previous cycle (when MSTR admittedly held much less Bitcoin than it does now), the BTC price fell 22% below its average purchase price level and MSTR sold nothing (see Bitcoin – Risks to corporate treasury holdings). In the current context, 22% below the average purchase price would be around 58k – well below the current BTC level.

$60k

GOLDMAN SACHS WORKING WITH ANTHROPIC TO AUTOMATE ACCOUNTING, COMPLIANCE ROLES

GOLDMAN TO DEPLOY AGENTS TO AUTOMATE ACCOUNTING FOR TRADES AND TRANSACTIONS, AND CLIENT VETTING AND ONBOARDING

EMBEDDED ANTHROPIC ENGINEERS AT GOLDMAN SPENT 6 MONTHS BUILDING AUTONOMOUS AGENTS FOR GOLDMAN

GOLDMAN SAYS ANTHROPIC IS SURPRISINGLY GOOD AT NON-CODING TASKS: INFINITYHEDGE

GOLDMAN EXPECTS EFFICIENCY GAINS RATHER THAN NEAR-TERM JOB CUTS, USING AI TO SPEED PROCESSES AND LIMIT FUTURE HEADCOUNT GROWTH

CHINA: RWA WITHIN CHINA PROHIBITED

CHINA: DOMESTIC ENTITIES MUST OBTAIN CONSENT BEFORE CARRYING OUT RWA TOKENIZATION ABROAD

CHINA: STRICT SUPERVISION ON DOMESTIC ENTITIES GOING ABROAD FOR REAL-WORLD ASSET TOKENIZATION: INFINITYHEDGE

BITCOIN ON TRACK FOR THE BIGGEST DAILY GAIN SINCE NOV 2022: INFINITYHEDGE

AMAZON SHARES POST BIGGEST WEEKLY DECLINE SINCE 2022

NVIDIA SHARES JUMP 7.8% TO ADD $325 BILLION IN MARKET VALUE

BITCOIN MINING DIFFICULTY DROPS 11.16% LARGEST DECLINE SINCE CHINA'S JULY 2021 MINING BAN: MEMPOOL | INFINITYHEDGE

IT ALSO MARKS 10TH LARGEST NEGATIVE ADJUSTMENT IN BITCOIN HISTORY

MORE: This decline was largely driven by weather-related mining curtailment towards the end of January, with implied hashrates showing signs of recovery later in the epoch per Bitcoin developer Mononaut

Also Bitcoin hashrate has dropped ~20% over the past month, 11% in the past week alone to 863 EH/s from Oct high of ~1,190 EH/s and Winter Storm Fern took 200 EH/s offline in late January per theblock

Hashprice, the key measure of mining revenue per unit of computing power hit an all-time low of $33 on Feb 2, with $40/PH/s/day level is widely seen as the threshold at which miners must decide whether to keep machines running.

Theblock says transaction fees as a share of miner revenue collapsed from about 7% to roughly 1% after the 2024 onchain activity boom faded, making miners increasingly reliant on BTC price appreciation.

Avg. mining costs is $87k while BTC currently trading near $69k, 20% below production cost.

The Week Ahead: infinityhedge

HIGH VOLATILITY THIN LIQUIDITY

Mon:
* Japanese Finance Minister said she will communicate with financial markets if needed to maintain stability in the USDJPY movement
* Saylor expected announce another BTC purchase
* Fed’s Waller speaks

Tue:
* Fed’s Hammack & Logan speaks
* 2nd meeting btw crypto and banks to discuss stablecoin yield concerns
* LayerZero announced
* Robinhood earning

Wed:
* SEC Chairman Paul Atkins will testify at a hearing of the U.S. House Committee on Financial Services at 10AM
* Netanyahu to discuss Iran with Trump at White House
* U.S. NFP; BE estimate the BLS benchmark revision will lower the level for March 2025 by about 650K jobs — somewhat less pessimistic than the consensus. Jan’s jobs print may surprise on the low side, as the BLS’s modifies its ‘birth and death’ model to account for recent hiring weakness

Thu: Coinbase earning

Fri: U.S. CPI

Whole Week: DeepSeek-R2 just before the Lunar New Year?; Consensus Hong Kong event; Fed-Treasury; USDJPY; Trump-Iran;

ICYMI:
* Japan’s Takaichi forges Japan’s Biggest Post-War Election Victory. Expectations of a stable, pro-stimulus admin point to a risk-on start to the week — stronger equities, higher bond yields & a weaker yen. baseline scenario is that there will be greater pressure on the BOJ to avoid swift tightening.
* Warsh Call for Fed-Treasury Accord Stirs Debate in $30 Trillion Bond Market
* A renewed decline in S&P 500 could trigger about $33B of selling this week, acc. to GS. S&P top-of-book liquidity has deteriorated sharply, falling to about $4.1M from a YTD avg of $13.7M. Feb has historically been a weaker and choppier month for both the S&P 500 & Nasdaq 100

https://infinityhedge.substack.com/p/the-7-days-612

ALPHABET PLANS TECH’S FIRST 100-YEAR BOND SINCE DOT-COM ERA

ALPHABET’S DEBUT STERLING BOND ISSUE INCLUDES FIVE TRANCHES, WITH A RARE 100-YEAR NOTE

MARKET FOR 100-YEAR CORPORATE BONDS HAS BEEN DOMINATED BY GOVERNMENTS AND UNIVERSITIES SINCE MOTOROLA’S 1997 ISSUE

ALPHABET SEEKING TO RAISE ABOUT $20 BILLION FROM US BOND SALE IN ITS BIGGEST EVER US DOLLAR BOND SALE

ALPHABET KICKS OFF SEVEN-PART U.S. BOND SALE TO FUND AI INFRASTRUCTURE

ALPHABET’S 40-YEAR BOND PRICED AT 1.2 PERCENTAGE POINT PREMIUM ABOVE TREASURIES: INFINITYHEDGE

ALPHABET'S DOLLAR BOND SALE DRAWS OVER $100 BILLION OF DEMAND

ALPHABET SET TO RAISE RECORD £4.5B FROM POUND BOND SALE

ALPHABET'S STERLING BOND SALE DRAWS RECORD £24 BILLION OF BIDS

ALPHABET'S 100-YEAR POUND BOND GETS HIGHEST BIDS AMONG TRANCHES: INFINITYHEDGE

LAYERZERO TO LAUNCH IT'S OWN L1 CHAIN 'ZERO'

CITADEL SECURITIES AND ARK INVEST MAKE STRATEGIC INVESTMENTS ACQUIREED ZRO TOKEN

TETHER INVESTMENTS MAKES STRATEGIC INVESTMENT IN LAYERZERO LABS TO SUPPORT INTEROPERABILITY

ZERO BLOCKCHAIN FEATURES HETEROGENEOUS ARCHITECTURE WITH THREE ZONES: EVM ENVIRONMENT, PRIVACY PAYMENTS, AND TRADING VENUE

ZERO BLOCKCHAIN LAUNCH SCHEDULED FOR SEPTEMBER 2026: INFINITYHEDGE

EU PROPOSES TOTAL BAN ON ALL CRYPTOCURRENCY TRANSACTIONS WITH RUSSIA TO BLOCK SANCTIONS EVASION: INFINITYHEDGE

EU PROPOSES BLANKET CRYPTO BAN WITH RUSSIA RATHER THAN TARGETING INDIVIDUAL PLATFORMS LIKE GARANTEX

TRUMP: CONSIDERING SENDING A SECOND AIRCRAFT CARRIER TO THE MIDDLE EAST: INFINITYHEDGE

TRUMP: EITHER WE MAKE A DEAL, OR WE’LL HAVE TO DO SOMETHING VERY TOUGH, LIKE LAST TIME

TRUMP SAID HE EXPECTS THE SECOND ROUND OF U.S.-IRAN TALKS TO TAKE PLACE NEXT WEEK: AXIOS

JAN NFP PREVIEW: INFINITYHEDGE

CONSENSUS: +65K
HIGH: +135K
LOW: -10K

BBG: 0k (?)
GS: 45K
JPM: 70k

S&P 500 reaction:
>110k: -0.5 to -1%
60k to 100k: +0.25% to 1%
30K to 60k: ±0.25%
<30k: -0.5% to -1.25%

JPM: We think the print falls in the Goldilocks zone, but one that is too hot will trigger a repricing of the yield curve higher and the elevated bond vol likely produces a down day for stocks, and one that is too cool will have the market on edge that the Fed is late to resuming its easing cycle and with Powell unlikely to cut before his term as Fed Chair ends, means that first cut would be in June.

GS: We estimate that the unemployment rate was unchanged at 4.4% in January, but we see the risks as skewed to a decline: the bar for rounding down to 4.3% is not high from an unrounded 4.38% in December and the January unemployment rate appears to suffer from modestly negative residual seasonality (the unrounded unemployment rate has declined in each of the last three Januarys).

BBG & GS both estimate that the updated birth-death model could contribute to fewer jobs

*BLS will also release it's final benchmark revisions, and BBG expect that almost 1M jobs erased between 2024 and 2025: infinityhedge

Views from Trump Adminstration ahead of NFP release:
*TRUMP: OUR EMPLOYMENT NUMBERS ARE REALLY GOOD
*HASSETT: LOWER JOBS NUMBERS SHOULDN'T TRIGGER PANIC
*NAVARRO: WE HAVE TO REVISE OUR EXPECTATIONS DOWN SIGNIFICANTLY FOR WHAT A MONTHLY JOB NUMBER SHOULD LOOK LIKE

*US JAN. NONFARM PAYROLLS RISE 130K M/M; EST. +65K
*US JAN. UNEMPLOYMENT RATE 4.3%; EST. 4.4%

*US JAN. TWO-MONTH PAYROLL NET REVISION SUBTRACTS 17,000

*US ANNUAL BENCHMARK REVISION SUBTRACTS 862K JOBS; EST. -825K

*US JAN PRIVATE SECTOR PAYROLLS +172K AND GOVERNMENT PAYROLLS -42K

TRADERS FULLY PRICE IN FED RATE CUT BY JULY VS JUNE PREVIOUSLY

US Treasuries Slump Across Maturities After Jobs Data

January saw the first increase in manufacturing payrolls since September 2024

Morgan Stanley’s Michael says this report is “largely the real deal.” The economist adds that the average hourly earnings number suggests that these are quality jobs that were created.

Goldman Sachs: an upside surprise in the CPI on Friday could tilt the balance of risks in a hawkish direction

PENTAGON PREPARES SECOND AIRCRAFT CARRIER TO DEPLOY TO MIDDLE EAST, SOURCES SAY -- WSJ

ORDER TO DEPLOY COULD BE ISSUED IN A MATTER OF HOURS: WSJ

⚠️ UPDATE: WORLD’S LARGEST AIRCRAFT CARRIER USS GERALD R. FORD ORDERED TO DEPLOY IMMEDIATELY TO THE MIDDLE EAST FROM CARIBBEAN, IT WILL TAKE ABOUT 10 DAYS TO REACH: INFINITYHEDGE

U.S. JAN CPI PREVIEW: INFINITYHEDGE

Forecast:
*headline: 0.26% vs 0.31% M/M prev.
*headline: 2.5% vs 2.7% Y/Y
*Core CPI: 0.34% vs 0.24% M/M
*Core CPI: 2.5% vs 2.6% Y/Y

SPX rxn on Core MoM:
> 0.45%: -1.25% to -2.5%
0.4 to 0.45%: -0.7% to +0.2%
0.3 to 0.4%: +0.25% to 1.5%
< 0.3%: +1.2% to 1.7%

Citi Recommends Betting on Higher US Inflation

*US JAN. CONSUMER PRICES RISE 0.2% M/M; EST. +0.3%
*US JAN. CONSUMER PRICES RISE 2.4% Y/Y; EST. +2.5%
*US JAN. CORE CPI RISES 0.3% M/M; EST. +0.3%
*US JAN. CORE CPI RISES 2.5% Y/Y; EST. +2.5%

One caveat with Jan’s data is that it usually comes in hot compared to other months of the year. In fact, researchers at the Fed calculated in a study last week that Jan’s avg inflation rate since 1985, once seasonally adjusted, was 0.03% higher than at any other point in a given year. This likely going to prompt officials at the Fed to call for more data to gain greater clarity on how inflation is faring. Unless there is a dramatic shift in the economic outlook in the intervening weeks, officials at the FED are likely to once again hold rates steady at that meeting, extending a pause in cuts that began last month

Happy Chinese New Year

- infinityhedge

TWITTER (X) DOWN: INFINITYHEDGE