At 08:30 ET at the moment, the Bureau of Financial Evaluation is ready to launch its advance estimate for US Q1 GDP, with consensus expectations at a 0.3% seasonally adjusted annual charge.
If confirmed, this is able to mark the weakest quarterly print since early 2022 and distinction starkly with the influx of over $3 billion into spot Bitcoin ETFs final week, reflecting what some market individuals interpret as a pivot in capital desire towards digital property amid macroeconomic stagnation.
[Editor’s Note: Q1 GDP will not include tariff impact as the cut-off date came before ‘Liberation Day.’]
GDP forecasts present a stark divide. The Atlanta Fed’s Nowcast has known as a contraction of two.7%, whereas the Philadelphia Fed’s mannequin tasks development of two.5%, final up to date on Feb. 14.
Whatever the closing determine, the drag from the file goods-trade deficit is a typical characteristic throughout estimates, with some fashions attributing as much as 1.9 proportion factors of destructive contribution to it.
This commerce shortfall seems to be a delayed consequence of tariff front-loading, spurring preemptive imports in the course of the prior quarter. Inventories are anticipated to be flat, whereas shopper sentiment continues to deteriorate, hitting a five-year low. Enterprise capital expenditure has additionally been curtailed.
Inflationary persistence additional complicates the image. March’s Shopper Value Index rose 2.4% year-over-year, and the Core PCE index, the Federal Reserve’s most popular inflation gauge, stood at 2.8% in February.
Rate of interest futures now worth in over 90% likelihood of a charge minimize by December. Concurrently, Treasury yields have declined and the greenback has weakened, reinforcing stagflation comparisons with the Seventies as financial development stalls and inflation stays above goal.
Bitcoin macro hedge for 2025?
Bitcoin’s market setup diverges notably from the standard macro image. Realized capitalization for the highest digital asset continues to make new all-time highs, at the moment at $883 billion and signaling continued inflows regardless of the pullback from January’s worth peak.
Information present that roughly 20,000 BTC exited exchanges previously week, the very best weekly internet outflow in two years, primarily pushed by whale accumulation of 19,255 BTC. In the meantime, spot Bitcoin ETFs captured $3.4 billion in inflows, the third-largest weekly consumption so far.
BlackRock’s IBIT alone recorded $643 million on April 23, its second-largest single-day influx.
Volatility metrics recommend a broader evolution in market construction. Realized volatility has compressed by roughly 50% from its 2022 peaks, and the volatility unfold between Bitcoin and the Nasdaq now sits close to cycle lows.
This compression has lent credence to characterizations of Bitcoin as a maturing asset class, a view strengthened by VanEck’s commentary that its volatility and co-movement profile more and more resemble that of gold somewhat than equities.
The juxtaposition between a near-stalling US financial system and a record-high cumulative invested value in Bitcoin displays diverging narratives round capital preservation.
The commerce deficit drag highlights the restrictions of a tariff-distorted items financial system, whereas Bitcoin’s borderless framework affords a contrasting car for world allocation.
The backdrop of tepid development and elevated inflation has reopened discourse round digital property as potential stagflation hedges, significantly as ETF demand endures regardless of recessionary alerts.
With main funds from the likes of BlackRock and Constancy persevering with to soak up provide, flows into digital property present resilience that’s disconnected from standard macro indicators.
Market individuals now look towards the Could 1 Core PCE replace and subsequent week’s FOMC resolution for additional readability on charge trajectory and inflation circumstances.
