The rally in crypto and risk assets has persisted, with BTC crossing above 23k and the S&P 500 having broken its downward trend (see chart below). With so far strong employment data and a lower-than-expected US PCE, the scenario of “goldilocks” has been scoring some points.
We present three possible macro scenarios from here, their respective implications for crypto markets, and considering what is “priced in” vs these scenarios’ probabilities.
Scenario 1: Goldilocks or lower inflation and resilient growth (it is the current backdrop) continues for longer and the Fed gets its desired “soft landing”. Positive crypto.
In this configuration, inflation continues to come in below market...