Possible Presidential Policies Supercharge Spending, Heightening Hope of Bitcoin Boom

A new analysis from the Committee for a Responsible Federal Budget shows that both US presidential candidates' plans are forecast to raise the federal debt. The report (AP) estimated federal debt would swell by $7.5tn through 2035 under Trump's agenda, while Harris's proposals would increase debt by $3.5tn through the same time span. While federal debt hawks might not like it, ballooning debt burdens tend to be a positive catalyst for the price of BTC as investors flock to the safety of a decentralized and deflationary asset.

On Friday, data concerning the state of US labor showed the US job market to be incredibly resilient. The US economy added 254,000 jobs in September, well above the 150k expected by economists. We also saw positive revisions to the previous two months’ data, the unemployment rate fall to 4.1% from 4.2%, and wage data remain constructive. ING’s economists remarked that “the Fed should be hiking rates with these sorts of figures, not cutting rates.” The data sent US Treasury yields higher, but price action in equity markets and cryptocurrencies has remained constructive. Markets are still pricing an 84% chance of a 50bps cut at the Fed’s next meeting despite the stronger than expected data.

Escalating tensions in the Middle East have driven oil prices higher as the market anticipates strikes on Iranian oil infrastructure.

ETF flows turned negative last week with BTC ETFs showing $274mm of outflows

Notable Crypto News

• United Arab Emirates (UAE) Exempts Crypto Transactions From Value Added Tax (VAT) (coindesk.com)

• $147 million exits global crypto funds, ending three-week inflow streak: CoinShares | The Block

• Ethereum proposal ‘EIP-7781’ calls for slot time reduction from 12 to 8 seconds to boost transaction throughput | The Block

The Macro Week Ahead

The week ahead will be dominated by US data including inflation numbers, PPI and the FOMC meeting minutes.

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