Don't blame the recent BTC drop entirely on PCE data! The new highs in the US stock market are the real behind-the-scenes driver!
Recently, people have been asking: If the core PCE data is clearly negative, why can the US stock market still reach new highs? Why did Bitcoin drop instead? This operation is indeed a bit confusing, so I will try to clarify it in the simplest terms— the fundamental problem may lie with CRCL and COIN, this pair of difficult brothers.
First, let's talk about the PCE data itself. On the surface, the inflation data does look bad, but upon closer inspection, we find: the rise in housing prices hasn't fully reflected in the data yet, and the increase in goods prices is more due to tariff expectations causing a stir. Once the tariffs are truly implemented, inflation pressure may actually ease. So over at the Federal Reserve, Powell has clearly indicated that there will be a rate cut in September. Logically, this should be good for risk assets, so why did BTC still drop?
Here comes the key point! Institutions like CRCL, which rely on US Treasury interest for easy profits, are now panicking. For the past two years, they have been feasting on interest, but once the rate cut cycle begins, their income will shrink directly. Although they keep painting a rosy picture about entering the payment business, there are no short-term results in sight.
When CRCL drops, it directly drags COIN down with it, and retail investors who chased the highs are left trapped.
What's more concerning is that the US stock market is hitting new highs every day; don't companies like Nvidia, Tesla, Apple, and Microsoft look appealing? Naturally, funds vote with their feet, and some are retreating from the crypto market to hold onto those big legs. Look at the mess in the Middle East; BTC has dropped without rebounding, showing a clear lack of market confidence.
However, it is still too early to assert that the crypto market has peaked. Although the US stock market is reaching new highs, the pressure for a correction is also accumulating. As long as there are no black swan events, systemic risk is temporarily not visible. But in the short term, the divergence between BTC and the US stock market may continue for a while.
The next 10x coin is about to be born. On July 30, the day of the rate cut, the code for the 10x coin will be announced, stay tuned.