This is a liquidity-led bull market without traditional liquidity.

The Fed is restrictive, fiscal impulse is fading, and yet risk keeps ripping. Why? Because AI-driven capital gains and capex at the top of the economy are cascading down the stack, while crypto treasury companies (TCos) have engineered a new transmission mechanism that reflexively converts equity euphoria into on-chain bid.

This flywheel can power through weak seasonals and macro noise until hyperscaler capex rolls over or ETF demand stalls.

Image from: https://x.com/lanamour69/status/1957087662105415896

My Thesis in Three

• Liquidity Source Shift: Not from the Fed or Treasury, from AI hyperscalers’ equity gains and capex. NVDA/MSFT wealth effects plus $100B+ capex waves are radiating into labor, suppliers, and, cruciallym retail portfolios, pulling risk out the curve into crypto.
• Crypto’s New Buyer of Size: TCos (MicroStrategy-style for BTC; Bitmine/others for ETH) are the bridge from public equity capital to spot tokens. This is the structural buyer the last cycles lacked.
• Macro Crosscurrents Manageable For Now: Sticky inflation risks (tariffs, wages, dollar) and softening labor show up in the data, but the AI productivity optionality + regulatory tailwinds for crypto keep the risk premium compressed.

1) AI at the Top of the Pyramid

• Capital gains → risk rotation: With the S&P 500 fully priced (rich forward P/E), retail rotates into unprofitable tech, high-short baskets, and crypto.
• Capex as liquidity: Hyperscalers’ record spend acts like a private-sector liquidity pump → cash to vendors, workers, and shareholders → then back into markets.
• Side effect: AI infra build (data centers, chips, power) shows up as investment growth now, productivity later. The time lag → the wealth effect is immediate.

2) TCos = DATs

• From “Gen 0” to price-seeking TCos: Early TCos (think Saylor) were price-insensitive floors. New ETH-focused TCos are price-seeking, defending key levels and engineering breakouts when it accelerates upstream equity value.
• The reflexive loop: Equity raise → buy reserve asset (BTC/ETH) → token price up → TCo equity up → cheaper capital → repeat. That’s the flywheel.
• Achilles’ heel: Gaps between defended levels. If ETFs/retail don’t fill the middle, failed breakout attempts force TCos to conserve cash and price reverts quickly.

3) Policy & Positioning Tailwinds

• Crypto deregulation & friendlier posture have unlocked TradFi capital pipes.
• Tariff “resolution” is a mirage: Businesses still lack visibility on China/Mexico/Canada/USMCA, exemptions, and court outcomes. Uncertainty biases firms toward financialization over capex—more money chasing assets.

The State of Ethereum (and Why It Flipped)

• Treasury demand + ETF flows gave ETH a narrative pivot after years of underperformance to L2s.
• “Cup Theory” lens: Price-seeking ETH TCos defend $3,000 → $3,300–$3,500 → $4,000 zones; ETFs fill the in-between. If ~$27B of queued demand materializes in stages, the current leg can extend. If it doesn’t, air pockets matter.
• My read: ETH now has a structurally different buyer set than prior cycles. It’s no longer “retail vs miners”; it’s ETFs + TCos vs liquidity gaps.

Image from: https://x.com/lazyvillager1/status/1956414334558478348

Macro: The Walls of Worry (and Why Markets Climbed Them)

Inflation

• Survey pipeline pressures: Three straight months of rising selling-price indices (highest since Aug ’22) point to goods-led price pressures, consistent with tariff pass-through, a softer dollar, and wage stickiness.
• Read-through: Implied inflation near ~4% isn’t a crisis, but it complicates cuts. The Fed can tolerate growth-friendly inflation only while labor doesn’t crack.

Labor

• Youth underemployment spiking (~17% 3-mo avg) is an early-cycle canary. Young workers are first to feel turns; if that bleeds into core employment, risk will notice.

Growth, Debt, and AI

• AI’s fiscal offset: If Total Factor Productivity runs +50 bps above baseline for decades (AI scenario), public debt/GDP by 2055 could be ~113% vs 156% baseline, with ~17% higher real GDP per capita. Translation: AI is the only credible growth lever big enough to bend the debt curve.
• But lags matter: The 1980s computer capex → late-90s productivity boom reminds us adoption takes time. Markets are discounting future efficiency today.

Tariffs & Uncertainty

• Policy fog = valuation clarity risk: Unfinalized rates, vague deals (EU/Japan), exemption churn, and legal challenges all muddy the forward cost curve. That keeps CFOs overweight financial assets vs long-dated physical bets—ironically supporting markets while raising medium-term inflation risk.

Bear vs Bull: My Scorecard

Bearish checks

• TGA drain + QT still restrictive.
• Weak seasonals into September.
• Early labor slippage; inflation re-accelerants (tariffs/wages).

Bullish checks (overweight)

• AI capex + wealth effects are today’s liquidity.
• Crypto policy shift opened the TradFi spigot.
• TCos/ETF structure is a persistent mechanical buyer.
• Dovish tilt in 2026 Fed composition is a credible forward catalyst.

Net: I stay constructive while the AI→Retail→TCo→Spot chain is intact.

What Would Change My Mind

• Hyperscaler Capex Roll-Off: A clear downshift in AI infra orders.
• ETF Demand Stall: Persistent outflows or failed secondary launches.
• TCo Equity Shut Window: Down rounds, failed ATMs, or premium-to-NAV collapse.
• Labor Crack: Youth weakness spreading to prime-age employment.
• Tariff Shock → CPI: Goods inflation forcing the Fed to re-tighten instead of cut.

Positioning the Cycle (NFA)

• Core: Quality AI compounders; selectively own the picks-and-shovels (compute, power, networks).
• Crypto: BTC as beta, ETH as reflexive flywheel. Respect defended levels; assume air pockets between.
• Risk management: Size around ETF flow data, TCo issuance calendars, and hyperscaler guideposts. Add on defended floors; lighten into euphoric breakouts that lack follow-through.

Bottom Line

This cycle is differenr from 2021.

It’s driven by private-sector liquidity born of AI equity gains and capex, transferred into crypto by new corporate structures and sanctioned by ETFs.

The flywheel is real and it will run until the top of the pyramid (hyperscalers) blinks.

Until then, the path of least resistance remains up and to the right. 👇🧵

Macro Pulse Update 16.08.2025, covering the following topics:

1️⃣ Macro events for the week

2️⃣ Bitcoin Buzz Indicator

3️⃣ Market overview

4️⃣ Key Economic Metrics

5️⃣ China Spotlight

1️⃣ Macro events for the week

Last week

Next Week

2️⃣ Bitcoin Buzz Indicator

3️⃣ Market overview

• Inflation Data and Bitcoin’s Reaction: July’s CPI at 2.7% aligned with expectations, giving markets initial relief and fueling Bitcoin’s surge to a new all-time high above $124K. However, the sharp 0.9% PPI jump — the highest in three years — reminded traders that producer costs remain sticky. This tug-of-war between cooling consumer inflation and rising producer costs highlights why BTC remains highly sensitive to macro signals.
• ETH ETFs Reach Institutional Breakthrough: U.S. spot ETH ETFs recorded their strongest single-day inflow to date with over $1B, led by BlackRock and Fidelity. With cumulative inflows above $10.8B, ETH is gaining legitimacy as an institutional asset — a trend accelerated by regulatory clarity around liquid staking. This inflow momentum may mark the beginning of Ethereum carving out its own ETF-driven growth cycle, similar to what Bitcoin experienced earlier this year.
• BitMine’s Bold Treasury Strategy: By expanding its equity program to $24.5B, BitMine is signaling long-term conviction in Ethereum. With holdings now surpassing 1.15M ETH, BitMine is not just the largest public ETH treasury — it’s shaping itself as a strategic player in ETH’s supply dynamics. Such concentration raises questions about how corporate treasuries might influence future liquidity and governance in Ethereum markets.
• Bullish IPO Shows Institutional Appetite: Bullish’s $1.1B IPO debuting at 143% above issue price reflects strong investor demand for crypto-native infrastructure, especially from institutions. With backing from Peter Thiel and ARK Invest, Bullish is positioning itself as a high-profile bridge between traditional markets and digital assets — suggesting investors are eager to fund platforms catering to large-scale institutional flows.
• ALT5 Sigma Bets on Alternative Treasuries: ALT5’s $1.5B World Liberty token deal, combined with Eric Trump joining the board, underscores a different trend: corporate treasuries looking beyond Bitcoin and Ethereum. Whether this diversifies risk or dilutes focus remains to be seen, but it signals growing appetite for governance tokens and new forms of corporate-aligned crypto exposure.
• The Do Kwon Precedent: Do Kwon’s guilty plea is more than the end of a high-profile saga — it sets a precedent. For years, crypto founders operated in regulatory gray zones. Now, with a likely 12-year sentence looming, there’s a clear message: market manipulation and fraud in crypto will carry consequences on par with traditional finance.

4️⃣ Key Economic Metrics

Gen AI and US Economic Growth

• Investment vs. Productivity: In H1 2025, IT equipment investment — much of it tied to gen AI infrastructure — accounted for 59% of real GDP growth. Gen AI is fueling spending and valuations, but hasn’t yet translated into broad productivity gains.
• Shifts in Investment: Traditional structures (factories, offices, retail) declined, but data warehouses surged, underscoring AI’s outsized role. Tariff uncertainty is delaying other capital projects.
• Market Dynamics: Gen AI is echoing the dotcom era — driving equity froth, with the “Magnificent Seven” powering much of the S&P 500’s rise. A broader economic slowdown could trigger a correction, especially if investors liquidate tech to cover other losses.
• Energy Strain: AI-driven data centers could consume as much power as Japan by 2030, with US electricity demand from data processing outpacing heavy industry. Rising energy costs — especially with reduced subsidies — may pressure households and dampen consumer demand.
• Productivity Lag: Like past tech waves, AI’s long-term payoff requires integration and adaptation. It will reshape labor markets before boosting productivity, with winners and losers emerging across industries.

Gen AI and Other Influences on US Government Debt

The future of US debt will hinge not only on AI’s ability to raise productivity but also on immigration policy’s impact on labor supply — two powerful but opposing forces.

• Baseline vs. Productivity Upside: The CBO projects federal debt to reach 156% of GDP by 2055 under current assumptions. A faster productivity path — potentially accelerated by Gen AI — could reduce this to 113% of GDP, with real GDP per person 17% higher than baseline. Stronger productivity boosts revenue growth, curbs deficits, and lowers debt burdens.
• Bond Market Implications: Faster growth could mean higher yields from stronger demand for capital, but lower inflation from efficiency gains. The net effect on borrowing costs remains uncertain.
• The AI Productivity Unknown: Historical precedent (computers, internet) shows long lags between innovation and productivity payoffs. Gen AI may follow this pattern — its fiscal benefits could take decades to materialize.
• Immigration as a Counterforce: Immigration is critical to US labor force growth, with foreign-born workers making up 19% of the workforce. Restrictive policies and mass deportations (targeting 3,000/day) risk cutting the labor supply by 1M per year, raising wages and inflation, while slowing GDP growth and tax revenue.

Dual Path Ahead:

Gen AI-led productivity boom → stronger growth, lower debt ratios.

• Immigration-driven labor squeeze → slower growth, higher inflation, rising deficits.

Evidence Inflationary Pressures Are Accelerating

• Survey Signals Rising Prices: S&P Global’s PMI survey shows U.S. selling prices for goods and services rose sharply in May–July, with July hitting the highest since Aug 2022. Unlike the U.S., global price indexes have declined — making this acceleration uniquely American.
• Goods Driving Inflation: For years, services prices outpaced goods, but recently goods prices jumped faster — likely reflecting tariffs’ direct impact.
• Company Feedback: Firms cited tariff-driven import costs, a weaker dollar, and rising wages from labor shortages as the key drivers of higher selling prices.
• Implied Inflation Trend: Based on historical comparisons, S&P Global estimates U.S. inflation is effectively running at ~4%, in line with Yale Budget Lab’s projection that tariffs could add 2 percentage points to inflation over the next year.

• Fed’s Dilemma: If inflation keeps climbing while employment weakens, the Fed faces a trade-off. History suggests it will prioritize inflation control, even at the risk of jobs, unless it views the shock as temporary.

  5️⃣ Tariff Uncertainty🔴

Despite recent announcements, clarity on U.S. trade policy is still elusive, leaving businesses hesitant on supply chain and investment decisions. Key reasons:

• Unfinished Negotiations: Tariff rates for China, Mexico, and Canada remain unsettled. With the USMCA set for renegotiation next year, uncertainty stretches further.
• Provisional Announcements: Many tariffs were imposed without finalized deals, leaving room for renegotiations or exemptions. Companies and countries are lobbying hard for carve-outs.
• Vague Commitments: Agreements with the EU and Japan include promises of U.S. investment and energy purchases, but these are non-binding goals. Differing interpretations already risk future disputes.
• Legal Challenges: Court cases questioning tariff legality could lead to reversals, adding another layer of unpredictability.
• Exemptions & Lobbying: Industry groups are gearing up to secure sector-specific relief, signaling that current tariff structures may be temporary.
• Higher Tariff Shock: Over 60 countries now face tariffs well above the baseline 10%, threatening exports, jobs, and sparking new negotiations (e.g., Ireland, Taiwan, Lesotho).

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