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All Eyes on Tomorrow’s CPI Print
Both the crypto and stock markets are locked onto tomorrow’s US CPI print, as any deviation above or below the forecast should be the next catalyst to move asset prices.
CPI numbers come out tomorrow at 8:30 am ET. Previous YoY CPI was 3.5% (forecast 3.4%). Previous MoM CPI was -0.4% (forecast 0.1%). Previous core MoM CPI was 0.0% (forecast 0.2%).  Here’s why tomorrow’s CPI print has particular importance:
1. Earlier this month, markets were pricing a likely 25 bps rate hike at the Fed’s September 16th meeting. This expectation had been putting pressure on gold, Bitcoin, and the US indices.
2. But last week’s weak employment figures flipped the script. The data showed that labor is contracting, which puts direct pressure on the Fed to hold rates steady, since half its dual mandate is maximum employment.
3. So the markets pivoted late last week and began betting that a rate hold for September 16th was the base case. Asset prices responded in kind, with gold, Bitcoin, and the indices all catching a bid.
But with tomorrow’s CPI looming, there’s a growing sense that the market got too enthralled over the soft labor prints. The other half of the Fed’s mandate (i.e. keeping inflation in check) has been persistently sticky, so a hot reading tomorrow likely trumps labor concerns and triggers downward corrections again (as rate-hike odds climb). Then add that oil is currently rising (which worsens inflation) after already fragile US-Iran negotiations appeared to break down over the weekend, with both sides demanding reparations from the other.
So if you’re tracking the catalysts for shorter-term price action, the thing to watch is tomorrow’s CPI data.
Bitcoin Whale Addresses Hit Six Month ATH
Bitcoin whales, which here is defined as addresses that hold 10K BTC or more (i.e. +$640M in USD value), are at a six month high at 90, according to on-chain data. The last time it was this high was early February. The lowest this number hit in the interim was 84 (in mid-June).  Now while this local whale ATH may not look like much, the data suggests that coins are rotating away from the weaker hands and into the larger diamond hands — a phenomenon typically witnessed during bear market bottoms.
Zooming further out, if you’re concerned about the larger decline in whale addresses (i.e. the 2022 bottom peaked at 121 addresses), don’t be. Holding 10K BTC is worth $640M today, whereas it was $157M at the 2022 bottom. Meaning, as Bitcoin appreciates further in value into the future, expect fewer and fewer addresses with +10K BTC.
Nvidia Pushes to Make AI Compute an Investable Infrastructure Asset Class
Breaking news as of yesterday, Nvidia is working with six Wall Street firms (i.e. Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs, and KKR) to turn AI compute into an investable infrastructure asset class. According to a company announcement, Nvidia has signed memorandums of understanding with the aforementioned firms that could unlock +$500B in third-party capital.
AI compute is the processing power that comes from electricity combined with specialized, high-end GPUs. This processing power is what’s used to train and run AI models inside large data centers. Currently, most companies treat buying or renting AI compute as an expense on the balance sheet, and that’s what Nvidia wants to change.  The basic argument is AI compute can serve multiple customers over many years and generate steady rental income. So therefore, AI compute should be regarded as a long-lived, revenue-generating, investable infrastructure asset — similar to power plants or productive real estate. And if the shift succeeds, it opens a far larger pool of institutional capital for the general AI build-out, as it can all be further collateralized and leveraged.
So essentially, Nvidia is seeking to further financialize an already heavily-levered AI economy. But if the sector is in a bubble, and AGI isn’t realized or new tech efficiency gains reduce the need for chips or power, then turning AI compute into a widely held investible asset class only makes any eventual crash even worse.
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