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Jordi Visser said the crypto community has missed how much the bond market was driving Bitcoin.
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He said that for Bitcoin to recover, inflation fears should fade.
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This would allow the Fed to stop raising rates, Visser added.
Wall Street veteran Jordi Visser said on Saturday that the Fed’s December decision could spark Bitcoin’s (BTC) next rally, while calling analysts’ Nvidia (NVDA) target cuts “very, very weird.”
Speaking with Anthony Pompliano on the Pomp Podcast, Visser said, “Don’t be surprised if the catalyst for the next rally is in December, where we don’t do 50.” He was referring to Fed Governor Christopher Waller, who said on Tuesday that a 50 basis point hike “should be considered” at the December meeting if October inflation came in hot, which it did.
Visser said many in the crypto community have missed how much the bond market was driving Bitcoin. He pointed to “the largest rise in two-year yields at a week, 35 basis points since 2022.” He added, “So that’s why Bitcoin is down.”
What Could Turn It Around?
For Bitcoin to recover, inflation fears should fade, allowing the Fed to stop raising rates, Visser added, opposing Arthur Hayes’s stance, who saw Bitcoin going higher if interest rates rise.
But Visser’s point stands on his explanation that Brent crude was back to its March price and inflation swaps were “at the lows of the year.” That is why he sees the Fed’s December meeting as a possible turning point.
Visser still expected the Fed to keep raising rates, saying there are “probably at least two more hikes.” His point was that a smaller increase in December, rather than a half-point hike, or 50 basis points, could be enough to spark a rally. “We need the liquidity side to turn it around,” he said.
The AI Side Of The Trade
After the market learned of Nvidia CEO Jensen Huang’s departure, Bitcoin’s decline accelerated. On November 10, it fell below $73,000, its lowest level since August.
When asked whether the AI sell-off was dragging on Bitcoin, Visser said, “Not right now. It was last week.” He explained that he thought of Bitcoin “as being two separate parts. One [was] the innovation side, and the other one [was] the liquidity side.” When the AI trade was doing well, he said, Bitcoin tended to do well with it.
The AI trade’s rough stretch continued as Huang stepped down as the CEO. Visser noted the exit “came right after we had semiconductors and all the AI trade [went] through a massive liquidation.”