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A mixed bag of headlines recently, but in our view, dips are still for buying.
For the month of July:
Crypto:
BTC +7%
ETH +48%
SOL +10%
Equities:
S&P 500 +2%
NASDAQ +2%
Gold:
Gold (-1%)
A year ago, we would have never imagined the regulatory tailwinds we are now being graced with.
The GENIUS Act (stablecoin bill) was passed into law.
The CLARITY Act (non-stablecoin crypto bill) passed by the House, sent to the Senate, with strong support.
SEC chair Paul Atkins announced Project Crypto - a movement to “modernize the securities rules and regulations to enable America’s financial markets to move on-chain.”
166 page White House crypto report released, putting meat on the bones of President Trump’s January executive order.
A few highlights:
Protect open public blockchains & self-custody: safeguard open public blockchains and every American’s right to self-custody
Non-discriminatory bank access: require banks and payments networks to provide nondiscriminatory access
Promote USD stablecoins: implement GENIUS Act to standardize and onshore issuers
Ban CBDC: agencies are prohibited from establishing/issuing/promoting a CBDC
Presidential Working Group deadline: 180 days to deliver coordinated regulatory + legislative recommendations
Establish Strategic Bitcoin Reserve under Treasury + broader Digital Asset Stockpile to bolster national balance sheet strength
Clean up and streamline Tax and reporting cleanup: carry cost basis across exchange transfers, clarify business-receipt reporting, and align IRS–FinCEN threshold
Scott Bessent is calling for the Golden Age of Crypto.
Trump is preparing an executive order to allow 401K plans to invest in alternatives, including crypto.
It’s simple - the Trump administration is delivering on their promises.
This further shrinks the “left tail” risk of crypto as a sector. Very structurally bullish.
Who knew regulation could be dreamy?
The last week has brought some soft macro data and headlines, which cooled things off across both traditional and crypto markets.
These sorts of dips are to be expected, especially as we saw speculative activity heat up.
Crypto open interest (a good marker for leveraged trading) climbed above $87B on July 28th. This marked the highest level in the last year - higher even than last November/December in the wake of the rapid gains after Trump’s election victory.
This leverage adds fragility to the structure of the market, leaving it vulnerable to swift corrections sparked by small moves that get exacerbated by forced selling to cover margin for those leveraged positions.
Case and point, as the last week brought
news that tariffs would go live on August 1st as deadlines wouldn’t be extended,
followed by the Fed’s decision to keep rates steady, accompanied by what some would categorize as “hawkish” commentary,
weak jobs data,
July non-farm payrolls coming in at +73K, below forecasts of +110K
Unemployment rate up slightly to 4.2% from 4.1% month prior
and even weaker downward revisions for past months,
May revised down by 125,000, from +144,000 to +19,000
June revised down by 133,000, from +147,000 to +14,000),
open interest fell ~17%, now right around $72B. Still elevated, but moderated a bit.
This exacerbated downward price movements, with
BTC down (-6%)
ETH down (-17%)
and SOL down (-19%)
before bouncing into the start of this week.
Securing the border has resulted in an artificially low unemployment rate despite the weak jobs numbers.
The labor force participation rate has fallen as a result of the slowdown in immigration. This is masking the weakness in the labor market by mechanically driving down the unemployment rate.
This analysis is interesting. If you hold this labor force participation rate variable constant, the recent jobs numbers would instead reveal quite a dramatic increase in unemployment rate - 4.9% vs. the official 4.2% reading.
These dramatic revisions led to Trump firing the head of the Bureau of Labor Statistics, adding to last week’s headline volatility.
He may have a point here. The quality of the data has been deteriorating for a while, with less actual data collected, and more of it estimated.
This is especially striking for inflation data. We used to have upwards of 90% of the data collected. We’re now dropping towards 60%.
This is why Truflation is my much preferred source for inflation data, even if it is slightly detached from the official CPI metrics that policymakers use in their decision-making process.
I’ll take the better signal, based on the assumption that official lagging metrics will eventually catch up.
The manufacturing PMI came in at 48, down from 49 last month, and below expectations of 49.5.
The services PMI came in at 50.1, down from 50.8 last month, and below expectations of 51.5.
As we’ve hit on for a while now, these metrics are a key driver of the “real” economy, and we’ve been expecting these to pick up.
We still have tailwinds for the business cycle in the form of the easing economic conditions that we’ve been seeing since Q2, in combination with positive growth surprises relative to inflation.
These still point towards an acceleration in these business cycle metrics, but we’re simply not seeing this - yet.
We’ll keep watching for how this unfolds. For now, we’re not convinced that this point of view has been invalidated - just delayed.
RealVision just released a great report on the differences between the ISM and S&P Global PMIs.
Much of the attention goes to the ISM PMIs - it’s the legacy metric (they’ve published their manufacturing PMI since the 1940s, while S&P launched in the 2000s). So when the ISM PMI headlines are weak like they were in the last week, they grab all the attention.
Less reported, however, is that the S&P PMI composite increased from 52.9 in June to 55.1 in July.
So, which is more accurate?
RealVision calculated that the S&P PMI has much better fit with other metrics of real business activity.
The S&P survey focuses more on domestic activity (vs. the ISM’s more global purview), and has a broader, more representative set of businesses and sectors.
Color me convinced that the S&P PMI is a better metric to be looking at. It has better representation of the domestic economy, and maps more closely to other metrics we see elsewhere - on-the-ground business activity, as well as the easing of financial conditions we’ve been tracking.
For now, our point of view is still that things will pick up - that the ISM PMIs will re-rate in line with S&P’s.
Not only that, but the softer data represented in the jobs report and ISM PMIs actually gives the Fed stronger evidence that they should in fact cut rates, which would work to bring this acceleration to life.
While the Fed didn’t change rates, 2 of the 7 Fed Governors dissented for the first time in over 30 years.
We then had Fed Governor Adriana Kugler announce her resignation, giving Trump the ability to nominate someone to fill the spot.
In addition, Powell’s Fed Chair position ends next May, and Trump also gets to nominate the next Chair.
Trump is putting the pressure on.
Remember this?
Polymarket odds of a September rate cut are above 80%.
All signs point to further easing.
In July, we saw crypto break out, and whispers of alt season, with ETH leading the charge.
Bitcoin dominance (BTC’s % share of total crypto market cap) drop from ~65% to testing 60% - meaning alts started outperforming BTC.
On July 24th-25th, Galaxy announced that it sold 80,000 BTC (over $9 billion) into the market. The price only dropped ~3%, before quickly recovering.
BTC’s hash rate - the measure of the coordinated computational power securing the network - hit all-time highs. BTC’s hash rate touched 1 zettahash per second - to put this in context, this is roughly 100,000x more compute than the entire infrastructure of the Mag 7 combined.
The higher the hash rate, the higher the cost and difficulty of hacking the network.
Plus, the market is still offsides.
Corrections - sometimes sharp, and often short - are to be expected in crypto, especially after things move up as fast as they did for most of the month of July, and especially with the Trump administration’s bold and volatile style of leadership.
Let’s not forget, BTC climbed to all-time highs in July, touching above $123K.
We’re still holding strong with our view that the rest of the year looks quite good.
Policymakers are running it hot. Liquidity is rising. Tariffs aren’t as inflationary as feared. The business cycle should still heat up.
This is a setup that doesn’t come around often. Until something clearly and materially changes, we stay fully invested to ride this wave.
Overall, I’d still give us a green light.
None of the 6 technical/valuation metrics below are in the warning zone.
Currently: ~61%
Warning zone: ~45%-50% (bottomed ~40% last cycle)
Currently: ~2.2
Warning zone: ~3-3.5 (topped ~3.9 last cycle)
Currently: ~2.5
Warning zone: ~6-7 (topped ~7.5 last cycle)
Currently: ~0.55
Warning zone: ~0.6-0.7 (topped ~0.75 last cycle)
Currently: ~1.21
Warning zone: ~2 (topped ~3.25 last cycle)
Currently: not near a cross
Warning zone: when blue line approaches purple line
Also all on Farcaster
punk6529 on the freedom to transact
Clifford Sosin on the wealth of everyday
Raoul Pal on the crypto playbook
Tyler Neville on the philosopher builder
David Senra on the lessons of history
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Devin Baker
Share Dialog
Makes technical stuff friendly.
Comma Partners, July 2025 update Dreamy regulation, tepid macro, but strong outlook intact A mixed bag of headlines recently, but in our view, dips are still for buying https://paragraph.com/@comma/comma-partners-july-2025