Bitcoin (BTC) kept investors guessing on May 3 as markets awaited May 4’s Federal Reserve comments.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Tudor Jones says “no thanks” to stocks, bonds
The pair had stayed practically static over 24 hours to the time of writing as volatility in stocks dictated the mood.
Amid multiple calls for a “capitulation” style event to hit both crypto and TradFi markets, there was an eerie sense of calm leading up to the Federal Open Markets Committee (FOMC) meeting, with news on U.S. rate hikes to follow.
Everyone is waiting for Jerome Powell to come up tomorrow to have a speech of 45 minutes where he’s going to say absolutely nothing.
– Michaël van de Poppe (@CryptoMichNL) May 3, 2022
While some felt that markets had already “priced in” the expected 50-basis-point hike, veteran investor Paul Tudor Jones did not mince his words when telling mainstream media about the precarious nature of the economy under current conditions.
Speaking to CNBC’s “Squawk Box” segment on May 3, Tudor Jones told viewers that it would not pay to own stocks or bonds.
“Clearly you don’t want to own bonds or stocks, you start with that,” he stated.
“It’s going to be a very, very negative situation for either one of those assets classes. You can’t think of a worse macro environment than where we are right now for financial assets.”
Tudor Jones, well known for his Bitcoin investment and evangelism, also said that the U.S. was entering “uncharted territory” by raising rates during a period of tightening in the Financial Conditions Index (FCI).
FCI is a composite gauge of stocks, credit spreads and more, and is a “very good indicator of the general strength of the overall economy,” he explained.
“Extremely delicate equilibrium”
The cautious tone from within crypto circles likewise extended to Bitcoin hodlers.
In its latest weekly newsletter, “The Week On-Chain,” analytics firm Glassnode described BTC price action as being in an “extremely delicate equilibrium.”
“The current market structure for Bitcoin remains in an extremely delicate equilibrium, with short-term price action and network profitability leaning bearish, whilst long-term trends remain constructive,” it summarized.
Glassnode also acknowledged demands for a “capitulation event,” which on-chain indicators were so far not supporting.
“A capitulation event, alongside developing divergences in short- and long-term trends continues to make Bitcoin one of the most fascinating assets to monitor within this macroeconomic environment,” it added.
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