₿ 3 Crypto Predictions For This Year

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What’s on the Menu 🍴

The Daily Dough team is back in action after hosting some of our Wealth Building Community members in Austin last week for a 4 day retreat!

And today we’re diving into some important market data and trends to help you grow your dough.

Let’s go!

• 3 Crypto Predictions For This Year ₿

• The Fed’s Dilemma 🤔

• Can the U.S. Afford Its Political Promises? 🤞

Today’s newsletter is a 5 minute read.

3 Crypto Predictions For This Year ₿

Some crypto influencers are saying rate cuts will spark a FOMO buying frenzy into altcoins…

But let’s get real for a second:

• Most of these coins are as valuable as a promise from a compulsive gambler

• Rate cuts are already priced in

• And we’ve already seen signs that altcoins have been in a structural bear market

Here’s where the small cap altcoin bear market started:

Here's what I'm seeing on the horizon for the crypto markets:

1. BTC Dominance Back to 70%

Bitcoin is the OG for a reason. With all the noise about altcoins, BTC’s market cap dominance is quietly climbing its way back to 70%.

While alts fight for crumbs, Bitcoin investors are stacking sats like it’s 2017 all over again.

The broader market might be praying for an alt season, but it looks like Bitcoin is once again going to be the big winner.

2. Altcoin Mass Extinction by Year’s End

We’ve been here before: a sea of altcoins promising the moon but delivering less than your neighbor's garage sale.

Expect another wave of the weak getting weeded out by EOY. Only a handful of alts have any shot at survival, and those that do will be clinging onto BTC’s coat-tails.

Think memecoins are a good store of wealth? We have a better shot at beanie babies making a comeback!

3. Less Than 5% of Alts Outperform BTC in 2024

Even with the hopium in the air, the reality is bleak for most alts. Expect less than 5% to even come close to outperforming BTC this year.

A few might get a pump, but the majority are more likely to leave investors with that familiar sinking feeling.

Stick with the proven performer, or risk being left with a bag of regrets.

As we’ve said for the past decade - altcoins are vehicles to TRADE for short-term profits, not long-term investments.

The Fed’s Dilemma 🤔

On Wednesday afternoon the US Federal Reserve will decide if they are cutting the benchmark Fed Funds interest rate by 25 basis points (0.25%) or 50 basis points (0.50%).

For the first time in a long time, both the market and the Fed themselves are somewhat unsure which path the Fed will take.

The market currently sides with a more aggressive 50bps cut:

Let’s look at the pros & cons of each scenario:

25 basis point cut

The Fed rarely likes to move in an aggressive fashion unless there’s a crisis.

So a smaller cut would be in line with their gradual approach.

It would also do more to avoid the perception that the Fed is helping any one political party ahead of the election, which will take place before the next Fed meeting in November.

The Fed is very serious about maintaining the appearance of independence and political neutrality.

Some investors are still worried about inflation, and a smaller cut would also give the Fed more time to study the effects of easing policy in the current environment.

50 basis point cut

On the other hand, inflation risks seem to be receding while unemployment risks are on the rise.

The Fed does not want to see rising unemployment start to snowball into a major recession.

With inflation cooling to +2.5% in the most recent CPI release, the current Fed Funds rate of 5.25-5.50% is quite restrictive:

Since the Fed won’t meet again for seven weeks (November 7th), it might make sense to do a larger cut now, especially if they are worried about the economy softening further.

The Fed did hike rates by 50 bps and 75 bps to fight high inflation in 2022, so larger rate moves are not unprecedented under current Fed chairman Jerome Powell.

Some investors think a larger cut would signal panic by the Fed, but the futures market already favors a 50bps cut.

Therefore, it would not come as a shock or surprise to the market in our view.

Other central banks such as the ECB and Bank of Canada are well ahead of the Fed in cutting rates as well.

Our Prediction

So what’s the most likely outcome and how will the market react?

Our guess is that the Fed will only cut rates by 25bps, but will give “dovish” statements to try to appease financial markets.

Chairman Powell has talked about wanting to avoid a second wave of inflation similar to what happened in the 1970’s.

The Fed could argue that market interest rates have already fallen quite a bit in recent weeks, which is easing financial conditions without their help.

This may still disappoint markets in the short term, but the Fed’s statements could lay out a path of declining rates in the meetings ahead.

If we’re wrong and the Fed does cut rates by 50bps this time around, then markets should view that positively.

A robust rally would not be surprising to see in that scenario.

Let us know what you think the Fed should AND will do on Wednesday!

Can the U.S. Afford Its Political Promises? 🤞

The federal debt is climbing faster than a cat in a room full of rocking chairs, and guess what?

It’s not just a number on a screen—it's a ticking time bomb that could blow a hole in the economy, and neither Kamala Harris nor Donald Trump seems eager to defuse it.

Here's the kicker:

They both played major roles in ballooning this debt while in office. So why is this issue now as ignored as the last cookie at a gluten-free bake sale?

• We’re looking at a federal debt set to soar past $50 trillion by 2034 if current trends continue.

• That’s a whopping $22 trillion more than today, with interest payments soon expected to outstrip defense spending.

• It’s like buying a mansion on a janitor's salary and thinking, “Nah, the credit card bill can wait.”

The reality is this:

When the U.S. isn’t grappling with wars, crises, or recessions, it's still piling on debt as if the sky’s falling.

During times of relative peace and prosperity, like today, you'd expect a bit of belt-tightening.

Instead, we've got politicians from both parties tossing around spending promises like confetti at a ticker-tape parade.

• Trump and Harris, despite their differences, are singing a similar tune—one that avoids the painful notes of fiscal responsibility.

• Trump’s pushing more tax cuts without corresponding spending cuts, while Harris has matched him on tax breaks for tips and proposed lavish expansions to child tax credits.

• Both seem happy to kick the fiscal can down the road, protecting big-ticket items like Social Security and Medicare from any meaningful reform.

The looming fiscal nightmare could spell higher interest rates, slower economic growth, and a government too strapped for cash to respond to the next big crisis.

The U.S. may not be Greece yet, but we’re playing a dangerous game of fiscal chicken, and eventually, someone’s going to swerve.

For now, it seems both Trump and Harris are betting that voters are more interested in short-term gains—think tax cuts and government checks—than long-term stability.

The sad truth?

Fiscal discipline just isn’t sexy. No one wins elections by promising to tighten the belt; they win by loosening it and handing out the spoils.

So until the bill comes due, expect more spending, more borrowing, and more political dodging than you can shake a stick at.

Food For Thought 🧠

"If you can keep your head when all about you are losing theirs,
it’s just possible you haven’t grasped the situation.”
- Jean Kerr

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.