₿ Why bitcoin is taking a pause

What’s on the Menu 🍴

All eyes have been on the bitcoin, price and big tech stocks lately…

So today we’re going to talk about what’s been happening and why.

Let’s get it!

• Why Bitcoin Is Taking a Pause ₿

• MSFT and GOOG Set The Stage For A Bounceback

• What’s In Store For Housing Prices? 🏡

• Thoughts On Bitcoin, Tesla, Inflation, Real Estate, and Taxes 💲

Today’s newsletter is a 4 minute read.

Why Bitcoin Is Taking a Pause ₿

After seven consecutive green months, Bitcoin has hit a snag this April.

What's up with that?

Let’s dive in:

Bitcoin's bull run saw a much-anticipated pullback this month.

Historically, after such prolonged rallies, the market often takes a breath—and that's precisely what we're witnessing. Investors had reason to expect this cooldown, and it seems the market gods were listening.

The recent slowdown in inflows to spot Bitcoin ETFs signals a broader hesitation.

The early year frenzy has given way to a more measured pace, with investors perhaps taking stock after the post-halving exuberance has started to fade.

These ETFs, a previously hot destination for both retail and institutional money, aren’t seeing the same inflow rush as before.

On the regulatory front, the SEC isn’t making life any easier.

With increased scrutiny and lawsuits against privacy-focused entities like Samourai Wallet, the regulatory clouds are gathering, casting a shadow over some of the crypto’s more private corners. This has certainly played its part in dampening investor sentiment.

Economically, the macro landscape is also twitchy. Inflation fears and interest rate hikes can affect investment appetites broadly, impacting assets like Bitcoin.

And let’s not forget the market mechanics—sometimes, assets just need to reset.

But is this the end of the bull run?

We think it’s far from the end.

Think of it as the market catching its breath after a sprint. The fundamentals driving Bitcoin's adoption and interest—be it institutional investment, technological advancements, or broader economic conditions—are still in play.

Stay tuned, but don’t fret—markets ebb and flow, and this is just part of the dance.

MSFT and GOOG Set The
Stage For A Bounceback 📈

Just when we thought we may see a deeper correction in the S&P 500, Microsoft (MSFT) and Alphabet (GOOG) pulled out solid Q1 earnings reports yesterday.

Microsoft rose +5% and Alphabet (Google) flew over +10% after their reports.

Hopes for a deeper stock market correction may be dashed by big tech delivering strong earnings growth.

Although META was a disappointment because of spending (a story we’ve seen before), the rest of big tech could keep things afloat.

MSFT posted healthy revenue growth of 17%, much better than the 7% revenue growth at this time last year.

MSFT is also growing earnings at a healthy clip of 20%, well above the 11% expected earnings growth for the S&P 500 index in 2024.

Their “Intelligent Cloud” business is still a bright spot for the company with continued strong demand thanks to AI.

Then there was Alphabet with an impressive report which showed re-accelerating revenue growth and margin expansion that boosted earnings.

Earlier in the year, sentiment around GOOG stock was negative as investors were unsure if they were existentially threatened by AI advancements.

Their search business however (which brings in over 50% of their revenue) kicked off 14.4% year-over-year growth in Q1.

Youtube Ads was also a bright spot, with 20.9% growth versus last year:

We still have important earnings reports to come from Apple and Amazon to round out the “magnificent 7” stocks.

However, so far the group looks a lot better than many predicted thus far!

What’s In Store For Housing Prices? 🏡

It’s been a strange few years in housing.

Everyone went into interest rate hikes with the notion that housing prices HAD to come down.

While we saw a short reduction in the median house price, it looks possibly short lived.

More supply coming online (active listings) and more new homes being built hasn’t seemed to help THAT much yet.

New housing supply has become pretty robust:

But, when you look at the OVERALL trends of active listings, we’re still hoovering above the lows.

Of course, new homes aren’t “being listed” so, that inventory isn’t reflected in active listings, but, it’s clear median housing prices aren’t going in the right direction even with the supply increasing.

The GOOD for future housing prices coming down?

There is some speculation that Airbnb owners selling their homes, and older Baby Boomers eventually aging out of their homes could boost supply more over the next few years.

Lower interest rates in the future could also cause more people to start selling and boosting inventory (more inventory is typically better for buyers).

The BAD for future housing prices coming down?

If/when interest rates start heading lower, this could cause a frenzy for people to finally pull the trigger on buying as interest rates make it more affordable.

The demand that could come online from buyers could keep bids on housing prices higher than we want.

So, it’s a complex, dynamic situation with housing. One that we will have to watch and be open that things may not go as one thinks.

It doesn’t feel like housing prices are likely to have a MAJOR correction. Better deals may come online, but it will be very market dependent.

My best advice always, is to buy what you can afford today. Don’t depend on being able to refinance your mortgage. Let that be a cherry on top later, if it comes.

Video of the Day: Thoughts On Bitcoin, Tesla, Inflation, Real Estate, and Taxes 📺

This week we’re rolling through a ton of big topics…

And looking at the good, bad, and ugly of this economic landscape.

If you’re a trader or investor, you don’t want to miss this one!

You’ll also learn:

• What does Biden’s 44% capital gains tax mean for investors?

• Why is bitcoin price pulling back this month?

• Why rates are starting to rise again

• And much more!

Food For Thought 🧠

"Fiat money, in the long run, becomes monopoly money.
Monopoly money becomes funny money. Funny money becomes worthless."
- James Cook

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.