Friday Charts: How the Observer Effect is Shaking Crypto Markets
Markets don't just move—they react. Every trader's gaze alters the outcome.
When whales watch, charts bend. Retail FOMO kicks in. Suddenly, that 'organic' breakout smells like a coordinated pump. Classic Schrödinger's crypto—both dead and alive until you check the price.
Wall Street's quant bots pretend they don't stare at the same TA patterns as degens. Meanwhile, Bitcoin's 20% weekly surge gets credited to 'institutional adoption' (read: one pension fund intern testing Kraken API).
Here's the paradox: the more we track volatility, the more we create it. Tick by obsessive tick.
Next time some VC claims 'this time it's different,' remember: markets have only two states—manipulated or about to be.
The Wall Street Journal documents the surge in capex among the four hyperscalers, which are on pace to collectively spend $400 billion this year alone.
Going all in:
The hyperscalers are both making more money and spending more of it on capex.
This morning’s unemployment data:
The US economy is estimated to have added only 73,000 jobs in July. But the shocker in this morning’s report was the 253,000 downward revision to the prior two months, taking the three-month average down to just 35,000. An economy that seemed surprisingly resilient suddenly looks unsurprisingly fragile.
Contrary to popular belief…
…the jobs do not seem to be going to China. Data from Jonathon Sine shows that “China shed the equivalent of the entire US manufacturing sector (~15 million jobs) over the last 15 years.”
Inflation estimates are more of a guesstimate now:
Thanks to funding cuts, the Bureau of Labor Statistics is collecting less inflation data, which means that a bigger portion of CPI is “imputed” (aka, guessed) based on the data it did manage to collect.
Not out of the inflation woods yet:
The two dissenting FOMC voters will feel vindicated by this morning’s weak jobs report. And the president will be even more irate than he was yesterday. But it might still be hard for Powell and the rest of the FOMC to agree on cuts when the price of Core goods are rising at a 3.75% pace.
The price of copper is down, at least:
Copper futures fell 20% after it was announced that President Trump’s latest round of tariffs WOULD exclude metals. That kind of whiplash policymaking is good for volatility traders and bad for anyone trying to run a business that requires copper.
Tariff update:
The pink line is the overall level of tariffs, according to what’s been announced. The black line is what importers have actually paid. The 10 percentage point difference between the two suggests that most of the impact on the economy is still to come.
Railroads next?
As a percentage of GDP, AI infrastructure capex is already bigger than the internet telco boom, but still has a lot of upside to match the railroad boom.
What will AI become if the hyperscalers spend 6% of US GDP on it?
Investors seem determined to find out.
Have a great weekend, observant readers.
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