Bitcoin’s Bull Run Ignites as Dollar Tumbles & Nvidia Soars—Recession Signals Fuel Crypto Frenzy

Bitcoin flexes its anti-fiat muscles as the dollar index crumbles—just as Nvidia’s stock punches through another record high. Meanwhile, Wall Street’s recession playbook gathers dust.

DXY in freefall: The dollar’s weakness paints a target on Bitcoin’s back. When traditional finance stumbles, crypto’s hedge narrative roars back to life.

Nvidia’s AI bonanza spills into crypto: Chip giant’s rally mirrors 2021’s tech-crypto symbiosis. Remember when 'metaverse' was a thing?

Recession alarms ringing: Smart money’s rotating out of equities faster than a DeFi flash loan. Bitcoin’s scarcity play looks increasingly attractive as macro uncertainty grows.

Bonus cynicism: TradFi analysts still can’t decide if crypto’s a risk asset or inflation hedge—meanwhile, BTC hodlers keep stacking sats.

BTC and NVDA correlation

Meanwhile, shares in Nvidia (NVDA), a bellwether for all things AI and emerging technologies, rose 4%.33% Wednesday, hitting a record high of $154.30.

Both NVDA and BTC bottomed out in late 2022 and have been in an uptrend ever since. As of the time of writing, the 90-day correlation coefficient between NVDA and BTC was 0.80, indicating a strong positive relationship between the two assets.

NVDA's record high came a day after the Nasdaq futures formed a bullish golden cross, signaling a continued risk-on rally.

Bonds teasing recession

The yield on the U.S. two-year note, which is more sensitive to interest rate expectations, dropped to 3.76% early today, the lowest since May 2. The yield has declined by 24 basis points this month. Meanwhile, the 10-year yield has declined by 16 basis points to 4.27%.

As such, the spread between the 10- and two-year yields has widened in a MOVE known as the steepening of the yield curve.

Historically, recessions have begun with the two-year yield falling alongside a steepening of the yield curve, as noted by wealth advisor Kurt S. Altrichter on X.

"We’re not there yet, but we’re dancing on the edge. The 10Y-2Y spread is bull-steepening. If the 2Y breaks lower, it signals the Fed has lost control. That’s your cue. Watch it closely," Altrichter said.

Consumer expectations signal an impending recession

Consumer confidence dropped last month to a reading of 93, registering a 5.4-point decline from May, with Republican party respondents leading the decline, according to data released by the Conference Board on Tuesday.

More importantly, the expectations index, which represents the short-term outlook, slipped to 69, well below the 80 threshold that typically signals an impending recession.

Traders price in Fed rate cuts

These developments, coupled with the oil price slide and the talk of a July rate cut by some Fed officials, have likely prompted traders to price in an early rate cut by the Fed. According to the CME's FedWatch tool.

According to Bloomberg, interest rate swaps are now pricing around four basis points of easing into the July Fed meeting, up from NEAR zero a week ago. Furthermore, traders anticipate a combined 60 basis points of easing over the remaining four meetings this year, up from 45 basis points a week ago.