Digital Asset News NFA Live: Inflation data release and Bitcoin market analysis with Guy Turner and Ben Cowen
Rob from Digital Asset News hosts a live discussion with Guy Turner (Coin Bureau) and Ben Cowen (Into the Cryptoverse) on fresh inflation data and Bitcoin's market outlook.
Summary
Rob hosts Guy Turner from Coin Bureau and Ben Cowen from Into the Cryptoverse to break down freshly released inflation data and its implications for crypto markets. The PCE price index fell 0.1% month-over-month with core PCE up 0.1%, GDP growing at an annualized 1.5%, and initial jobless claims at 197,000. Fed Governor Kevin Waller declined to raise rates at this meeting, but three FOMC members dissented in favor of an immediate hike, and both Guy and Ben argue a rate hike later in the year is likely. Ben points to the 2-year Treasury yield now exceeding the Fed funds rate as a signal that monetary policy may no longer be in restrictive territory, which could reignite inflation pressures. The hosts also discuss a farmer who sold his truck to put $55,000 into Bitcoin as a lump sum, and debate whether the Bitcoin cycle low is already in. The episode closes with discussion of Strategy's inability to buy Bitcoin at the lows due to preferred stock dividend obligations, Hyperliquid's strong product-market fit, and the failure of several smaller Bitcoin treasury companies.
Key Takeaways
FULL TRANSCRIPT
Inflation Data Release and Fed Rate Decision
Rob: Welcome to NFA Live. The inflation data is out and it is not too awful. To help me break that down, I've got Guy Turner from Coin Bureau — and Coin Finance and Coin Korea and Coin Everything — thank you, Guy, for stopping by. And Ben Cowen from Into the Cryptoverse. How are you guys doing? How you doing, Guy?
Guy Turner: Yeah, I'm well, thanks Rob. I'm well. I've had a couple of weeks back home in the UK and now back home again in Dubai. Yeah, it's all good.
Rob: All good. And Ben, after two weeks off, how have things been for you?
Ben Cowen: Good. I was out of town for the last week on a vacation, so I feel pretty good. Bitcoin's the same price as I left it, so here we are.
Rob: See, this is why you left it — you let it just chop sideways and that's fine.
So everybody, before we get into it, I want to see where we actually are with macro. The numbers just came out about 30 minutes ago. The PCE price index for June fell 0.1% — so that's great — month-over-month, at 3.7% year-over-year. The core PCE price index increased 0.1%, so kind of a wash. GDP grew at an annualized rate of 1.5%, and initial jobless claims came in at 197,000. The market has responded — Bitcoin likes that. Not too bad.
Now, yesterday Waller came out and said he is not raising rates, but there are a couple of members of the team who appear to be dissenting. I'll talk to Guy about that. But first, Guy, you put out a nice little snippet on a short where you talked about three things that Waller came out and said that were concerning. Tell us about that, and then we'll break down a little bit of the economic macro with Ben. What were the three things?
Kevin Waller's Three Key Signals
Guy Turner: Sure. And remember, this is Kevin Waller — he very much has a different attitude to what the Fed should be saying and doing, especially as it concerns forward guidance. So the third thing he said was that the Fed is very much focused on forcing inflation down to that 2% target no matter the cost. What was interesting is he said that five years of high prices have made people kind of accept 3% as normal. It's this idea of shifting baseline theory — people are getting used to 3% inflation, whereas the Fed's mandate is a whole percentage point lower than that, and that's what they should be aiming at.
He also said there are no soft targets. What he meant by that was that the Fed will keep rates high enough until they have an effect on inflation and bring it down, even if that causes pain — even if it hurts family budgets — because he, like many others, recognizes just how insidious a force inflation is and that you have to stay on top of it. That's something to bear in mind, and it's along the same lines as what Powell would always say. One thing hasn't changed from the transition in chair: 2% is still the inflation target, no matter the cost.
That leads on to the second thing he said — that interest rates could actually go up. As you mentioned, Rob, three members of that 12-person FOMC board dissented, and their dissent was that they wanted to raise rates right now. The phrase Waller used was that this is the beginning of the story and not the end. So for anyone carrying debt or hoping that mortgage rates are going to go down — sorry, that isn't going to happen. The spectre of rate rises is still very much alive, and it's probably a question of sooner rather than later.
The first one was perhaps more concerning than the other two. This feeds into what Kevin Waller has been saying ever since he took the reins: they're not going to do forward guidance. They're not going to give any early warnings or hints about what they're going to do. The phrase he used to investors was to play the ball and not the referee.
Rob: That's pretty good. I like that.
Guy Turner: I like to think that's a nice football analogy, just in time for the end of the World Cup. But what this means is that without those early warnings, without that forward guidance we were used to under Powell, everything — all investors, all markets, the smart money, the dumb money, and everyone in between — is just left guessing until the actual decision is announced. That means uncertainty and that means volatility. It's making it very tricky to get an idea of where they might be headed. We obviously have tools like the Fed Watch and what have you, but with the lack of forward guidance it very much becomes a bit of a guessing game. That makes it that little bit harder.
Reading the Fed Watch Tool and Rate Hike Probability
Rob: Well said, Guy. And talking about those tools — the target rate of 350 to 375, they called it, they nailed it. I think a lot of people said they were not going to raise rates, that Waller was going to stay the same. The only one that said it might actually happen was Citadel Securities, which I thought was kind of interesting — they came out and said, "Yeah, it's going to be a surprise raise, you guys just watch and see." And of course the numbers don't lie.
Taking a look at the next meeting, coming up on the 16th of September 2026, just like what you said, Guy, we've got three dissenters. It looks like rates could be going up from 375 to 400. Let me refresh that — maybe things have changed a little bit. It's a 60/40 split. It looks like we might raise rates.
So this comes back to Ben. What do you think? If we start to raise rates and that expectation is coming into the markets — I did like this video you put out, "When Will the Fed Raise Rates?" You had a nice overlay looking at inflation year-over-year and also the 2-year Treasuries as they're lining up. You talked about how the 2-year Treasury, which the Fed has been tracking, has actually increased, and this is where you think Fed rates will actually go as they increase. So as you see the numbers that are there, what are your thoughts moving forward, Ben?
Ben Cowen: Yeah. Back earlier this year, the Fed funds rate was lower than the 2-year yield, but that's now changed — it's now higher than the 2-year yield. What that sort of means is, if you believe in the neutral rate — this abstract concept — when the Fed funds rate is above the 2-year yield, the argument is that we are in restrictive territory in terms of monetary policy, and when it's below, it's more accommodative.
For the last year or two, the Fed funds rate had been above the 2-year yield. But that's changed now. The 2-year yield is actually above the Fed funds rate even though the Fed funds rate hasn't gone anywhere in a while. So you could argue that while it was above it, you could pretty clearly see higher risk assets bleeding to lower risk assets — that's why things like Bitcoin dominance were going up and whatnot. But now it's flipped back.
The argument now is that because the neutral rate is a moving target, we're no longer in restrictive territory. And if that's the case, then the labor market might start to heat back up again. You can already see the unemployment rate has been trending down, initial claims have been trending down. That could put pressure on wage inflation, which could put pressure on overall inflation and headline inflation.
So I think what you're seeing happen is the Fed is unwilling to raise rates, but the bond market is revolting. If you look at the 30-year yield, it's breaking out to new highs. The 10-year yield is probably heading back up to where it was in October 2023. When yields were breaking out starting in July 2023, they really moved up from July until October 2023, and the S&P ended up getting about a 10% drop. So I think we are likely going to get a rate hike this year. I don't know exactly what month — September seems like a likely candidate — but I think you will have one. And then I think people are going to get really spooked by it, because a rate hike after rate cuts kind of hits a little bit different than just a rate hike a few years ago.
I think it would be the perfect narrative for everything playing out just the way it always does, right? The stock market gets a correction in the back half of the midterm year, Bitcoin finds a market cycle bottom, and it's all because people are freaking out about the Fed raising rates. If you need a narrative, it's there — not that you need one.
Rob: We all need a narrative. That's the whole thing. So right now, I still think we're going to see a little bit of rate hikes. Even one of the most dovish Fed members was on Squawk Box yesterday and said, "Even I can see a case for raising rates." So if people are expecting things to just keep dropping, I don't think it's actually going to happen. Evaluate that and put it into your buying or selling strategy. I think we've got a little bit of a rocky road going into and out of the midterm years. Thank you, gentlemen, for that.
Anecdote: Farmer Sells Truck to Buy Bitcoin
Rob: The next part I want to talk about is an anecdotal story. I like this one because it kind of shows you where things are at. Now, if you're a technical trader, this has nothing to do with you, but I got to tell you, this was a pretty good one.
I had lunch with a friend last week. He talked about how he sold his truck — he's a farmer. He sold his truck and he was going to put it all into Bitcoin. But this guy's a little bit different. He was in Bitcoin in 2013 and has been holding for quite some time and had some pretty good gains. He sold his truck, took a loan out to buy another truck because he's a farmer and he needs one, and he said, "I'm going to buy Bitcoin this week." He just bought recently.
So my question to you — Guy, I'll start with you — do you think this was a good move for him in the long run or the short run, or do you think this was just crazy talk? And what do you hear about as far as people around you and the sentiment for crypto right now, Bitcoin specifically?
Guy Turner: So he sold the truck — now he does not have a truck?
Rob: No, no. So he sold his truck, got $55,000 out of it — it's a very nice truck, a Ford F-150, one of my favorites. He took that $55,000 and dumped it into Bitcoin as a lump sum. And then he took a loan out to buy another truck because he needs one and he wanted a new one anyway. So he's got a loan at whatever it is — maybe 6.5% or something like that over five years. Would this be a good strategy or is this just crazy talk?
Guy Turner: I just wanted to check because if he was without a truck, I was going to say he's the biggest fool alive. But okay, he has got a truck — he's just rotated some of the money he made on the last one out of it. Okay.
Well, I don't love the idea of — however well you're doing — taking out a loan to buy anything, really. But a highly speculative and very volatile asset like Bitcoin? Taking out a loan to buy that is not something I would ever advise anyone to do. Even though I believe that in the long term Bitcoin will start going back up again, and I'm kind of on board with what Ben said about the cycle playing out and possibly towards the end of this year we could see prices start to rise again — so on that timeline he's bought at a good time — I still feel very uncomfortable with the idea that he's done it with borrowed money.
I feel like, okay, he was in it in 2013, made a nice profit. But just because he won last time doesn't necessarily mean he'll win again. I've got to hope he's got other ways of paying that loan back if Bitcoin doesn't do what he wants it to do. Getting into debt to buy a highly risky speculative asset like Bitcoin is not the way forward, personally.
Rob: Yeah, I can see that for sure. And I remember in 2021 people would take out massive loans, go into altcoins, and just lose everything. When he did it, it was interesting to me because he has another stream of revenue — real estate, crops, and things like that. So he's like, "Look, I just wanted this to come in." He also talked about how he made a big move in 2018 when Bitcoin was at $3,000 and said it worked out pretty well. So we'll see. I just wanted to put this story out because I want to reference it in the next two or three years and see whether $60,000 was an awful mistake or a pretty good strategy.
Guy Turner: I really hope it works out for him. If it goes to $200K or whatever and he quadruples his money, great. But I guess it kind of suggests that we live in a culture now where so many people are just like, "To hell with it, I'm going to spin that wheel, I'm going to take that risk." And I think that says a lot about the world we live in and the values that we have. You hear a story like that now and most people might be like me — it's not a great idea — but I think most people would be like, "Okay, good luck to you." Whereas if you'd said that to someone 30 years ago, they would have said the guy's insane. The world has changed a lot.
Rob: 30 years ago people would say, "You know what you need to do? Collect a pension and put everything away in your savings account. You'll be just fine." Anyhow, Ben, last question for you. What do you think about that strategy? Would you ever do something like that?
Ben Cowen: I think it probably depends on his timeline. If his timeline's long enough, it probably works out. If it's not, probably doesn't. Someone I learned from a long time ago would tell me about stocks — don't ever buy the S&P unless you have the ability to hold it for at least a few years. If you're going to buy it and it has to go to a certain price or it can't go down in the next six months, you're probably better off not buying it. But if you can hold it for five or ten years, there's no reason to worry that much about what the stock market's going to do next month.
With Bitcoin, obviously there's this four-year cycle stuff looming over our heads, and that would say the price could go lower. But at the same time, normally just buying Bitcoin in the second half of the midterm year works out relatively well, as long as you can not panic if there is that drop in Q4. I typically prefer to DCA into Bitcoin rather than lump sum, just because the stock market doesn't usually drop 50% overnight, whereas we've seen Bitcoin do that many times. So it's a little bit different than investing in the stock market. I hope it works out for him. There are probably going to be a few more scary times this year before hopefully things look a little bit better.
Rob: Well said. We'll see how it all works out. I'd like to reference this story as time goes on because it's always interesting to get that perspective, especially as we are in the bear market midterm lows.
Q&A: Bitcoin Bottom, Strategy, Hyperliquid, and Altcoins
Rob: Let's go into a Q&A session. You can ask Guy and Ben anything and they'll answer your questions.
Here's a good one: what's the chance, percentage-wise, that the bottom is already in for Bitcoin? Anyone want to take that one? I think we've got some time to go, but that's me.
Ben Cowen: I mean, anything's possible — you can never get too confident in a low being either in or not. I would say it's probably less than 50% that it's already in. I think the most likely time is the fourth quarter of the year. That's what it normally is. The hard thing about this year is the constant mental gymnastics around that.
Even back in early this year when we were talking about how Bitcoin usually finds a low in February and then bounces, people were saying, "Oh no, just because it usually does that, this time's going to be different." And then it did the same thing anyway. And then in May, I think we did a live stream — Rob titled it something like "Sell in May and Go Away" — about how Bitcoin then normally sells off again into the summer, and people were like, "No, just because it always happens doesn't mean it will happen again." And then it just happened again anyway.
I understand where people are coming from, but I'm also of the opinion: if it's not broke, don't fix it. If the market wants to prove me wrong, let it prove me wrong. Until then, I'm just going to assume it's going to keep doing what it always does.
Rob: Guy, same thing?
Guy Turner: Yeah, not much to add there. I agree.
Rob: It's funny — I think we live in the matrix. It seems like things just keep going round and round. Almost Groundhog Day-like. But we'll see.
Here's a good one, and it's actually a question I have: what's the reason Strategy is not buying the lows? Strategy does a great job of buying the tops, that's for sure, and also selling some of the bottoms. Anything you guys are tracking over there at Coin Bureau, Guy?
Guy Turner: I just think Strategy has been caught out by the fact that they overleveraged — well, overleveraged isn't quite the word, but I think they got too ambitious. Issuing things like STRC preferred stock that pays a pretty hefty dividend gives them obligations to meet — dividend obligations — which means they have to have cash or find a way of raising it. Either they do that by diluting MSTR holders, which is what they've been mostly doing, or by selling Bitcoin, which they did a little bit of, and the market really did not like that at all.
I guess the plan was to keep on accumulating through the lows, unless they just mistimed the lows. But basically, their strategy was overcomplicated and a bit ambitious. Just buy and hold Bitcoin. Instead, they found this so-called infinite money glitch — and guess what? It didn't quite work out like that. Now the market is basically telling them, "No, you can't go and buy more Bitcoin right now because you need to have cash on hand to honor those dividend obligations." Otherwise people are going to dump MSTR, people are going to lose faith in Bitcoin, or whatever. I think they've had their hand forced in a way. Just one more reason why treasury companies will bleed to Bitcoin over the long term, in my opinion.
Rob: Yeah, unfortunately. And I have to apologize — I thought they bought the high, but they did not. They bought at $117K. So I stand corrected.
Now, what's your thought on Hyperliquid, Guy? I think you're more of the altcoin person as opposed to Ben and derivatives.
Guy Turner: I think it's been struggling a little bit recently. There does seem to be a bit more competition, and I think Lighter is maybe giving Hyperliquid a bit of a run for its money. But it is still very much the venue, especially for out-of-hours trading. The Iran conflict was a big proving moment, I think — when stuff was happening out of hours and people were able to speculate on oil and what have you.
Certainly of the major altcoin projects, it's one of the few that has found product-market fit. People love it, it generates a ton of revenue. I think I saw somewhere that Hyperliquid alone is responsible for, if not the majority, then certainly a huge chunk of overall app revenue in crypto — which shows us we've got a long way to go as an industry.
They're still doing buybacks of HYPE with profits, so I don't see why — unless something bad happens, unless it gets hacked or has some sort of exploit — I think it's going to stick around. I know Lewis, my colleague at Coin Bureau, has said he's going to buy a whole load more of it every time it drops 10%, investing $5,000 each time. So there's some conviction for you. I think long-term, HYPE should do well.
Rob: Very nice. Yeah, I've got a little bit of that. Hopefully it does well.
Someone mentions Meta Planet and the digital asset treasuries, especially for Ethereum — pretty brutal. We'll see if that goes.
Guy Turner: Well, look at Jack Mallers — he just stepped away from Twenty One, didn't he? There was a British one I'd never heard of called Satsuma or something like that, just wound up. I'm sure there will be more, because it's the sort of thing that can work for one. I think Strategy will be fine — they've had their wings clipped a little bit, but they'll be okay. But all these smaller ones, it was a disaster waiting to happen. The sooner the crap ones just go and die and put all their Bitcoin back on the market so other people can accumulate it, the better, really.
Rob: That's spoken like a true multi-cycle veteran.