Weekend Reading
Crypto: BTC Surpasses $125,000, Why Crypto Remains Our Hedge
Bitcoin blasted to an all-time high above $125,000 overnight, underscoring a historic run fueled by surging institutional ETF inflows, rate-cut expectations, and global risk aversion amid U.S. political gridlock and currency devaluation risks. As fiat currencies and traditional assets face macro headwinds, Bitcoin’s decentralized nature, its role as a liquidity hedge, and its limited supply reinforce its strategic allocation as a 21st-century hedge in diversified portfolios, especially as analysts expect the Fed to boost liquidity through rate cuts, potentially driving BTC even higher as investors seek shelter from potential dollar instability.
We’re holding BTC not only as a hedge but as a growth tool. Don’t fight the trend. COIN is a major holding in our Value portfolio for a reason, they're poised to gain from any BTC momentum.
Why REITs Stay on Our Radar, But No Action Yet
Real Estate Investment Trusts (REITs) are trending for total return and yield, with 2025 expectations set at 8-10%, including 4% yields, anchored by stable property valuations, solid sector earnings in industrial and data center REITs, plus sticky inflation keeping rate cuts gradual. However, earnings growth remains moderate (forecasted at 4-6%) due to higher operating expenses and still-elevated debt costs, while lagging sectors like office and storage act as a drag. While promising for income-oriented allocations, current valuation multiples suggest limited deep-value or momentum upside until broader real estate supply/demand and interest rate dynamics materially shift.
Macro: Rate Cuts, Global Bull Market, and Tariff Uncertainty
The global macro backdrop for Q4 2025 is a delicate balancing act: Central banks are signaling further rate cuts to counter lingering but elevated inflation and offset the economic headwinds from rising tariffs and modest global growth expectations. U.S. equities continue to show fundamental leadership as profit margins and free cash flow improve, and there is cautious optimism that accelerating earnings growth could power global markets into 2026, especially in sectors like AI and technologically driven industries, even as policymakers navigate the aftershocks of protectionist measures and shifting currency dynamics
Looking into the week ahead, global markets are positioned for heightened volatility amid an ongoing U.S. government shutdown, which has created a critical data void and left investors relying more on private sector data, Fed commentary, and corporate newsflow to gauge the economic outlook. Major indices remain near record highs despite the policy uncertainty, buoyed by momentum in technology, expectations for future rate cuts, and robust international demand, especially in AI and digital assets, while the absence of key federal releases may skew trading and add to uncertainty around labor and inflation trends. As Q3 earnings pre-announcements begin, central banks’ statements and FOMC minutes will be closely watched, with any hint of progress on Washington’s fiscal impasse likely to influence both market tone and global risk appetite.