Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• The pro-crypto reps that could be in position to lead US crypto policy. 

• We’ll know soon if MSTR will join the Nasdaq 100. A look at that question and its impact.

• The data that has strengthened consensus around an upcoming Fed cut.

Republicans nominate pro-crypto reps to lead key House committees 

It’s that time of the year: Republicans are finalizing their picks for House committee and subcommittee chairs. 

For eagle-eyed crypto fans, you probably saw Rep. French Hill was nominated to chair the House Financial Services Committee. Also of note, Glenn Thompson is slated to hold on to his position as Agriculture Committee chair.

Let’s run through what these representatives have said about crypto and what could be in store for policy next session: 

French Hill 

Hill was the first-ever chair of the House Subcommittee on Digital Assets, Financial Technology and Inclusion, serving for the past two years. 

Chair Maxine Waters created the subcommittee during the 116th Congress. It was expanded to also include crypto matters this session under Chair Patrick McHenry, who did not run for re-election. Since broadening its scope, subcommittee hearings have been held on DeFi, crypto market structure and the role of federal agencies. 

Hill received bipartisan support Thursday following his nomination announcement. Democrat Ritchie Torres, a fellow crypto-friendly rep, said he looks forward to continued bipartisan cooperation next session. 

Glenn Thompson 

You may be wondering what the Agriculture Committee has to do with finance. But this group actually tackles a lot of pressing issues, specifically with commodities and derivatives markets. As many crypto advocates push for more regulation from the CFTC and less from the SEC, the Ag Committee could prove crucial. 

Thompson introduced the Digital Commodity Exchange Act last session — a bill that went on to influence FIT21, which passed through the Ag Committee and later the full House with backing from both parties. A major part of the legislation is granting the CFTC authority to oversee crypto spot markets, a distinction agency leadership and industry actors have supported. 

Thompson, a co-sponsor of FIT21, said last year the legislation had been drafted based on “extensive feedback from stakeholder and market participants.” 

The bill “aims to close existing authority gaps, ensuring US leadership in financial and technological innovation,” he added. 

Committee nominees must be ratified by the House Republican Conference, which is expected to meet next week. 

Meanwhile, over in the Senate, there’s still no word on if (or when) senators will vote to confirm SEC Commissioner Caroline Crenshaw before Congress recesses next week. 

Senate Banking Committee Chair Sherrod Brown on Wednesday attributed the delay to Republican senators heeding "corporate special interests and standing in the way of [Crenshaw’s] nomination.” 

Next week should be interesting.

— Casey Wagner

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The number of bitcoins Riot Platforms bought between Dec. 10 and Dec. 12, according to a Friday filing. The bitcoin miner shelled out $510 million to acquire the BTC (avg. price of $99,669).

After this purchase — made using proceeds from its 0.75% convertible senior notes offering and cash — the company now holds 16,728 BTC total. It seems large bitcoin buys from companies are poised to continue.

MicroStrategy could later this month join the Nasdaq 100, which includes many of the largest non-financial, Nasdaq-listed companies.

A Nasdaq spokesperson told me changes to the index would be announced tonight at 8 pm ET. Adjustments would go into effect on Dec. 23. 

MicroStrategy’s market capitalization stands around $95 billion and appears to meet the requirements for inclusion, analysts say.  

But the Nasdaq committee’s decision could depend on MSTR’s ICB classification, Bloomberg Intelligence analyst James Seyffart mentioned in a recent research note. Much of the company’s share performance is linked to financial engineering derived from its bitcoin buys, he explained; whether this could make it a “financial” stock (and ineligible) remains to be seen.

While TD Cowen analyst Lance Vitanza puts odds of MSTR’s Nasdaq 100 inclusion in the 60-80% range (noting its operating software business sets it apart from traditional financial companies), he told me he wouldn’t be surprised if it was kept out.

Benchmark’s Mark Palmer said the stock — already up 480% this year — could see another boost as Nasdaq 100 inclusion would enable MSTR to benefit from giant passive funds (like Invesco’s QQQ) buying blocks of shares. 

Vitanza said he isn’t so sure inclusion in the index would cause any sort of price spike. Still, it would certainly broaden the universe of investors, he added, which would augment the company’s long-term access to capital.

TD Cowen analysts raised their price target for the stock from $525 to $550 on Monday. MSTR shares were trading at ~$397 at 2 pm ET.

“If they were to be kept out of the index,” he told me, “that would not change our view of the stock one iota.”

— Ben Strack

Happy Friday! We are now just days away from the next FOMC meeting and markets seem all but certain (97%, according to CME Group data) that we’ll see one more 25bps cut before the end of the year. 

Here’s what the economic data said this week and why we agree rates are poised to end 2024 lower: 

• November’s CPI report may not have surprised analysts, but the headline figure was still just a bit hot. Prices increased 2.7% year over year. So-called core CPI, which excludes volatile food and energy prices, increased 3.3% in the 12 months ended November — also on par with forecasts, but higher than the Fed would like. Now that we are fairly certain a 25bps cut next week is locked in, the question is what can we expect in 2025?

• Thursday’s PPI report, on the other hand, came in a little higher than expected. The headline figure showed a 3% annual increase, up from 2.6% in October. This was mostly attributable to much higher food prices last month. Core PPI for the 12 months ended November was 3.3%, unchanged from October and just a bit below analysts’ expectations. All in all, it’s a bit of a mixed bag. We’ll get economic projections next week, so stay tuned on what committee members are anticipating for next year.

— Casey Wagner

• Bitcoin rose to above $101,900 Friday afternoon and was trading around $101,400 at 2 pm ET. It was up 1.4% in the past 24 hours, at that time, and up 4.5% from a week ago. ETH also saw daily and weekly gains, trading at about $3,915 at 2 pm.

• The SEC charged financial firm Cantor Fitzgerald with alleged regulatory disclosure violations. The company agreed to pay $6.75 million to settle the charges without admitting or denying wrongdoing. This agreement comes a few weeks after President-elect Donald Trump nominated Cantor Fitzgerald CEO Howard Lutnick to lead the Department of Commerce.

• Self-custodial crypto software platform Exodus said Friday its common stock was approved to trade on the NYSE American after its public listing was delayed earlier in the year. The shares are set to start trading on the stock exchange — under the EXOD ticker — on Dec. 18.