Here’s what you’ll find in today’s edition:

• The factors behind BTC’s latest dip. Also, what’s next?

• Trump’s tariff threats continue. 

• It’s Fed week. Keep reading to see what else we’re watching.

A market check-in after the latest BTC dip

Bitcoin’s price dipped below six figures for the first time in a week. Sounds like a good chance to check in.

Hours after dropping below $98,000, BTC rebounded to ~$102,000 Monday morning. The asset was trading around $99,400 at 2 pm ET.

Price fluctuates, we know. But identifying the factors at play can go a long way in helping new and recurring investors gain a better understanding of this growing asset class.

Ledn CIO John Glover acknowledged on Friday that President Donald Trump’s executive order was enough to keep BTC from selling off last week after achieving an all-time high near $109,000. But he argued there are plenty of market participants looking to take profit — or swap their BTC for other assets that’ve underperformed since Trump’s election win. 

Another factor to consider is the strong correlation between bitcoin and equities, which Bitfinex analysts wrote “remains one of the most reliable market dynamics.” 

They explained the 30-day rolling Pearson correlation between BTC, the S&P 500 and the Nasdaq reached 0.7 — “highlighting a trend that isnʼt just coincidental but indicative of how bitcoin is increasingly treated like a risk-on major asset class.” 

Thus, the Bitfinex analysts note, BTC “reacted with caution” after last week’s Bank of Japan rate hike and sharply fell due to “jitters” stemming from Chinaʼs ability to produce cheaper AI models through startup DeepSeek.

Bitcoin options implied volatility declined 13% over the course of last week, they added, “suggesting traders are not expecting to see elevated price action.”

Still, you’ve read here about the bullish signals. The latest crypto executive order and the end of SAB 121, sure — but also ongoing institutional investment into bitcoin ETFs, companies buying BTC, etc.  

On those two points, the US spot BTC products nearly reached the $40 billion net inflow milestone last week after just over one year on the market. 

MicroStrategy continues its big bitcoin purchases (scroll a bit for more on that) and more companies (like Critical Metals Corp., with a plan to buy $500 million of BTC) mull, and execute, similar acquisitions. 

Blockworks’ David Canellis pointed out that today marks day 799 of a bull market that — if history repeats — could last about 1,000 days.

While corrections are normal within bull markets, Two Prime Digital Assets has observed more sophisticated market participants pulling volatility out of the market through long-term investing behavior and derivatives strategies — going as far to coin a term: “The Silent Put.”

“In short, a new cadre of bidders, including governments and corporate balance sheets, are willing to buy the dip without getting shaken out,” the firm wrote on X.

Glover said in a Friday statement he’s still looking for BTC to trade towards $126,000 over the next two months. That could be a near-term top as “those looking to lock in profits battling with those bulls that are late to the party,” he added.

When I followed up with Glover Monday after the latest correction, he said his thoughts haven’t changed.

He told me he’s expecting “lots of directionless volatility” as we hear from various levels of government (and the central bank) as to how immediate (or not) Trump’s promises may be implemented.

— Ben Strack

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Yes, MicroStrategy bought more bitcoin, and yes, that figure above is the amount —purchased from Jan. 21-26 for roughly $1.1 billion (avg. of $105,596 per BTC).

The buy isn’t surprising, given the company’s history, stated plans and overall conviction in the asset. 

But we’re going to keep pointing these purchases out because, well, we probably shouldn’t get desensitized to a firm periodically laying out a billion in cash for the largest crypto.

It seems Colombia has narrowly avoided a trade war with the US. 

The White House last night announced that Colombia had agreed to terms related to accepting newly deported immigrants. As such, Trump has revoked his 25% tariff threat. 

It’s clear, though, that tariffs have emerged as one of Trump’s first and favorite tools when it comes to advancing his geopolitical agenda. 

While we have yet to see any increases on Canadian, Mexican or Chinese tariffs, the White House has assured these are coming. Economists are busy assessing what the impact on domestic prices will be, and we suspect the Fed is considering this as well. 

We already know the Fed tends to take a “wait and see” approach when it comes to responding to tariffs and inflation that ensues. Or at least it did back in 2018. 

Trump’s tariff threats (and, to be clear, they are just threats for now), may be rocking global markets in the immediate term. But the actual impact on prices will take longer to see. 

The two options for the central bank are:

1. Raise interest rates. 

2. Take a so-called “see through” policy approach, where FOMC members ride out the (hopefully) temporary higher prices without raising rates. 

We’re betting they go with option two, but we’ll be curious to see how Fed Chair Jerome Powell responds to any tariff-related questions during Wednesday’s press conference. More on that later this week.

— Casey Wagner

Happy Monday! It’s Fed week, so the biggest economic news will come on Wednesday with the FOMC’s interest rate decision. 

Here’s what else we’re watching: 

• The Fed on Wednesday is expected to hold interest rates at 4.25%-4.5%. Markets will be listening for any signs from Powell about how long this pause may last. Perhaps the most telling of all will be if he even uses the word “pause.” 

• On Thursday we’ll get the advanced estimate for Q4 GDP, which analysts expect to show 3% growth. Anything 3.5% or higher would be surprisingly strong, and therefore could impact Fed decision expectations for later in the year. Anything below 2% signals a “soft landing” is not happening. 

• The Fed’s preferred inflation measure, the PCE index, will come out Friday. Both the headline and core indexes are projected to increase for the month of December. Anything at or below expectations bodes well for future rate cuts from the Fed.

— Casey Wagner

• The S&P 500 and Nasdaq Composite indexes were down 1.8% and 3.4% on the day, respectively, as of 2 pm ET.

• The $1.9 billion of net inflows into crypto investment products last week was slightly down from the $2.2 billion the week before, according to CoinShares data. While bitcoin vehicles attracted the bulk of the capital, ETH products brought in about $200 million of last week’s total.

• BitMEX co-founder Arthur Hayes wrote on X that he expects BTC could go as low as $70,000 before then hitting $250,000 by the end of 2025.