Tom Lee Predicts Bitcoin's Rise As Gold's Replacement

Winkelmann

Commodity

Cryptocurrency

Forex

Economic

Summary:

Tom Lee of Fundstrat Global Advisors suggests Bitcoin will mature as a replacement for gold, supported by increased institutional adoption. He highlights evolving dynamics, including supply constraints and regulatory changes. His forecast anticipates Bitcoin's price escalation.

Key Points:

● Tom Lee foresees Bitcoin replacing gold.

● Institutional adoption may end Bitcoin cycles.

● Bitcoin projected to spike in value.

Tom Lee: Bitcoin's Rise and Institutional Adoption

Tom Lee, co-founder of Fundstrat Global Advisors, asserts Bitcoin is replacing gold and ending its four-year cycle, due to increasing institutional adoption and macroeconomic shifts.Lee's perspective suggests Bitcoin's growing legitimacy could transform global financial landscapes, potentially driving significant price appreciation, attracting investor interest, and impacting associated cryptocurrencies.

Lee cites Bitcoin's superior properties over gold, emphasizing its role in the financial market. Institutional interest is reportedly rising post-ETF approvals, driving a shift in Bitcoin's traditional boom-bust cycles, potentially altering its market dynamics.The forecast potentially impacts global markets, stirring interest among investors and policymakers. The demand and supply imbalance noted by Lee could drive up Bitcoin's value, affecting how governments and investors view cryptocurrency investments.

Financial implications include a prospective revaluation of Bitcoin's store of value, with the U.S. possibly integrating it into strategic reserves. Regulatory adaptations could bolster this shift, fostering comfort among institutional stakeholders and promoting further adoption.The potential growth of Bitcoin could affect related cryptocurrencies such as Ethereum and Solana. Lee anticipates significant price movements due to heightened institutional flows and network adoption patterns. The financial landscape may experience material shifts in asset valuation structures.

Historically, Bitcoin's four-year cycle has led to significant price upticks, but Lee predicts a new paradigm by 2025. As Bitcoin matures, backed by substantial institutional backing, it could surpass gold’s market cap, reshaping investment norms and asset management strategies. Lee remarked, "95% of all Bitcoin has been mined, but 95% of the world doesn't own Bitcoin. There's a huge demand versus supply imbalance."

Source: CryptoSlate

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Blue River

Technical Analysis

The New Zealand dollar continues to have a quiet week. In the European session, NZD/USD is trading at 0.5923, up 0.37% on the day. The kiwi has been under pressure, falling 3.4% against the US dollar in July.

New Zealand’s unemployment rises, job growth declines

New Zealand’s employment report for Q2 was pretty much as expected, but the news wasn’t good. The unemployment rate rose to 5.2% from 5.1% in Q1, below the consensus of 5.3%. This marked the highest unemployment rate since Q3 2020. Employment Change declined by 0.1%, down from a 0.1% gain in Q1 and matching the consensus. This was the third decline in four quarters.

The weak figures point to growing slack in the labor market as the economy continues to struggle. Global trade tensions remain high and New Zealand’s export-reliant economy has taken a hit from softer global demand.

The Reserve Bank of New Zealand will be paying close attention to the weak job numbers, which support a rate cut in order to provide a boost to the economy. The RBNZ maintained rates in July after lowering rates at six consecutive meetings. The conditions for a rate cut at the Aug. 20 meeting seem ripe and the markets have priced in a quarter-point reduction at around 85%.

We’ll get an updated look at the inflation picture on Thursday. Inflation Expectations rose to 2.3% in the second quarter, the highest in a year. This is the final tier-1 release prior to the August rate meeting.

Fed expected to cut in September

Three FOMC members will speak later today and investors will be hoping for some insights regarding the Federal Reserve’s rate plans. The Fed hasn’t lowered rates since December but is widely expected to hit the rate trigger at the September meeting.

NZD/USD Technical

NZDUSD 1-Day Chart, Aug. 6, 2025

NZD/USD has pushed above resistance at 0.5902 and testing 0.5922. Next, there is resistance at 0.5944
0.5880 and 0.5860 are providing support

Source: ACTIONFOREX

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Glendon

Economic

Stocks

Stock bulls have another reason to worry that the blistering rally in American equities may be about to cool.

The Bloomberg Intelligence Market Pulse Index pushed to a “manic” reading last month, a sign that investor exuberance may be running too hot. The measure combines six metrics like market breadth, volatility and leverage to deliver a reading on investor sentiment. When it gets into overheated territory, returns tend to weaken in the following three months.

The Pulse index’s rise comes after the S&P 500 rallied almost 30% from its April low even as the American economy and labor market have shown signs of weakening. Surveys of investor sentiment indicate bullishness is growing toward alarming levels among Americans. And just this week, Wall Street strategists issued a slew of warnings that equities could face a pullback.

“Risk taking in the stock market has gotten a bit overheated, so more muted returns may be in store in the next few months,” Michael Casper, senior US equity strategist at BI, said by phone. “But this doesn’t necessarily signal a major selloff is imminent. Sentiment could hover at these levels for awhile, which may lead to a bumpier path for stocks in the second half of the year.”

The S&P 500 notched its worst week since May last week before dip buyers stepped in to deliver its best one-day gain since that same month. The index slipped 0.5% Tuesday.

BI’s Pulse index hit 0.6 in July for the second straight month to push it into the “manic” zone. Over the past 30 years, the Russell 3000 Index — a crucial benchmark of the virtually the entire US stock market — has averaged just a 2.9% return over the next three months, according to data compiled by BI’s Casper and Gillian Wolff. When the gauge swings into what BI dubs “panic” territory, the Russell 3000 averages a 9% gain in the next 90 days.

The index signal jibes with recent warnings from a host of Wall Street strategists. Morgan Stanley’s Mike Wilson sees a correction of up to 10% this quarter, while Evercore’s Julian Emanuel is expecting a drop of up to 15%. A team at Deutsche Bank notes that a small drawdown in equities is overdue.

Added to bulls’ worries is seasonality. August and September have historically been the two worst months for the S&P 500. Friday’s jobs report showed the labor market cooling, while a private reading on the American services sector on Tuesday signaled a slowdown in output and an increase in price pressures — all while President Donald Trump pushes ahead with tariffs that are the highest since 1934.

The Pulse index has been a reliable harbinger of market performance in recent years. The readings hit “panic” levels ahead of the March 2023 regional banking crisis, the December 2018 tariff-induced slide and the 2012 European Union debt crisis.

Among the reasons for the latest “manic” reading were was the re-emergence of the meme frenzy in late July, with retail traders snapping up speculative stocks like Opendoor Technologies Inc. and Kohl’s Corp.

Of course, sentiment can stay frothy for weeks — even months — before stocks suffer a significant drop. It hit a manic reading during January 2021’s meme craze but hovered in that territory for over a year before the S&P 500 slumped into a bear market.

Perma-bull Ed Yardeni of eponymous firm Yardeni Research noted that not all signs are ominious. In the week through July 29, a ratio of bulls to bears identified in an Investors Intelligence survey of newsletter writers hovered at a ratio of 2.4, below a long-term average of 2.6 over the past decade, Yardeni Research analysis shows.

“In other words, sentiment wasn’t overly bullish,” Yardeni wrote in a note to clients on Sunday. “Rather than yet another correction this year, we are more likely to see seasonal choppiness.”

BI’s Market Pulse Index is based on six inputs: price breadth, pairwise correlation, low-volatility performance, defensive-versus-cyclical performance, high-versus-low leverage performance and high-yield spreads. The major difference last month was that high-yield spreads were manic in July, joining high versus low vol performance in that territory.

The Market Pulse Index ranges from 0 to 1, with the latter denoting periods of risk-on sentiment, or extreme “mania,” as BI defines it, while a level close to 0 shows a risk-off period of extreme “panic.” In July, the indicator rose to nearly 0.7 — approaching a mania stage.

Generally, two repeat readings above 0.6, like now, suggests there will be some mean-reversion activity in the equity market over the next three months, with small caps underperforming their larger counterparts, according to Casper. In fact, three months after a manic reading, the small cap Russell 2000 Index historically has underperformed the S&P 500 by 1.8% after such a figure.

“Stocks have come a long way in a short time and things seem stretched,” said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors, whose firm is neutral US equities and is snapping up dividend-payers like energy, financial and industrial shares. “We’re not chasing this rally or stepping on the gas pedal.”

Source: Bloomberg Europe

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Gerik

Economic

Geopolitical Risk Reignites Market After Four-Day Decline

Crude oil rebounded midweek after a sustained decline, with Brent climbing back above $68 per barrel and West Texas Intermediate nearing $66. The rally follows speculation that U.S. President Donald Trump may impose secondary sanctions on nations continuing to buy Russian oil such as China and India in a bid to intensify pressure on Moscow.

The market reaction reflects growing sensitivity to geopolitical developments that may disrupt global trade flows. Trump’s rhetoric has already triggered diplomatic unease, and U.S. envoy Steve Witkoff’s arrival in Moscow for last-minute talks underscores the seriousness of the looming deadline. With just two days left before Trump's ultimatum for a ceasefire in Ukraine, oil traders are recalibrating risk scenarios that could limit Russian exports or provoke retaliatory trade restrictions.

OPEC+ Output Decision Fuels Oversupply Concerns

The upward momentum in oil prices is occurring alongside broader uncertainty surrounding supply. OPEC+ recently confirmed its decision to increase production again in September, continuing its gradual rollback of earlier output cuts. This policy shift has sparked concerns that global supply could once again outpace demand, particularly in the context of a weakening economic outlook in major consumer markets.

The decision by OPEC+ to proceed with production hikes despite price volatility reflects a broader strategy of supply normalization. However, this move, combined with the potential for weaker demand due to economic softening in the United States and Europe, may limit the sustainability of the current price rebound.

Soft U.S. Economic Data Adds Headwinds to Oil Demand Outlook

Macroeconomic indicators in the U.S. are also weighing on market sentiment. Recent data revealed stagnation in the services sector in July, adding to signals of a broader economic deceleration. These figures contribute to market fears that slowing domestic activity could reduce near-term energy consumption, weakening the demand side of the oil equation.

Despite geopolitical premiums, traders remain cautious given these economic indicators. Forward-looking market gauges suggest a loosening of supply-demand balance, with front-month contract spreads narrowing an indication that physical markets may be entering a softer phase.

Mixed U.S. Inventory Signals Keep Traders Wary

Data from the petroleum industry has provided a mixed view of short-term supply conditions. U.S. crude inventories reportedly fell by 4.2 million barrels last week, suggesting a drawdown in domestic stockpiles. However, inventory levels at Cushing, Oklahoma the primary delivery point for WTI futures rose, along with distillate reserves. These conflicting signals complicate interpretations of short-term tightness versus longer-term oversupply.

An official inventory report is expected later, which could provide additional clarity. Until then, the market remains volatile, with investors weighing multiple, and at times contradictory, inputs from policy, macroeconomics, and physical inventory trends.

Oil Market Caught Between Geopolitical Risk and Economic Softening

The rebound in oil prices underscores the market's acute responsiveness to geopolitical developments, particularly those involving U.S.-Russia tensions and global energy trade disruptions. However, this upside is tempered by growing concerns over macroeconomic weakness and rising production levels.

The causal link between Trump’s tariff threats and near-term price action is evident, though the longer-term impact remains contingent on enforcement, global diplomatic responses, and structural supply adjustments. Meanwhile, OPEC+ actions and U.S. economic indicators continue to serve as critical variables in determining whether this rebound is temporary or the beginning of a new upward trend.

Source: Bloomberg

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Michelle

Economic

Stocks

Asian shares were mostly higher in muted trading Wednesday, after discouraging signs about the U.S. economy sent Wall Street shares declining.

Investors are sifting through a slew of corporate earnings reports to assess how businesses may have been affected by U.S. President Donald Trump’s tariffs.

Among Japanese companies, automakers Honda Motor Co. and Toyota Motor Corp. will report fiscal first quarter results this week, as will electronics and entertainment company Sony Corp.

Japan’s benchmark Nikkei 225 rose 0.6% to finish at 40,794.86. Australia’s S&P/ASX 200 added 0.8% to 8,843.70. South Korea’s Kospi was little changed, gaining less than 0.1% to 3,198.14.

Hong Kong’s Hang Seng rose 0.2% to 24,958.75, while the Shanghai Composite gained 0.8% to 3,633.99.

U.S. futures were up 0.5%.

On Tuesday, the S&P 500 fell 0.5% to 6,299.19, coming off a whipsaw stretch where it went from its worst day since May to its best since May. The Dow Jones Industrial Average dropped 0.1% to 44,111.74, and the Nasdaq composite fell 0.7% to 20,916.55.

A weaker-than-expected report on activity for U.S. businesses in services industries like transportation and retail added to worries that Trump’s tariffs may be hurting the economy. But conversely such indicators raise hopes the Federal Reserve may cut interest rates. That along with a stream of stronger-than-expected profit reports from U.S. companies helped to keep losses in check. The S&P 500 remains within 1.4% of its record.

The pressure is on companies to report bigger profits after the U.S. stock market surged to record after record from a low point in April. The big rally fueled criticism that the broad market had become too expensive.

For stock prices to look like better bargains, companies could produce bigger profits, or interest rates could fall. The latter may happen in September, when the Fed has its next policy meeting.

Expectations have built sharply for a rate cut at that meeting since a report on the U.S. job market on Friday came in much weaker than economists expected. Lower interest rates would make stocks look less expensive, while also giving the overall economy a boost. The potential downside is that they could push inflation higher.

Treasury yields sank sharply after Friday’s release of the jobs report, and they haven’t recovered. The yield on the 10-year Treasury eased to 4.19% from 4.22% late Monday and from 4.39% just before the release of the jobs report. That’s a significant move for the bond market.

In energy trading, benchmark U.S. crude rose 57 cents to $65.73 a barrel. Brent crude, the international standard, added 64 cents to $68.28 a barrel.

In currency trading, the U.S. dollar edged up to 147.66 Japanese yen from 147.61 yen. The euro cost $1.1575, down from $1.1579.

Source: BNN BIoomberg

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Risk Warnings and Disclaimers

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Gerik

Economic

Revised Data Reveals Stronger-than-Expected Retail Momentum

The euro zone retail sector showed unexpected strength in June 2025, with sales rising by 3.1% compared to the same month last year, according to new figures from Eurostat. This figure exceeded the 2.6% increase anticipated by economists and reflects an upward revision to previous months' performance, signaling a more robust trajectory for consumer spending than initially assumed.

Although monthly retail growth for June came in at 0.3%, slightly below the 0.4% forecast, revisions to April and May data altered the underlying trend, leading to a stronger annual performance. The cumulative effect of these adjustments suggests that the euro zone economy is withstanding external pressures more effectively than earlier projections had implied.

Domestic Consumption Cushions Trade-Driven Headwinds

The upward revision to retail data reinforces the narrative that the euro zone’s internal demand is acting as a stabilizing force amid global trade volatility. Despite concerns that protectionist measures and weakening global trade flows might weigh on the region’s economic output, indicators such as GDP growth and consumer sentiment have remained resilient.

The 3.1% annual rise in retail sales was fueled by a 4.3% increase in non-food product purchases and a 4.0% gain in motor fuel sales. These categories point to broad-based consumer activity, which remains a key driver of overall economic health in the 20-member currency bloc.

Spain led the region with a 6.4% year-on-year increase in retail sales, while Germany also posted a strong performance with a 4.8% gain both above the euro zone average. These figures highlight how large euro zone economies are contributing disproportionately to the bloc’s retail recovery, driven by solid labor markets and wage growth.

Retail Data Suggests Structural Resilience Despite External Risks

The resilience in consumer spending suggests a decoupling between external trade tensions and internal economic activity, at least in the short term. While euro zone exports remain exposed to fluctuations in global trade policy, the domestic economy appears to be anchored by stable employment and improving disposable incomes.

This relationship is more correlational than causally immune external shocks can eventually transmit inward but for now, the data indicate that the euro zone’s economic foundation remains intact, helped by relatively low inflation and steady monetary policy from the European Central Bank.

The broader European Union mirrored the euro zone’s performance, with retail sales also increasing by 0.3% month-on-month and 3.1% year-on-year, suggesting that consumer resilience extends beyond the core economies.

Retail Sector Supports Euro Zone Growth Outlook

June’s stronger-than-expected retail sales reinforce the view that the euro zone is maintaining its economic footing despite geopolitical headwinds and trade frictions. The positive revisions to prior months and the strength in non-food and fuel-related spending suggest that domestic demand may continue to underpin growth into the third quarter.

While external risks persist, especially amid a global trade war and slowing industrial activity, the current momentum in household consumption provides a buffer that could delay or mitigate broader economic softening. Future data will need to confirm whether this trend is sustainable, particularly if inflationary pressures or monetary tightening re-emerge.

Source: Reuters

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Gerik

Economic

Concerns Over Monetary Tightening Amid Fragile Recovery

Ken Saito, a senior member of Japan’s ruling Liberal Democratic Party (LDP), has voiced strong concerns over potential interest rate hikes by the Bank of Japan (BOJ), arguing that the economy remains too fragile to withstand tighter monetary policy. His remarks reflect a growing divide between political leadership and monetary authorities as Japan grapples with mounting economic pressures, including the threat of U.S. tariffs.

Saito emphasized that if the BOJ acts too aggressively, it risks derailing Japan’s delicate recovery from decades of stagnation and low inflation. His position underscores a potential conflict between short-term political priorities such as stabilizing wages and corporate profitability and the BOJ’s longer-term goal of achieving sustainable inflation above 2%.

While inflation has been persistent enough to prompt a rate hike to 0.5% earlier this year, real interest rates remain deeply negative, and BOJ Governor Kazuo Ueda has indicated the possibility of further tightening. However, Saito argues that any such move must be carefully coordinated with government policy to avoid undermining wage growth and household consumption.

U.S. Tariffs Add Pressure to Japan’s Economic Outlook

A central factor in Saito’s caution is the anticipated impact of increased U.S. tariffs on Japanese exporters, particularly automakers. These levies threaten corporate margins and may hinder wage increases, which are crucial for the BOJ’s inflation outlook. While the central bank is concerned about rising prices, Saito’s comments suggest that policymakers must also account for how external shocks such as trade frictions may suppress domestic demand.

The link between higher tariffs and constrained wage growth is not merely coincidental but causally significant. If corporate profits are squeezed, firms are less likely to sustain salary increases, potentially stalling the demand-led inflation cycle the BOJ is trying to foster. As such, inflationary pressures may not be as durable as headline figures suggest, particularly if they stem more from cost-push than demand-pull dynamics.

Political Uncertainty Compounds Economic Risks

Saito’s warning comes at a time of heightened political instability. Following a disastrous electoral performance, the LDP and its junior coalition partner Komeito have lost control of both houses of parliament. This legislative deadlock complicates economic governance, especially as Prime Minister Shigeru Ishiba resists calls to resign.

Saito, who is widely viewed as a potential successor due to his experience in trade and economic policy, has called for Ishiba to step down to allow the formation of a new coalition government. He suggests the LDP should seek alignment with moderate opposition parties such as the Japan Innovation Party or the Democratic Party for the People.

This political maneuvering adds another layer of uncertainty to Japan’s policy landscape. If leadership change occurs, it could reshape fiscal priorities and influence the BOJ’s monetary trajectory. Conversely, prolonged political gridlock could stall necessary reforms or delay coordinated economic responses to external shocks.

Diverging Policy Paths: Growth Versus Discipline

Saito’s position also reflects a broader philosophical debate over Japan’s economic strategy. He has rejected calls from opposition parties to lower Japan’s sales tax, framing such moves as short-term populism. Instead, he advocates for policies that generate sustainable growth through rising wages and prices a vision that aligns loosely with the BOJ’s objectives but diverges on timing and method.

His remarks suggest a correlation between fiscal credibility and political stability. He argues that inconsistent leadership hampers policy continuity and weakens investor confidence. As such, the debate over BOJ rate hikes is not just a monetary issue it is a reflection of deeper structural tensions in Japanese economic policymaking.

Coordinated Strategy Needed in a Time of Economic and Political Crossroads

The tension between Japan’s political establishment and its central bank reflects a precarious economic moment. While the BOJ sees the need to raise interest rates to control inflation and normalize policy after years of ultra-loose monetary conditions, political leaders like Saito warn that the timing may be wrong amid trade shocks and electoral instability.

The effectiveness of Japan’s economic recovery now hinges on the ability of policymakers to synchronize monetary and fiscal tools while maintaining public trust. If misaligned, rate hikes could undermine fragile wage momentum and slow domestic consumption, counteracting inflation targets. A more collaborative and politically coherent approach may be needed to navigate the convergence of inflation, trade tensions, and political upheaval now confronting the Japanese economy.