ETF outflows pin Bitcoin at $77k as gold nears $5,000, safe-haven flows bypass crypto
Digital Asset Market: Bitcoin’s modest recovery from weekend lows appears to be stalling as its price slips back to around $77,000, losing 2% in the past day, while Ether has dropped even more significantly. Precious metals, on the other hand, have renewed their rallies, with silver gaining nearly 15% and gold approaching the $5,000 per ounce level after climbing 6.5%. U.S. tech stocks, especially those tied to AI, such as Nvidia and Oracle, are leading the Nasdaq's decline. Shares of major crypto-related firms like MicroStrategy, Coinbase, and Circle have also fallen, while some bitcoin miners-turned AI-infrastructure providers like TeraWulf and Cipher Mining are posting gains due to expansion and new projects. Options market activity suggests traders expect only a temporary rebound in bitcoin and are heavily seeking protection against further declines, a stance reminiscent of April 2025 market behavior. Analysts are waiting for volatility to settle and for the options curve to return to normal before calling a bottom in bitcoin’s price.
Macro Economics: Gold and silver prices have rebounded sharply after experiencing their steepest declines in over a decade, with spot gold rising as much as 6.2% to nearly $4,950 an ounce and silver jumping over 10% to more than $87 an ounce. These gains followed a speculative rally last month driven by geopolitical tensions, concerns about the Federal Reserve’s independence, and large investments from both Chinese and Western traders, which abruptly collapsed last week amid warnings of excessive gains. Despite the recent correction, many banks, including Deutsche Bank, remain bullish on gold’s longer-term prospects, with forecasts as high as $6,000 an ounce. The dip has attracted bargain hunters, especially in China, ahead of the Lunar New Year, while ongoing geopolitical risks and a weak dollar continue to support precious metal prices. However, a breakthrough in US-Iran nuclear talks could reduce gold’s appeal as a safe haven.
Equities: The Dow Jones Industrial Average briefly hit a record high as investors shifted from technology stocks toward sectors more tied to economic growth, sending the Dow up 0.2% while the S&P 500 and Nasdaq fell amid declines in tech giants like Nvidia and Microsoft. Merck led Dow gainers, surging over 3% on strong earnings from its cancer drug Keytruda, while Pepsi shares rose 4% after solid sales growth. Banks, including JPMorgan and Wells Fargo, also traded higher, and Palantir jumped 6% on upbeat results. However, tech stocks broadly lagged, with software companies such as ServiceNow and Salesforce dropping sharply. Despite volatility, positive factors such as the Fed’s dovish stance and ongoing AI optimism remain market tailwinds, supported by a rebound in gold and silver prices. Meanwhile, investors are closely watching a packed week of earnings, especially tech giants like Amazon and Alphabet, for further signs of AI-driven growth and efficiency.
The Fed and US Treasury: U.S. Treasury yields increased on Monday as investors responded to strong economic data and considered the effect of President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair. The yield on the 10-year Treasury rose above 4.28%, with the 2-year and 30-year yields also climbing by more than 4 basis points each. The latest ISM manufacturing index for January came in at a robust 52.6, well above expectations and signaling expansion after more than two years of contraction, which boosted business confidence. Investors are now watching the ADP employment survey for more labor market insight, as the official jobs report is delayed by a partial government shutdown. Sentiment has also been shaped by the Federal Reserve’s recent signals of an improving economic outlook, which has led investors to believe that further interest rate cuts will be postponed.
Geopolitical: Iranian media reports that the US aircraft carrier Abraham Lincoln has moved away from the Iranian coast near Yemen, which is seen as creating space for diplomatic efforts between Tehran and Washington and potentially reducing the chance of military conflict. In response, oil markets have begun to give back the risk premium associated with heightened tensions over Iran as traders refocus on supply concerns. As regional intermediaries such as Turkey, Egypt, and Qatar work to lower tensions, Iranian officials, including Foreign Minister Abbas Araghchi and President Masoud Pezeshkian, have signaled a willingness to pursue direct talks with the US, provided the talks are not conducted under threats or unreasonable demands. Meanwhile, a possible meeting between American envoy Steve Witkoff and Araghchi is being planned in Istanbul, raising hopes for renewed negotiations on the nuclear issue, though the situation remains uncertain. Observers like Trita Parsi argue that Iran sees little risk in trying a diplomatic approach at this stage.
View from our desk
Bitcoin resistance cap fights back
Bitcoin and other majors are back on defense as ETF outflows and investor fatigue keep rallies shallow and selloffs sticky. The tone has shifted from “institutional bid” to “position reduction,” as shown by softer derivatives demand, thinner risk appetite, and fewer credible near-term catalysts to reprice expectations higher.
What matters now is asymmetry. Without a clear policy tailwind (Treasury stance, regulatory clarity, or a credible legislative path), the market is left to grind on flows and macro, where downside sensitivity is higher than upside convexity. In that setup, any incremental regulatory, credit, or liquidity shock can quickly widen risk premia and push spot prices through prior support levels.
Net: downside risk remains elevated versus upside opportunity until flows stabilize and a durable catalyst emerges. If that doesn’t materialize, “resistance cap” becomes the operating regime, with bounces sold, volatility sticky, and positioning defensive across BTC, ETH, and high beta.
Trump Homes Plan must guard against Wall Street landlords
“Trump Homes” could be a real supply-side swing at affordability if it actually puts a million entry-level units into the market and converts renters into owners. Partnering with major builders can move faster than purely public programs, and tying capital to new construction is directionally positive for jobs, supply, and household balance sheets.
The risk is incentive misalignment. A rent-to-own label is not the same thing as an attainable ownership path, and institutional capital will optimize for yield and control unless the rules force conversion. Without tight guardrails, the program can unintentionally expand the single-family rental pipeline and entrench “permanent renter” dynamics, especially if contracts include punitive resets, opaque fees, or weak purchase options.
Safeguards should be explicit: standardized purchase option terms, transparent pricing mechanisms, limits on bulk ownership concentration, and clear enforcement that allows renters to actually exercise the path to ownership. Done right, it expands ownership. Done loosely, it subsidizes the landlord scale.
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The 1Konto Team
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