Cryptocurrency majors held their ground on Tuesday despite a sharp turn in the macro market relative to risk assets.
Bitcoin It was trading just above $81,000 in early Asian trade on Tuesday, after briefly touching $82,026 overnight. Solana (SOL) and The major stock indexes performed best, rising as much as 2% on the day. BNB rose 1.7% to $662, XRP was unchanged at $1.46, up 0.9% on the day, while Ethereum fell 0.8%.
Investor Michael Burry, best known for calling the 2008 housing market crash in “The Big Short,” warned in a Substack article that the Nasdaq 100 is trading at a price-to-earnings ratio of 43 times, well above the implied level of about 30 times, and likened the current situation to “the minutes before a bloody car crash.”
Burry sees the Philadelphia Semiconductor Index’s 70% rise since late March as central to what he calls a parabolic surge in technology valuations, advising readers to take profits and reduce exposure to artificial intelligence trades.
“Wall Street may be overstating the earnings of our fastest-growing and most highly valued companies by more than 50%,” Burry wrote.
Brent crude oil prices rose nearly 1% to over $105 a barrel after President Donald Trump expressed doubts about a ceasefire with Iran on Monday, raising concerns that the closure of the Strait of Hormuz will be extended. The 10-year Treasury yield rose to 4.42%, and the dollar strengthened against all G10 currencies on safe-haven demand.
Asian stocks retreated from all-time highs. South Korea’s Kospi fell 5.1% intraday after a top South Korean policymaker proposed paying citizens dividends funded by a tax on artificial intelligence profits, a comment that sparked wild swings as investors tried to parse the scope of the proposal.
The MSCI Asia Pacific index swung between gains and losses. European futures opened down 0.6%. U.S. futures edged lower after the S&P 500 closed at a record high on Monday, ending a six-week winning streak of more than 16%, its strongest gain since the global financial crisis.
Bitcoin’s price action may be tested later on Tuesday as investors will focus on U.S. inflation data, which will show the extent to which war-driven price pressures have affected consumer prices and could affect the outlook for the Federal Reserve’s interest rate decision.
Fresh Iran tensions and hot data outside of Bury’s bearish expectations will put real pressure on the AI trade thesis underpinning stock market gains, while soft print has room to buy risk assets, including cryptocurrencies, for another week.
