SignalPlus Macro Analysis: GBTC Outflows Approaching Zero

In yesterday's price movement, the bullish trend seems to have shown slight cracks. First, in fixed income, the large-scale issuance of corporate bonds and government bonds has finally led to some indigestion. Following last week's $60 billion new bond supply, the market welcomed another $20 billion in corporate bond issuance on Monday, bringing the total issuance in February to $145 billion, just $5 billion short of last year's record high. Meanwhile, the issuance of 2-year and 5-year government bonds reached $63 billion and $64 billion respectively, with market demand for both auctions being relatively subdued, causing yields to rebound close to December's highs and erasing all gains made since the beginning of the year.

The stock market performed slightly better, although both the Nasdaq and SPX indices closed lower due to expectations of month-end rebalancing. Given that the SPX (+4.8%) has significantly outperformed U.S. Treasuries (-1.5%) this month, Wall Street estimates that a considerable amount of rebalancing funds will shift towards the bond market in the coming days.

Despite the soaring stock prices, investors continue to flock to the stock market, with only the net position in Hong Kong stocks showing a negative trend. According to a survey by Bank of America, the proportion of investors expecting the U.S. economy to not land (i.e., not enter a recession) has risen to 41%.

Speaking of FOMO, as of the time of writing, BTC has surged to nearly $57,000, and the market seems to be entering an accumulation phase. Microstrategy announced an additional purchase of $150 million in BTC (with a total holding of nearly $10 billion, at a cost as low as $31,000!), which has once again boosted market confidence. Additionally, the outflow of GBTC has decreased, and funds continue to flow into new ETFs, further supporting the narrative of mainstream market participation.

At the same time, ECB analysts took this opportunity to reiterate that despite the approval of ETFs, "cryptocurrencies have no value," as this asset has no intrinsic value (or similar). Perhaps for central bank officials, purchasing negative-yielding bonds (around 2016-2021) is a better "investment decision" for pensions…