The Passive Bid Has Already Come for Crypto

One of the most important trends underpinning markets today is the passive bid.

That’s simply the term for the fact that money comes into the market. If you’re participating in a 401(k) plan, you’re part of the passive bid. Each payday, the money that gets deducted from your paycheck goes into your investment funds.

In turn, that money moves down to individual stocks that get bought up. Payday after payday after payday.

In time, this trend could reverse. A rising unemployment rate. Higher withdrawals from retirees from stocks as they shift to bonds.

Until that shift changes, it’s a structural reason why stocks are the best game in town – and why investors should buy market pullbacks.

Today, the passive bid is also drawing capital to crypto. Just consider how Vanguard’s small-cap ETFs are regular buyers of Strategy:

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Vanguard’s Strategy holdings now top 8% of the company – and rising

Strategy – formerly MicroStrategy, until its market cap hit $100 billion – is best known today for aggressively buying bitcoin and holding it. Given that Strategy is in a number of funds, there’s already passive money flowing to shares today.

The money flowing to Strategy could soar even higher if the company is added to the S&P 500 later in the year.

For now, we prefer bitcoin to Strategy, given that shares trade at a premium to their bitcoin holdings. With positive crypto legislation on deck from Congress this week, however, expect both bitcoin and Strategy shares to add to their recent gains.

~ Andrew

This is Elon Musk’s Next Tech Disruption…

And it could turn the entire AI market upside down.

Click here to see the details and learn how to prepare.

P.S. We see cryptocurrencies as a key part of President Trump’s Great Reset plan. However, it’s more likely that stablecoins, rather than bitcoin, Ethereum or the like, will get the most attention in the coming months.

Stablecoins take a dollar, issue a token, and then the process is reversed at some point. But stablecoins also invest those dollars into U.S. Treasurys. With stablecoin demand increasing, it could become the lynchpin for refinancing America’s debt at a reasonable interest rate.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

One of the most important trends underpinning markets today is the passive bid.

In turn, that money moves down to individual stocks that get bought up. Payday after payday after payday.

In time, this trend could reverse. A rising unemployment rate. Higher withdrawals from retirees from stocks as they shift to bonds.

Until that shift changes, it’s a structural reason why stocks are the best game in town – and why investors should buy market pullbacks.

Today, the passive bid is also drawing capital to crypto. Just consider how Vanguard’s small-cap ETFs are regular buyers of Strategy:

Turn Your Images On

Vanguard’s Strategy holdings now top 8% of the company – and rising

The money flowing to Strategy could soar even higher if the company is added to the S&P 500 later in the year.

~ Andrew

This is Elon Musk’s Next Tech Disruption…

And it could turn the entire AI market upside down.

Click here to see the details and learn how to prepare.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

Mining stocks amplify everything. First Majestic went from losing money to 45% margins without building anything new. They just held the line on costs while silver did the heavy lifting.

That cuts both ways. If silver drops hard, margins compress just as fast. Same leverage, opposite direction.

The miners with the lowest costs and cleanest balance sheets will hold up best in a pullback and capture the most upside if the deficit keeps grinding.

Economists at Goldman Sachs said this morning they expect core inflation to finish the year around 2% even while GDP rises at a “surprisingly strong” 2.5% clip.

In our view, their inflation forecast is optimistic. Their GDP call? Modest.

The last time we pumped this much liquidity into the system — 2020 through 2022—the result was a manic asset bubble, runaway inflation, and an epic hangover at the Fed.

Goldman’s optimism has triggered a fresh round of bullish bets: cyclical stocks are rallying, “dispersion” in the S&P 500 is spiking, and the Fed is expected to cut interest rates twice before Jerome Powell gets kicked out of Washington at the end of his term on May 15.

Anecdotally, we’re hearing stories of warehouses full of GPUs sitting unused for lack of energy to power them. It’s a natural feature of the heavy capital investment in new machines. The grid has to catch up!

While Trump’s great reset rolls on in 2026, keep an eye on modular nuclear reactors and increased demand for uranium, natural gas and related resources.

These PM producers are literally printing the most ‘hard money’ that they ever have at these metals prices and record margins here at the midway point in Q4.

If there ever was a time for this sector to get overheated and frothy, this would be it… only that isn’t what we’ve seen playing out.

PM producers are still insanely profitable at even at current metals prices and should be far more valuable based on their margins, revenue generating potential, and their resources still in the ground.