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.)

I’m obviously very biased against socialism. I don’t think socialism has solutions to these problems. I don’t think Mamdani particularly has solutions. I don’t think you can socialize housing. If you just impose rent controls, then you probably have even less housing, and eventually, it’s even more expensive.

But to Mamdani’s credit, he at least talked about these problems. So my cop-out answer is always to say: The first step is to talk about the problems, even if you don’t know what to do about them. There’s been a failure of, let’s say, the center left-center right establishment to even talk about them.

According to Global Markets Investor, 655 large U.S. companies have already gone bankrupt this year, the most in 15 years. Not yet a “recession,” per se, but a perceptibly slow tightening of the vise.

Credit conditions are stiff. Debt is heavy. Tariffs are pushing up costs. Consumers are fatigued. The Fed may pause in December.

Industrials lead the pack, followed by consumer discretionary and healthcare.

Stocks have developed a habit of selling off into the weekend before rebounding this year.

One big explanation might be that traders don’t want to be leveraged going into two days where the market’s closed in New York – but stay open online.

Any random Trump tweet can and has moved the market!

Ostensibly, if the weekend is quiet, stocks can recoup their Thursday/Friday declines.

What we’ve seen since 2008 is nothing short of a theft of the commons. Except it happened in little pieces that seemed unrelated at the time. But if we look at the story holistically, it all comes together.

When we step back and view the entire picture, what emerges is not just a story of market excesses and economic shifts. What we see is the gutting of middle America – be it intentional or otherwise.