Macro Dragon WK # 22: Crypto's Freefall & Biden Infra-Bill Downgraded to $1.7trn from $2.25trn... Macro Dragon WK # 22: Crypto's Freefall & Biden Infra-Bill Downgraded to $1.7trn from $2.25trn... Macro Dragon WK # 22: Crypto's Freefall & Biden Infra-Bill Downgraded to $1.7trn from $2.25trn...

Macro Dragon WK # 22: Crypto's Freefall & Biden Infra-Bill Downgraded to $1.7trn from $2.25trn...

Macro 8 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Cross-Asset Quasi-Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.

(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

Macro Dragon WK # 22: Crypto's Freefall & Biden Infra-Bill Downgraded to $1.7trn from $2.3trn...

Top of Mind…

Crypt - WK 22

Source: Bloomberg & Saxo Bank

  • Worth noting that the Fed’s Brainard should be speaking at a crypto conference later today, which is that much more interesting given the IRS news last wk that’s transfers of more than USD10k in Bitcoin have to be reported to the IRS (& yes, that is continued legitimization, institutionalization, governmentalization…).
  • The Soprano fans – remember Furio? That was one of the best closing episodes when he knocks on the door of the loan shark that was giving Tony’s restraint bud a hard time – will remember Carmela Soprano, practicing risk management, wealth preservation & optionality by opening multiple accounts & depositing sub USD10K (i.e. banks don’t have to declare it). She also took it a step further, by correctly assessing the family business as high risk, she allocated the deposits to low risk investments like treasuries & money market funds.    
  • The second is Biden, where we are seeing an infra bill that KVP originally believes had a +$3trn handle, go to $2.25trn & now has been diluted to $1.7trn. Now, intuitively from a spending negotiation context, one starts of with X & the deal is closed at a discount to X. Yet this is shaving a clean $500bn off & we are still not clear on a Dem/Rep agreement on the deal.
  • The potential near-term signal here is that, this administration may not be spending as much as was originally envisaged. And irrespective of whether that ends up being true or false, what it likely does is put a cap on US nominal yields (i.e. not as much debt coming as we envisaged just a wk ago), on inflation expectations & real yields.
  • What it may also do is put a floor on some of the growth tech names that have been getting hammered, whilst their value, cyclical cousins have massively outperformed. Whether this is a permanent floor, or just some MR between the two groups will remain to be seen.
  • Yet last wk’s charts & price action alongside the likes of Peloton (chk out piece on this from last Tue: Reflections on Peloton [PTON] $92, -46% from its peak, +15% from recent lows), Coinbase, Palantir, AirBnB, Beyond Meat, Compass Pathways & even the now infamous ARK ETF – suggest that those names & that genre is trying to put in a floor.
  • Harder to know if there is a bigger effect on the USD, gold (likely still all about real rates), crypto, global currencies. Yet it should not be positive for commodities for a variety of different reasons:
  • 1. They’ve had an epic YTD start (just think annualized, most commodities are on track for +50% to +100% for the year), so folks are sitting on a lot of profits & the noise continues
  • 2. We know there are covid-induced supply constraints that are going to be coming off over the next few quarters as the world opens up
  • 3. It’s a super crowded trade & crowded narrative – this does not make it wrong, yet makes it prevalent to sharp positioning rinsing
  • 4. Does not look like we will be getting as much spending done by Biden as we thought just a week back – think of it this way, how much harder is it going to be to get more fiscal bills through, once the US has fully reopened & we have regained c. 6 to 8m of the lost jobs since pre-Covid?
  • 5. The 2, 5 & 10yr break-even inflation charts [respectively 2.82%, 2.64% & 2.45%] have reversed sharply from previous highs – whether this is a consolidation & break before moving higher, or start of a reversal remains to be seen.

BE - Wk 22

Source: Bloomberg & Saxo Bank

Rest of the Week & Other Reflections

  • US will see 2nd reading on 1Q GDP 6.5%e 6.4%p, core PCE which will likely be key focus, as well as personal income, personal spending, durable goods & the weekly Thu jobless figures.
  • CH is data light this wk. Europe has final German 1Q GDP, GER IFO index, as well as regional CPI & GDP data out of France. UK has house prices & housing sector borrowing due.   
  • CB: Indonesia 3.50%e/p, New Zealand 0.25%e/p, South Korea 0.50%e/p
  • Fed speak: Brainard (later Mon @ a crypto conference! Is she a HODLer?), Bostic, Evans, Quarles.
  • BoE’s Bailey speaking on Mon
  • Hols: Quite a few countries are out today including Germany, France, Switzerland & Canada. Worth noting the US should be out next Mon, 31 May on Memorial Day. So long wkd coming up in the US.    
  • Dragon Interviews U-Tube Channel for easier play-ability…


Start<>End = Gratitude + Integrity + Vision + Tenacity | Process > Outcome | Sizing > Position.

This is The Way




Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.