What Is Bitcoin Telling Us Now?

1) CHEAP – Cheap is always a relative term, and not one I tend to use much in the world of investment analysis and management. But the last time the Nasdaq 100 traded this cheaply versus the S&P 500, it staged its biggest outperformance in a year. Honestly, that's tough to ignore. Many of the big Nasdaq 100 names (think Nvidia, Meta, Tesla, etc.) are also in the S&P 500. Now, can “cheap” get cheaper? Sure. But by historical standards, this is an interesting spot.

2) BITCOIN – When in doubt, zoom out, is the old adage. Prices trend, and the best way to see that is to “zoom out.” Q1 is now past, and this is the time to see what is trending and what is standing out. While most stocks were getting hit in March, Bitcoin went the other way. To be fair, it is still trending down since OCT 2025 and may still have downside volatility in it. But while the median S&P 500 stock was down about 5% last month...Bitcoin was up. That’s not what people expected. And that’s exactly why it matters. Bitcoin held right around that former resistance from the prior cycle. The same level that capped prices for years is now being tested as potential support. Why is this valuable? Well, based on how it has acted, we know that Bitcoin is not an inflation hedge. It’s not a currency hedge, and it’s definitely not protection when stocks are falling. Bitcoin is a risk asset. We can argue about that all day, but price movement is price movement. When risk appetite is there, it participates. When it’s not, it gets hit. And yet, in a month where most stocks were under pressure, Bitcoin was higher and that is saying something. But at the end of the day, Bitcoin is volatile (about a 50 vol asset) and a swing back toward long term support near $60,000 would also not be surprising.

3) INFLATION – According to Truflation, the US inflation index went down quite significantly today from 1.77% to 1.26%. The Truflation CPI often shows larger monthly shifts on the 1st of each month because multiple data providers update their data. This time, the shift is downwards and unusually strong, highlighting multiple sticky deflationary trends across major categories, while gasoline prices continue to go up and have driven inflation higher over the past month. Main Drivers = Transport (-0.17%) - Used and new car price inflation is decreasing despite being offset by gasoline prices going up. Food (-0.10%) - Food at home and food away from home inflation is dropping. Utilities (-0.10%) - Natural gas prices are declining. Housing (-0.09%) - Prices are dropping across all three sub-categories: rented, owned, and other lodgings. Now, before we get excited about declining inflation, “deflation” isn’t great for an economy either. There’s a balance that needs to be kept. Right now, rates suggest inflation is still the stronger force. So was this dip a blip? Maybe. We’ll see how the data continues to trend, much of which will depend on oil prices.