This week, the digital asset market is frozen in anticipation of two landmark events: the release of Nvidia's financial report on Wednesday and a speech by Federal Reserve Chairman Kevin Warsh in Jackson Hole on Friday. However, as my analysis shows, neither of these events will trigger a decisive move in the leading cryptocurrency. The stock market, which often sets the tone for risk assets, has long since priced in future corporate earnings, so the reaction to this news will be minimal.
Jenny Harrington, managing director of Gilman Hill Asset Management, rightly notes that this year's stock rally has been driven solely by companies' fundamental performance, not by individual reports or regulator statements. This argument directly extends to the crypto market, where investors are paying less and less attention to one-off news triggers, focusing instead on global liquidity.
Liquidity — the main driver
The key factor that truly moves bitcoin is the inflow of liquidity. Last week, the U.S. Treasury expanded its bond buyback program, which noticeably reduced yields on long-dated securities and triggered a powerful momentum in digital currencies. Gautam Chhugani, senior analyst at Bernstein, rightly calls this a historical pattern rather than a coincidence. Bitcoin has traditionally been a beneficiary of an expanding money supply, and the current rise above $75,000 is direct confirmation of that.
Arthur Hayes, co-founder of BitMEX, follows similar logic: the Treasury's actions had a far more significant impact than any verbal interventions. In this context, Friday's rhetoric from Warsh takes a back seat, although it remains an important indicator for the stock market.
Hidden risks and new variables
Some specialists, including analysts at QCP Capital, believe the market has not yet fully priced in the changes that have occurred. Bitcoin remains in its previous range without breaking its boundaries, which points to uncertainty. Oscar Munoz from TD Securities adds intrigue: Warsh has barely spoken publicly since May, and confidence in the Fed has been shaken. His speech on Friday could seriously sway markets if he touches on monetary policy issues.
The personal factor also deserves special attention. Warsh sold his own digital asset portfolio before being confirmed as Fed Chairman, and appointed a person who invests in bitcoin to the position of co-chair of the relevant working group. Any phrase he utters about cryptocurrency regulation could move the market regardless of talk about interest rates.
My conclusion: the stock market can afford to ignore these events because earnings are already priced in. Cryptocurrencies do not have such a cushion, so the argument that "everything is already accounted for" does not work here. Investors should prepare for heightened volatility, especially if Warsh makes unexpected statements about digital assets.