Ndax Wealth: Market Report Sept 22

Bitcoin traded near $86,500 USD, its highest level since January, after absorbing the Federal Reserve's first rate increase since 2023 and the Bank of Japan's move to 1.25%. Long-dated Treasury yields pushed toward 5% and the U.S. dollar strengthened, while equities finished mixed with technology and semiconductors leading and rate-sensitive sectors under pressure. This week brings Fed speakers, preliminary U.S. PMIs and consumer data.

Through the noise: Bitcoin traded near $86,500 USD, its highest level since January, despite the Federal Reserve's first rate increase since 2023, the Bank of Japan's move to 1.25%, and the U.S. Senate's failure to advance the CLARITY Act. U.S. spot Bitcoin ETFs saw sizeable mid-week redemptions before recovering with approximately $433 million USD of inflows on Friday. The SEC introduced an exemption allowing qualifying venues to facilitate tokenized securities through blockchain infrastructure, while the CFTC advanced additional digital-asset rulemaking.

Participation broadened beyond Bitcoin. Ethereum and Solana advanced alongside Bitcoin, while Avalanche (AVAX) gained more than 50% over the week, Uniswap (UNI) approximately 40%, and Hyperliquid roughly 18% at record highs. The Altcoin Season Index rose to 58 from 44 a week earlier, with strongest performance in trading infrastructure, tokenization and decentralized finance.

The next signals: Whether broader participation can persist alongside elevated global yields and upcoming U.S. inflation and consumer data. 

Central banks tighten: The Federal Reserve unanimously raised the federal funds target range by 25 basis points to 3.75% to 4.00%, its first increase since 2023. Most officials projected at least one additional increase this year, while the Fed modestly raised its 2026 growth and inflation forecasts. August inflation reached 3.4% year-over-year, and elevated energy costs continue to complicate the outlook. The Bank of Japan also raised its benchmark rate to 1.25%.

The next phase: Several Federal Reserve officials speak this week, providing an opportunity to clarify conditions for another adjustment. Preliminary U.S. PMIs, jobless claims, new-home sales, durable-goods orders and consumer sentiment are due. Oil has eased as shipping through the Strait of Hormuz improves, while renewed U.S.-China discussions may provide further clarity on trade. 

Absorbing the hike: The Nasdaq finished the week higher while the Dow declined and the S&P 500 remained comparatively stable. Technology and semiconductors continued to provide support, while financials and rate-sensitive areas experienced greater pressure as the 10-year approached 5%. Higher rates have raised the threshold for what investors are willing to pay for future earnings, with visible revenue growth and returns on capital expenditure generally more resilient.

Semiconductor shares including Broadcom and Micron advanced during the week, while parts of the broader technology complex faced greater scrutiny over the scale and financing of AI infrastructure investment. Expectations for Q3 corporate earnings remain strong ahead of the reporting season beginning in October. 

Yields toward 5%: The 10-year Treasury yield briefly reached its highest level since 2007 while the 30-year moved above 5.4%. Fiscal deficits, heavy Treasury issuance and competition for capital from AI infrastructure investment contributed to elevated term premiums. The U.S. dollar strengthened following the Fed decision, while USD/JPY remained elevated even after the Bank of Japan's rate increase.

Gold holds, oil eases: Gold remained comparatively resilient despite historically high real yields, supported by ongoing geopolitical and fiscal uncertainty. Brent retreated after testing substantially higher levels as shipping through the Strait of Hormuz improved and diplomatic efforts intensified. 

• Strategy purchased 950 BTC for $75.7 million USD, bringing its total holdings to 846,000 BTC. (CoinDesk)
• The CFTC submitted new crypto market regulations to the White House as it moves forward with rulemaking. (The Block)
• Ethereum developers scheduled the Glamsterdam testnet upgrade for October 6 while flagging potential testing risks. (CoinDesk)
• The U.S. Treasury alleged Iran has used Bitcoin to process Strait of Hormuz passage fees since June. (CoinDesk) 

With Bitcoin trading near $86,544 USD and long-dated Treasury yields approaching 5%, market conditions remain active across asset classes. Whether you're looking to add exposure or manage risk, our OTC desk can help you move efficiently. Please reach out any time for more information about trading or available services.