Arthur Hayes: I bet that Bitcoin will surpass $110,000 before retracing to $76,500

Bitcoin has fallen more than 2% in the past 24 hours, trading at around $62,380. Market expectations of a Federal Reserve (Fed) interest rate hike as early as July have risen sharply: funding markets now put the probability of a rate hike this month at roughly 50%, up from only about 10% just a few days ago. The shift in expectations stems from Fed Governor Christopher Waller’s remarks that officials may need to raise rates to curb price pressures. U.S. two-year Treasury yields have since climbed to 4.29%, hitting their highest level since the start of last year. Escalating U.S.-Iran tensions and a sharp rally in oil prices have also amplified inflation concerns: WTI crude oil futures have risen from $67 per barrel at the start of the month to nearly $80 per barrel. The U.S. Labor Department will release June’s Consumer Price Index (CPI) on Tuesday. Economists surveyed by Bloomberg expect the year-over-year rise in headline CPI to fall below 4%, with both headline and core inflation likely seeing their first monthly decline since January; May’s figures were 4.2% and 2.9% respectively. However, the recent oil price surge may lead markets to view this CPI data as a lagging indicator. If inflation proves more persistent, it could further intensify rate hike fears. Markets will next focus on Federal Reserve Chair Jerome Powell’s testimony before Congress. ING analysts note Powell can emphasize that inflation expectations remain relatively moderate, and there is sufficient basis to keep interest rates unchanged; even if a rate hike is ultimately delivered, it could be reversed shortly after, with future rate cuts likely to exceed hikes in magnitude.

According to Cboe data, the U.S. stock market's VIX volatility index is currently at 17.16, up 2.13 points from its previous close of 15.03, marking a 14.17% daily gain. Still, it remains within the normal fluctuation range and has not entered panic territory. Separately, data from Alternative.me shows today’s Crypto Fear & Greed Index stands at 22, down from 26 yesterday, returning to the "extreme fear" zone.

According to Bitget market data, the Nanfang 2x Long SK Hynix ETF’s decline has widened to 18%, while the Nanfang 2x Long Samsung Electronics ETF is down 6.6%.

Data released by the Bank of Korea on Tuesday shows that despite the South Korean stock market rising on the back of tech stocks, foreign investors were net sellers of South Korean stocks for the fifth consecutive month in June. According to the BOK, foreign investors net sold a total of $30.72 billion worth of South Korean stocks and bonds in June, following a net sell of $26.15 billion in May. They have remained net sellers since February. The Bank of Korea noted that concerns over overheating investment in AI infrastructure have dampened investor sentiment, leading to an expansion in foreign investors' net sell volume compared to the previous month. It added that as South Korean equities rose, foreign investors reduced their stock holdings during portfolio rebalancing, further accelerating net capital outflows. (Jinshi)

Morgan Stanley analyst Brian Nowak believes that large tech companies’ capital expenditures (capex) on AI data centers have not yet peaked, and market concerns about a slowdown in AI investment may be premature. The bank raised its capex forecasts for Amazon, Meta, and Google, projecting that AI data center spending by major platforms including Meta, Amazon, Alphabet, Microsoft, and SpaceX will hit around $1.2 trillion in 2027 and rise further to roughly $1.4 trillion in 2028. Morgan Stanley noted that supply chain bottlenecks, surging computing power demand, and higher costs of key components are pushing hyperscalers to accelerate their construction pace. The bank forecasts Meta’s 2028 capex will reach about $250 billion, Amazon’s at roughly $318 billion, and Google’s 2027 capex at approximately $350 billion. Nowak remains bullish on the long-term returns of AI investments for these firms and maintains positive ratings for Meta and Amazon.

South Korean exchanges have implemented a suspension of algorithmic trading for the KOSDAQ. (Jinshi)