News Block: Hot Inflation Hits Bitcoin Price, Paul Tudor Jones Issues 2027 Warning, Strategy vs. MSCI

Natalie Brunell (0:00)

Welcome to the Coin Stories News Block, powered exclusively by Ledn. I'm Natalie Brunell, and in about 10 minutes or less, I'll provide you with insightful updates on Bitcoin, financial markets, and the global economy. Everything you need to know in one block. Let's go.

Well, Bitcoin briefly dipped under $80,000 last week, for the first time in nearly a month, after inflation came in hot and raised concerns that the Fed could hike interest rates again. Prices are up 3.7 percent over the last year. Up from 3.4 the month before, with much of that increase driven by energy. Gasoline alone is up 34 percent from a year ago. The 10-year treasury yield is still above 5 percent, and that's one of the biggest factors pushing mortgage rates up. The Fed raised rates in September for the first time in more than three years, and now it has to decide at the end of this month whether to do it again. Rising prices are a major issue heading into the midterm elections, and a new report from Investopedia shows why. It put an updated price tag on the American Dream, which now costs $5.3 million. That's what it costs over a lifetime to buy a house, raise two kids, send them to college, own a couple of cars, take a vacation every year, pay for health care and retire. Now compare that to what people actually earn. Investopedia says the typical college graduate who works full time for 40 years will make only $3.6 million before taxes. Add 20 years of social security on top and it comes out to $4.1 million.

So one person's entire working life comes up more than $1 million short of the American dream. And of course, for many families, it now takes two incomes to afford a lifestyle that was once possible on just one. When you measure your life in dollars that lose value every year, the finish line keeps moving and that's the problem Bitcoin was built to solve. All right, Paul Tudor Jones went on CNBC last week and said, 2027 is going to be, in his words, really, really challenging for the stock market and that he plans to be short the entire year. Now, he's not worried about earnings. He's worried about where the money is going. For years, companies have been among the biggest buyers of stock, spending trillions buying back their own shares, which helped push stock prices higher. But now that could all reverse. SpaceX has already raised a massive amount of money selling shares and OpenAI and Anthropic could raise hundreds of billions more. Much of that money will go toward chips and data centers, while more shares flood the market. So instead of companies reducing the supply of stock, we're seeing more and more shares being issued. And Jones called it the most negative flow picture since 2002 Now, he's not calling for a crash tomorrow. And he actually thinks stocks can still rally into the end of the year. But what worries him is the federal deficit, because he says no politician will voluntarily cut spending. And eventually, a market crisis is going to force Washington's hand, the way that the 2008 financial crisis forced the bank bailouts. He puts the odds at 60% that we're already at that tipping point. And if he's right about 2027, don't expect Bitcoin to be immune in the short run, because last week, it sold off with everything else. But think about what he's actually describing. A government that can't stop borrowing, a market flooded with new shares, and a reckoning that eventually gets forced on Washington. That's the whole reason to own something nobody can print more of. And Jones himself has said Bitcoin has the greatest scarcity value of anything he's seen.

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Strategy & Metaplanet could get kicked out of the MSCI's global stock indices at the end of November because of new rules about what qualifies as an operating business. MSCI builds the indices that major investment funds follow. And last week, it finalized a rule targeting companies that function more like what they call investment funds than traditional businesses. The first test looks at whether more than half of a company's assets are tied to actual business operations. Strategy holds most of its assets in Bitcoin, so it could fail that test right away. But then come five more tests looking at things like how much the company spends running its business, whether it generates cash, where its profits come from, and whether it relies on raising money from investors to grow. If you fail four out of those five, you could be out. And MSCI's initial analysis flagged three companies, Strategy, Japan's Metaplanet, and a British company that holds uranium. The final list comes out November 11th, and investment funds that follow MSCI's indices own about 3% of Strategy's stock. So JP Morgan estimates that getting kicked out could force roughly $2.8 billion in selling. Strategy says that's less than what normally trades in a single day and argues that MSCI is using a definition of a non-operating company that doesn't even exist in standard accounting rules. The company's response was pretty blunt. Bitcoin doesn't need MSCI and neither does Strategy. Saylor has said the decision won't change how the company operates, but Strategy shares fell more than 11% last week, closing around $137.