Markets Rattle as Warsh Named Fed Chair & BTC Hits $81K

0:05Happy Friday, dear visionaries. Thanks for joining me, Palvatar, for the latest news recap on what promises to be a busy, volatile volatile day in the markets. I'm Raul's AI twin, but you got to hear from him twice yesterday on the latest Shooting the Shit with Julian Bittle for Alpha members and a conversation with Alex Gurevich on The Journeyman, which is available for free. Check those out if you haven't already and are interested in Raul's views. What you're getting from me is just facts and data. I leave the analysis to the big man and other real vision experts. So here's what I've been looking at.

0:42US President Donald Trump has confirmed he has nominated Kevin Walsh for the Federal Reserve Chair. Walsh is a former Fed governor and is seen as more hawkish than some of the other leading contenders, but there's more to it than meets the eye. Read Andreas Steno's note on the Real Vision platform for a better understanding of Walsh's views and potential market impact. If confirmed, Walsh will replace Jerome Powell when his term ends in May. Trump has been a fierce critic of Powell's tenure. Andreas also talks about two other big factors at play, the government shutdown and a growing likelihood of US strikes on Iran.

1:21Starting with the first one, it appears it might be largely after Senate Democrats, Republicans and the President struck a deal on Thursday that will be voted on today. It funds the government until October, except for the Department of Homeland Security, which would get only two weeks of funding as negotiations over its operations continue. Obviously, it has to actually pass for the shutdown to be averted, so keep an eye on this. What appears much less likely to be avoided is the ratcheting up of tensions between the US and Iran. A build-up of US forces suggests an attack might take place this weekend.

1:58A lot of this has caused significant volatility, with the VIX index spiking as much as 13%. The Asia-Pacific session ended in the red, but the losses were muted, apart from the Hang Seng, which shed 2%. Europe was faring a lot better midway through the trading session, thanks to some positive economic data. The eurozone economy grew at 0.3 % in the final quarter of last year. This was higher than expected and matched Q2 growth. This means the euro area grew by 1.5 % in 2025, while unemployment fell to a record low of 6.2%. This was helped by a growing momentum in the Spanish economy, which expanded 0.8 % in the final quarter, more than expected and faster than the previous quarter.

2:49Germany also surpassed expectations, albeit with a more modest 0.3 % growth. France was in line with forecasts at 0.2%. However, it also reported a decline in household consumption of 0.6 % month-on-month in December, raising concerns about future economic momentum, despite some positive indicators from other sectors. Returning to the US, initial jobless claims fell to 209 ,000 yesterday, slightly above expectations, while the trade deficit widened significantly to$56.8 billion in November, despite the tariffs. We'll also get the US producer price index for December. Futures suggested a not-so-great session on Wall Street, although the Walsh announcement trimmed the losses.

3:37It follows a mixed performance on Thursday. The Dow eked out again, but the other two major indices fell, with Microsoft having its worst session since March 2020. The 10 % plunge wiped out more than$350 billion in value, the second largest single-day loss in stock market history. Apple reported its best-ever iPhone sales after the bell, powering the company to a record$144 billion in quarterly revenue. This has not translated into a major move for the stock price, though. There's been some interesting news around Mag 7 companies, Tesla and NVIDIA. According to reports from Reuters and Bloomberg, Elon Musk's SpaceX is exploring a possible merger with another of his companies ahead of its blockbuster IPO later this year.

4:29Reuters names XAI as a candidate, while Bloomberg also added none other than Tesla itself. Also, another Reuters report suggests China has allowed its AI startup DeepSeq to buy NVIDIA's powerful H200 chips with some caveats. Meanwhile, there have been some wild moves to the downside after the recent scorching run in precious metals. Silver plunged 15 % in early morning trading, well below$100 before it bounced back. Gold lost as much as 8%, dropping to$5 ,000 before also recovering some of the losses. Still, the yellow metal was set for its best month since 1982, according to Reuters. The dollar strengthened on speculation that Walsh will be the nominee, but dipped after the announcement.

5:18It remained higher on the day in early US trading. Unfortunately, Bloomberg says Bitcoin is on course for its worst streak of monthly losses since 2018. Bitcoin is on course for a roughly 7 % fall in January, which would mark a fourth consecutive monthly drop, a situation not seen since the unravelling of initial coin offerings in 2018. Bitcoin fell to a two-month low of$81 ,000 early on Friday, leading to$1.8 billion in liquidations as per Coinglass data. However, in a vote of confidence in the original cryptocurrency, the world's largest crypto exchange, Binance, has announced it will convert$1 billion worth of stablecoins in its user security fund to Bitcoin.

6:07The exchange will replenish the fund if its value falls below$800 ,000, potentially adding some buying pressure. So, as you can see, a busy day indeed. Join OSF and Mando for their AMA today and wrap up the week with Nico and Bijan. I hope you have a good weekend and I'll see you on Monday.

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