Crypto Bulls Receive a Big Macro Alert: Here’s the Explanation

A significant rise in the Philadelphia Federal Reserve’s May Manufacturing Business Outlook Survey has electrified global risk markets, providing crypto asset traders with a clear macroeconomic catalyst for the year. The Future New Orders diffusion index surged by more than forty points, described by Julien Bittel, head of macro research at Global Macro Investor (GMI), as “truly historic.”

Optimism Among Crypto Traders

Bittel’s remarks on X highlighted the statistical impact: “Yesterday’s Philly Fed report for May showed that the Future New Orders index set a historical precedent. The increase in expectations for new orders was the largest monthly surge ever since the index started in May 1968—a remarkable +4.3 standard deviation jump. To frame this shock, consider that it’s a more significant rise than the drop during the severe downturn of the 2008 Global Financial Crisis (-4.1σ). Reflect on that…”

Bittel then placed this upswing within the larger narrative that has shaped his analysis since late last year. He noted, “Q1 growth was sluggish. This is clear—financial conditions tightened sharply in Q4. The dollar spiked, bond yields rose… a classic tightening scenario,” he explained.

The immediate cause, according to him, involved “businesses stockpiling inventories in anticipation of Trump tariffs, alongside markets front-loading the inflation narrative.” He contended that this situation mirrors events from Donald Trump’s first term: “We noted early on that this echoed Q4 2016 during Trump’s initial term. Just as in early 2017, that tightening led to reduced growth momentum in Q1.”

Where 2017 began under uncertainty but concluded in a synchronized global boom, Bittel sees parallels for 2025. “Those Q1 challenges have shifted into Q2 advantages,” he asserted. “All developments stem from variations in financial conditions… Expectations among purchasing managers are evolving—these shifts in mindset eventually lead to action. Sentiment changes first, and then actions follow, as it always does. This is bullish.”

The crypto market’s response has been subdued. Bitcoin regained the $104,000 mark in early European trading but fell back later. Ether stabilized around $2,600, and volatile layer-one tokens like Solana and Avalanche followed similar patterns.

Giancarlo Cudrig, head of markets at Immutable, commented that while the magnitude of the shock is notable, the real issue lies in how poorly positioned investors are for any positive growth surprises. “A rare upside shock such as this—+4.3σ in new orders—has implications. However, the broader context of market positioning is key. Asset prices are not ready for a rise, leading to the potential for a significant upward shift.”

Independent analyst Market Heretic echoed this sentiment on X: “When this data was released, markets hardly reacted. This indicates that the transition has already begun. What’s fascinating is that markets brushing off a four-sigma upside surprise signifies that change is already underway—and it’s just getting started.”

For crypto investors, the effects are immediate. A weaker dollar alongside falling real-yield expectations diminishes the cost of holding non-yielding assets, while the early stages of a reflationary shift historically favor high-beta investments. Bittel’s strategy is straightforward: “Sentiment shifts first, action follows.” As long as this chain reaction persists, crypto bulls seem to have both the numbers and momentum in their favor.

As of now, the total cryptocurrency market cap is $3.28 trillion.