Crypto comes under pressure, as Gold surges, and Argentina gets help from US

The focus on Monday is a mini pullback in US stocks, and in some parts of the tech sector. Amazon and Microsoft are lower, as the market digests President Trump’s plan to charge $100,000 for new H-1B visa applications. Amazon and Microsoft are some of the top users of H-1B visas, and the concern is that they will struggle to attract new foreign talent, which could impact productivity down the line. We believe that the tech giants will be able to afford the visas, and this selloff in tech shares will be temporary, in the same way that tariff concerns weighed on stocks before dying down.

However, there is a risk off tone to markets today, stocks are mildly lower in Europe and in the US, as they slip from their post-Fed high last week. The bond market is rallying in the US and the UK, with yields falling in the UK across the curve. This suggests that for now, investors are not concerned about the UK’s public sector borrowing habit.

Gold and crypto: Diverging fortunes

There has also been a surge in the gold price to a fresh record high at the start of this week. The price of an ounce of gold is now above $3,700. The gold price is now higher by 41% YTD, and is easily outpacing gains in other asset classes, including stocks. There is an interesting dynamic in financial markets today. Crypto is getting slammed, and digital assets are also falling. Bitcoin  is lower by more than $3,000, and Ethereum is also lower, after $1.5bn of bullish bets were pulled from the crypto market. This move also highlights an unusual fragility in risk sentiment at the start of this week. As you can see in the chart below, gold and crypto have been moving closely together in recent months, however gold has surged to a fresh record today as crypto has come under pressure.

Gold and crypto, normalized to show how they have moved together so far this year

Source: XTB and Bloomberg

The move in gold and crypto is having an impact on stocks. In the UK, the FTSE 100’s mining sector is helping the index to eke out a gain. Miners including Endeavour, Fresnillo, Glencore and Rio Tinto are rising sharply on Monday, as they benefit from the rise in the yellow metal. The silver price is also following gold higher today. In contrast, MicroStrategy, the bitcoin treasury company, has seen its share price tumble by more than 4% on Monday. The bigger risk is that a prolonged sell-off in crypto infects broader market sentiment. However, MicroStrategy does not seem to be worried about the crypto slump, it is using the sell-off as a buying opportunity, and has bought another 850 BTC for $99.7MN, and now holds 639k BTC, worth $72bn. We will keep an eye on the development of the crypto trade, as a prolonged sell-off could have a broader market implications.

US throws argentina a lifeline

The other main news is that the US has offered financial support to Argentina, as it struggles with political woes that have weighed heavily on its bond market and currency. Its 10-year bond yield has risen 150bps in the past week, and the Argentine peso has fallen 5% vs. the USD since the start of the month. The US Treasury Secretary said that all options to stabilize the US’s ‘systemically important US ally’ are on the table, including swap lines, direct currency purchases, and purchases of dollar-denominated Argentinian debt. Bessent said that the White House is fully supportive of President Milei, as he tries to push through conservative fiscal reforms. The US’s support has had an immediate impact on the Argentinian bond market, the 10-year yield is lower by 37bps, and ARG/USD is higher by 2% on Monday. This suggests that the US is willing to help its allies, as long as they follow Trump’s conservative agenda.