Fartcoin (FART) Just Touched $1 Billion as the Market Saw a Second-Straight Day of Losses

The scatologically named AI agent token jumped over $1.1 billion in market cap early Friday even as the broader market saw a second-straight day of losses, becoming one of the few tokens in the green.

China's 1-year government bond yield fell below 1% for the first time since the Great Financial Crisis on Friday, adding to a year-to-date decline that has also seen the benchmark 10-year yield slip to 1.7%.

This bodes well for risk assets like bitcoin (BTC), which slipped overnight amid a broader market downturn fueled by concerns over the Federal Reserve’s recent interest rate outlook. Here are two reasons to be optimistic for crypto.

China economic troubles worsening

The continued decline in yields suggests that Beijing will have to roll out more aggressive stimulus measures than we saw earlier this year, to keep the world's second largest economy on track.

As Jeroen Blokland, founder and manager of the Blokland Smart Multi-Asset Fund, put it succinctly: “This indicates that China's economic troubles are far from over, and the government will do what aging economies often do: ramp up government spending, allow for larger deficits and higher debt levels, and drive interest rates down toward zero.”

China's factory-gate inflation worsened in December, having already seen the longest stretch of falling prices since the late 1990s, according to a Reuters analysis of central bank data on Friday. This could cap Producer Price Index (PPI) and Consumer Price Index (CPI) readings worldwide, including in the U.S., a major trading partner.

BNP Paribas noted this phenomenon earlier this year, with analysts saying that China has already contributed to lowering core inflation in the eurozone and the U.S. by about 0.1 percentage point and core goods inflation by roughly 0.5 percentage point.

This means that Powell's concerns about stubborn inflation may be unfounded, begging the question: will he really stick to just two rate cuts for 2025, as he implied on Wednesday? Many experts think there might be more.

“Fed concerns on inflation are misguided. Interest rates are still too high in the U.S., and liquidity is about to increase, driving Bitcoin higher,” Dan Tapiero, CEO and CIO of 10T Holdings, said on Friday via email about China's declining bond yields.

Markets, for now, aren't looking at this bullish angle. BTC fell below $95,000 and ETH slipped to $3,200, with all 100 of the biggest coins in the red. S&P 500 futures were down 0.5%, indicating a negative open and continuation of the post-Fed risk-off.

Sentiment may worsen if the core PCE, the Fed's preferred inflation gauge, comes in hotter than expected later today. That might see markets price out another rate cut, leaving just one on the table for 2025. Stay tuned!