Evening digest: Bitcoin slide rattles markets, Trump's Fed choice, Musk's bold move

Markets are lurching between ambition and anxiety.

Elon Musk is plotting a moonshot merger that could redefine tech’s next IPO, while Washington braces for a Fed leadership shake-up that threatens central bank independence.

Commodities are flashing speculative excess as copper spikes, even as crypto cracks under capital flight.

From orbiting AI dreams to hard-nosed macro reality, today’s moves underscore one theme: volatility is back, and conviction is thinning fast.

Musk's space play gets a tech boost

Elon Musk is cooking up something audacious: merging SpaceX with xAI before taking the rocket company public this year.

Reuters broke the exclusive on Thursday, citing Nevada corporate filings dated January 21 that suggest the deal's already in motion.

Picture it: Starlink, Grok, X platform, and Falcon rockets all under one roof.

Musk wants to park AI data centers in orbit, slashing compute costs by tapping solar power from space.

SpaceX is already worth $800 billion privately, while xAI sits at $230 billion. This merger could catapult Musk's next IPO into the trillion-dollar club.

Fed Chair game enters final round

Trump's dropping the hammer next week as he's naming the new Fed chair to replace Powell when his tenure ends in May.

The shortlist is lean: BlackRock's Rick Rieder leading the betting pools at 42-43%, followed by Kevin Hassett (NEC chief), Christopher Waller (existing Fed governor), and Kevin Warsh.

Trump's blunt as always, "unacceptably high" rates need 2-3 point cuts. This isn't about policy neutrality anymore.

The political collision is real: Powell's already facing a bogus DOJ probe, and if Trump rams through a rate-cutting zealot, the Fed's independence takes another gut punch.

Markets are pricing Rieder as the favorite, but Trump is unpredictable. Wall Street's bracing for volatility the moment he announces.

Copper tops $14,000

Copper smashed through $14,000 a ton Thursday on the London Metal Exchange, jumping 11% in the biggest single day since November 2008.

Short-covering and pure speculation drove the madness, but here's the rub: physical demand in China, the world's largest consumer, is absolutely anemic.

The Yangshan premium collapsed to just $20/ton, the lowest since July 2024.

Bearish traders got torched, but strategists are sounding alarms. "This isn't sustainable," traders grumbled anonymously.

Speculators are piling in on weak dollar dynamics and geopolitical hedging, while miners sit on bloated inventories.

Lunar New Year could be the pin that deflates this. Marex's Alastair Munro drew parallels to 2006, same move, same crash pattern.

Bitcoin stumbles below $84,000

Bitcoin plummeted 6.4% to $83,383 Thursday, the lowest level since late November, as $1.137 billion in Bitcoin ETF outflows over five consecutive days triggered a panic spiral.

The killer: Fed's rate-hold decision alongside rare-earth tariff jitters and Iran tensions sent traders fleeing to gold instead.

Long liquidations exploded across derivatives, $319 million wiped out in hours, with 97% of call options now out-of-the-money.

Technical collapse was brutal. RSI hit 35 (deep oversold), MACD bearish crossover confirmed, and price sits 20% below the critical 200-day EMA. Support's crumbling.

Analysts eyeing $74,000 as the next target if $79,000-$80,000 breaks. This isn't speculation anymore; it's capital rotation to safety, plain and simple.