A fascinating chart making rounds in financial circles shows the S&P Commodity Index vs S&P 500 ratio at multi-decade lows. This indicator suggests commodities may be extremely undervalued compared to equities, potentially setting the stage for a major market rotation. Key points:

The ratio is approaching levels last seen in the early 1970s, before a massive commodity bull run. Gold prices have already shown strength, often a leading indicator for broader commodity trends. If central banks maintain loose monetary policies (what they are forced to), industrial metals and other raw materials could follow suit.

Why should we care?

Macro correlation: Major shifts in traditional asset classes can impact bitcoin market sentiment and capital flows.

Bitcoin as "digital gold": A rising tide in the precious metals market could boost the narrative of Bitcoin as a store of value.

Inflation hedging: If a commodity boom signals rising inflation expectations, it could drive more investors towards hard assets.

As always, this is not financial advice. Markets are complex systems... any thoughts? Could be the brewing of the next wave of cost push inflation.