Last Friday, the collapse of Japanese and U.S. stock markets, triggered by the Bank of Japan's interest rate hike and concerns about the U.S. economy, quickly spread to other stock markets around the world.
The Bank of Japan's rate hike has caused investors to worry about Japanese exports and the Japanese economy and sell risky assets to repay debts.
Concerns about the US economy mainly come from the economic data released recently in the United States - the unexpected rise in unemployment rate and the shrinking manufacturing index.
If interpreted according to previous interpretations, these data would be considered positive for the next interest rate cut, but Wall Street's interpretation this time seems to be more inclined to the US economy entering a recession.
As a result, we saw the “stock market crash” on Friday.
Over the weekend, the market received more bad news, especially from the Middle East, as the market was worried that the conflict between Iran and Israel would soon lead to armed conflict.
As I write this article, the stock market opened today (Monday), and the Japanese Nikkei index plunged again by more than 5%, and Asian and European stock markets also fell across the board. It is estimated that the US stock market will not look good when it opens tonight.
I am more cautious about the future trend of the Japanese stock market. Regardless of whether Japan will continue to raise interest rates, the yen will likely continue to strengthen against the US dollar. This may not be very favorable for the Japanese stock market.
I am also cautious about the future trend of the US stock market. Because up to now, the space for early hype of artificial intelligence has basically been consumed, and new application scenarios and new business models have not yet appeared on a large scale. Under such circumstances, it may be difficult for the US stock market to reach a new high in the short term. Even if it can, I think it is very close to the peak.
In the context of the recent stock market crash, the crypto market, which is increasingly inseparable from the global financial market, cannot remain immune - the entire crypto market has also plummeted.
As I write this, Bitcoin has fallen to $54,000 and Ethereum has fallen to $2,300.
When I saw this market situation, my first reaction was that Ethereum was lower than the fixed investment price of US$2,500 that I set, so I started the fixed investment in Ethereum again .
In addition, I also noticed another phenomenon: the price ratio of Bitcoin and Ethereum has now risen to 23:1 (one Bitcoin can buy 23 Ethereums).
In my impression, in this round of bear market, the price was maintained at around 20:1 even when it was relatively high before, but now it has risen again.
This reflects the market's serious lack of confidence in Ethereum.
Overall, I remain confident about the next steps of the crypto market.
First of all, if we compare the crypto market with the major stock markets that have been bullish in the past period of time, I think the price of the crypto market is undervalued. So in the future, when the market sentiment stabilizes and re-evaluates, I believe that new funds will definitely enter the crypto market, and when they enter this market, they will definitely buy Bitcoin and Ethereum first.
In addition, looking at the current prices of Bitcoin and Ethereum, I don’t think they are very low, but I don’t think they have too much bubble. This price is not like the price that a bull market should have. So I believe that they will still have their own bull market and highlight moments in the second half of this year and next year.
But there is one thing that I am increasingly worried about:
From the collapse of the last bull market to the present, the innovation and development of both Ethereum and Bitcoin in application scenarios are too weak (especially Ethereum). If they still do not make breakthroughs in application, the next bull market can only be regarded as a bull market brought about by the influx of external funds into the crypto market due to allocation needs.
However, such a bull market is unlikely to be strong or last long.
"Disclaimer: This article does not constitute investment advice. Please learn and communicate with netizens, be rational, establish correct concepts, improve risk awareness, and abide by the relevant laws and regulations of the country and region where you are located."
