US elections are approaching.
And the bond market is sending important messages.
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BTC plunges, altcoins collapse. The election is favorable in the future, and investors are surprised by the plunge, why? What important information was ignored?

The following content is from <Followin>, the latest analysis from industry practitioners.

Phyrex@Phyrex_Ni:
I don't know why it's falling, but there are indeed a number of unfavorable factors today, but these factors are not the key ones.
For example, the tech stocks' earnings reports are indeed not very good, even dragging down Nasdaq and S&P 500, and Coinbase's earnings report is very poor, plunging more than 15%, but MSTR only fell 1.15%...

With the election approaching, BTC plummeted by nearly 4000U, and altcoins collapsed. Why?

On the eve of the 16th anniversary of the Bitcoin whitepaper, CZ, who has been out of the spotlight for a while, stated that 2024 will be a "year of recovery".

BTC briefly fell below $69,000. Where is the promised new high?

The journey of escaping the trap, starting with the self-rescue of MEME.

What initially attracted me to the crypto circle was the story of Bitcoin's sudden wealth and the annual lament over the pizza day.

Once, as a staunch mainstream coin holder, I only used Binance and OKEx as my trading platforms, feeling comfortable under the big tree, believing that the coins bought on these platforms were reliable. Although I was not a full-time coin trader, I liked to follow the hot topics. By chance, I made some money on $Bome and $Pandora, and thought of myself as a genius trader.

But as time went on, the situation changed.

Whenever Bit...

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Both candidates foresee persistent fiscal deficits and Trump's policies are seen as more stimulative for growth and inflation.
Bond markets are in fibrillation.
10-year Treasury yields have rapidly increased to 4.25%.
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So we are hearing again about ''Bond Vigilantes''.
This is a macro expression which means investors are requiring a premium to hold US assets because of the foreseen inflation and policy risks.
But that's wrong: there are no Bond Vigilantes in action:
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Over the last 40 years, we never really had investors puking on US assets - true Vigilantes are in action when both bond yields go up, and the USD goes down.
As you can see from the chart, that quadrant is basically empty.
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We are instead experiencing people pushing US yields higher and the USD getting stronger.
The bond market is hence sending a different message.
''Trump's policies will be stimulative for nominal growth, and the US will grow faster than other countries''
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Additionally, investors are hedging for a scenario in which rates move up fast via options.
This is evident in the so-called ''skew'':
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This means investors are willing to pay more for bond puts than for bond calls for the next month.
This is unusual: investors normally pay more for ''insurance premium'' (bond calls) than for puts, so this is related to election hedging.
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In general: there are no ''Bond Vigilantes'' in action here.
Instead, the bond market is preparing for a Trump victory and for policies that will be stimulative for growth and inflation.
Finally (and this is important)...
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