I think bitcoin’s new low merely reflects the movement of funds to other areas like AI, aerospace and resilience areas such as healthcare. There is no reason to put money in bitcoin and other cryptocurrencies when in the near term there are clear stocks that can almost guarantee good returns for the next 1-2 years.
With the US market being resilient, I think market fears rate hikes which would impact tech and AI stocks. Market has pulled back slightly on Friday in a knee jerk reaction. Market taking a breather now is also expected as the rise this year has already cause many of the indices to hit 52 week highs.
I think the market has mostly priced in the oil prices and potential of inflation being sticky but market always reacts to the potential for rate hikes. As long as there is no stagflation, market has priced it in. A stagflation is the real killer but maybe avoided if AI can truly lead to structural changes in the economy with increase productivity and job generation.
Rate Repricing and Memory Crash Slam Markets: Risk-Off Here?
Nasdaq plunged 3.29% and SOXL cratered 23%, caught in a double blow from Fed rate repricing and a memory sector meltdown. Yesterday's hawkish FOMC shockwaves linger. Another violent rebalancing in the "software-to-hardware, growth-to-value" rotation underway since last week, with even the strongest memory crowded trades beginning to unravel. As rate expectations and sector liquidation resonate, will you cut exposure across the board, or hunt for hard assets in the selloff?
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