For some investors, a 50 bps interest rate cut is an extremely bullish case for markets as the money in the deposit accounts will flow into the risky markets such as crypto, NASDAQ, or emerging markets of the developing countries. Yet, when we put the hyper bullish view aside, the " unnecessarily " high interest rate cut made lots of investors suspicious about the health of both the U.S. and the global trades.
The uncertainty and a small amount of fear affects the investors' forecasts and actions deeply. Though there is a huge expectation that the markets will form higher highs after a long time of high interest rate era, the reality is totally different. All eyes are on the performance of S&P500 companies and the traders' approach to the businesses over the next two weeks.
In the case that the S&P stocks start to lose value, the other markets may not be able to stay strong against the growing discomfort. Thus, cautious investors follow prudent investments for a while.
Crypto is the Last Stop
If we are ready to turn fully bullish, I believe we still need some time for that.
First of all, the presidential election is around the corner. Both of the nominees are focusing on different types of taxation, trade restrictions, regulations etc. Their direct impact on the markets can easily affect the prices of assets over the next 4 years.
So, the settled conditions in the markets should not be surprising. We need to get over that day to be able to set our strategies accordingly.
While the future of the giants of the economies cannot be foreseen, crypto has no place in the champions league. Crypto, with its very limited market capitalization and the role it plays in the global markets, will work as an indicator of purely bullish sentiment.
Otherwise, we better stay away from unnecessarily high risks or bets until everything becomes clearer.
The spot Bitcoin ETFs' net flow has turned positive, but there is still not much action on that side, either.
The Grayscale dumps have been ceased for a while but the market has not pointed any direction on the other side.
While the number of ambiguous factors stays high, the best strategy might be prudent investments with some hopium inside. As the stablecoin amount in the market and the narratives rise up, the better days in the near future!
What do you think about the flow of investment in crypto for now?
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Hive On ✌️
Posted Using InLeo Alpha
