Source: Talking about Li and other things
According to a research report by The Kobeissi Letter, the current long-term inflation expectations in the United States have soared to 4.1%, the highest level since 1993, and the tariff policy since Trump took office is the main cause of this problem, because in just over two months, there has been a trade deficit of more than 300 billion US dollars, which has seriously affected consumer confidence. In addition to long-term inflation expectations, 1-year inflation expectations have also soared from 2.6% to 5.0%, which has doubled in less than 3 months, which will inevitably have a negative emotional impact on the investment market. 
In this environment, it is not difficult to understand the decline of US stocks, and the resulting decline in the crypto market will be even greater, while gold continues to rise and break through historical highs. It seems that smart big funds are beginning to make choices with practical actions. In just over two months, the inflow of gold ETFs has reached 12 billion US dollars. As shown in the figure below. Since the beginning of this year, the S&P 500 has fallen by nearly 5%, and the price of gold has risen by nearly 17%. Does it reveal an atmosphere of economic slowdown?
Let’s continue back to the crypto market.
Bitcoin, which has been touted as digital gold in the past two years, does not seem to have the same properties as gold. The price of Bitcoin has also fallen by 30% since the beginning of this year. Therefore, many people are now bearish on the crypto market and believe that there is no hope for this market.
However, judging from the current situation of Bitcoin, it seems to be better than any period in history, because it has changed from a so-called tulip scam to a national strategic reserve asset of the United States. At the same time, more and more large institutions are beginning to adopt Bitcoin. In other words, the image of Bitcoin is slowly undergoing some qualitative changes.
In the short to medium term, Bitcoin still cannot become real gold (the property of digital gold). Compared with gold, it cannot be used as a mature hedging tool for large funds. Its price is still subject to huge fluctuations caused by speculative factors. The current Bitcoin looks more like a technology stock. But in the long term, we believe that Bitcoin will sooner or later become a global asset and exist as an effective financial tool on various balance sheets. This seems to be just a matter of time.
But as far as this cycle is concerned, although the theoretical new bull market seems to have started in 2023 (2023-2025), if we continue to look at some indicators from experience, it seems that we are not currently experiencing what we call the theoretical big bull market (or crazy bull) market, as shown in the figure below.
There may be two possibilities:
First, the crypto market no longer follows some indicators and rules of historical cycles.
Second, the crypto market has not yet truly ushered in the so-called bull market in theory.
So, which of these two situations do you personally prefer?
We will not provide a specific answer here, because there is no standard answer to this question. Different people have different opinions.
In the recent series of articles in Hualihuawai, we mentioned Trump quite frequently, because Trump's every move will have a direct impact on the market trend. For example:
Last year, Trump's friendly commitment to encryption helped Bitcoin break through the historical mark of $100,000. However, this year, Trump's tariff policy has caused Bitcoin to continue to pull back, and the US Bitcoin strategic reserve, which was highly expected by the market, has become merely composed of confiscated assets.
On the one hand, the various policies implemented by Trump after he took office have caused the market to plummet. On the other hand, WLFI (World Liberty Financial, Trump family project) continues to accumulate some crypto assets (including ETH, etc.) in its investment portfolio. They even recently announced that they would launch a new US dollar stablecoin USD1. This has created a rather strange and interesting phenomenon.
In the current overall market environment, it seems that the catalyst of the crypto market needs to rely more on external environmental factors (in the case of insufficient internal innovation). That is, if the market wants to rise again, it mainly relies on three points:
First, Trump’s tariff policy can end within a few months.
Second, the Federal Reserve adopts a new quantitative easing (QE) policy to stimulate the market (that is, providing more liquidity conditions, causing some liquidity to spill over into the crypto market).
Third, global net liquidity continues to increase (although the US dollar is still king, the increase in net liquidity from the European Union, China, and Japan will also to a certain extent drive up the prices of high-risk assets such as Bitcoin).
However, these major points do not seem so clear at the moment, and the market may need some time to wait and digest.
Here we might as well make an assumption from a single angle (note that this is only an assumption). If we only look at the macro Global M2 indicator, because this indicator has a lag of about 70 days with the Bitcoin trend for some time, for example, on September 23, 2024, Global M2 reached a stage peak of 108 trillion US dollars, and on December 17, 2024, BTC reached a stage peak of 108,000 US dollars.
Therefore, theoretically speaking: Global M2 will reach a temporary peak of 109 trillion US dollars on March 24, 2025. If there is no new or larger black swan event, BTC may rebound to a temporary high point in June 2025 (it is only a temporary high point, which does not mean that it will definitely break the previous historical high).
Of course, you can also directly deny the above assumption. Since it is an assumption, it may be right or wrong. There is no need to continue arguing here. Here we are just providing a possible idea and not serving as any investment guidance.
At present, there are many opinions and voices on the Internet. Recently, I occasionally pay attention to the comments and emotions of some KOLs on CT (Crypto Twitter) and found that:
It seems that most KOLs have already seen the bear market, and most of these KOLs also claim that they have accurately escaped the top at high levels, which I admire quite a lot.
Some KOLs also believe that the bull market has not yet begun, and 100,000 Bitcoins is just a new starting point. By the end of the year, the price of Bitcoin will continue to break new highs and reach 150,000 US dollars.
Some people also believe that there may be a new round of rising prices in the second quarter of this year...and so on.
However, everyone has different ideas or opinions, and the corresponding strategies they adopt will also be different. What others say or do is actually not important. What is important is what you will do. Do you have different coping strategies yourself?
Take me personally, although I sold 10% of my Bitcoin in December last year, strictly speaking, I am still in a state of actively hoarding coins and once again "enjoying" the profit drawdown. Fortunately, I have experienced this kind of thing many times, and the current market sentiment has not brought me any new anxiety.
Because funds are always flowing, there is never a lack of hot spots in the financial market. I have found that many people seem to have started to study gold, US stocks, Hong Kong stocks, etc. recently. I have not participated in any of these. In addition to not having so much time and energy, I will still choose to stay focused in the encryption field and continue to hone myself.
Tomorrow (April 2) is the special day that Trump has been hinting at recently. The president may then announce an average increase in reciprocal tariffs of more than 15% on imports from about 25 countries. In addition, there are some important economic data to be released by the United States this week. We may continue to experience relatively large market fluctuations in the next few days. If you don’t know what to do at this time, then the best thing to do is to do nothing.
It is precisely because of Trump’s possible reciprocal tariff measures that Goldman Sachs has significantly raised its US inflation expectations and lowered its GDP growth expectations. At the same time, Goldman Sachs also expects that the Federal Reserve will cut interest rates three times in a row in 2025 (in July, September and November respectively), ultimately maintaining the federal funds rate forecast at 3.50-3.75%.
Although some institutions such as Goldman Sachs have also issued new forecast reports, the high inflation expectations on the one hand and the interest rate cut expectations on the other hand have undoubtedly added more new uncertainties to the market.
Let's look at another data. As of now, the average tariff rate in the United States has reached about 8%, which is the highest level since 1970. If the US tariff war continues to escalate this week, we may also see a new round of retaliatory policies from some countries, and it may even evolve into a large-scale global trade war. In other words, this month (April), we may witness the average tariff rate in the United States break the record of 1946.
In addition, for Trump, who likes to stir up trouble, it seems that the tariff war alone is not enough. He has also frequently carried out some other outrageous operations recently. For example, Trump publicly stated yesterday (March 30) that if Iran does not reach an agreement with the United States, it will be bombed.
Tariff war + military threats seem to have become Trump's current specialty, and the impact of these events is not only on the crypto market and stock market, but will also affect the global economy and situation to a certain extent.
Today (April 1) is April Fools' Day, and tomorrow is what Trump calls the American Liberation Day (April 2 is called Liberation Day by US President Trump). Will April be a new beginning or a new end for the overall market trend?
Let time tell us the answer.
As ordinary investors, we seem unable to change the overall situation. The only thing we can change is our own positions (protect our positions and wait patiently for new opportunities to make money).
