Bitcoin’s volatility yesterday was relatively intense. In the short term, the price briefly broke above the 79,570 high. Many people are very worried—could the market reverse? The main reason is that Lao Cui received too many pieces of information in the morning, and at the same time, the U.S. 10-year Treasury yield rose to 5%, the first time in nearly three years. This has also led many friends to question whether the U.S. will still hike rates. An increase in Treasury yields will definitely result in more interest to pay back with further rate hikes—this is also one of the concerns everyone has: always worrying about the U.S. and its debt repayment issues. Have you ever seen any company that makes money faster than the U.S.? The profits to be repaid are almost on par with U.S. military spending. Plus, with support behind South Korea and Japan, repayment for the U.S. is not the biggest problem. The biggest problem is that while the debt keeps accumulating, no one is willing to take the “off-ramp” as it were—which is what keeps pushing yields higher. Yield increases are also intended to make it attractive for outside investors to step in and buy the debt. That is the full logic.

When the rate hikes happen, everyone just needs to remember the following points—these are all favorable to the U.S.: the U.S. dollar appreciates, inflation is lowered, capital flows back, and global trade is restrained. Every one of these items is more supportive than rate cuts or keeping rates unchanged for “Old Uncle Sam.” And suppressing the income of major export countries is also one of the main reasons. Everyone, don’t just focus on Trump’s few remarks and then make your own investment plans. Trump’s cabinet and the Federal Reserve are two different entities. And the statements from Waller still emphasize the 2% inflation target—so rate hikes are almost a fact; what’s left is only the certainty of the timeline. Also, many people think we’re currently in the early stage of a bull market? Lao Cui has no idea how this view was formed. What Lao Cui sees right now: among the public statements out there, most people support rate hikes (the Fed is sending signals outward). Especially yesterday and today’s performance—the U.S. 10-year Treasury yield breaking above 5% will lead to capital reorganizing its investment directions again, because the yield on Treasuries is very likely higher than that of the U.S. stock market. This market will be more stable.

Once these big players pull out of the stock market and choose U.S. Treasuries, and rate hikes are coming (not discussing the cyclical nature of rate hikes for now)—this will deal a nearly fatal blow to both the stock market and the crypto market. Everyone, look back: over the past two years, Nasdaq’s data show that the market value growth of the top 10 tech companies is enormous—even some storage-related stocks in “Old A” have managed to break through like this. So why does everyone think that this is the beginning of a bull market? Is there a possibility that what we’re seeing now is the final wild celebration of a bull market? It’s just that in the crypto world, the shock is hit first and hardest. When you’re watching for positive news in crypto, do you still remember that most mainstream analysts are almost all predicting the timing of the next financial crisis? If the passage of the bill happens during a rate-hike cycle, then throughout the entire cycle, crypto’s positive news can hardly hold—let alone usher in a new bull market. The issuance of stablecoins hasn’t directly provided any breakthrough for the coins; in other words, the impact is not very significant.

Lao Cui’s summary: Everyone, you need to seriously examine the overall logic framework of the entire financial market. Many friends feel that Lao Cui doesn’t really like to answer everyone’s questions; unless it’s a very critical moment, many friends will ask Lao Cui to take a look—especially at those orders with extremely high risk. Perhaps Lao Cui will respond in a timely manner. Generally, for financial issues that have bigger loopholes, you can ask certain AI software—their logic is stronger than 80% of investors. Yesterday, Lao Cui was still reminding everyone to pause; before they even fell asleep, many users told Lao Cui that their short positions were trapped. Some parts were resolved, and surprisingly, some people were even able to stop-loss on their own. Obviously, they didn’t carefully check Lao Cui’s articles. If you don’t have a mid/long-term investing mindset, then at this stage, don’t touch futures/contracts. Within a week after the interest-rate announcement, this kind of market behavior will appear. No matter whether the result is bullish or bearish, there will be sudden spikes that will shake out retail investors. If you only play short-term trades, remember not to enter the market. If your mindset isn’t stable, don’t try it easily either. After this interest-rate announcement, think it through before acting. At the end of the day, Lao Cui remains bearish. For this kind of short-term breakout—Lao Cui sees it, he will only add to the short position! While you’re paying attention to the interest-rate meeting, also watch the fluctuations of the yield on U.S. Treasuries—this is also a useful reference!