Don’t mistake emotional rebound for a trend. The current market is being firmly pinned down by two tangible forces.
First, expectations that compliant capital will enter have been disproven. The Clarity Act failed in the Senate with a vote of 49 to 50, missing even the 60-vote threshold needed to advance. Funds that were previously wagering on policy implementation have lost their basis, and near-term catalysts have completely gone cold.
Second, the source of liquidity has been drained. The Bank of Japan has lifted the benchmark interest rate to 1.25%, the highest level in 31 years. Institutions that used to rely on borrowing cheap yen to trade crypto now see soaring arbitrage costs, forcing them to sell high-volatility assets in order to return capital and meet debt obligations.
On one side, the hoped-for positives don’t materialize; on the other, tightening underlying liquidity forces institutions to de-leverage. In these crosswinds, shouting “bull market” is meaningless—risk control and preventing drawdowns are the top priority.
#MARKET
First, expectations that compliant capital will enter have been disproven. The Clarity Act failed in the Senate with a vote of 49 to 50, missing even the 60-vote threshold needed to advance. Funds that were previously wagering on policy implementation have lost their basis, and near-term catalysts have completely gone cold.
Second, the source of liquidity has been drained. The Bank of Japan has lifted the benchmark interest rate to 1.25%, the highest level in 31 years. Institutions that used to rely on borrowing cheap yen to trade crypto now see soaring arbitrage costs, forcing them to sell high-volatility assets in order to return capital and meet debt obligations.
On one side, the hoped-for positives don’t materialize; on the other, tightening underlying liquidity forces institutions to de-leverage. In these crosswinds, shouting “bull market” is meaningless—risk control and preventing drawdowns are the top priority.
#MARKET