Once the "arbitrage spread" of Bitcoin ETFs and futures disappears, BTC may be at risk of plummeting
1. Macroeconomic factors dominate, and the Fed’s interest rate cut expectations are subtle
The market has digested expectations of interest rate cuts in advance, and the Fed has not made a clear commitment to cutting interest rates, resulting in a dull market response. Jerome Powell emphasized data dependence and paid equal attention to inflation and economic growth, but the threshold was high and the prospect of interest rate cuts was unclear. The market may over-interpret the Fed's actions and macro uncertainty continues.
2. US stocks and Bitcoin logically part ways
US stocks are driven by Gamma hedging and CTA, while Bitcoin is significantly affected by long-term interest rates. The rise in long-term interest rates has hit liquid assets, and it is difficult for a Bitcoin bull market to emerge this year. The logical differences between U.S. stocks and Bitcoin have caused the trends of the two to diverge.
3. Republican policies tend to be inflationary, putting Bitcoin under pressure
Republican policies may exacerbate inflation, such as the tariff policies during the Trump era, which will be negative for liquid assets such as Bitcoin. In a high inflation environment, it is difficult for assets such as Bitcoin to gain support.
4. Long-term bond issuance and the status of the US dollar: a double-edged sword in the market
The increase in long-term bond issuance in the United States will push up long-term interest rates, and the market will react. If the status of the US dollar is shaken, global assets will be hit hard. Assets such as Bitcoin cannot survive alone, and market volatility has intensified.
5. The road to Bitcoin’s reserve asset is difficult
The proposal of Bitcoin as a reserve asset faces many difficulties, and congressional approval is complicated. It is more suitable as a macro asset rather than a reserve asset. Trump’s policies are biased toward inflation, and the Bitcoin market needs to be treated with caution.
6. ETF arbitrage and Bitcoin price bubble
Bitcoin ETF arbitrage drives up prices, but risks surge when the premium disappears. Arbitrageurs can quickly withdraw their funds, causing prices to plummet. The current price is mainly supported by arbitrage funds, and the risk of bubbles cannot be ignored.
7. Hong Kong ETF potential and Bitcoin price stability
Hong Kong private bank Bitcoin ETFs are yet to be popularized and have great arbitrage potential. ETF buying and arbitrage funds provide support for Bitcoin prices, but bull market expectations still need to be cautious.
Still the same, the current bull market is approaching its final breaking point.
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