Stock Market Bubble Could Burst Soon?! What It Means For Crypto!
Summary
TLDRDer Skript diskutiert die Auswirkungen des Verlusts von 6,4 Billionen Dollar auf globale Aktienmärkte und die Rolle von Technologieaktien, insbesondere der 'Sieben Großen', in der aktuellen Marktsituation. Es geht über die Hype um künstliche Intelligenz, die Investitionen in AI und die potenziellen Blasen in den Technologiemärkten. Zudem wird die 'grote Rotation' und ihre Auswirkungen auf kleine Kapitalunternehmen und die Kryptowährungsmärkte thematisiert, schließlich wird die Frage gestellt, ob wir uns in einer Blase befinden und was das für die Zukunft bedeutet.
Takeaways
- 📉 Im letzten 20 Tagen wurden 6,4 Billionen US-Dollar von den globalen Aktienmärkten gelöscht, was dem gesamten Marktwert des Kryptomarktes entspricht.
- 🔥 Die Ursache für die Schwächung der Finanzmärkte sind unter anderem japanische Zinssätze, geopolitische Spannungen, Devisenmarktbewegungen und Rezessionsgerüchte.
- 🔥 Die Flammen der Schwächung begannen in Silicon Valley mit einem Ansturm auf die Aktien von Big Tech-Unternehmen.
- 🚀 Seit der Veröffentlichung von Chat GPT im November 2022 hat der Hype um künstliche Intelligenz (KI) die Tech-Aktien zum Rally führen lassen.
- 📈 Aktien von Microsoft, Alphabet und Amazon sind um mehr als 100% gestiegen, während Meta und INE um 546% und 1200% gestiegen sind.
- 🌐 Die sogenannten 'Magnificent 7' Unternehmen machen einen Drittel des Marktkapitalisierungsindex S&P 500 aus und haben 45% des Wachstums des S&P 500 in den letzten 10 Jahren verursacht.
- 🤖 Die KI-Unternehmen investieren Milliarden in die Zukunft der KI, aber es gibt noch keine offensichtliche Daseinsberechtigung oder nachhaltiges Geschäftsmodell, das die hohen Kosten rechtfertigen könnte.
- 💡 Die KI-Unternehmen haben große Erwartungen geschürt, aber die Grenzen der KI sind offensichtlich, und Forscher haben eine 'Modellkollaps'-Phänomen beobachtet.
- 📉 Im Juli 2024 haben die Aktien der 'Magnificent 7' stark an Wert verloren, was auf eine 'große Rotation' von Mega-Caps zu Small-Caps zurückzuführen ist.
- 📊 Die kleinen Kapitalunternehmen profitieren von den Erwartungen einer Zinssenkung und haben begonnen, an Wert zu gewinnen, während die großen Tech-Unternehmen unter Druck geraten sind.
- 🧐 Die Diskussion über Blasen in den US-Aktienmärkten ist kontrovers, aber nach den Kriterien von Ray Dalio scheint der Markt derzeit keine Blase zu sein, obwohl es immer Risiken für eine Korrektur gibt.
Q & A
Wie viel hat der globale Aktienmarkt in den letzten 20 Tagen verloren?
-Der globale Aktienmarkt hat in den letzten 20 Tagen 6,4 Billionen US-Dollar verloren.
Was hat den Finanzmärkten zu einer Zeit der Schwäche beigetragen?
-Interessensatzschwankungen, geopolitische Spannungen, Devisenmarktdramen und Rezessionsgerüchte haben den Marktturm geschürt.
Wo begann der anhaltende Absturz im Finanzmarkt?
-Der Absturz begann in Silicon Valley mit einem Ansturm auf Tech-Aktien.
Was bedeuten die sogenannten 'Die Sieben Großen' im Zusammenhang mit dem S&P 500?
-Die 'Sieben Großen' beziehen sich auf Microsoft, Alphabet, Amazon, Meta, Apple, Tesla und NVIDIA, die zusammen einen Drittel des S&P 500-Marktwertes ausmachen.
Warum haben die Aktien der 'Sieben Großen' in den letzten Jahren so stark zugelegt?
-Die Aktien der 'Sieben Großen' haben stark zugelegt, weil sie als Proxy für das Wetten auf die Zukunft der künstlichen Intelligenz (KI) verwendet werden.
Wie hat sich die Popularität von KI auf den Aktienmarkt ausgewirkt?
-Die Popularität von KI hat zu einer Rallye von Tech-Aktien geführt, insbesondere bei den 'Sieben Großen', deren Aktienkurse im Vergleich zu ihren Tiefständen von 2022 um über 100% gestiegen sind.
Was ist der geschätzte Betrag, den Open AI für den Betrieb von Chat GPT täglich ausgibt?
-Der geschätzte Betrag für den Betrieb von Chat GPT pro Tag beträgt 700.000 US-Dollar.
Was ist der sogenannte 'Modellkollaps', auf den sich ein Forscher aus Oxford bezieht?
-Der 'Modellkollaps' tritt auf, wenn neue Sprachmodelle auf der Ausgabe früherer Sprachmodelle trainiert werden, was zu einer Verschlechterung der Qualität führt, ähnlich wie bei wiederholtem Drucken und Scannen eines Bildes.
Was ist die Bedeutung der 'großen Rotation' im Kontext des Aktienmarkts?
-Die 'große Rotation' bezieht sich auf den Trend, bei dem Investoren von den Aktien der 'Sieben Großen' zu kleineren Kapitalisierungsunternehmen wechseln, die bessere Risiko-Rendite-Verhältnisse bieten.
Wie hat sich die Aussicht auf eine Zinssenkung im September auf den Aktienmarkt ausgewirkt?
-Die Aussicht auf eine Zinssenkung im September hat das Vertrauen der Investoren gestärkt und zu einer Rallye bei kleinen Kapitalisierungsunternehmen geführt, während die Aktien der 'Sieben Großen' stark fielen.
Was könnte eine mögliche Blase im Aktienmarkt bedeuten?
-Eine Blase im Aktienmarkt könnte eine Phase des spekulativen Kaufs bedeuten, der die Aktienpreise weit über ihrem fairen Wert treibt, was zu einem Zusammenbruch führen kann, wenn kein neuer Käufer gefunden werden kann.
Wie beurteilt Ray Dalio den aktuellen Zustand des US-Aktienmarktes hinsichtlich einer Blase?
-Ray Dalio, der Gründer des Hedgefonds Bridgewater Associates, hat anhand seiner 'Blase-Schnäpper'-Methode ermittelt, dass der US-Aktienmarkt und insbesondere die Aktien der 'Sieben Großen' keine Blase aufweisen.
Was könnte die Auswirkungen einer Blase auf den Kryptowährungsmarkt sein?
-Obwohl Kryptowährungen schwach mit dem Aktienmarkt korreliert sind, wäre ein echter Blasensprung bei Unternehmen dieser Größe für alle keine gute Nachricht.
Outlines
📉 Aktuelle Finanzmarkt-Turbulenzen
Der erste Absatz beschreibt die massiven Verluste auf den globalen Aktienmärkten und nennt Gründe wie Zinssätze, geopolitische Spannungen und Aussagen über eine kommende Rezession. Es wird auch auf den Beginn der Schwächung großer Technologieaktien in Silicon Valley hingewiesen, die als Auslöser für die aktuellen Marktbewegungen angesehen werden. Zudem wird die Bezeichnung 'Die Sieben Großen' für einige dominierende Tech-Unternehmen eingeführt, die einen erheblichen Einfluss auf den S&P 500 haben.
🤖 Die Dominanz von KI-Technologie-Unternehmen
In diesem Absatz wird auf die steigende Beliebtheit von KI-Technologie-Unternehmen hingewiesen, die durch die Veröffentlichung von Chat GPT im November 2022 ausgelöst wurde. Es werden die steilen Aufschwungskurse von Microsoft, Alphabet, Amazon und anderen Unternehmen diskutiert, die als 'Die Sieben Großen' bezeichnet werden. Ihr Marktkapitalisierungsgewicht im S&P 500 wird betont, und die Tatsache, dass diese Unternehmen als Platzhalter für die Zukunft der KI-Entwicklung dienen, wird hervorgehoben.
📈 Die Suche nach nachhaltigen Geschäftsmodellen in der KI-Branche
Der dritte Absatz konzentriert sich auf die Herausforderungen von KI-Unternehmen, nachhaltige Geschäftsmodelle zu finden, die ihre hohen Betriebskosten rechtfertigen können. Es wird auf die Kosten für die Betreibung von Chat GPT und die offensichtlichen Grenzen von Large Language Models (LLMs) eingegangen, die sich im Laufe der Zeit verschlechtern. Zudem wird auf die Rotation von Investments von den 'Sieben Großen' zu kleineren Kapitalunternehmen diskutiert, die durch Inflation und Zinssätze beeinflusst werden.
📉 Reaktionen auf Quartalsergebnisse und die Suche nach einem 'Killer-Use-Case' für KI
Dieser Absatz diskutiert die Reaktionen der Märkte auf die Quartalsergebnisse der 'Sieben Großen', insbesondere von Microsoft und Alphabet, und wie diese die Aktienpreise beeinflusst haben. Es wird betont, dass trotz positiver Zahlen die Märkte auf eine Verschlechterung reagiert haben, was auf eine mögliche Überbewertung hinweist. Zudem wird die Suche nach einem 'Killer-Use-Case' für KI angesprochen, der die hohen Kosten für die Entwicklung und Nutzung von KI-Technologie rechtfertigen könnte.
🌐 Globale Marktbewegungen und die Suche nach einem Aktienmarkt-Blase
Der fünfte Absatz analysiert die globale Finanzmarktlage und die Diskussionen über eine mögliche Aktienmarkt-Blase. Es wird auf die Definition einer Blase und die Schwierigkeit, diese zu identifizieren, eingegangen. Zudem wird auf die 'Blase-O-Meter' von Ray Dalio und seine Kriterien für die Identifizierung von Blasen hingewiesen, um zu beurteilen, ob der US-Aktienmarkt oder die 'Sieben Großen' in einer Blase sind.
🤔 Analyse der aktuellen Situation und deren Auswirkungen auf Kryptowährungen
Schließlich wird in diesem Absatz die aktuelle Situation des US-Aktienmarktes und die Auswirkungen auf Kryptowährungen diskutiert. Es wird betont, dass die Märkte möglicherweise eine Korrektur benötigen und dass eine Blase, wenn sie platzt, auch Auswirkungen auf Kryptowährungen haben könnte. Es wird die Notwendigkeit einer Überprüfung der Investitionsthese und eine ruhige Reaktion auf Marktbewegungen hervorgehoben.
Mindmap
Keywords
💡Global stock markets
💡Crypto market cap
💡Interest rates
💡Geopolitical tensions
💡Recession
💡Big tech stocks
💡The Magnificent 7
💡AI trade
💡Model collapse
💡Great rotation
💡Bubble
Highlights
Global stock markets have lost $6.4 trillion in the last 20 days, comparable to the entire crypto market cap.
Japanese interest rates, geopolitical tensions, and rumors of a recession have intensified market volatility.
The downturn began in Silicon Valley with significant declines in big tech stocks.
The 'Magnificent 7' tech companies account for one third of the S&P 500 market cap.
These tech giants have been the driving force behind the S&P 500's growth over the last decade.
The hype around AI has led to a rally in tech stocks, with some shares increasing over 100% from 2022 lows.
Investment in AI by tech companies is projected to reach $1 trillion in the coming years.
General artificial intelligence remains elusive, and AI stocks seem to rely heavily on large language models.
The limitations and degradation over time of large language models are becoming increasingly apparent.
Open AI's chat GPT costs an estimated $700,000 per day to operate.
Investors are starting to seek better risk-reward ratios as valuations of the 'Magnificent 7' reach extreme levels.
A significant shift in market direction occurred in July, with the 'Magnificent 7' losing an average of $125 billion per day.
Small cap US stocks started to rally as expectations of a September rate cut boosted trader confidence.
The Q2 earnings reports of the 'Magnificent 7' fueled further share price declines.
Ray Dalio's bubble gauge suggests that the US stock market and the 'Magnificent 7' do not appear to be in a bubble.
The current market conditions may represent a correction rather than a bubble burst, influenced by geopolitical tensions and financial market dynamics.
Cryptocurrency, despite weak correlation with stocks, could be negatively impacted by a significant downturn in large tech companies.
Investors in the current climate should reassess their investment theses and be prepared for market volatility.
Transcripts
$6.4 trillion has been erased from
Global stock markets in the last 20 days
that's like the entire crypto market cap
rugging for 3 weeks straight Japanese
interest rates geopolitical tensions
foreign exchange drama and rumors of a
recession have poured fuel on the fire
in the financial markets but it was in
Silicon Valley that the Flames began
with a bonfire in big tech stocks so is
the mother of all bubbles bursting in
the US Stock Market well today we find
out plus what it could mean for crypto
stay
tuned ever since open AI released chat
GPT in November 2022 the hype around AI
has caused us tech stocks to Rally like
crazy Microsoft alphabet and Amazon
Shares are up well over 100% from their
2022 lows meta is up
546 and in is up
1200% less so at the time of shooting
but well who's counting now these
companies along with apple and Tesla are
referred to as The Magnificent 7 and
looking at their charts you can see why
together they account for one third of
the market cap of the S&P 500 the market
cap weighted index of the 500 biggest US
Stocks so dominant is this handful of
tech stocks that over the last 10 years
just six of them were responsible for
45% of the growth in the S&P 500 and
thanks to the popularity of passive
investment products that track the
performance of the S&P 500 the
Magnificent 7 have created a rising tide
that's lifted the rest of the index
along with it what looks like a
market-wide bull run is really just a
case of the tail wagging the dog so if
there is a bubble in the market it's
thanks to a handful of swollen Silicon
Valley residents who've added trillions
of dollars to their market caps in
recent years and it's no secret that
this is because these companies are
being used as proxies for betting on the
future of AI but nobody knows who the
biggest winner of the AI boom will be in
the long term will nvidia's Monopoly
last forever will meta pivot away from
AI as fast as it did the metaverse your
guess is as good as ours but for the
time being the Magnificent 7 are leaning
into AI as hard as they can and this has
made them synonymous with the AI trade
and for a while expectations around the
economic and social benefits of AI
became so great that there was no longer
any ceiling on the valuation of these
companies no valuation was too high and
no amount invested into silicon Valley's
AI pet projects could be too big at
least that's what the CEOs wanted us to
believe according to alphabet the opport
Unity cost of underinvestigated
expenditures according to Goldman Sachs
spending on AI by tech companies will
reach $1 trillion in the coming years a
sum so great that it's unimaginable that
there will be a return on investment
anytime soon General artificial
intelligence is still nowhere on the
horizon and apart from nvidia's GPU
Monopoly AI stocks seem to be riding on
the coattails of large language models
without any obvious moat meta llm for
example is open source hold up a second
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much and now back to you guy as for
alphabet the AI overview that now
appears above Google search results has
on occasion advised eating rocks using
petrol to cook spaghetti gluing cheese
to pizza and running with Scissors and
when it comes to Microsoft open AI has
played them like a piano since 2020
Microsoft has invested $13 billion into
open AI Microsoft is also the exclusive
provider of computing power for open
ai's research products and programming
interface in 2023 CNBC said quote
leaning on open AI has the potential to
help Microsoft dramatically reverse its
Fortunes in AI where it has stumbled
publicly and didn't build a meaningful
business on its own but this year Apple
announced that chat GPT will be
integrated into iOS and OSX apparently
without having given open AI a single
penny or GPU for that matter this
probably isn't what CNBC meant when they
said open AI would dramatically reverse
Microsoft's Fortunes in AI but hey if
the shoe fits tech companies can
shoehorn large language models into as
many products as they want but there is
still no killer use case let alone a
sustainable business model that can
justify The Upfront costs chat GPT for
example costs an estimated
$700,000 per day to run assuming this is
correct that means open AI has spent
$427 million and Counting since launch
just to keep it turned on and what have
we got to show for it well the
limitations of llms are by now painfully
obvious to anyone who's tried talking to
one they flooded the internet with AI
generated driil and turned from a
novelty to a nuisance in the process and
unfortunately I do mean literally that
they've transformed researchers at
Stanford and UC Barkley have found that
both GPT 3.5 and GPT 4 are getting quote
substantially worse over time another
researcher who led a study at Oxford
University described this phenomenon as
quote model collapse which occurs
through training new language models on
the output of previous language models
as lead researcher Ilia shov put it
quote it's like a repeated process of
printing and scanning the same picture
over and over again first you print an
image then scan it then print it again
you keep repeating this process until
you discover that over time the quality
of the picture will turn from being
great to purely noise where you can't
really describe anything and at the
moment open AI seems more focused on
cutting costs than making its AI
substantially better at least this is
the impression given by the company's
pivot towards smaller models like the
new GPT 40 mini that are faster and
cheaper to run at the expense of being
stupider than the flagship GPT models
and yes it's great to see a move towards
cost efficiency but we're just not sure
who needed worse output but
faster so it's no surprise to see
investors starting to revolt sure the
Magnificent 7 are probably going to
accomplish big things with AI eventually
but this summer The valuations of these
companies reached levels so high that
investors started shopping around for
better risk reward after almost 2 years
of up only for Mega cap tech stocks the
market changed Direction quite
dramatically in July over a 20-day
period the combined market cap of The
Magnificent 7 fell on average
$125 billion per day this amounted to
$2.6 trillion being deleted from the
stock market but interestingly while
Mega cap started to melt down small cap
US Stocks started to rally and the media
became a buzz with Talk of the great
rotation from the Magnificent 7 into
small caps so what happened well the
rotation began on the 11th of July after
the US Department of Labor posted cooler
than expected inflation data this
boosted Traders confidence in the
prospect of a September rate cut which
the CME fedwatch tool currently says is
100% likely to happen what does this
mean well the Magnificent 7 companies
are sitting on a mountain of hundreds of
billions of dollars in cash reserves and
this means that they are pretty well
insulated from macroeconomic trends like
rate hikes and cuts if anything higher
interest rates might even be better for
them because they can sit around earning
yield on their reserves smaller cap
companies on the other hand have been
hammered by high interest rates over the
past 2 years many of them are not
profitable and rely on external
financing this means they have a lot
more debt on their balance sheets making
interest rates a matter of life and
death and this has been reflected in
share prices the Russell 2000 an index
of small cap US Stocks has been trading
sideways for almost 2 years but now that
rate cuts are visible on the horizon
shares in these small cap companies are
starting to look like pretty decent RR
as evidenced by the recent rally Al so
in July the Magnificent 7 companies
started posting Q2 earnings figures and
these turned out to be fuel for the fire
of their own share prices and the crazy
part is with the exception of Tesla
their earnings weren't even bad
Microsoft and alphabet shares fell after
both companies posted better than
expected earnings for Q2 in alphabet's
case it seems that spending rather than
earnings was on the minds of
shareholders as a wave of selling caused
shares to Fall by 5% on the release of
the company's Q2 report alphabet
reported spending $13.2 billion on
property and Equipment mostly for
building AI models in just 3 months this
was twice the amount it spent in the
same period in 2023 and according to CFO
Ruth porat the company plans to maintain
this rate of spending for the remainder
of the year as for Microsoft meanwhile
revenues overall were up by 15%
year-over-year but its Azure Cloud
Computing Services grew by 29% rather
than the expected 30% apparently this
was enough to Spook investors as shares
fell by up to 8% in after hours trading
now what began as the great rotation has
since spiraled as foreign exchange
markets geopolitical tensions and rumors
of a recession have created a perfect
storm for a major crash in financial
markets this has put wind in the sales
of those who've been declaring a bubble
in the US stock market so how will
history remember the summer of 2024 will
the current market crash turn into a
great bursting are we in a bubble of the
kind seen in 2008 2000 or even
1929 well to answer these questions
we're going to need to agree on what
exactly a bubble is the textbook
definition of a bubble is a period of
speculative buying that pushes asset
prices far above their intrinsic or Fair
value as determined by fundamental
analysis of metrics like demand earning
revenue or growth potential bubbles
emerge when news of rising prices and
high trading volumes causes more and
more buyers to fomo in which generates
more news of rising prices and so on
this frenzied speculation continues
until prices become so exorbitant that
no new buyers can be found the Music
Stops Panic ensues and a wave of selling
causes prices to collapse in hindsight
market conditions were so extreme that
any fool could spot the bubble a mile
off just look at the dot bubble the
subprime mortgage bubble or the bubble
of the Roaring 20s people must have been
crazy back then but the problem is this
is only obvious in hindsight bubbles
tend to be driven by a narrative that
promises some paradigm shift that
persuades bulls that this time is
different and even if you become aware
that you are in an unsustainable bubble
it's impossible to tell when the good
times will come to an end as John
Maynard KES once put it quote the
markets can remain irrational longer
than you can remain solvent take the
dotcom bubble for example back in 1996
Federal Reserve chair Alan Greenspan
famously warned that the stock market
was overvalued with asset prices
unjustified by fundamentals and yet the
stock market proceed proceeded to double
over the next 4 years before the dotom
bubble finally burst in 2000 so let's
see what we can cook up much like timing
the markets in general calling a bubble
is no easy feat but naturally this
hasn't stopped many people from trying
various metrics have been used to gauge
how bubbly certain markets or assets are
from social sentiment to price to
earnings ratios so let's see what can be
cooked up
now as far as we can tell no bubble
gauge is more comprehensive than the one
developed by Ray Delio he's the
billionaire founder of Bridgewater
Associates the world's largest hedge
fund his bubble ometer sorry bubble
gauge takes an aggregate of six
different variables to get a read on the
market according to Delio a bubble
occurs when the market has a combination
of the following in high degree One
prices are high relative to traditional
measures EG present value of cash flows
for the duration of the asset compared
to their interest rates two prices
discount unsustainable conditions EG
extrapolating past revenue and earnings
growth rates late in the cycle when
capacity limits mean that growth can't
be sustained three new buyers are
entering the market four there is Broad
bullish sentiment five purchases being
financed by high leverage six and buyers
businesses have made extended forward
purchases to bet on price gains EG
inventories that are more than needed
contracted forward purchases Etc now
back in q1 dio applied these criteria to
the US Stock Market and the Magnificent
Seven imp particular and compared his
findings with historical readings from
past bubbles he concluded that the US
stock market quote and even some of the
parts that have rallied the most and
gotten media attention do not look very
bubbly mark conditions he said quote are
not consistent with past bubbles now
bear in mind that this was q1 of this
year at the time diio judged that the
Magnificent Seven share prices were in
aggregate fairly priced however they
continued to Rally throughout Q2 so
let's take a look at an ETF tracking the
Magnificent 7 stocks to see what has
changed by the end of Q2 price looked
overextended beginning in July with a
weekly candle closure well above the
upper Ballinger band this turned out to
be a local top and the great rotation
began soon after for red Weeks Later
price is now approaching the moving
average for the first time since April
it's probably below it by the time you
see this video so on Delio's first
measure we would say prices are not
dangerously high at the moment next up
are prices discounting unsustainable
conditions in q1 Delo said no the
Magnificent 7 looked frothy but not
bubbly this he said was taking into
account price to earnings ratios that
had already baked in Fairly High
projected earnings growth as we saw
earlier from the available earnings data
the Magnificent 7 minus Tesla are
beating earnings estimates this suggests
that Dio's judgment is still valid at
this time when it comes to sentiment
diio found that investors were bullish
on Ai No Surprises there and this is
likely still true in a broad sense but
since the biggest buzzword or words of
Q3 so far are the great rotation we
wouldn't say that there is Broad bullish
sentiment around the Magnificent 7 right
now quite the opposite in fact on the
question of new buyers entering the
market Dio's q1 judgment was quote not
particularly concerning trading volume
increased moderately in Q2 and then
almost tripled from June to July again
this was the sell-off of the great
rotation and there is no indication of a
wave of new buyers foming into the
market here to judge the level of
purchases being financed by high
leverage diio pointed to us household
margin debt outstanding approaching
10year lows in q1 looking at the same
chart in Q3 this is still the case
Delio's final question asks to what
extent buyers are making exceptionally
extended forward purchases in other
words are they overly optimistic in
extrap ating current demand into strong
demand growth going forward in q1
capital expenditures at the Magnificent
7 were at all time highs both versus
their own sales and as a share of the
economy indicating that forward
purchases were indeed frothy but not
quite at bubble levels the eyering capex
numbers reported in the recent earnings
season suggest that this measure is
still frothy if not bubbly the great
rotation and the subsequent crash seen
in Global Financial markets have taken a
lot of the steam out of the Magnificent
7 as such we don't think that the US
Stock Market looks much more bubbly than
it did in q1 and based on Ray Delio's
measures from back then we can infer
that the market of today is not in a
bubble unfortunately when it comes to
investing there is no room for certainty
so of course what we are witnessing now
may only be the first leg down of a much
steeper drop however right now it looks
a lot more like a correction in the
stock market exacerbated by geopolitical
tensions and the unwinding of the Yen
carry trade in the foreign exchange
markets so what does this mean for
crypto well crypto may be weakly
correlated to stocks these days but if a
real bubble bursts of companies this
size it would not be good news for
anyone at the time of shooting the
markets are screaming in fear but
frankly a correction in the stock market
was overdue the longer the Magnificent 7
rally without a pullback the closer to
Mania and a dangerous fomo cycle we get
as for the great rotation we should
remember that it was prompted by
heightened expectations of a rate cut in
September while the 11th of July
inflation data turned out to be bad news
for overextended Mega cap tech stocks
BTC bounced 9% over the following week
since then much dumping and chopping has
ensued sentiment online is pretty hairy
to put it mildly but Times Like These
are the ultimate test of conviction if
you hold crypto it's a good time to
think through your investment thesis
what invalidation of that thesis would
look like and how you will respond to
different moves in the market whatever
you do just keep a cool head and don't
get wrecked by fear greed or
leverage right that's all for today
folks if you have another take on the
bubble or no bubble argument let us know
what you think and why in the comments
smash the like button if you're looking
forward to those rate cuts and while
you're at it make sure you're subscribed
and have your bell notifications
switched on too that way you'll be the
first to catch our next upload as always
thank you for watching and I'll see you
next time this is guy over and
[Music]
out but
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