Trump’s Bitcoin Bet: Euro Crisis?

● Trump Family’s Bitcoin Bet, Lagarde’s Euro-Military Push

2024 Global Stock Market, U.S. Economy, Bitcoin, Euro Outlook: Key Points You Need to Know Now

Here’s a summary of the most important global economic trends, including the U.S. 10-year Treasury yield, Bitcoin, and the global stock market outlook.

Stability signals surrounding U.S. Treasury yields and cryptocurrencies
Bear market debate, changes in investor sentiment
U.S. M2 all-time high and liquidity effect
Trump Media's aggressive cryptocurrency investment plan
European Central Bank's remarks on strengthening the global status of the euro

Make sure to check these five important points. The current situation, outlook, and investor guidelines are summarized in chronological and flow order below.

Current Situation and Investor Sentiment in the U.S. Stock Market

The U.S. stock market is closed today, but both the 10-year Treasury yield and Bitcoin are showing stability.
The market has returned to normal orbit in the last two weeks without much confusion.
Moody's downgrade of the U.S. credit rating has already been priced in, as with S&P (2011) and Fitch (last year).
The assessment of representative bulls such as 'Topli' is that there is not much surprise in the stock market rise, so it is necessary to look at the 'blind spots' rather than blindly believing.
The recent U.S. stock market is "the most hated rally," with investors focusing on the basis for stock price declines, similar to the rebound after the 2020 Corona and the October 2022 lows.
Investor sentiment can change rapidly as it approaches market highs. In fact, public opinion will quickly shift to optimism if the actual high is broken.

Major Drivers and Potential Risks of Stock Market Rise

Data shows that the proportion of U.S. stocks is at the lowest level in the global portfolio, which is interpreted as a 'contrarian bullish signal.'
Hedge fund short positions have increased to the highest level in 10 years. In other words, many investors are already betting on a market decline, which may limit the decline.
Bitcoin is emerging as a leading indicator of major stock market indices such as the S&P 500. Bitcoin's record high = intuitive signal of global liquidity expansion.
The U.S.'s aggressive tax cuts and fiscal policies such as defense expansion are also expected to further expand liquidity. Tariff and geopolitical uncertainties are gradually declining.

Liquidity, U.S. M2, and Bitcoin

U.S. M2 (dollar money supply) recovered from its high of $21.74 trillion in February 2022, recording $21.76 trillion in April 2024, renewing its real all-time high.
After Corona, M2 surged → stock prices such as Nasdaq also rose on almost the same curve, and when M2 decreased, it reacted excessively and fell, but it is recovering again.
There is sufficient room to interpret the expansion of liquidity as not only a short-term decline but also a long-term 'asset price increase pressure.'
The increase in M2 is also reflected in Bitcoin. The formula is inflow of funds – expansion of global liquidity – rebound of risk assets.

Market Timing Strategies and Practical Investment Guidelines

'The Law of 10': Missing the top 10 days of the annual stock market will turn the average annual return (12%) into a negative (-10%).
The risk of timing prediction, a medium- to long-term holding strategy (Buffett-style approach) is superior at this time.
An excessive reaction to fears of a stock market decline contains the risk of giving up profit opportunities.

Trump Media’s Cryptocurrency Fundraising Issues

Trump Media & Technology Group plans to directly purchase crypto assets such as Bitcoin after raising $3 billion (Financial Times).
New shares and convertible bonds may increase the size of fundraising due to strong actual demand.
It is possible to be a mega-level positive for the Bitcoin and other cryptocurrency ecosystems. However, it is officially denied, and the timing/scale is uncertain.

Euro’s Challenge to Global Key Currency and the ECB’s Message

Christine Lagarde (ECB President) emphasized the possibility of the euro growing into a global key currency to replace the dollar.
She mentioned "unprecedented dollar aversion and portfolio diversification into euros and gold" due to uncertainties in U.S. economic and geopolitical policies.
However, without practical power such as strengthening military power and security partnerships in Europe, expanding the status of the euro is meaningless.
It is necessary to pay serial attention to European government bond yields, defense stocks, etc.

Investor Notes and Concluding Remarks

Risk assets such as Bitcoin and Nasdaq move in tandem with the increase in global M2 and the increase in liquidity.
U.S. and European interest rates and government bond market supply and demand, and geopolitical issues will be the watershed in the future.
For the time being, a strategy focused on maintaining holdings (cash strength) rather than market timing is effective.
All investment decisions should be made taking into account your own risk.

< Summary >
This summarizes the key trends and outlook for asset markets such as the U.S. stock market, global liquidity, Bitcoin, and the euro in April-June 2024.
Major news and data such as the U.S.'s all-time high liquidity (M2), Bitcoin signals and the possibility of a stock market rally, changes in bear market sentiment, and Europe's will to become a key currency are summarized in context at once.
The conclusion is that medium- to long-term holdings and asset allocation are more efficient than market timing now.

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