The Founder of 10x Research, Markus Thielen, Turns Bearish on Risk Assets
Markus Thielen, the founder of 10x Research known for his accurate Bitcoin predictions, has shifted to a bearish outlook on risk assets, including technology stocks and cryptocurrencies. This change in perspective is driven by concerns about sustained inflation and its potential impact on financial markets.
Thielen’s Bearish Stance on Risk Assets
- Thielen believes that risk assets are on the verge of a significant correction.
- One of the primary triggers for this correction is unexpected and persistent inflation.
- The bond market has adjusted its expectations, leading to a rise in U.S. 10-year Treasury yields.
Impact of Bond Market Adjustments
- The increase in risk-free rates makes high-risk investments like technology stocks and cryptocurrencies less appealing.
- Hawkish repricing in the bond market, driven by U.S. inflation and a strong labor market, has diminished the attractiveness of these assets.
- Thielen has shifted his holdings, selling tech stocks and retaining only select high-conviction crypto coins.
Challenges to Previous Narratives
- Bitcoin’s rally in 2023 and 2024 relied on expectations of rate cuts, a narrative now under scrutiny.
- An article by RBC Capital Markets suggests a potential delay in rate cuts, challenging previous market expectations.
Recent Developments in ETF Flows
- The approval of eleven spot Bitcoin ETFs by the U.S. SEC initially drove significant inflows, but these have since tapered off.
- Market observers anticipate a correction in the wake of reduced ETF flows and decreased Bitcoin price momentum.
Current Market Status
- Bitcoin is trading at approximately $63,410, reflecting a 4.7% decrease in the past 24 hours.
- In the last five days, the NASDAQ Composite Index, dominated by tech stocks, has dropped by 2.72%.
Hot Take: Thielen’s Caution and Market Outlook
Thielen’s decision to sell tech stocks and limit exposure to high-risk assets indicates a cautious stance in the current market environment. With inflation concerns on the rise and bond yields climbing, the landscape for risk assets appears challenging. Crypto investors may benefit from monitoring these developments closely to navigate potential market corrections effectively.
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