The cryptocurrency market fell sharply, the US stock market also fell sharply, and today Hong Kong A also fell sharply. The market in these two days is worth reviewing, and there are three aspects worth discussing: 1) Why did cryptocurrency fall first and US stocks fall later? I see many people using the liquidity pool theory to explain that the US stock market is a larger pool, while cryptocurrency is a smaller pool. When liquidity is abundant, the US stock market will rise first, followed by cryptocurrency; When liquidity is scarce, cryptocurrencies fall first, followed by the US stock market. Coincidentally, the recent US government shutdown has led to a surge in short-term interest rates, tight short-term funding, and a combination of cryptocurrency and US stock market crashes, which seems to have validated this theory. But I think it's just a coincidence in time. According to this theory, at the end of October and beginning of November when liquidity is most tight, cryptocurrency should have fallen first, followed by the US stock market. In fact, cryptocurrency fell, but the US stock market actually rose; In addition, with the recent return of normal funding, it should have been that the US stock market rose first, followed by cryptocurrency, but there has been a synchronous decline in both the US stock market and cryptocurrency. So liquidity theory cannot explain the recent decline. In fact, with the launch of ETFs for Bitcoin and Ethereum, and the launch of various DATs on the US stock market, the theoretical referenceability of this liquidity gap is decreasing. The impact of short-term liquidity on both markets is of the same dimension. 2) What is the real reason? Let's first take a look at the overall background. The background of the market is the increase in macro uncertainty. As I mentioned before, macro uncertainty lies in whether the Federal Reserve can initiate interest rate cuts as desired without data support? Can the performance be realized under the high valuation of AI? https://(x.com)/xingpt/status/1987713132521996343? s=20； (When I posted this, I bet on No change on Polymarket and it has risen by 68%, making a small profit of 10u) Under the premise of macro uncertainty, institutions that make more profits and have negative expectations for the future will reduce their holdings in advance, such as Masayoshi Son clearing his position in Nvidia. 3) The core reason for the decline in the US stock market As mentioned earlier, under the premise of macro uncertainty, once there is any movement, the first reaction of institutions is definitely to take risks and reduce positions. There have been two major setbacks in a row: firstly, Coreweave's financial report did not meet expectations, and the delivery of one data center was delayed until Q1 of next year, resulting in delayed revenue for this part; The second reason is that the performance of Kaixia has been missed, and the short-term benefits of long-term single lock up, such as Apple's overall price increase, have been lowered. So the AI computing power, data center sector, and storage sector of the US stock market all plummeted. However, I believe that the US stock market should not panic excessively. The reaction to the financial report this time is a bird startled, and it should be corrected next week. The core reason is that there has been too much price increase, and there is a demand for profit taking. The US stock market also needs to lower its valuation. 4) The core reason for the decline in the cryptocurrency market The reasons for the cryptocurrency industry are more complex, including macro reasons, liquidity reasons, endogenous structural issues, and so on. However, if we grasp one point, the most crucial one is that there are no new buyers, No Marginal Buyer in this Market now. The reason for the high sideways trend from July to October was due to the dynamic balance of buying and selling, with Bitcoin OGs, whales, and miners selling at high levels, making them profitable and in need of cash out; Institutions are taking over, while listed companies such as DAT and ETFs are allocating Bitcoin. But what can be seen after November is that ETF outflows exceeded 1 billion US dollars, the largest since February, and other institutions that have not disclosed are also selling. The giant whale continues to sell under pressure, and the institutions that originally accepted the offer are no longer accepting it, so naturally the price will come down. The reasons why institutions do not accept orders include macro hedging, as well as the allocation of other assets such as stocks and gold, leading to a process of moving cryptocurrency assets from over allocation to standard or under allocation. 5) Is Bitcoin in a bear market? Today I saw many comments about entering a bear market, with many reasons such as the approaching end of the four-year cycle, a pullback in the US stock market, and a break in the K-line. From a trading perspective, it is true that Bitcoin has performed very poorly. Holding Bitcoin this year is far inferior to holding gold and Bitcoin, and there are ample reasons to look at bears. There is no obvious sign of a rebound in the technical aspect. But looking at bears and bulls doesn't make much sense. Bears and bulls are posterior, you only know it's a bear market when it falls through, and you only know it's a bull market when it rises. The real question that needs to be considered is, when can we bottom out? Or let me rephrase my question, how much did Bitcoin fall to and would institutions buy Bitcoin instead of gold or Nvidia? Will 80000 Bitcoin institutions buy it? If you don't buy, what about 60000 bitcoins or 50000 bitcoins? I think this is the key to the problem. 6) Gold, NVIDIA, and the cryptocurrency industry This topic is too big and takes up too much space. Here, we can only provide a brief introduction to the topic. The current rise in gold is due to the huge debt risk in the United States affecting the credit of the US dollar. The core is hedging, and institutions and central banks have shifted from low allocation to over allocation; The endpoint is the return of the US dollar to strength and interest rate hikes, but currently, there is no sign of either of these conditions happening; Nvidia's rising logic is the tide of AI's technological revolution, and the end of the rising is the bursting of AI's foam, and the overvalued performance cannot be realized; There are concerns at present, but Nvidia's performance remains strong, and stock price corrections are likely to occur multiple times. There seems to be insufficient evidence of a collapse yet. The bull market cycle of Bitcoin from 30000 to 100000 was due to the improvement of political status, the relaxation of regulatory environment, and the process of institutions increasing their Bitcoin allocation from no allocation. The collapse was due to institutions having adequate allocation; So in order to stop the decline of Bitcoin, it is necessary to balance selling pressure and closing pressure, and to balance the long-term OG selling pressure with institutional inflows; To continue breaking through the previous high, more institutions need to increase their allocation or increase the allocation ratio of Bitcoin (over allocation), and even Bitcoin needs to enter the reserve assets of mainstream countries (expansion). One possible path is that gold and Nvidia have started to decline at their peak, Bitcoin has already fallen through, and institutions have reason to increase their allocation of Bitcoin again; Another path is that gold and Nvidia remain high, Bitcoin is included in larger national reserves, and central banks participate in purchasing Bitcoin; In addition to the above two paths, macroeconomic easing and changes in liquidity are indeed beneficial for risk assets, but institutional allocation of gold and Nvidia (a core stock in the US stock market) have higher returns. Just like this year, Bitcoin will rise, but not as high as the first two. The road ahead is long, may you proceed with caution. （Disclaimer：NFA，DYOR，Opinions on my own. My remarks do not represent the position of the institution and do not constitute investment advice