Binance Learning Camp Masterclass The Key Anchor of This Round of Market Pricing Video contains complete lecture notes 1/ The market reflects the speed of changes in interest rate expectations, not the interest rate level itself. This year, expectations shifted from rate cuts to rate hikes, with the turning point around May, coinciding with Bitcoin's drop from over $80,000 to over $50,000. 2/ Once the slope of expectations flattens, the price stops making new lows. After interest rate expectations shifted from steep to flat, Bitcoin did not experience a deeper decline, indicating that the negative news was priced in all at its peak. 3/ The two declines were completely different in nature. The first was due to risk sentiment related to war, which recovered quickly; the second was due to a shift in interest rate expectations from decline to rise, indicating a change in the pricing logic, resulting in a much slower recovery. 4/ The midterm elections were a clear signal of de-escalation. Sectors most heavily suppressed without their own negative news rebounded first, with crypto and non-hardware sectors within the broader tech sector leading the gains, followed by Hong Kong stocks, A-shares, and the ChiNext market. 5/ When assessing global liquidity, one should not only focus on the Federal Reserve. Bitcoin is a global asset; a large amount of capital is not concerned about US interest rates. Using the tightness or looseness of central banks as an indicator is more representative. 6/ This indicator read 2 last year, and 19 this year. Of the 38 central banks, 19 last time they raised interest rates, which corresponds to the weakening of cryptocurrencies starting last October. This indicates that the decline is due to global tightening, not just a problem within the crypto market itself. 7/ We've now completed half of the cycle, and tightening is entering its second half. Two or three months ago, at the height of panic, the reading was only 12; now it's 19. The closer we get to a reversal, the closer we get. 8/ Whether to wait until 36 or even 38 before the bottom is reached is a key judgment. If all central banks have to tighten to the extreme, there's still a long way to go; if a reversal occurs earlier than in history, we're already in the bottoming area. 9/ The Fed is locked in by employment this time. With the unemployment rate rising above 6%, a 7% interest rate is simply unrealistic; the US cannot accept widespread unemployment. 10/ The employment buffer is already very thin. The hiring rate is the lowest since the pandemic, and the ratio of job openings to job seekers has fallen to around 1. The Fed dares not raise interest rates continuously. 11/ Market expectations for interest rate hikes are often overestimated. Last week, 30% to 40% of expectations predicted an October rate hike, but no change was made; now, expectations are for hikes in December and January, again leaning hawkish. 12/ This round of inflation is energy-driven, not demand-driven. September PCE was 3.6%, with energy contributing 0.7%, roughly one-fifth, while energy prices only started rising in February this year due to the war. 13/ Supply-driven inflation will disappear on its own. Inflation is year-on-year; oil prices were low before February last year, and the base effect will have reversed by early next year, so a recession is not needed. 14/ The probability of oil prices spiraling out of control is low. Crude oil inventories are falling, but only to the 10-year historical average, far from a truly tight situation. 15/ The timeline for inflation peaking can be calculated directly. If oil prices remain at $115, the peak will be in January or February next year; if oil prices return to $95, the peak will be in October this year. The monthly reading might be the peak. 16/ Watching oil prices is more useful than watching Fed speeches. War de-escalation is the most direct dovish variable. Once oil prices fall, inflation, interest rate expectations, and risk assets will shift in sequence. 17/ The inflection point of inflation, the inflection point of interest rate expectations, and the inflection point of risk assets are the same thing. Once the expectation of inflation peaking is formed, interest rate expectations will ease first, and stocks and cryptocurrencies will move first. 18/ By the time the data is confirmed, the market has already completed half of its movement. Releasing November data in December, even if it's hot, is still an extreme value; it will only go down afterward. 19/ The correctness of the deduction depends on three variables. How long the war lasts, when oil supply will recover, and how strong the machine effect is—any change in any of these will require a complete recalculation of the above conclusions. 20/ This AI cycle is shorter than any in history. It peaked just four years after GPT in November 2022, while Ethereum took more than five years from the DeFi Summer in 2020. 21/ Because of AI The spread is too fast. It only took 4 years for the US personal penetration rate to reach 61%, while the internet took 8 years to achieve the same distance. 22/ The personal penetration rate has already peaked, but the enterprise penetration rate hasn't even started yet. Personal usage is 61%, but only 10% to 20% of enterprises are actually using AI in their businesses. Traditional industries have almost no desire to adopt it. 23/ Hardware price increase cycles have historical patterns. In the railway, electricity, and internet sectors in 2000, raw material price increases only lasted three to four years. This round, DDR5 prices have increased 14 times in three years. 24/ AI capital expenditure is already so large that it can drag down the entire economy. It contributes more than one-third to US GDP. The five major tech companies have invested over $800 billion this year, and the entire industry is approaching $1 trillion, expected to exceed $1 trillion next year, and reach $1.3 trillion by 2028. 25/ But the growth rate is at its peak this year. Next year, it will drop from 94% to 37%. This year is the best year for growth, so the market has started to correct valuations ahead of time. 26/ This round of computing power and... The fundamental difference between fiber optics in 2000 and 2000: Back then, after installation, it was uncertain whether anyone would use it; the bursting of the bubble was terrifying. Now, once computing power is built, there will definitely be demand, only the price varies. Therefore, the pullback is a valuation correction, not a collapse in demand. 27/ Bitcoin's current trend is in tandem with big tech: The recent drop in Bitcoin is the same as the previous drop in big tech; its risk asset characteristics are strengthening. 28/ Memory stock pricing is already very pessimistic: Samsung and SK Hynix have PE ratios of less than 3, implying a 25% to 50% revenue decline in the next year. However, their orders for next year are basically completed, making this assumption unlikely. 29/ China's supply shock is overestimated: SK Hynix's new capacity won't be available until after 2028. Changxin is currently still in the DRAM and NAND segment, not yet reaching HBM, which is the most profitable segment. 30/ Both are killing free cash flow, but Google is more dangerous than Amazon: Google's search growth rate dropped from 17% to 12%, while Amazon's revenue still grew by 40%. Amazon will be significantly stronger during rebounds. 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