The biggest bubble in your career: Bitcoin, tech stocks and the crisis analysis of the bond market

In today's ever-changing financial world, investors are often faced with a variety of choices and challenges. Bitcoin, tech stocks and bond markets, which were once regarded as "safe havens", are now undercurrents in the shadow of bubbles. This article will analyze the crises faced by these three major areas in detail, explore the bubble effects they may bring in your career, and provide some practical investment advice.

Since its launch in 2009, Bitcoin has attracted the attention of countless investors with its decentralization and anonymity. Early Bitcoin investors achieved thousands of times returns in just a few years. However, behind this irrational madness, there are huge risks. In 2021, the price of Bitcoin once soared to $60,000, but the subsequent sharp fluctuations frightened many investors. In the process, the market's enthusiasm for Bitcoin gradually cooled, and many people began to question its status as "digital gold".

Technology stocks have also experienced a similar fate. Driven by the new crown epidemic, the stock prices of many technology companies such as Apple, Amazon and Tesla have risen rapidly, creating unprecedented market capitalization. However, is there an overly optimistic bubble behind this growth? Some analysts point out that the valuation of technology stocks has far exceeded their actual profitability, and the market adjustment seems to be only a matter of time. Especially in the context of the Fed's interest rate hike, the rising cost of funds will have a significant impact on technology stocks, and investors need to respond with caution.

In addition, the bond market, as a traditional safe-haven tool, has also faced tremendous pressure in recent years. As interest rates rise, bond prices have shown a downward trend, which is undoubtedly a major blow to investors who rely on fixed income. Many pension funds and insurance companies are reassessing their portfolios to cope with the increasingly severe market environment. Experts generally believe that in the future market, the attractiveness of bonds will be greatly weakened, and investors need to find new sources of income.

In these three major areas, we can see a common point: investor sentiment often dominates the direction of the market. Whether it is the craze for Bitcoin, the overvaluation of technology stocks, or the turmoil in the bond market, changes in sentiment may trigger a crisis that sweeps the entire financial market. Many investors are often susceptible to the "herd effect" when facing market fluctuations, blindly follow the trend, and ultimately suffer huge losses.

For ordinary investors, it is particularly important to understand these market dynamics and bubble mechanisms. First, investors should always remain rational and avoid making impulsive decisions due to short-term market fluctuations. Secondly, diversification is an effective means to reduce risks. Reasonable allocation of funds to different asset classes can effectively resist the fluctuations of a single market. In addition, it is also very necessary to review and adjust the investment portfolio regularly, especially in the current market environment full of uncertainty. Timely adjustment of strategies will help seize investment opportunities.

In this process, education and information acquisition should not be ignored. In recent years, with the development of the Internet, the speed and breadth of information dissemination have greatly increased, and investors can obtain market dynamics and analysis reports through various channels. However, the flood of information has also made it more difficult to distinguish the truth from the false. Therefore, when obtaining information, investors should pay attention to the source and reliability of information to avoid being misled by false information.

Looking back at history, we find that many successful investors have experienced market fluctuations and challenges. Warren Buffett once said: "Be fearful when others are greedy, and be greedy when others are fearful." This view deeply reveals the essence of investment. At the moment when the bubble is about to burst, rational investors are often able to go against the trend and seize market opportunities.

Of course, investment is not just a game of pursuing profits, but also a responsibility. While pursuing wealth, investors should also pay attention to the sustainable development of society and the environment. In recent years, ESG (environmental, social and governance) investment concepts have gradually gained attention, and more and more investors have begun to incorporate social responsibility into investment decisions. This not only helps to enhance the long-term value of enterprises, but also brings more stable returns to investors.

In general, the crisis of Bitcoin, technology stocks and bond markets is a complex and multidimensional phenomenon. As an investor, understanding the dynamics of the market, maintaining rationality, and flexibly adjusting strategies are the keys to dealing with bubble risks. At the same time, paying attention to social responsibility and sustainable development will also bring more meaning and value to our investment. In this era full of challenges and opportunities, only by continuous learning and adaptation can we be invincible in the financial market.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Thanks to the recent strong financial performance of US companies and the fact that the Federal Reserve has not changed its current loose monetary policy, investors are optimistic that the stock market may continue to rise. The S&P 500 Index and the Nasdaq Composite Index, which is dominated by technology stocks, have both hit record highs this month.

Rich Bernstein, who was twice selected as an All-Star Analyst by Fortune magazine, chief analyst of Merrill Lynch, and founder of Bernstein Investment Advisors, said in an interview with CNBC on (9): "We may be in the biggest bubble of my career, from technology stocks, meme stocks, Bitcoin and even the bond market. Crisis has occurred."

He warned that the scale of this bubble may be even larger than the Internet bubble in 2000 and the real estate bubble in 2008. Bernstein pointed out that the US Federal Reserve has distorted long-term bond yields so much that long-term assets continue to rise; but once interest rates rise, it will be the nemesis of these assets.

Bernstein had previously warned in mid-June that Bitcoin was a bubble. Although the price of Bitcoin subsequently fell below $30,000, he believes that the current background is more dangerous than in June.

"Every time people always ask him when the bubble will burst? But the answer is... No one knows."

Regarding the advice to investors, Bernstein pointed out that in addition to paying attention to risks, you can observe those assets with pricing power in an inflationary environment for investment: "This will lead you to commodities, materials, energy and other fields. Interestingly, the energy market has been in a bull market for the past 6-12 months, but everyone says that this situation is unsustainable. However, Bitcoin has been in a bear market recently, but everyone is waiting for it to return to a bull market."

Although Bernstein issued an epic bubble warning, he did not predict that the entire market would collapse. He regarded the market as a seesaw.

"We are balancing these overvalued long-term assets and bubbles with the rest of the world, and unless liquidity dries up soon (which seems unlikely), the likelihood of a major bear market may be much lower than people think."

Different optimistic views

Unlike Bernstein's warning, many people are optimistic about the future of Bitcoin. Tom Lee, also a well-known Wall Street analyst, publicly pointed out today that Bitcoin has re-standing on the 200-day moving average, showing an important upward signal, and optimistically predicted that Bitcoin will stand at a high of $100,000 by the end of this year.

Bloomberg Chief Analyst Mike McGlone also tweeted on (9): "If Bitcoin catches up with Ethereum's performance this year, the price of the top cryptocurrency will be close to $100,000."

There are many factors that affect the overall crypto market. No one can perfectly predict the future direction. We can only wait for the market to verify it, but doing a good job of risk management is a must-learn lesson for every investor.