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Clearing technology stocks, cryptocurrencies, 10X Research: Will re-enter at even lower levels

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Clearing technology stocks, cryptocurrencies, 10X Research: Will re-enter at even lower levels

According to CoinDesk, market analysis firm 10X Research sold all technology stocks and most cryptocurrencies on the 15th, expressing a bearish outlook for the future. What are the reasons behind this decision?

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10X Research: Liquidating Stocks and Cryptocurrencies

Founder Markus Thielen pointed out that risky assets such as stocks and cryptocurrencies are on the brink of significant price corrections, mainly due to unexpected and persistent inflation.

With the bond market expecting fewer interest rate cuts than previously anticipated, the 10-year U.S. Treasury yield has surpassed 4.50%, suggesting that risky assets may have reached a critical turning point.

He stated:

We sold off all tech stocks after the opening on the 15th because the Nasdaq index performed terribly and reacted to the rise in bond yields. Currently, we only hold a small amount of promising cryptocurrencies. Overall, we maintain a bearish outlook on risky assets - stocks + cryptocurrencies - and hope to re-enter the market at lower price levels in the future.

Reasons for Bearish Outlook on Q2 Crypto Market

Regarding cryptocurrencies, specifically Bitcoin, Markus Thielen has put forward several bearish viewpoints:

  • Bitcoin spot ETF flows are weak, with most net inflows occurring in Q1.

  • MicroStrategy (MSTR) has retraced by 30%, still significantly above fair value as per the tweet below.

  • Initial expectations of six interest rate cuts at the beginning of the year have now reduced to three, with the possibility of no rate cuts for the entire year.

  • The price surge of Bitcoin in 2023 and 2024 was primarily driven by rate cut expectations, and the upward momentum now faces significant challenges.

Markus Thielen commented:

Following the hype, unless prices continue to rise, ETF inflows often dry up, but Bitcoin prices have been stagnant since early March and with declines ranging from 2% to 17%, potential investors may adopt a wait-and-see approach.