Just one month after the interest rate cut, the global capital market has experienced several large-scale capital flows - the US technology sector rebounded first, driving the Nasdaq index up, the S&P 500 index and Dow Jones index to new highs, and the A-share and Hong Kong stock markets also saw a strong surge before the National Day holiday. And this week, funds returned to Nasdaq and the cryptocurrency market, driving the price of Bitcoin related assets to rise above $68000, expected to break through a new high soon.

Funds quickly switch between different tracks, forming a "seesaw" effect. Currently, global liquidity is about to emerge. How to analyze the market pattern? How will encrypted assets trend?

This week, the cryptocurrency market has shown impressive performance, with Bitcoin continuing to rise and now approaching the $68000 mark. Personally, I predict that it will challenge the pressure level of $70000 to $72000 in the near future, breaking through historical highs.

The timing of the current market rally is quite meaningful and may be related to the upcoming US election. As the November 4th election day approaches, the stability of the financial market becomes particularly important - before the election, the stability and prosperity of the market play a key role in the Democratic Party's election situation, so maintaining the smooth operation of the market has become a top priority; After the election, regardless of who takes office in the White House, stabilizing and stimulating financial markets will become an important agenda for their governance.

At the same time, looking at the world, the current situation in Northeast Asia remains tense, leading to a cautious attitude of international funds towards investing in the Asian market and a significant slowdown in the pace of "going east". In this context, the results of the US election will reshape the international geopolitical landscape. The new government's foreign policy orientation - whether its attitude towards the Russia-Ukraine conflict or its response to the situation in the Middle East - may trigger chain reactions. The changes in these geopolitical factors will affect global risk aversion and capital flows, causing significant adjustments in financial markets in the period following the election.

In addition to political factors, the cryptocurrency market itself is also releasing signals worth paying attention to. Firstly, there was a breakthrough in the stock price of MicroStrategy (MSTR). As the largest publicly traded Bitcoin holder, MicroStrategy's stock value not only reflects the company's own valuation, but also represents the expectations of the US stock market for the future price of Bitcoin. The MSTR stock price has risen by about 50% in the past month, which can be seen as a reflection of institutional investors' optimistic attitude towards cryptocurrency assets.

Secondly, Bitcoin has completed the necessary consolidation. Over the past six months, Bitcoin has undergone a long period of sideways consolidation, successfully digesting selling pressure from countries such as Germany and the United States. These selling pressures mainly come from regulatory approved Bitcoin spot ETFs and various institutional liquidations. After the market has fully digested these selling orders, the timing for Bitcoin's price changes is ripe.

In addition, Ethereum currently demonstrates good investment value. In the past six months of market adjustment, Ethereum has experienced a greater decline compared to Bitcoin, creating a significant price gap. Based on historical experience, this gap is often repaired in subsequent market trends, which also makes Ethereum highly attractive to funds at its current price.

Global liquidity is about to emerge, and the cryptocurrency market has great potential

In addition, an interesting phenomenon has emerged between the traditional capital market and the cryptocurrency market - when the traditional capital market is strong, the cryptocurrency market is relatively sluggish; While the prices of encrypted assets have risen sharply, some traditional capital markets have shown weakness, forming a special "seesaw" effect. This "seesaw" effect reveals the flow of global funds - funds always chase the most speculative market opportunities. Against the backdrop of intensified global competition, constantly changing policies, and emerging asset classes, capital is accelerating its flow towards areas that can bring the highest returns.

Although we see the peculiar phenomenon of liquidity jumping back and forth now, from a long-term perspective, the liquidity of global capital will inevitably be injected into the cryptocurrency market on a large scale in the future, and the turning point is also coming.

Firstly, from the underlying logic of economics, the rise of the cryptocurrency market can be attributed to the free flow of capital and the significant improvement in efficiency. Traditional financial markets are subject to numerous regulations and constraints imposed by intermediaries, resulting in restricted global liquidity of capital. The cryptocurrency market has achieved the free flow of funds globally through blockchain technology, reducing the frictional costs in capital flows.

By reducing intermediaries, increasing transparency, and improving the efficiency of financial services, the cryptocurrency market can adapt to market changes more quickly and respond to the needs of global investors. This improvement in liquidity and efficiency will have a greater impact on the global economy and drive capital allocation towards a more optimized and rational direction. Meanwhile, with the continuous popularization and application of encryption technology, even grander scenarios can be achieved in the future. With the continuous development of RWA and DePIN, it can promote the innovation of traditional economy, which is an important driving force for the future of the cryptocurrency market.

At the same time, the emergence of the "seesaw effect" means that in the past two years of industry development, encrypted assets, along with traditional assets, have become the mainstream choice in the capital industry. The huge potential of the cryptocurrency market is largely due to the lack of a compliance pathway that previously did not attract large-scale funding. However, the United States has now opened up a compliance path for the development of the cryptocurrency market through measures such as Bitcoin spot ETFs, the launch of a cryptocurrency regulatory framework, and support for Web 3.0 development.

Starting from 2023, Hong Kong will implement a new cryptocurrency regulatory framework that allows retail investors to legally participate in cryptocurrency asset trading through licensed exchanges. At that time, HashKey Exchange became the first licensed exchange approved to provide trading services for retail investors. Nowadays, the total trading volume of HashKey Exchange has exceeded HKD 538 billion, and user assets have accumulated over HKD 5 billion. As of October 16th, according to the latest data from CoinGecko, HashKey Exchange ranks among the top 8 global exchanges and is the highest ranked Hong Kong licensed virtual asset exchange.

Hong Kong not only provides policy guarantees, but also has the dual advantages of innovation and technological development, which can effectively attract global liquidity capital inflows. For investors, this combination means they can safely enter a highly innovative market while enjoying strong legal and policy protections. Through this two-way liquidity bridge, Hong Kong can continue to consolidate its position as a global financial hub, while utilizing Web 3.0 to develop new sources of liquidity, further enhancing its importance in the international capital market.

In this era of global liquidity and capital allocation, the cryptocurrency market, with its unique advantages and innovative potential, is becoming a new battlefield in the global capital battle. With the continuous advancement of technology and the gradual improvement of regulation, the cryptocurrency market is expected to usher in broader development space and become an indispensable force in global capital allocation.