QCP Capital: Risk assets are about to rebound, and the medium-term outlook remains bullish

ChainCatcher news, QCP Capital stated that the Chinese stock market continued to decline today, with the China A50 index dropping another 7%, down 17% from recent highs. The lack of fiscal stimulus has severely impacted investor sentiment. However, the U.S. stock market has not been affected by developments in Asia. Despite uncertainties surrounding the U.S. elections and the exclusion of interest rate cuts in 2024 following the non-farm payroll report, the U.S. stock market continues to rise to new highs. The bond market currently expects two rate cuts in 2024, down from three just a week ago.

Despite the escalating turmoil in the Middle East and domestic challenges related to the U.S. elections, the U.S. stock market continues to steadily climb, reaffirming the view that risk assets are poised for a rebound. In the cryptocurrency market, the Meme coin sector has surged with increased on-chain and off-chain trading activity. Traders are heavily speculating and leveraging the latest popular Meme coins, leading to some bubbles in the market.

In the past two weeks, the perpetual contract funding rates on exchanges like Deribit and Binance have also risen, indicating that short positions are decreasing or long positions are increasing. This, along with the bubble in the Meme coin market, keeps it vigilant for potential downturns, as such situations often occur when the market is bullish and investors are least guarded. Even in the face of short-term uncertainties and declines, we still plan to continue accumulating, with a bullish mid-term outlook.