From time to time, I wonder how the bull market will develop in the second half of this round, just as the infrastructure plan just launched by the president of the United States gives me some clues.
In this new plan, the United States will continue to invest about $2 trillion in infrastructure construction over the next 8 years.As soon as the news was released, the market was immediately elated and the stock market surged.
But in fact, if we look at the plan carefully, we will find that there is a hidden worry, which is the source of the 2 trillion US dollars.
Under the plan, the vast majority of the $2 trillion will come from corporate taxes, which will raise corporate taxes in the United States and bring corporate tax rates to 30.8% for many companies.It is estimated that one-third of the 100 largest companies in the United States will be responsible for this.
This is likely to have a direct impact on the US stock market.Because one of the fundamental driving forces for the bull run of US stocks in the past 10 years is not the growth of corporate profits and the strengthening of the economy, but the substantial increase in the stock market driven by the fact that US enterprises have used a large amount of surplus under the tax reduction policy of the former president for the repurchase of their own shares.
The current US stock bubble is so big that it is likely to enter a bear market soon.But the ensuing new crown outbreak has led the US government to start large-scale money spilling, forcing the stock market back to its peak after the Dow fell nearly 30%.However, this did not solve the fundamental problem, but further pushed up the bubble and delayed the crisis.
I always think this crisis will break out sooner or later, and this tax increase plan may be the trigger.Once the corporate tax increases, the surplus of enterprises becomes less, and the incentive for enterprises to repurchase shares will become smaller; in addition, as the value of the US stock market becomes larger, the capital required to continue to rise will also become more and more; the combined factors of these 2 aspects will make it difficult for the US stock to continue to rise, which may crash at a certain point in the future.
Combined with the rising global concern about inflation, I wrote in the previous article that it is possible that the Federal Reserve will not raise interest rates in 2023 but will raise interest rates ahead of time to 2,022 or even at the end of this year.
Under the influence of these 2 factors, it is possible that the US stock market will crash at the end of this year or the beginning of next year.
Once the U.S. stock crash will inevitably lead to capital flight, where will the capital flight go?I estimate it could be government bonds, precious metals and digital currencies.
Once the outflow funds flow into the digital currency, it may be the last push of the current round of digital currency bull market, pushing bitcoin and Ethernet to the peak of the current round of bull market, and then the entire digital currency market will start to bear.
Now the most uncertain is how much money will flow into digital currency, so how much bitcoin and Ethernet will rise in the current bull market.
In the current situation, it is still possible for bitcoin to rise to USD100,000, but will it rise to USD150,000, USD200,000 or even USD300,000 as predicted by some people?This is difficult to predict.
Some people asked, if the current round of bitcoin down to how much?If we still take a 90% decline, if bitcoin rises to USD100,000 and USD150,000, it is possible that the lowest point of bitcoin will be around USD10,000 and USD15,000 in the next bear market.However, given the growing size of bitcoin and the fact that bitcoin dropped less than 90% in the previous bear market, it is likely that the lowest point of bitcoin in the next bear market will be around USD15,000.
In my opinion, a big difference between the trend of this round of digital currency bull market and the previous round is that it is likely to resonate with the stock market.
In the previous bull market, the participation rate of institutional investors was almost 0; and this time, institutional investors have entered the market, so we have to consider the possible movement of institutional investors when considering the next trend of the bull market.This will make the trend of the bull market more complicated and more complicated.
In a word, whether it is good or bad, the second half of the big play to be kicked off will be brilliant, and we will see!
Thank you for READING, LIKING, FOLLOWING and VOTING.
You may also like reading this article：