When non-economic recession, dollar depreciation, and U.S. interest rate cuts occur simultaneously, risk markets will welcome a favorable environment. However, the impact of the U.S. push for manufacturing to return is more complex for risk markets and the cryptocurrency market.
On the positive side, it can enhance the attractiveness of the real economy to capital, prompting funds to flow out of speculative assets and into real industries.
Taking the current market as an example, Bitcoin has performed outstandingly in this cycle, while some altcoins like DOT have seen declines. This is precisely because, under conditions of tight liquidity, funds tend to flow into safer and more stable assets, represented in the cryptocurrency space by Bitcoin, and in the U.S. stock market by companies like Nvidia and the other "seven sisters."
Thus, while the return of manufacturing can stimulate investment, it will also withdraw market funds.
Assets that are experiencing sluggish growth and have an imbalance between risk and return will see significant liquidity withdrawn, while high-quality assets will receive more capital injection.
