Today is May 19th, and many people may not be unfamiliar with the number 519. On May 19, 2021, the cryptocurrency market experienced a massive crash, with Bitcoin's price plummeting sharply from around $44,000 to $29,000 (a drop of over 34%), Ethereum halving directly, and other altcoins like Dogecoin also experiencing significant declines, leading to a large number of investors being liquidated, and the market falling into extreme panic.
Yesterday (May 18th), Bitcoin briefly broke through the $107,000 mark, just a little short of the historical high. Perhaps it's still haunted by the shadow of 519 from a few years ago. Today, Bitcoin continued to experience a slight pullback, showing that it still cannot escape the panic surrounding the anniversary...
Compared to the current market, the market in the three months after Trump took office is actually very similar to the 519 period, both are at the peak of a bull market. However, this wave is falling along with the stock market. Global risk assets are affected by tariffs and the Federal Reserve's dollar hegemony crisis. However, Trump's policies on cryptocurrencies did play a positive role. Additionally, institutions are starting to dominate the market, so Bitcoin just dropped from 109,000 to a low of 75,000. But since this wave of funds is focused on Bitcoin, the decline of altcoins is not much better than during the 519 period. Many projects have dropped more than 3x from their highs. It can only be said that this wave of altcoins has indeed reproduced the 519 market, and even Bitcoin has returned to above 100,000. Most altcoins have not returned and many are hovering at historical lows.
Only a few sectors like meme and AI agents have seen significant rebounds. Whether altcoins can break out of the bull market after the 519 incident will also depend on favorable policies and funds, such as Bitcoin's strategic reserves attracting substantial funds to the cryptocurrency market, the Federal Reserve initiating a rate cut, and improvements in the legal and regulatory framework for cryptocurrencies, as well as more institutional-level funds entering the fray. Only then can funds possibly flow into altcoins, leading to a real altcoin bull market. The next key point is Bitcoin's all-time high, followed by a decrease in Bitcoin's market share. To gauge the altcoin bull market index, just look at the ETH/BTC exchange rate trend.
In June, the US is going to make a big move, borrowing new debt to pay off old debt. This will release funds and is likely to bring liquidity into the cryptocurrency circle, along with small company stocks in the US stock market and gold. June and July may welcome a wave of profitable market activity, which we can call the 'US Debt Replacement Bull Market'.
What exactly is going on?
In June, $6.5 trillion of old US debt will mature, and at least $1.42 trillion of new debt must be issued to fill the gap. The question is, who will buy this new debt? How high must the interest rates go for anyone to want it?
China definitely won't buy anymore. Trump has done so much against China before, and in March, he already reduced holdings of 27.6 billion long-term US Treasuries. Now the UK is the second largest holder of US debt, and China has dropped to third. Other smaller allies are also unreliable; no one has that much money to take over. If they forcibly let foreigners take over, interest rates would skyrocket, and the US government simply can't afford such high interest rates.
Now we can only rely on the Federal Reserve to directly start the money printing machine, wildly printing trillions of dollars to buy bonds, forcibly pushing bond interest rates down to rock bottom.
Don’t be fooled by Federal Reserve Chairman Powell’s daily tough talk about not injecting liquidity; in reality, there are no options left. In the end, the Federal Reserve will definitely absorb over 90% of the new debt, while others will only symbolically buy a bit.
If this scenario is realized, it means injecting money into the market. When there is more money, it will flow into the financial markets, cryptocurrencies, small-cap stocks in the US stock market, gold, and other safe-haven assets.
Although altcoins may still fluctuate up and down for now, if there are no negative news during this period, they should not reach new lows. Once the funds arrive in June and July, the altcoin phase of the bull market will continue.
In the coming time, if we get signals, we will slowly build positions. If altcoin prices return to those lows in April, we can buy in several batches. This opportunity for monetary easing brought about by the adjustment of US Treasuries might be the best money-making opportunity in the next year.
You can't rush to bottom fish; during volatile markets, we need to take our time. Following the rhythm like we did before Trump was elected last year, we can operate slowly. When the wave comes in June and July, catching it once will be enough to sustain you for a year.
Brothers, hurry to gather in the chat room: