Many financial partners are currently focusing on the Japanese interest rate decision by Bank of Japan Governor Kazuo Ueda at 2:30 PM. In fact, whether Japan raises interest rates or not is becoming less important, as the market recognizes market interest rates. Generally, we use the 10-year Japanese government bond yield as a reference (as shown in the image below). As for raising or not raising interest rates, the market interest rate is more relevant when it comes to the benchmark rate!

Currently, the core influence on Japan's carry trade is the leverage ratio. The three assets with the highest leverage ratios in the U.S. stock and cryptocurrency markets are Nvidia, Tesla, and Bitcoin, which has led to a very high correlation among the three. Additionally, the continuously rising 10-year Japanese interest rate over the past month has also been one of the triggers for their decline.

So, when to buy the dip has a relatively good observation indicator: leverage ratio + valuation + Japanese interest rate situation. Observing these three together is very important for determining when the cryptocurrency market will bottom out and start a new trend. The leverage ratio can be assessed through the stock data of Nvidia and Tesla (FINRA - Financial Industry Regulatory Authority). Valuation is a good case for Tesla; after business segmentation, it is easier to find a reasonable valuation range by comparing segments like automotive, energy storage, humanoid robots, and FSD autonomous driving. The Japanese interest rate mainly focuses on the data for 10-year, 5-year, and 2-year bonds.

Why should we frequently pay attention to Tesla and Nvidia? Besides their strong correlation with #BTC, they have also been key factors benefiting from Japan's carry trade, achieving exponential growth over the past two years, which has completely exceeded their intrinsic value! After all, they are leaders in #AI and new energy vehicles, similar to the logic of China's SMIC and Xiaomi. This logic has only recently replayed across regions in China over the past two months, which is what is known as cross-geographical and cross-market arbitrage! 🧐

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