Quick Summary:
The Japanese yen reaches the lowest level of 2024. US dollar and Japanese yen at 139.92 — 11.5% lower than its highest.
The U.S. Dollar Index declines to 98, the lowest levels since April of 2022.
It causes sell-off of bonds as 10-year bond yield of Japan soars to 1.30%.
Stock indices in the U.S. now lie in the realm of technical corrections as investors are currently unsure.
Bitcoin proves to be resilient, attracting more than $381M of inflows into ETF in a single day.
There are analysts suggesting that Bitcoin is bound to become a safe-haven asset, like gold.
Ethereum, Solana, and Pepe are altcoins that are copying the steps of Bitcoin.
Yen Flexes Muscle as Safe-Haven around the World
Japanese yen held on its bullish run making a new high of 139.92 against U.S. dollar — its best rate since 2023. The increased movement suggests that investors are quite confident of the safe-haven status of the yen following the uncertainty prevailing in the conventional market.
This is also complemented by a general weakness of the U.S. dollar where the Dollar Index fell to a two-year low of 98. The other developed currencies such as the euro, British pound, and the Swiss franc have soared as well.
Markets Respond: Stocks Fall, Yields Rise
A large rebalancing of portfolios has been caused by the rise of the yen. BitMEX co-founder Arthur Hayes said this week that leverage traders are currently unwinding their U.S. equity and bond positions. The result? Major indices such as Nasdaq 100, the S&P 500, and the Dow Jones, which have all moved to negative territory, entered corrective territory.
At the same time, Japanese investors have cashed out about 20 billion dollars in foreign bonds, mainly U.S. Treasuries, due to higher returns in Japan. The 10-year yield in Japan has jumped to 1.30 percent, which is a huge increase compared to the previous year.
Bitcoin: Emerging Digital Haven OS
Interestingly, Bitcoin is starting to become a potential safe-haven asset. According to Hayes, declining U.S. dollar may compel the Federal Reserve to quantitative easing, which in the history has triggered an increase in the value of Bitcoin.
In support of this theory, aggregation of spot Bitcoin ETFs went through giant inflows: $381 million just on Monday. This was accompanied by a steep decline by 1,000+ points in the Dow Jones.
Volatility notwithstanding, Bitcoin has lost less than 3 percent so far this year, whereas U.S. indices have declined in the tens of percent. This durability has the potential of turning Bitcoin into something gold-like in diversified portfolios.
Altcoins that are Bound to Expand
Just like Bitcoin is making waves, altcoins are following in the same suit. The tokens such as Ethereum (+5.27%), Solana, and Pepe have recorded good gains. In the past, these coins have performed better when the Bitcoin mood is positive — indicating the possible altcoin season ahead.