Restart the regular investment in Ethereum

Last Friday, the interest rate hike by the Bank of Japan and concerns about the U.S. economy quickly transmitted the crash of the Japanese stock market and U.S. stocks to other global markets.

The Bank of Japan's interest rate hike raised investor concerns about Japanese exports and the Japanese economy, leading to a sell-off of risk assets to pay off debts.

Concerns about the U.S. economy mainly stem from the recent economic data released by the U.S.—an unexpected rise in the unemployment rate and a contraction in the manufacturing index.

According to past interpretations, this data would be seen as favorable for an upcoming rate cut, but Wall Street's interpretation this time seems to lean more towards the U.S. economy entering a recession.

As a result, we witnessed Friday's "stock market crash."

And just over the weekend, more bad news emerged, especially from the Middle East. The market is worried that the conflict between Iran and Israel could soon escalate into military confrontation.

As I write this article, today (Monday) the stock market opened, and the Nikkei index in Japan plummeted again by over 5%, with Asian and European stock markets also experiencing widespread declines. It is estimated that the U.S. stock market, which opens tonight, will not look good either.

I am quite cautious about the future trend of the Japanese stock market. Regardless of whether Japan continues to raise interest rates, the yen is likely to strengthen against the dollar. This may not be favorable for the Japanese stock market.

I also hold a cautious attitude towards the future trend of the U.S. stock market. At this point, the hype around artificial intelligence has mostly been exhausted, and new application scenarios and business models have not yet emerged on a large scale. In this situation, it may be challenging for the U.S. stock market to reach new highs in the short term, and even if it does, I believe it will be very close to its peak.

In the context of the recent stock market crash, the cryptocurrency market, which is increasingly intertwined with the global financial market, cannot remain unaffected— the entire cryptocurrency market has also seen a sharp decline.

As I write this article, Bitcoin has fallen to $54,000, and Ethereum has dropped to $2,300.

Seeing this market situation, my first reaction is that Ethereum is again below my set dollar-cost averaging price of $2,500, so I have now restarted my dollar-cost averaging for Ethereum.

In addition, I have noticed another phenomenon: the price ratio of Bitcoin to Ethereum has risen to 23:1 (one Bitcoin can buy 23 Ethereums).

In my impression, during this bear market, this price ratio has maintained around 20:1 even at higher points, and now it has surprisingly risen again.

This reflects a serious lack of confidence in Ethereum in the market.

Regarding the next steps for the cryptocurrency market, overall, I still have confidence.

First, if we compare the cryptocurrency market horizontally with several major stock markets that have been bullish recently, I believe the prices in the cryptocurrency market are undervalued. Therefore, when market sentiment stabilizes and re-evaluates, I believe new funds will enter the cryptocurrency market, and they will primarily buy Bitcoin and Ethereum.

Moreover, looking at the current prices of Bitcoin and Ethereum, while I don't think they are very low, I also don't see them as having a significant bubble. These prices do not resemble what we would expect in a bull market. Therefore, I believe they will still welcome their bull market and highlight moments in the second half of this year and next year.

However, there is one thing I am increasingly worried about:

Since the last bull market crash, both Ethereum and Bitcoin have shown very weak innovation and development in application scenarios (especially Ethereum). If they do not make breakthroughs in applications moving forward, the next bull market may only be a wave driven by external funds entering the cryptocurrency market due to allocation needs.

And such a bull market is unlikely to be strong or long-lasting.