Market Commentary on US Equities and Bitcoin

Investors are advised to reduce their positions in US equities and Bitcoin, according to commentary from US Tiger Securities, Inc.

While the US economy shows stability, the firm warns that elevated valuations and rising risks make these assets less attractive heading into 2025.

The CAPE (Cyclically Adjusted PE Ratio) for US stocks has surpassed its 2021 highs, nearing levels not seen since the dot-com bubble. Historically, such valuations signal heightened correction risks. For instance, in the early 2000s, the S&P 500 fell over 50% from its peak and took seven years to recover.

While it is impossible to predict whether 2025 will bring a correction or continued gains, the firm notes that the probabilities now do not favor investors.

Additionally, potential policy uncertainties under the incoming administration, such as aggressive tariffs, immigration policies, and the strong dollar's impact on US exports, compound these risks.

Geopolitical and macroeconomic concerns, including Japan's rate hikes and global retaliatory measures, further cloud the outlook.

Bitcoin, which has soared above $90,000, faces similar challenges. US Tiger Securities states that realized profits from Bitcoin sales have reached historic highs, often indicative of market peaks.

They suggest that a significant sell-off by long-term holders and heightened FOMO (fear of missing out) sentiment might signal potential exhaustion in the current rally.

The firm advises that "reducing positions now might be prudent," given the deteriorating risk-reward profile for both US equities and Bitcoin.

"With market uncertainty rising, the risk-reward profile is less attractive," says Tiger Securities, noting that the current sell-off rate is approaching levels seen in March, further supporting the idea that Bitcoin may have peaked.