Crypto market crashes

The cryptocurrency market has plunged sharply in recent weeks and days, with the total market capitalization falling by more than 25% from its early-October peak and over US$1 trillion in value erased. Major coins like Bitcoin dropped below US$90,000 for the first time in seven months, and outflows from crypto ETFs accelerated. The rout is being driven by a combination of waning rate‐cut expectations from the Federal Reserve, deleveraging in the crypto futures market (billions in liquidations), and a broader risk-off rotation away from speculative assets. Investor sentiment is now deeply negative — the “Fear & Greed” index plunged into “extreme fear” territory.

• Drawdowns like this are not atypical for this market
• As crypto assets gain broader adoption, it is reasonable that there will be broader correlation to the macro environment and risk assets
• The use of leverage in this space exacerbates these downside moves
• Longer-term, there are still fundamentally sound use cases for various assets that make them interesting as a small allocation to a broader portfolio

Nvidia crushes earnings expectations, but its stock declines

Nvidia delivered a blow‐out quarter: revenue of ~US$57 billion (+62% y/y) and EPS of US$1.30 beat expectations, driven by its data-centre segment (~US$51 billion) and strong guidance for Q4 (~US$65 billion). Following the report, shares rose ~3-5% in after‐hours trading, and broader tech markets rallied as investor anxiety about an AI bubble was temporarily alleviated. However, while the near‐term reaction was positive, the stock sold off on the following day, bringing the broader market down with it.

• Nvidia remains the bellwether for the AI/infrastructure cycle
• While the earnings expectations were significantly elevated, the company managed to beat
• The stock reaction, however, is pretty telling, showing that even a strong earnings beat was not enough
• This could mean that real expectations were even higher, or it could be the start of some of the hype coming out of the space
• An interesting data point was released at around the same time, when Google released its latest model, which was trained entirely on its own TPUs (not Nvidia GPUs)
• If there are are alternatives to Nvidia in training LLMs, this could significantly change growth expectations

Japanese Yen weakens even as yields surge

Japan’s long-end government bond yields have surged markedly: as of November 2025, 30-year Japanese Government Bond 30‑Year yields climbed to about 3.41%, up from roughly 1.6% at the start of the year. The 10-year JGB yield rose to about 1.79%, the highest since 2008. Meanwhile, the Japanese yen weakened to around ¥156–¥157 per US $1, marking a drop of about 6 % since the new administration took office in October. The yield surge is being driven by fiscal stimulus fears, including a proposed supplementary budget exceeding ¥25 trillion (≈ US $161 billion), and the partial retreat from ultra-loose policy by the Bank of Japan paired with waning domestic demand for long-dated debt.

• Japan has been emerging from a decades-long low-yield environment
• Despite yields being significantly higher, which, all else being equal, would be positive for their currency, the Yen has been weak
• A weak Yen is inflationary and will eventually require government intervention
• If the Bank of Japan were to buy the Yen, it would likely sell US treasuries in order to do so
• Given that Japan is the largest foreign holder of US treasuries, this could pressure yields higher in the US

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