Part 6/14:
Now, with Japanese interest rates climbing, the possibility of unprofitable carry trades increases, prompting asset reallocation. Investors may start pulling money from dollar-denominated assets like Bitcoin and US Treasuries, aiming to bring capital home amid changing incentives. This shift is exacerbated by the Federal Reserve’s announcement that it will end quantitative tightening (QT) on December 1st, signaling potential fragility in the financial system. Such hesitance from the Fed suggests underlying stress, causing risk assets—including technology stocks and cryptocurrencies—to decline as investors adopt a risk-off mentality.