## The Mainstream Asset Allocation System Is Experiencing a Fission: Cryptocurrencies Officially Enter the Market, "New Competitors" to US Stocks and Gold

The yield on the 10-year US Treasury remains at 4.09%, and against this macro backdrop, a significant market signal is quietly emerging—the global asset allocation landscape is being redrawn.

### Institutional Investors' Policy Shift

When Vanguard (the world's second-largest asset management company) announced this Tuesday that it would allow clients to trade cryptocurrency ETFs and mutual funds on its platform, it was not just an opening of trading functions but an official recognition of digital assets by traditional finance.

Vanguard, managing over $11 trillion in assets, will provide its over 50 million brokerage clients with access to invest in Bitcoin, Ethereum, XRP, and Solana. Simultaneously, Bank of America (BofA) made a major move—recommending its wealth management clients allocate 1%-4% of their portfolios to crypto assets, covering Merrill, Private Bank, and Merrill Edge divisions. About 15,000 wealth advisors will be able to directly recommend allocation plans to clients. What does this mean? Digital assets, once considered "highly volatile," are now officially integrated into mainstream asset allocation systems.

### Market Reacts Immediately

The reaction of the cryptocurrency market has been swift and intense. Bitcoin surged 5.97% within 24 hours, currently trading at $91,420, successfully breaking the $90,000 threshold; Ethereum rose 7.25%, now at $3,001, re-establishing above the $3,000 mark. Behind this rally, Coinglass data shows that in the past 24 hours, the market experienced $376 million in liquidations—$310 million short positions and only $65.66 million long positions—fully illustrating a large-scale stop-loss among short sellers.

The stability of the 10-year US Treasury yield provided a mild macro backdrop for this rebound, preventing sharp fluctuations in the bond market from suppressing risk assets.

### US Stocks Rise Simultaneously, US Dollar Falls

Driven by the rally in cryptocurrencies and institutional reallocation, the three major US stock indices all rose—Dow Jones up 0.39%, S&P 500 up 0.25%, Nasdaq up 0.59%. Semiconductor equipment and crypto-related stocks performed especially well, with Strategy and ContiTech rising over 5%, Nvidia temporarily up 3.2% and closing up 0.9%.

Meanwhile, the US dollar index fell 0.09% to 99.3, continuing its previous weakness. Notably, this marks the eighth consecutive day of decline for the dollar, forming a clear technical selling pressure. EUR/USD rose 0.14%, USD/JPY increased 0.26%, and although exchange rate fluctuations are limited, the trend direction is clear.

### Federal Reserve Policy Path Changes, Rate Cut Expectations Rise

President Trump announced that the Federal Reserve chair candidate has been narrowed down from 10 to 1, hinting that White House National Economic Council Director Kevin Hassett( is most likely to succeed. This statement directly boosted market expectations for a rate cut in December—the probability of a 25 basis point cut in December rose to 89.2%.

Deutsche Bank analysts warned that if the next Fed chair continues to follow Trump’s demand for rate cuts amid high inflation, the dollar will face sustained downward pressure. Given that Hassett is widely viewed as a loyal ally of Trump, market expectations for further easing are strengthening.

) Gold Tests Key Levels Under Pressure

Gold's rally has stalled, falling 0.58% to $4,205.7 per ounce. The US 10-year Treasury yield remains at 4.09%, not rising further but also preventing gold from breaking higher. The $4,200 level has become a critical technical support—if this level is broken, gold will face greater downside risk.

Crude oil is also under pressure, with WTI falling 1.55% to $58.59 per barrel, reflecting ongoing market caution about global economic growth.

### Global Economic Growth Outlook Slightly Adjusted

OECD has recently upgraded its economic growth forecasts for China and the US. China’s growth forecast for this year has been raised from 4.9% to 5%; the US growth forecast has been increased from 1.8% to 2%. However, OECD also warned that global economic growth remains vulnerable to trade policy changes, and if investor optimism about the AI boom reverses, a stock market correction could occur.

These conclusions precisely reflect the current market duality: on one hand, institutional reallocation is boosting risk assets; on the other, concerns about policy uncertainty and AI bubbles are mounting.

### Money Market Funds Break Through $8 Trillion

US money market funds' assets under management have surpassed $8 trillion for the first time, increasing by about $105 billion in a week. Despite the Federal Reserve having started a rate cut cycle, investors continue to pour in, mainly because these funds offer an attractive annualized yield of 3.80% (based on Crane 100 index data). This reflects investors’ balancing act between high yields and capital safety.

### Tech Giants Chip Competition Heats Up

Amazon has launched the AI chip Trainium3, directly challenging Nvidia’s GPU monopoly. The chip boasts lower costs and higher efficiency but faces bottlenecks due to limited software library support. Interestingly, Amazon’s future Trainium4 will adopt Nvidia’s NVLink Fusion technology—this not only highlights Nvidia’s technological importance but also shows that even the largest cloud computing players need to collaborate with chip giants.

### Outlook: Three Major Forces Driving Year-End Market

Wall Street analyst Tom Lee predicts the S&P 500 could hit a new high of 7300 in December, a 10% increase from current levels. He believes that the end of Fed quantitative tightening (QT) will be the main driver, drawing a parallel to September 2019—when US stocks rose over 17% within three weeks after QT ended.

The cryptocurrency market is supported by three factors: first, the official start of institutional reallocation; second, the continued weakening of the dollar creating relative return opportunities; third, the dovish stance of the Fed providing liquidity support. Although gold and oil are temporarily under pressure, their ultimate direction still depends on the final trend of the US 10-year Treasury yield—this "interest rate curve" remains the ultimate variable influencing all asset prices.