According to the Wisdom Finance app, the two most popular global risk assets since the beginning of this year — the world's largest market cap cryptocurrency, bitcoin, and global AI chip leader, Nvidia (NVDA.US) — have just experienced rapid value declines, reminding greedy short-term speculators that the hottest trading in the market is far from being a simple one-way long bet.

During the US stock trading session on Monday, the trading price of the world's largest cryptocurrency, bitcoin, experienced one of the largest price drops since the crypto market began to recover from early last year, and investors urgently need $60,000 as an important technical support floor to avoid further pain. On Monday, the price of bitcoin once fell below the key $60,000 threshold, and now hovers in the $60,000-61,000 range.

At the same time, Nvidia, the representative of the global artificial intelligence revolution, fell nearly 7% in a single day, losing nearly $430 billion in market value over the past three trading days. For any large-cap stock, this decline can be considered the largest three-day market value loss in history.

Following its brief reign as the world's largest listed company last week, Nvidia's stock price has fallen for three consecutive days. Fears of panic-selling pressure arose on Friday, the "triple-witching day" of stock options when both professional managers (including Huang Renxun) and retail investors scrambled to lock in profits and cash in, following a sharp rise of 240% in 2023 and an over 150% surge since 2024. Unable to withstand a huge amount of sell orders, Nvidia's stock price has fallen sharply over the past three days.

Market risk appetites suddenly changed.

From a long-term perspective, these two globally hot risk assets still boast astonishing returns. But this volatility has raised the question again: with the latest interest rate "dot plot" showing that the Fed is likely to maintain higher interest rates for a longer period of time, as well as the dot plot suggesting that the Fed may cut rates once or even not at all this year, the cracks in the popular trades linked with the "zeitgeist momentum" seem to be widening.

In the eyes of some analysts, this indicates that the prospect of a risk preference is becoming increasingly severe, and the risk of the two hottest assets in the market, bitcoin and Nvidia, suddenly turns to "Risk Off" rather than "Risk On" in the short term, leaving some short-term investors caught off guard and forcing them to exit speculative positions to reduce losses.

Chris Weston, research director at Pepperstone Group, said: "People are starting to realize that this violent momentum is bi-directional and can trigger sharp rallies or crashes." He added that bitcoin needs a frenzy of emotion to fuel the beast, while Nvidia's "bullish position is incredibly saturated."

On Tuesday, bitcoin stabilized relative to its price level, once again retaking the $61,000 level. Asian stock markets and Nasdaq 100 index futures, which are dominated by technology stocks, have both risen. Signs of rapid rebounds in these markets indicate that, thanks to the feverish wave of global corporate AI deployments over the past year and strong factors that some institutions are bullish on gold and cryptocurrencies that will benefit from a Fed easing cycle sooner or later, broader investor sentiment remains highly resilient.

Carol Schleif, deputy chief investment officer of BMO Family Office LLC, recently pointed out that the S&P 500 index rose on Monday, but one of its leaders — Nvidia — was in trouble. However, the equal-weighted benchmark of the S&P 500 index has completely removed the market weighting and diluted the impact of the sharp drop in large-cap tech stocks, and its recent trend has been much better than that of the weighted S&P 500 index. She stressed: "You need a broadening of the market for sustainability." "We believe that fundamentals can affect more industry values rather than just those of large tech giants such as Nvidia."

From a long-term perspective, the value prospects of Bitcoin and Nvidia are still worth looking forward to.

Some crypto traders are doubling down on bets that Bitcoin will hit a new record high again before the end of the year. They are optimistic about the dovish bets on the Fed cutting interest rates at least twice this year, as well as the increase in funds flowing into Bitcoin exchange-traded funds (ETFs).

Galaxy Digital's founder and CEO Michael Novogratz said that a more positive political environment for digital assets in the USA may help push bitcoin to reach a record-breaking $100,000 by the end of this year, or even higher. He said in an interview, "If the bitcoin price rises to $73,000 in the next few weeks, it will rise to $100,000 or higher by the end of this year."

CEO of BTC Markets Pty, Caroline Bowler, said: “Cryptocurrencies such as Bitcoin are increasingly vulnerable to macro factors such as expected Federal Reserve interest rates.” She added that she remains optimistic about the long-term investment prospects of cryptocurrencies.

According to a recent research report released by Bernstein, the organization's basic prediction shows that the expected Bitcoin price will reach $200,000 by 2025, $500,000 by 2029, and $1 million by 2033.

For Nvidia, the long-term trend is more important than any specific stock price point, according to Ari Wald, the head of technical analysis at Oppenheimer. Currently, Nvidia's fundamentals and long-term upward trend are still strong, and the stock price is still far above the 50-day moving average of around $100 and the 100-day moving average of $92. Wald said: "Generally, the formation of a major price top requires a process, there will be several rounds of buying and selling, and then price momentum will gradually decline, and then a key level will be lost. We have not found these signs yet."

Bruce Zaro, Chief Technical Strategist at Granite Wealth Management, also pointed out: "For stocks like Nvidia that are in an upward trend, even if they fall below the first support level of $115, it is not a big problem, but falling below $100 will be worrying."

In terms of stock price, the target stocks of Wall Street are far behind the rising trend of Nvidia's stock price. The skyrocketing trend of Nvidia's stock price, which has benefited from this unprecedented AI frenzy, has shocked global investors. After soaring by 240% in 2023, it has risen by 170% since 2024.

From a longer-term perspective, Nvidia's stock price has soared more than 1000% since October 2022 and has become the world's highest market value listed company last week, the first time it has topped the throne of "global stock king". After this 1000% surge in the AI carnival, global funds may surge back from irrational frenzy to rational thinking, which may mean that the short-term downward adjustment or plateau of Nvidia's stock price, which is known as the "AI stock shovel", cannot change the "long bullish trend" of Nvidia's stock price in the AI era.

Analysts at Bank of America believe the stock still represents a very attractive investment opportunity. Bank of America emphasized that any degree of decline in Nvidia's stock should be viewed as a buying opportunity for more stock. The bank's analysts wrote in a recent report that investors should continue to be bullish on the chip giant that drives AI prosperity, and Bank of America reiterated its "buy" rating and target price of up to $150 for Nvidia, which means there is still at least a 20% upside over the next 12 months.

Bank of America emphasized in the report that the deployment cycle of the hardware end of the generative artificial intelligence (GenAI) may be as long as 3-5 years, but it is currently only in the second year. It is expected that Nvidia has a long-term growth opportunity of as much as $300 billion, which is about three times its expected revenue this year. Bank of America also expects Nvidia's next-generation AI GPU based on the Blackwell architecture to bring huge revenue contributions, and Bank of America refutes the "AI bubble argument" derived from the "Internet bubble era" in 2000, emphasizing that unlike the "prosperity of the Internet era" financed by highly risky debt financing, generative AI deployment is a competition between technology leaders with strong fundamentals in the industry, such as cloud computing giants with the most abundant funds.

As billionaire investor Stanley Druckenmiller said, from the perspective of the long-term development of artificial intelligence technology, Nvidia, perhaps the "most important stock on earth," is still undervalued.

Rosenblatt, a well-known investment institution on Wall Street, recently released a heavyweight research report, the core content of which is that based on the potential prosperity of Nvidia's software business, which focuses on the CUDA core, even if the stock price of the AI chip leader Nvidia has soared in a year, the stock price of the chip giant will continue to rise over the next 12 months, and the expected Nvidia stock price will be at least 50% higher than the current level. This is the opinion of Hans Mosesmann, a chip industry analyst at Rosenblatt, who raised the firm's target stock price for Nvidia from $140 to an amazing $200 per share, placing it among the highest target prices for Nvidia on Wall Street.

This latest bullish forecast from Rosenblatt also means that the total market value of the "global stock new king" Nvidia, which recently crowned the title of "the world's highest market value listed company" for the first time, may reach $5 trillion within 12 months. Looking ahead, analyst Mosesmann said that Nvidia's truly strong source of profit comes not only from its core AI hardware infrastructure focused on driving ChatGPT and other generative AI, but also from Nvidia's software business, which is led by Nvidia's popular CUDA software and hardware collaborative platform. That is, "CUDA+AI GPU", together constitute Nvidia's extremely powerful moat.