Amid strong demand in major markets such as Japan, Europe, and North America, this world's largest auto manufacturer has increased its share buyback program to 1.2 trillion yen ($8.3 billion). $Bitcoin (BTC.CC)$ The price is approaching the $0.1 million mark, and its continuous upward momentum has not only driven the stock prices of crypto-related companies to soar, but it has also raised concerns in the market about a possible overheating of the stock market: Is it repeating the 2021 frenzy? Is it still far from the drop in 2022?

The market frenzy in 2021 brought investors a brief but substantial return, but it subsequently led to a brutal bear market, causing significant losses for many new investors.

Now, the valuations of some stock market sectors appear to be extraordinarily high again, for example, online used car retailer $Carvana (CVNA.US)$ , whose stock price has risen by 430.71% year-to-date, and the valuation of the s&p 500 index has also climbed to over 22 times the expected earnings for the next 12 months for the first time since 2021.

George Cipolloni, a portfolio manager at Penn Mutual Asset Management, stated:

"What worries me is that the market will go through another round of unsustainable madness, and people will get hurt. While it is currently difficult to say whether the market frenzy has reached dangerous levels, it is clear that the market's enthusiasm and bubble level have significantly increased compared to a month ago."

On Friday, according to some Wall Street sources cited by MarketWatch, investor optimism may be approaching "excessive". The Levkovich index, used by citigroup to measure market sentiment, has surged sharply in recent weeks, prompting the firm to include sentiment factors as one of the reasons for a cautious stance on the market's future direction.

However, despite some current trading behaviors being similar to those in 2021, the macroeconomic background of that year is quite different from the present.

In 2021, interest rates and bond yields were at historic lows, while currently, the 10-year U.S. Treasury yield is around 4.43%, far higher than the 1.5% of December 2021. Mohannad Aama, a portfolio manager at Beam Capital Management, stated that the current higher yields undoubtedly increase market risk.

Meanwhile, both the stock market and bitcoin have not "yielded" to the pressure from higher borrowing costs but have instead risen driven by enthusiasm from the "Trump trade." However, this has also rendered the prices of both assets overly perfect, meaning that if corporate earnings do not meet investor expectations, or if President Trump fails to fulfill his promise of creating a national bitcoin reserve, both markets might face difficulties.

Last Friday, the U.S. stock market collectively closed higher, with the s&p 500 index, nasdaq, and dow jones industrial average all achieving weekly gains, and the dow even setting a new closing record. Aama stated:

"The s&p 500 index and the nasdaq both reflect a lot of good news. If this good news does not materialize, that would be troubling."

Editor/rice