By Will, Metrics Ventures
As Bitcoin hits a new high again and the epic 6-month high consolidation is about to end this weekend, we think it is necessary to use this article to talk to you about our views. As we mentioned in the monthly report before, 6 months is enough to confirm the arrival of a trend measured in years. This article is based on the manager's observations of the industry in the first and second-tier markets over the past 6 months. It has a strong subjective component and will try to guide our future crypto asset management ideas. The core idea of this article can be summarized in one sentence:
The asset attributes of Bitcoin have been redefined in the past six months, and the new and old main funds have simultaneously completed the handover of pricing power. A new fund pool with Bitcoin as the core asset, ETFs and US stocks as capital inflow channels, and unlimited US dollar liquidity through the Ponzi model represented by US listed companies represented by MSTR has officially been launched.
Bitcoin has become the most core US dollar asset besides the leader of the US dollar industry cycle (such as AI), and a long-term low-volatility upward situation has basically taken shape.
But at the same time, the decoupling trend between the traditional digital currency market (Altcoins) and Bitcoin will continue to strengthen.
1. Bitcoin has established a fundamental turning point during consolidation
Bitcoin has found a clear definition of its own asset attributes
This is something that everyone may overlook, but in our opinion it is particularly important. This definition can be led by BlackRock, but it requires the affirmation of the entire US dollar capital system to be established. In the past, it was a task that no one expected. However, in the past six months, we have had enough evidence to make it clear:
Bitcoin is an alternative reserve asset that is independent of the traditional financial framework and can hedge against US dollar debt risks.
This definition concisely provides the most important basis for Bitcoin to become the center of the future US dollar asset system. The issue of US debt is already the elephant in the room and will be the core issue of the US fiscal and monetary system for a long time.
In the current context of Trump's big government, if the policy is radical again, we may witness further significant fluctuations in the US debt and US dollar exchange rate in the next three years. We believe that the US debt issue is one of the biggest themes in the past 10 years, against the backdrop of the shrinking global influence of the US dollar.
At the same time, what is more important is whether the above ideas are accepted by people. This is also the issue that we have been most concerned about in recent months. Standing at this moment, facing Trump’s unexpectedly large government, we have finally observed enough evidence, that is, enough giant Hedge Fund (1B+) founders have begun to publicly express their attitudes, including but not limited to Paul Tudor Jones, Verde Asset Management, Brevan Howard, Millennium Management, Schonfeld Strategic Advisors, etc., which represent the traditional old money. The old-fashioned Hedge Fund with a scale of tens of billions of dollars uses BTC as a hedging tool in risky transactions of US debt (especially in the recent election).
Bitcoin’s new Ponzi pattern has established momentum over the past 6 months
Since the passage of the ETF, the new Bitcoin Ponzi model led by BlackRock has taken shape. This system consists of ETFs actually controlled by BlackRock and Microstrategy, of which BlackRock is the second largest shareholder, as the creator and locker of unlimited buying. The overall low volatility of Bitcoin is the core essence. Through the stock price effect of MSTR, it creates the possibility of Bitcoin as a market value management tool and opens up future passive buying of US stock ETFs, forming a Bitcoin Ponzi model that can achieve unlimited self-positive reinforcement.
We believe that the premise for the above model to be established in the medium term (3-5 years) and to continue indefinitely in the long term is:
1. Bitcoin volatility decreases;
2. US dollar liquidity can maintain the average growth rate since 2008;
3. Bitcoin price can achieve annual growth, the percentage is not important.
The following important facts have already occurred:
1. Bitcoin volatility is close to its lowest level in history;
2. Without considering arbitrage factors, the total market value of Bitcoin held only through Bitcoin ETFs (including GBTC) and MicroStrategy has exceeded **90 billion US dollars**. Its holdings correspond to the current average daily spot trading volume (including various ETFs) of the entire network (actually effective about **100 billion US dollars**, at the peak of the current bull market), which has actually reached the so-called market maker threshold. In the past 6 months, we have truly felt that liquidity has further concentrated on CME and NYSE, which also proves the control of the above system over the current supply and demand of Bitcoin;
3. BlackRock has and is fully capable of guaranteeing MSTR’s equity refinancing capabilities in the long term, and continues to encourage MSTR to use long-term and short-term equity financing tools to act as a ballast for BTC volatility.
In summary, this infinite perpetual motion machine is expected to become the best Ponzi scheme in the next 2-3 years when the US dollar liquidity has just begun to ease. It is only a matter of time before the total value of Bitcoin held by the BlackRock system exceeds the gold ETF holdings.
Finally, let’s briefly explain the turning point observation method of the above-mentioned capital disk, which is mainly the reverse deduction of the aforementioned core conditions:
1. BTC volatility, especially downward volatility, begins to increase;
2. The US dollar liquidity has reached a turning point;
3. MSTR encountered difficulties in equity refinancing and failed to complete the currently planned 3-year USD 42 billion refinancing mission. Based on this logic, it is predicted that the MSTR stock price will peak ahead of the BTC price.
2. Manager’s Outlook on Bitcoin Trends in the Next Five Years
Based on the above, the manager believes that the key points to grasp for the trend of Bitcoin in the next five years are:
1. The US dollar is currently at a real turning point in liquidity, and the right-wing movement in the US led by the Republican government will further ensure that the US dollar liquidity will be looser than previously expected;
2. Judging from the current daily Bitcoin trading volume and MSTR stock price performance/market value, the current scale of funds accommodated is still in its early stages and is far from reaching a turning point;
3. Under the first two premises, the chips in the market are still leaving in large numbers. The sideways trading period near the new highs in the past 6 months has actually completed an epic turnover of new and old chips.
Therefore, we firmly believe that a new round of large asset cycle of Bitcoin is just beginning. Specifically at the asset management level, we will accompany you to enjoy the long-term low-volatility upward trend based on the previous understanding and actual trading signals, that is, the holding experience of core U.S. stock assets.
