Bitcoin New Asset Cycle: The Situation and Understanding After the New High
As Bitcoin hits a new high again, with the epic 6-month high-level consolidation entering its final stages over the weekend, we believe it is necessary to share our views with everyone through this article.
As we mentioned in our previous monthly report, a 6-month period is sufficient to confirm a trend that lasts for years. This article is based on the observations of the managers in the market over the past 6 months, with a strong subjective component, and will attempt to guide our future thinking in cryptocurrency asset management.
In summary, the core idea of this article is:
The asset properties of Bitcoin have completed a new qualitative change in the past 6 months, with the synchronization of new and old main funds completing the transfer of pricing power. A new funding pool, which uses Bitcoin as the core asset, ETFs and US stocks as capital inflow channels, and through a Ponzi scheme represented by MSTR-listed US companies to continuously incorporate US dollar liquidity, has officially started.
Bitcoin has become the most core US dollar asset apart from the US dollar industry cycle (such as AI), with a long-term low volatility upward trend basically taking shape. However, the trend of traditional digital currency market (Altcoins) decoupling from Bitcoin will continue to strengthen.
I. Bitcoin has established a turning point in its fundamentals during consolidation
Bitcoin has found a clear definition of its asset properties
This is something that may be overlooked by many, but we believe it is particularly important. This definition can be led by BlackRock, but it needs the affirmation of the entire US dollar capital system to be established, which was something unexpected in the past.
However, over the past 6 months, we have had enough evidence to confirm:
Bitcoin is an alternative reserve asset that can hedge US dollar debt risks, breaking away from the traditional financial framework.
This clear definition gives Bitcoin the most important basis for becoming the center of the future US dollar asset system. The problem of US debt has become an elephant in the room and will become a core issue in the US fiscal and monetary system in the long run.
In the current context of the Trump administration, if policy direction becomes more radical, we may witness further significant fluctuations in US debt and the US dollar exchange rate in the next three years. We believe that the US dollar’s declining global influence, combined with the US debt issue, is one of the biggest themes of the past decade.
More importantly, whether the above concept is accepted is also our main concern in recent months. At this moment, facing Trump’s unexpectedly large government, we have finally observed enough evidence that a sufficient number of giant Hedge Funds (1B+) founders have begun to publicly show their attitude, including but not limited to Paul Tudor Jones, Verde Asset Management, Brevan Howard, Millennium Management, Schonfeld Strategic Advisors, representing traditional big money, using BTC as a hedge tool for US debt risk trading (especially in the recent election).
Bitcoin’s new Ponzi scheme has established its momentum in the past 6 months
Since the approval of ETFs, the new Ponzi model of Bitcoin led by BlackRock has taken shape. This system is led by ETFs actually controlled by BlackRock and Microstrategy, which is the second largest shareholder of BlackRock, as the creator of infinite buying pressure and lock-in, with the core essence being Bitcoin’s overall low volatility upward trend. Through the stock price effect of MSTR, the possibility of Bitcoin becoming a market value management tool is created, opening up future passive buying of US stock ETFs, forming a Bitcoin Ponzi scheme that can achieve infinite self-reinforcement.
We believe that the above model will establish itself in the medium term (3-5 years) and become the most outstanding funding game in the next 2-3 years in the context of loose US dollar liquidity. The total value of Bitcoin held by the BlackRock system will surpass the holdings of gold ETFs; it is only a matter of time.
Finally, a brief explanation of the observation method of the above funding scheme’s turning point, mainly through reverse deduction of the core conditions mentioned above:
BTC volatility, especially downward volatility, begins to increase;
The US dollar liquidity reaches a turning point;
MSTR encounters difficulties in stock-type refinancing and fails to complete the planned $42 billion refinancing task within 3 years. Based on this logic, it is predicted that MSTR’s stock price will peak before Bitcoin’s price.
II. Manager’s Outlook on Bitcoin’s Trend in the Next 5 Years
Based on the above, the manager believes that the key points to focus on for Bitcoin’s trend in the next 5 years are:
Currently, we are at a real turning point in US dollar liquidity, and the US right-wing led by the Republican government will further ensure that US dollar liquidity will exceed previous expectations;
From the current Bitcoin daily trading volume and MSTR stock price performance/market value, the current capacity to accommodate funds is still in the early stages, far from a turning point;
Under the first two premises, on-chain chips are still leaving in droves, and the epic turnover of old and new chips near the new high in the past 6 months has actually been completed.
Therefore, we firmly believe that a new round of Bitcoin’s major asset cycle is just beginning. Specifically, on the asset management level, we will accompany everyone to enjoy the long cycle of low volatility upward, which is the experience of holding core assets in the US stock market.
This article is co-translated from: Deep Tide
