Bitcoin's new asset cycle: the situation and understanding after this new high

Author: Will, Metrics Ventures

At this time when BTC has reached a new high, with the epic 6-month high consolidation period seemingly coming to an end, we believe it is necessary to share our views with you. As mentioned in our previous monthly report, 6 months have been sufficient to confirm the arrival of a trend measured in years. This article is based on the observations of the industry made by the manager in the primary and secondary markets over the past 6 months, and has a strong subjective component, attempting to guide our future crypto asset management thinking.

The core idea of this article can be summarized in one sentence:

• The asset attributes of BTC have undergone a new qualitative change in the past 6 months, and the old and new main capital have synchronously completed the transfer of pricing power. A new capital pool that takes BTC as the core asset, ETFs and US stocks as the capital inflow channel, and US-listed companies represented by MSTR as the carrier of the Ponzi scheme, has officially started to absorb US dollar liquidity infinitely.

• BTC has become the most core US dollar asset outside the US dollar industry cycle (such as AI) leaders, and the long-term low-volatility upward trend has basically taken shape. However, the decoupling trend between the traditional digital currency market (Altcoins) and BTC will continue to strengthen.

I. BTC has completed the establishment of a fundamental turning point in the consolidation

BTC has found a clear definition of its own asset attributes

This is something that everyone may have overlooked, but is particularly important in our view. This definition can be led by BlackRock, but requires the affirmation of the entire US dollar capital system to be established, which was something no one expected in the past. However, over the past 6 months, we have enough evidence to confirm:

BTC is an alternative reserve asset that can hedge against the risk of US dollar debt, outside the traditional financial framework.

This concise definition has provided the most important basis for BTC to become the center of the future US dollar asset system. The US debt problem has become the elephant in the room and will be a core issue for the US fiscal and monetary system in the long run.

Against the background of the current Trump administration, if the policy direction becomes more aggressive again, 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 debt problem is one of the biggest themes of the past 10 years, in the context of the shrinking global influence of the US dollar.

More importantly, whether the above concept is accepted is also the issue we have been most concerned about in recent months. At this moment, faced with the Trump administration's larger-than-expected government, we have finally observed enough evidence that a sufficient number of giant Hedge Funds (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 and other representative traditional old-money Hedge Funds of over $100 billion in size, using BTC as a hedging tool in their US debt risk trades (especially in the recent election).

The new Ponzi scheme of BTC has been established in the past 6 months

Since the ETF was approved, the new BTC Ponzi model led by BlackRock has taken shape. This system is created by the ETFs actually controlled by BlackRock and Microstrategy, in which BlackRock is the second largest shareholder, as the infinite buyer and locker, with the core essence of the overall low volatility and upward trend of BTC, using the stock price effect of MSTR to create the possibility of BTC as a market capitalization management tool and open up the future passive buying of US stock ETFs, forming a BTC Ponzi scheme that can achieve infinite self-reinforcement.

We believe that the establishment and long-term infinite circulation of the above model in the medium term (3-5 years) is premised on:

1. Reduction of BTC volatility;

2. Maintaining the average growth rate of US dollar liquidity since 2008;

3. BTC price can achieve annual growth, the proportion is not important.

And the following important facts have already occurred:

1. BTC volatility has approached the historical low;

2. Excluding arbitrage factors, the total market value of BTC held by BTC ETFs (including GBTC) and Microstrategy has exceeded $90 billion. Its holdings correspond to the current daily average spot (including various ETFs) trading volume of the entire network (actually effective about $100 billion, in the current bull market peak environment), has actually reached the so-called market manipulation threshold, and over the past 6 months, we have felt the further concentration of liquidity to CME and the New York Stock Exchange, which also corroborates the control of the above system over the current BTC supply and demand;

3. BlackRock has and fully has the long-term ability to ensure the refinancing capability of MSTR's equity, continuously pushing MSTR to play the role of the ballast stone of BTC volatility by utilizing the short-term and long-term equity financing tools.

In summary, this infinite perpetual motion machine is likely to become the best capital pool game in the next 2-3 years, as US dollar liquidity easing has just begun, and it is only a matter of time before the total value of BTC held by the BlackRock system exceeds the holdings of gold ETFs.

Finally, a simple explanation of the turning point observation method of the above capital pool:

1. BTC volatility, especially the downward volatility, begins to amplify;

2. US dollar liquidity reaches a turning point;

3. MSTR encounters difficulties in refinancing its equity, failing to complete the current 3-year $42 billion refinancing plan, and based on this logic, we predict that MSTR's stock price will peak ahead of BTC's price.

II. The manager's outlook on the trend of BTC in the next 5 years

Based on the above, the manager believes that the key points to grasp in the current outlook for BTC's trend in the next 5 years are:

1. The current situation is a real turning point in US dollar liquidity, and the right-wing US government led by the Republican Party will further ensure that US dollar liquidity will be more relaxed than previously expected;

2. From the current BTC daily trading volume and MSTR stock price performance/market capitalization, the current capital absorption scale is still in the early stage and is far from the turning point;

3. Under the first two premises, the on-chain chips are still flowing out like the tide, and the epic turnover of old and new chips in the past 6 months of consolidation around the new high has actually been completed.

Therefore, we firmly believe that the new round of BTC's major asset cycle is just beginning, and in terms of asset management, we will accompany you to enjoy the long-cycle low-volatility upward experience of the core US stock assets based on the above understanding and actual market trading signals.