Author: Will, Metrics Ventures

As Bitcoin reaches new highs once again, and the epic six-month high consolidation approaches its end this weekend, we believe it is necessary to share our views in this article. As we mentioned in our previous monthly report, six months is sufficient to confirm the arrival of a trend measured in years. This article is based on the observations of the manager in the primary and secondary markets over the past six months, containing a strong subjective component, and will attempt to guide our future thoughts on crypto asset management. Here’s a summary of the core idea of this article in one sentence:

The asset attributes of Bitcoin have been redefined over the past six months, with both old and new major funds completing the transfer of pricing power simultaneously. A new funding mechanism centered around Bitcoin, utilizing ETFs and U.S. stocks as channels for capital inflow, has officially launched, characterized by a Ponzi model that infinitely incorporates new dollar liquidity through U.S. listed companies represented by MSTR.

Bitcoin has become the most core dollar asset outside of the dollar industrial cycle leaders (such as AI), establishing a long-term low-volatility upward trend.

However, at the same time, the decoupling trend between the traditional cryptocurrency market (Altcoins) and Bitcoin will continue to strengthen.

I. Bitcoin Completes the Establishment of a Fundamental Turning Point During Consolidation

Bitcoin Has Found a Clear Definition of Its Asset Attributes

This is something that may be overlooked by many, but in our view, it is particularly important. This definition can be led by BlackRock, but it requires the affirmation of the entire dollar capital system to be established, which was previously an unanticipated task. However, over the past six months, we have gathered enough evidence to clarify:

Bitcoin is an alternative reserve asset that can hedge against dollar debt risk, detached from the traditional financial framework.

This definition succinctly provides the most important basis for Bitcoin to become the center of the future dollar asset system. The issue of U.S. debt has become the elephant in the room and will long remain a core issue in the U.S. fiscal and monetary system.

In the current context of a large government under Trump, if the policy direction becomes more radical again, we may witness further significant fluctuations in U.S. debt and the dollar exchange rate over the next three years. We believe that against the backdrop of the shrinking global influence of the dollar, the U.S. debt issue is one of the biggest themes of the past decade.

At the same time, more importantly, whether the above concept is accepted by people is also the issue we are most concerned about in recent months. At this moment, facing Trump’s unexpectedly large government, we have finally observed enough evidence, as many founders of giant hedge funds (1B+) have begun to publicly express their stance, including but not limited to Paul Tudor Jones, Verde Asset Management, Brevan Howard, Millennium Management, and Schonfeld Strategic Advisors, representing traditional old money hedge funds at the billion-dollar level, using BTC as a hedging tool in U.S. debt risk trading (especially in the recent elections).

Bitcoin's New Ponzi Model Has Established Its Momentum Over the Past Six Months

Since the approval of ETFs, the new Bitcoin Ponzi model led by BlackRock has taken shape. This system is controlled by ETFs actually managed by BlackRock and Microstrategy, where BlackRock is the second-largest shareholder, acting as an infinite buyer and lock-up entity. The core essence is the overall low volatility of Bitcoin moving upward, creating the possibility of Bitcoin as a market value management tool through the stock price effect of MSTR, opening up future passive buying from U.S. stock ETFs, forming a Bitcoin Ponzi model capable of infinite self-reinforcement.

We believe that the establishment of the above model in the medium term (3-5 years) and its long-term infinite cycle depend on:

1. The volatility of Bitcoin decreases;
2. Dollar liquidity can maintain the average growth rate since 2008;
3. Bitcoin prices can achieve annual growth, with the proportion being unimportant.

The following important facts have already occurred:

1. Bitcoin's volatility is approaching historical lows;
2. Excluding arbitrage factors, the total market value of Bitcoin held through Bitcoin ETFs (including GBTC) and Microstrategy has exceeded $90 billion. The holdings correspond to the current daily average spot trading volume across the network (effectively about $100 billion, in the current peak environment of the bull market), which has reached the so-called market-making threshold. Over the past six months, we have felt that liquidity has further concentrated towards CME and the NYSE, which also supports the above system's control over the current supply and demand of Bitcoin;
3. BlackRock has and fully possesses the long-term capability to ensure MSTR's equity refinancing ability, continuously promoting MSTR to use equity financing tools to act as a ballast for BTC volatility.

In summary, this infinite perpetual motion machine is expected to become the best funding game in the next 2-3 years, just as dollar liquidity easing has just begun. The total value of Bitcoin held by the BlackRock system surpassing the holdings of gold ETFs is only a matter of time.

Finally, to briefly explain the observation method for the turning point of the above funding mechanism, it mainly involves the reverse deduction of the aforementioned core conditions:

1. BTC volatility, especially downward volatility, begins to amplify;
2. Dollar liquidity experiences a turning point;
3. MSTR faces difficulties in equity refinancing, failing to complete the current plan of $42 billion in refinancing over three years. Based on this logic, we predict that MSTR's stock price will peak before BTC's price.

II. Manager's Outlook on Bitcoin's Trend Over the Next Five Years

Based on the aforementioned, the manager believes that the key points to grasp regarding Bitcoin's trend over the next five years are:

1. We are currently at a real turning point for dollar liquidity, and the right-wing populism led by the Republican large government will further ensure that dollar liquidity will exceed previous expectations of easing;
2. From the current daily trading volume of Bitcoin and the performance/market value of MSTR's stock price, the current capacity for accommodating funds is still in its early stages, far from reaching a turning point;
3. Under the first two premises, market participants are still exiting en masse. The consolidation time near the new highs over the past six months has effectively completed an epic turnover of old and new chips.

Therefore, we firmly believe that a new round of major asset cycles for Bitcoin is just beginning. Specifically, in terms of asset management, we will accompany everyone to enjoy the long-term low-volatility upward trend based on the previous understanding and actual trading signals, that is, the experience of holding core U.S. stock assets.

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