In the relative calm of the Christmas holiday, former Binance CEO CZ posted on the X platform, "The true early buyers are those who buy when the market is filled with FUD," once again bringing the contrarian investment logic of Bitcoin to the forefront. Meanwhile, some Bitcoin spot funds experienced net outflows, with GBTC seeing approximately $24.6 million and BITB about $13.3 million flowing out, creating a subtle contrast between the funding situation and the slogans. Against the backdrop of expectations for a macro liquidity turning point, new regulatory rules, and institutional silent rebalancing, this statement of "buying in FUD" resembles a multiple-choice question that needs to be answered with data, rather than a simple emotional slogan.

Christmas Message Ignites Old Topic: Should One Enter During Fear or Frenzy?

During the Christmas period in the UTC+8 time zone, CZ published a holiday message on X, reiterating that "the true early buyers are those who buy when the market is filled with FUD." This statement was echoed by several media outlets, including Jinshi Kuaixun and PANews, sparking widespread discussion in the community. Holiday liquidity is typically weak, and the market is particularly sensitive to celebrity opinions. This statement, combined with U.S. stocks hitting new highs on the trading day before Christmas and the internal divergence of blockchain concept stocks, amplified the choice between "contrarian allocation" and "following the risk asset cycle." At a time when traditional stock indices are reaching new highs while the structure of crypto funds is diverging, CZ's contrarian buying theory is seen by the market as a public questioning of the current risk appetite level.

Spot Fund Net Outflows: Is it Real Panic or High-Level Turnover?

From the funding perspective, Bitcoin-related spot funds have not shown a picture of "consistent greed"; instead, they have recorded net outflows recently: publicly available data shows that GBTC experienced approximately $24.6 million and BITB about $13.3 million in outflows, indicating a phase of reduction in positions. On the surface, this seems to mismatch the optimistic sentiment on social media, appearing more like institutions and qualified investors are using the relatively ample liquidity phase for structural adjustments. When the leading spot funds see marginal outflows while the price narrative remains optimistic, the market is likely in a "sentiment optimistic, funding cautious" misalignment rather than a simple panic sell-off.

Two Interpretations Behind the Fund Flows: Profit-Taking vs. Risk Hedging

These net outflows can be interpreted in two distinctly different ways: one is that "smart money" is taking profits at a temporary high to reserve ammunition for potential volatility; the other is a broader cooling of risk—when feeling uncomfortable with overall risk asset positions, prioritizing the reduction of the most liquid assets. Specifically, in terms of behavior:
• For some long-term funds, spot funds are the main tool for adjusting positions, and net outflows are closer to rebalancing rather than a panic withdrawal.
• For short-term funds, reducing volatility exposure at a time of increased macro uncertainty is a common form of "preventive reduction."
In this context, CZ's statement of "buying in FUD" needs to be viewed alongside what the funds are actually doing; otherwise, it can easily be misinterpreted as a simple "encouragement to buy" during any downturn. If emotions can be ignited by words in an instant, then fund flows often more accurately reflect participants' judgments on the risk-reward ratio in the medium to short term.

Comparing Price and Volume: Far from the "Critical Point of Mass Frenzy"

From a market structure perspective, Bitcoin's recent volatility reflects more of a repeated range rather than a one-sided trend increase, and trading volume has not shown the "systematic amplification" seen in similar historical extreme phases. In this form, the net outflows from spot funds indicate less a peak and more an exposure of some funds' doubts about the "current value for money." Coupled with the market, it can be seen that:
• The relationship between volume and price is closer to "high-level turnover + short-term speculation," with no signs of widespread chasing or indiscriminate inflows.
• The use of leverage in the derivatives market is becoming more restrained, with the position structure leaning towards short-term swings rather than extreme leverage.
From the perspective of trading structure and leverage usage, the current crypto market resembles a "tug-of-war between optimism and caution," still significantly distant from a historically meaningful complete frenzy.

The "FUD Phase" Mentioned by CZ and the Discrepancy with Real Data

CZ's emphasis on "buying in FUD" highlights a time choice that is contrary to mainstream sentiment, rather than simply following price lows. However, from the fund flows and trading structure, the current situation resembles more a "period of structural divergence" rather than a singular direction of panic or greed: some funds are reducing positions, while others are positioning for sector rotation. On the emotional front, the discussion heat on social platforms has not cooled to the extent of "ignoring Bitcoin," but rather is highly concentrated on macro and regulatory uncertainty topics. In a range where funds have not shown large-scale panic withdrawals and emotions have not become fully extreme, simply viewing the current situation as a "typical FUD phase" is not rigorous; a more reasonable statement is that this is an "uncomfortable range driven by multiple variables."

Multicoin's WLD OTC: A Model of Silent Accumulation on the Other End

In contrast to the marginal net outflows from Bitcoin spot funds, institutional funds have chosen a more discreet accumulation path for specific assets. Recently, Multicoin Capital completed an OTC transaction of approximately $29 million in WLD, opting to reconfigure exposure outside the public secondary market. Such operations typically consider several factors:
• Reducing the price impact and slippage caused by direct purchases in the public market, controlling the average entry cost.
• Gaining a more controllable rhythm in information disclosure and compliance requirements, avoiding premature exposure of intentions that could trigger follow-the-leader behavior. When some funds amplify specific asset exposure through OTC while simultaneously reducing Bitcoin spot fund positions in the public market, the funding structure is quietly shifting from a "single main line" to a "multi-narrative parallel" phase.

One End is Reducing Bitcoin, the Other is Betting on New Narratives

If we place the net outflows of GBTC and BITB alongside the approximately $29 million WLD OTC transaction on the same chart, an intriguing contrast emerges:
• In mature assets, funds tend to prefer "structured exits"—reducing positions and increasing maneuverability.
• In new narrative assets, they choose to "silently amplify"—more often accumulating quietly through OTC and other means.
This indicates that so-called "contrarian investment" is no longer just about low-level buying of a single asset, but rather about reallocating across different risk curve assets. Institutional-level contrarian operations resemble "reshuffling combinations during volatility," rather than simply collectively bottom-fishing Bitcoin at a certain price point.

Institutional Contrarian Characteristics: Amplifying Chips Amidst Volatility, Emotions Fade from C-End View

Historically, professional institutions tend to act "against the tide" in two types of environments: first, when severe price volatility leads to pricing distortions; second, when emotions are significantly high but liquidity remains manageable. The former is suitable for amplifying long-term chips, while the latter is suitable for fading out of highly scrutinized varieties, transferring risk into more manageable structures. Currently, most crypto assets are still in a high-volatility range, and macro and regulatory signals are not entirely clear, leading institutions to naturally prefer:
• Accessing new narrative targets through OTC, private placements, etc., to lock in potential upside.
• Reducing net exposure to widely known assets in the public market to lower portfolio volatility. When C-end participants ask, "Is now the FUD low point?" institutions are more concerned with the position of the portfolio risk/reward ratio across the entire curve, rather than the temporary highs and lows of a single asset.

Interest Rate Turning Point Expectations: Potential Repricing of Dollar Liquidity

On a macro level, the market generally prices in a high likelihood of the Federal Reserve cutting interest rates in the first quarter of 2025 through derivatives, meaning that expectations about the interest rate path in the coming months will become the "invisible anchor" for pricing all risk assets. Compared to past macro cycles (without specifying years and events), Bitcoin often experiences:
• A period of high correlation with the stock market during the initial emergence of interest rate turning point expectations.
• Gradually transitioning from a "high-beta tech stock substitute" to an "independent risk factor" after real liquidity improvement.
If the market confirms the shift in interest rate expectations, the current cautiousness and reduction of funds are more about creating room for future re-entry rather than a denial of the long-term logic of the entire crypto asset.

EU DAC8 Effective: Asset Preference Reordering After Increased Compliance Costs

On the regulatory front, the implementation of the EU DAC8 tax regulations has established a clearer framework for reporting obligations for trading platforms, custodians, and users, effectively raising the compliance costs of using crypto assets for cross-border funds. In such a regulatory environment, long-term funds typically tend to:
• Use tools with clear KYC and defined reporting paths to hold exposure, reducing future compliance uncertainties.
• Prioritize allocating to larger market cap, more liquid, and more maturely regulated assets to lower "regulatory shocks."
When the regulatory coordinates shift from "gray and ambiguous" to "mandatory reporting," the real FUD is no longer just price volatility, but systemic concerns about whether assets will be labeled as high-risk.

Dark Web Migration to Telegram Controversy: How Risk Labels Spill Over to Mainstream Assets

Recently, the trend of some dark web activities migrating to channels like Telegram has sparked a new round of attention and debate in the regulatory and compliance circles. Although these actions do not have a direct correspondence with mainstream compliant platforms and assets, from a regulatory perspective, crypto technology is often bundled into the basket of "potential risk tools." The resulting consequences are:
• Compliant funds and traditional institutions are more willing to hold leading assets and regulatory-approved on-chain tools to explain fund paths when necessary.
• Narratively, any news related to "crime" or "money laundering" can emotionally suppress the valuation premium of the entire sector. In this discussion context, the so-called "FUD" stems more from uncertainties in compliance and public opinion rather than just the decline of the K-line itself.

Venture Capital Bets on USDC and Prediction Markets: Structural Winning Narratives for 2025

Top venture capital firms have recently mentioned that "assets pegged to fiat currencies like USDC and prediction markets will become the big winners in the crypto space in 2025," with reasons concentrated on two dimensions: first, a clear profit model and fee structure; second, a more direct connection to real economic activities. Taking USDC as an example, its income mainly comes from interest generated by custodial assets and related service fees, while prediction markets build a closed loop through transaction fees and liquidity provision rewards. In an environment of high macro interest rates and increasing compliance pressures, those business forms that can generate cash flow and are "understandable" by regulators are naturally more likely to attract long-term funds, proving to be more resilient than assets that rely solely on price increases to tell their story.

The Role of USDC and Prediction Markets: Liquidity Hub and Emotional Pricing Arena

In the current cycle, USDC has evolved from a mere trading medium into a liquidity hub across exchanges and chains; prediction markets have become venues for market participants to price vote on "event probabilities" and "policy paths." The roles of the two in the ecosystem can be summarized as:
• USDC provides low-friction fund transportation and temporary parking functions, serving as a "buffer pool" for funds switching between different risk assets.
• Prediction markets aggregate dispersed expectations into clear "emotional and information indices" through price signals. When funds can more finely switch between USDC, prediction markets, and assets like Bitcoin and Ethereum, "buying in FUD" no longer just means a one-time heavy position, but rather rationally weighting different risk exposures through a toolset.

Reassessing Bitcoin in the New Structure: Hedge or Collateral?

As tools like USDC and prediction markets are favored by venture capital, the role of Bitcoin within the entire system also needs to be re-evaluated: on one hand, it remains a narrative vehicle for "digital gold" amid macro uncertainty; on the other hand, it plays a core collateral role in lending, derivatives, and inter-institutional settlements. This means:
• When macro risks heat up, Bitcoin is viewed as a long-term chip to hedge against traditional asset risks.
• When on-chain credit activities expand, Bitcoin is one of the most readily accepted underlying collateral assets. In today's highly differentiated tools and tracks, the targets for "contrarian investment" need not be limited to Bitcoin itself, but should focus more on high-quality assets and infrastructure combinations centered around Bitcoin.

Historical Statistical Perspective on Emotional Extremes and Long-Term Returns

From a longer-term statistical perspective, a recurring pattern can be observed in the crypto market: the extremes of sentiment often overlap significantly with the best ranges for long-term returns. Whether in extreme fear or excessive optimism, looking back over many years resembles a "concentrated advance" or "concentrated discount" on future returns. However, the problem lies in:
• The extreme points of sentiment are difficult to accurately identify in the present, often only becoming apparent in hindsight.
• Investors' funding cycles and psychological endurance may not support the "statistically optimal" buying points. Statistical patterns tell us that contrarian approaches may be effective, but no data can guarantee that an individual will achieve ideal returns from any given "FUD buy."

How to Characterize "FUD" with Data Rather Than Just Looking at K-lines

To transform "buying in FUD" from a slogan into an executable framework, the first step is to define "FUD" using observable data:
• In terms of fund flows, one can observe whether there is an acceleration in net inflows and outflows of ETFs/funds/exchanges, or if large on-chain transfers exhibit characteristics of accelerated exit.
• In terms of leverage and derivatives, one can focus on whether the overall network leverage ratio, liquidation scale, and risk preference indicators for futures and options show extreme readings.
When fund flows, leverage, and options pricing simultaneously indicate that "participants are expressing fear with real money," it approaches a quantifiable FUD range rather than a single-dimensional price pullback.

Current Position: Fear, Wait-and-See, or Excessive Optimism?

Combining the previously mentioned net outflows from spot funds, institutional OTC operations, and macro and regulatory expectations, we can attempt to position the current market:
• There is no widespread panic on the funding side; rather, it leans towards structural reduction and sector switching, indicating that systemic fear has not yet been triggered.
• On the emotional side, there is neither "no one cares" nor "mass frenzy"; social discussions are more focused on policy and macro trends. In such a position closer to "neutral wait-and-see + structural divergence," CZ's remarks serve more as a reminder for the market to pay attention to the "overly cold future window" rather than suggesting that the current moment is the absolute FUD bottom.

Constructing a Three-Layer Data Framework for Contrarian Entry

If we abstract CZ's viewpoint into a methodology, it can be simplified into a top-down three-layer framework:
• The first layer looks at macro and regulatory factors: whether interest rate expectations are transitioning from rate hikes/high rates to a loosening turning point, and whether regulation is moving towards clarity and executability or increasing uncertainty.
• The second layer examines funding and structure: whether the net flows of ETFs and funds show extreme readings, whether institutions are increasing positions through OTC or reducing them in the public market, and which types of assets are being collectively increased or sold off. Only then does the third layer consider price and volatility: under the conditions of the first two layers, significant pullbacks and high volatility provide the statistical advantage for "contrarian betting." When the contrarian framework is built on macro, funding, and structural data, "buying in FUD" truly transforms from a slogan into a verifiable, executable, and moderately quantifiable investment discipline.

Is CZ's Statement a Call to Action or a Reminder?

Bringing the perspective back to this Christmas message itself, its marginal effect lies more in pulling investors out of short-term price debates and redirecting them to the dimensions of sentiment and cycles. Currently, with U.S. stocks hitting new highs, the structure of crypto funds diverging, and expectations of interest rate turning points and regulatory tightening coexisting, both simple chasing and simple bottom-fishing face higher uncertainty. In such an environment, CZ's "buying in FUD" resembles a reminder of "when what matters more than price," rather than a direct call to action for anyone's next trade.

Leaving Room for Multi-Cycle Allocation Between Frenzy and Fear

The real market is far more complex than slogans: few can steadfastly buy during deep FUD, while many hesitate in the "slightly uncomfortable" wait-and-see range. For most participants, a more feasible approach is not to make a one-time bet at some so-called "perfect low point," but to adjust long-term and short-term positions in batches across different emotional ranges:
• Use medium to long-term funds to support logical assets that can still stand firm under the triple variables of compliance, macro, and funding.
• Use short-term funds to manage volatility, avoiding passive exits when misjudging a single price. All data and viewpoints are merely tools to help participants understand their current position, not directives for any specific buying or selling actions.

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