On January 24, 2026, against the backdrop of continuous net outflows from Bitcoin spot ETFs and a general cooling of risk appetite, Liquid Capital founder Yi Lihua chose to increase his position in Ethereum against the trend. On one hand, he clearly stated that he is currently adding to his ETH holdings at around $3000, recalling his previous buying in the $1400-1800 range and selling in the $4500-5000 range; on the other hand, he expressed a strong view that “ETH will break through $20,000 in the long term.” Meanwhile, data from TechFlow and BlockBeats shows that approximately 65% of tokenized assets are deployed on the Ethereum network, equating “asset on-chain” with “Ethereum dominance.” However, while institutions are accelerating their layout in Ethereum's application layer and RWA, the shadow of the HK$21.4 million cryptocurrency fraud case in Hong Kong and tightening regulations in East Asia constantly remind the market: the narrative of compliance and risk events are competing in the same arena, and which future funds will bet on has become the core contradiction of the current cycle.
Bitcoin ETF Bloodletting Moment and ETH Counter-Cyclical Accumulation
● Market Environment: In the phase where the US spot Bitcoin ETF is reported to have continuous net outflows, and funds are withdrawing from “Bitcoin beta,” the overall risk appetite in crypto has significantly cooled, with liquidity outside blue chips becoming increasingly thin. Traditional institutions are more inclined to shrink their balance sheets and reduce allocations to high-volatility assets, with market sentiment shifting towards defense, and the narrative returning from “mindless bull market” to “cash is king.” This broader environment constitutes the headwind background for Yi Lihua's decision to increase his ETH holdings.
● Operational Rhythm: According to public records, Yi Lihua actively accumulated ETH in the $1400-1800 range, and then gradually reduced his holdings in the $4500-5000 range, realizing the paper profits from the previous major uptrend. Entering the current phase, he is re-accumulating at around $3000, effectively rebuilding a long-term position after a significant correction, replicating the past “buy low - sell high” framework into a new cycle, reflecting his continued trust in the medium to long-term structural opportunities of Ethereum.
● Sentiment Divergence: Retail investors, after the ETF bloodletting and sharp price fluctuations, are more likely to focus on short-term pullbacks and the cases of large whales suffering losses, tending to view ETH as a high-beta speculative asset; while many institutions and leading traders place greater importance on Ethereum's strategic position in the settlement layer and asset layer. When Yi Lihua states, “Do not short ETH, this is the biggest landing application opportunity in the crypto space,” this statement forms a strong contrast in the midst of panic: it serves as a warning to short-term short sellers and acts as a “signal to choose sides” for long-term funds.
65% Assets On-Chain: Ethereum Becomes the Main Battlefield for Applications
● Share and Network Effect: On-chain data compiled by TechFlow and BlockBeats indicates that approximately 65% of tokenized assets are deployed on the Ethereum network. Whether it is on-chain bonds, fund shares of an experimental nature by institutions, or various asset certificates, the preferred public chain for landing is almost always ETH. The high proportion not only signifies the current concentration of liquidity and development resources but also creates a strong network effect and lock-in effect: new assets and applications will continue to choose Ethereum for compatibility and liquidity considerations, reinforcing the path dependency of “the more assets on-chain, the harder it is to migrate.”
● Support from Leading Platforms: OKX CEO Star publicly stated the need to “promote more assets on-chain including RWA,” directly pointing to a new round of on-chain experiments represented by real-world assets. For leading platforms with large user bases and custody scales, this means continuing to expand business boundaries within the Ethereum ecosystem: whether it is issuing on-chain certificates, accessing compliant products, or building infrastructure for interaction with RWA, Ethereum is currently the most natural docking base, further consolidating its central position in the tokenized asset and RWA track.
● Yi Lihua's Underlying Logic: On this main line, Yi Lihua's ETH bet points more towards the “largest landing application opportunity” rather than a simple price game—the more RWA migrate on-chain, and the more assets choose Ethereum standards, the stronger Ethereum's dominance as an asset layer will be. This dominance will attract more institutions, compliant products, and dollar-denominated assets to enter the market, forming a positive feedback loop from narrative to revenue, and then to valuation. This cycle of “application - asset - value” is the core foundation for his willingness to increase his ETH holdings against the trend during the ETF retreat.
Trust Game Amid Regulatory Shadows and Fraud Storms
● Warning from the Hong Kong Case: In the East Eight Zone, Hong Kong police disclosed a cryptocurrency fraud case involving approximately HK$21.4 million, led by the Tseung Kwan O police district. Although the authorities have not yet disclosed more detailed information about the involved platforms and individuals, the high amount, localized victims, and the “investment/financial management” packaging model are enough to keep regulators highly sensitive to on-chain asset-related businesses, making ordinary users instinctively associate any “high-yield on-chain products” with risks and compliance red lines.
● Rising Regulatory Sensitivity: As such cases continue to emerge in East Asia, local financial regulatory agencies are becoming more cautious about crypto products, RWA experiments, and on-chain asset services. For institutions attempting to promote RWA in markets like Hong Kong and Singapore, how to embrace the expansion of the Ethereum ecosystem while meeting local KYC, anti-money laundering, and investor protection requirements has become a question that must be answered, which has inadvertently raised the institutional threshold for the Ethereum ecosystem in East Asia.
● Contrast Between Narrative and Reality: On one side is the grand narrative of “Ethereum being seen as a compliance-friendly asset layer” and “Wall Street willing to issue tokenized products on it,” while on the other side are the sporadic fraud cases and the reality of retail losses. The key question the market needs to answer is: is Ethereum's “trust premium”—derived from transparent on-chain records, auditable smart contracts, and institutional endorsements—sufficient to offset regulatory fears of bad cases? If the answer is affirmative, capital will continue to concentrate on Ethereum under stricter regulations; if not, some funds may turn to alternative solutions within more closed or strongly regulated frameworks.
Wall Street License Advancement and On-Chain Blueprint Anchored by the Dollar
● Traditional Financial Opening Signals: Across the Atlantic, US banking regulators have released a different stance than before—the US OCC director publicly stated that the WLFI bank license application is “progressing as planned.” This means that certain institutions with on-chain finance as their core business model are attempting to obtain regulatory status equivalent to traditional banks, marking a gradual blurring of the boundaries between Wall Street and the on-chain world, with compliant capital trying to directly enter the on-chain asset layer.
● Licensing and Dollar Asset On-Chain: When institutions holding US bank licenses participate in on-chain finance, the most natural extension is to innovate tokenization and settlement around dollar-denominated assets. The compliant dollar liabilities and assets of banks, integrated with on-chain infrastructure for clearing, custody, and circulation, can form a hybrid model of “offline holding of dollar credit—online completion of settlement and circulation,” providing a more solid legal and compliance foundation for the scaling of RWA and the on-chain migration of dollar assets.
● Resonance Between Ethereum and Yi Lihua's Views: In the current landscape, Ethereum is the de facto standard venue for RWA and dollar asset tokenization practices. Whether it is institutional pilot projects or potential bank-level products, they tend to prefer it as the underlying network. Yi Lihua's view that “ETH may break through $20,000 in the long term” is essentially a bet on this blueprint: if the mainstream forms of dollar assets and RWA ultimately settle on Ethereum, then ETH, as the asset layer and settlement layer, will directly bear the revaluation from traditional finance.
Whale's Floating Loss of $5.2 Million: Short-Term Pain and Long-Term Chips
● Dramatic On-Chain Case: A piece of on-chain data disclosed by BlockBeats shows that a whale address has incurred a floating loss of approximately $5.2 million on ETH transactions, quickly turning from “smart money” into a paper “bag holder.” In a phase of amplified price volatility, such cases of high-position accumulation followed by deep corrections are highly dramatic, quickly fermenting on social media and becoming material for bears to prove that “ETH hasn't dropped enough,” also strongly amplifying retail fear and wait-and-see sentiment.
● Contrast of Styles and Time Dimensions: Unlike this short-term whale's high-volatility game, Yi Lihua chose to accumulate on dips in the $2800-3000 range, publicly emphasizing that he is looking at multi-year application and asset cycles. One focuses on profit and loss fluctuations over weeks and months, while the other attempts to traverse bull and bear cycles and regulatory periods. The differences between the two reflect varying understandings of risk tolerance and time value among different investors.
● The Duality of Panic and Opportunity: From a market structure perspective, whale floating losses are often magnified in real-time on-chain, triggering more stop-losses and leveraged liquidations, temporarily increasing downward pressure; however, for long-term funds aiming to layout RWA and the Ethereum asset layer, such “passive dumping” actually means more cost-effective chip prices. It is in this interplay of short-term pain and long-term layout that Ethereum's chip structure gradually shifts from high-leverage, short-sighted funds to patient capital willing to bet on asset on-chain and institutional reconstruction.
Which Side Will Funds Stand On in Future Narratives
Looking back at the current narrative collision, three main lines can be clearly outlined: first, the outflow of funds from Bitcoin ETFs has weakened the imagination of a “single asset bull market,” forcing capital to reassess allocation structures; second, approximately 65% of tokenized assets are concentrated on Ethereum, with the story of RWA and asset on-chain taking shape first on ETH; third, from the HK$21.4 million fraud case to the US OCC advancing bank licenses, regulation and licensing are reshaping the institutional boundaries of on-chain finance. In this context, Yi Lihua's statement of “do not short ETH” is not just a market opinion, but rather a public bet on the long-term narrative that “the application layer and asset layer will inevitably merge, and Ethereum will play a core foundational role.”
Looking to the future, several key indicators will determine which side funds ultimately stand on: the actual speed of RWA and dollar asset expansion on Ethereum will test whether “asset on-chain” can move from pilot to scaling; the regulatory licensing advancement pace represented by WLFI will determine how much and in what form traditional financial capital can enter the on-chain world; and the changes in fund flows related to Bitcoin ETFs and potential ETH products will continuously reprice the aforementioned narratives. Funds may sway in short-term fluctuations, but in the long cycle of institutional reconstruction and asset migration, they will ultimately have to make a directional choice between different narratives.
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