In early 2024, under the backdrop of a prolonged high-interest rate environment, the cryptocurrency market has shown a distinct structural differentiation: BTC has reached a new all-time high, while most crypto assets, including ETH, have struggled to keep pace. In this context, Liquid Capital founder Yi Lihua publicly expressed optimism that the upcoming interest rate cuts will reignite risk appetite, initiating a new crypto bull market, and clearly stated that ETH is expected to outperform BTC in this cycle. He not only bets on ETH in narrative but also chooses to heavily invest and leverage in practice, claiming that his positions are already prepared for the next phase of the market, which has made the question of "what gives him the courage to take risks" a focal point of market debate.
The Dull End of the Rate Hike Cycle: Only Bitcoin is Celebrating
● Structural Differentiation: During this round of interest rate hikes, BTC has become one of the few winners, leading the way to new all-time highs and continuously setting new price records. In stark contrast, most altcoins and the major asset ETH have shown significantly weak overall performance, failing to create a broad rally or the rotation effect commonly seen in past bull markets. This "one flower blooms" pattern has led many participants to feel that "only BTC is worth watching."
● Macro and Capital Preferences: The high-interest rate environment has raised the risk-free return, leading institutions and large funds to prefer allocating to BTC, viewed as "digital gold," using it as a tool to hedge against macro uncertainties, while remaining cautious about other assets that are more volatile and have more complex narratives. This capital preference, combined with tightening regulatory and compliance expectations, has resulted in BTC receiving relatively more incremental attention, while other assets appear particularly weak in the existing game.
● The Build-up of Pessimism: In this context, the overall market sentiment leans towards defense and pessimism: on one hand, BTC's solo rise has triggered anxiety of "if I don't buy now, I will never get on board"; on the other hand, the long-term sideways movement or even pullback of altcoins and ETH has reinforced the perception that "only BTC has a chance this time." From Yi Lihua's perspective, it is precisely this collective disappointment and indifference towards non-BTC assets that lays the groundwork for the "best bottom-fishing opportunity" in the next phase.
Rate Cuts Ahead: The Main Line of the Next Bull Market in His Eyes
● Rate Cuts and the Return of Risk Appetite: Yi Lihua's core narrative transitions from "rate hikes suppressing risk assets" to "rate cuts restarting risk appetite." He believes that once the high-interest rate cycle comes to an end and rate cut expectations become clearer, global liquidity will once again seek higher risk premiums, and crypto assets will re-emerge as an important receiving end. This cycle is not a simple replication of the previous one, but a new phase of "recalibrating" asset pricing logic after the squeeze of high rates.
● The Ineffectiveness of the Four-Year Halving Cycle: In his view, the BTC four-year halving cycle, once widely regarded as a benchmark, is becoming ineffective, at least no longer the sole narrative to explain market trends. With increased institutional participation, changes in the macro environment, and the richness of financial products, the rhythm of a single supply side can no longer fully dominate price fluctuations. He emphasizes that the macro interest rate cycle is the "dominant clue" that needs to be prioritized in tracking current and future trends, and is also the key pivot for judging bull-bear transitions.
● The Logic of ETH Outperforming BTC: Within this macro framework, he anticipates that ETH's price increase is likely to outperform BTC in the new cycle. The reason is not simply that "it has fallen more, so it will rebound more," but is based on ETH's higher elasticity in narrative, application, and infrastructure: once liquidity warms up, funds will not only chase BTC's "hard asset attributes" but will also seek targets with greater imaginative space and application capacity, and ETH's on-chain ecosystem and functionality provide the soil for this "excess elasticity."
From Stablecoins to On-Chain U.S. Treasuries: The Settlement Layer Imagination of Ethereum
● USDT/USDC and RWA Binding: Yi Lihua frames the global usage trend of dollar-denominated tokens like USDT and USDC alongside the expansion of on-chain U.S. Treasuries and other RWAs as one of the most certain long-term opportunities in the next phase. In his judgment, whether institutions are moving offline assets on-chain or global users are indirectly holding dollar-related rights through on-chain assets, both require a secure, programmable, and liquid infrastructure to support them.
● Ethereum as a Bridge Between Dollar Assets and the Crypto Ecosystem: Within this narrative framework, he views Ethereum as the core settlement layer connecting dollar assets and the global crypto ecosystem. The significant circulation of USDT and USDC, as well as attempts to bring U.S. Treasuries on-chain, currently rely mainly on Ethereum and its compatible ecosystem. Regardless of whether new high-performance public chains will emerge in the future, Ethereum's first-mover advantage in compliance, developer ecosystem, and asset accumulation constitutes what he refers to as the "settlement layer position."
● Long-term Cost-Effectiveness and Price Range: For this reason, he views the current price range of ETH as a stage with long-term cost-effectiveness advantages: on one hand, market expectations for ETH are significantly lower than for BTC, with pricing leaning more towards "functional assets rather than core assets"; on the other hand, if the globalization of USDT/USDC and the on-chain narrative of U.S. Treasuries continue to advance, ETH's role as a settlement layer will be continuously strengthened. In his view, this dual support of narrative and real business is the fundamental reason for his willingness to reverse accumulate during a downturn.
High-Leverage Bet on Ethereum: Where Does the Margin of Safety Come From?
● Leverage Positions and Repayment Ability: Yi Lihua publicly stated that he has established a large-scale ETH leverage position and emphasized that the relevant preparations "have been made quite adequately." He claims that even in the face of market volatility, he can "repay most of the loans at any time," to illustrate his reserved space in capital arrangement and risk management. This also means that his bet is not purely a gamble but is based on a certain assessment of repayment ability.
● The Premise of "Absolutely Safe Above $1,000": In his statements, as long as ETH's price remains above $1,000, the current leverage position is "absolutely safe." This implies two layers of logic: first, the scale of his borrowing, margin, and liquidation line are all planned based on extreme scenarios far below the current price; second, he has sufficient confidence in ETH's long-term value, believing that the probability and duration of the price falling below this level are low. However, this margin of safety relies on premise assumptions, and once extreme macro or market events occur, the "absolute" nature of this safety will be severely tested.
● Sensitivity Reminder of Leverage Strategies: It is important to emphasize that high-leverage strategies are highly sensitive to price fluctuations and changes in liquidity. In the event of a sharp decline or sudden tightening of liquidity, even if the long-term logic is correct, short-term passive liquidation may occur due to insufficient margin, leading to a situation where "the direction is right but no profit is made." Yi Lihua can make choices based on his own capital size and risk tolerance, but this does not mean that ordinary investors can simply replicate it; the same price range corresponds to completely different risk levels under different capital structures.
The Controversy Over Liquidation at $4,500: Harvesting or Risk Control?
● Liquidation and Doubts: The most representative scene surrounding Yi Lihua's controversy is that after he liquidated near the $4,500 mark for ETH, he faced criticism from some market participants, being accused of "calling bullish and then dumping," and even being labeled as "calling for others to take over." Given his previously extremely optimistic views on ETH's prospects, this operation seemed particularly sensitive in terms of timing, and public opinion subsequently escalated.
● Self-Defense and Chip Strategy: In response, he later explained that the liquidation near $4,500 was essentially due to considerations of phase risk control, rather than an attempt to influence the overall market. His argument is that by realizing some profits at high levels, he can acquire more ETH at lower prices during subsequent pullbacks, thereby increasing his holdings in the long-term perspective, rather than simply "escaping the top." In his narrative, this is a tactical retreat, not a strategic bearish stance.
● Personal Size and Market Narrative: From the perspective of market capitalization and liquidity, the capital size of a single trader is unlikely to have a decisive impact on ETH's long-term trend, but in terms of short-term sentiment and narrative, it may amplify volatility. The public actions of well-known traders can be magnified, interpreted, or even misinterpreted, thereby affecting the confidence and behavior patterns of some investors. This phenomenon of "discrepancy between voice and size" also makes every public accumulation or liquidation action inevitably embedded in emotional games.
Cycle Belief and Personal Gamble: Wherever the Ethereum Story Goes, Money Follows
Yi Lihua's current bet can be broken down into a complete chain: starting from the judgment of the macro interest rate cycle, he believes that rate cuts will restart risk appetite; within crypto assets, he chooses to bet on ETH as the biggest beneficiary of the settlement layer and RWA narrative; at the execution level, he converts his belief in this macro-narrative framework into a highly concentrated capital gamble through large-scale leverage positions. The coupling of macro, narrative, and strategy in his case is exceptionally tight, which also amplifies the risk and attention of this bet.
As for the traditional four-year halving cycle "ineffectiveness theory" versus his emphasized "rate cut-driven theory," which one can better explain the current and future market trends largely depends on which framework you choose to prioritize. The reality may be closer to "both overlapping": halving still affects the supply rhythm, but macro interest rates, liquidity, and institutional capital behavior are continuously reshaping the boundaries of this rule. Absolutizing any single factor can easily lead to market education at some future stage.
For ordinary investors, it is more important to distinguish between "personal high-risk bets" and their own asset allocation decisions. A trader who can withstand significant drawdowns, has ample repayment ability, and possesses information advantages, making concentrated bets does not automatically apply to investors with limited risk tolerance. Whether Yi Lihua is right in this bet or whether he can achieve returns far exceeding BTC on ETH should not be reasons for blind following. Maintaining vigilance against any single viewpoint, in a market where uncertainty far exceeds certainty, may be more practical than "finding the right god."
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