Cryptocurrency Market Secondary Fund MVC May Market Observation

1/The past month’s market has been lively in trading expectations, on one hand trading the re-inflation from the global supply chain disruptions, and on the other hand trading interest rate hikes in both factual and Wash expectations, the two are like fire and ice, causing commodities and most equity assets to fluctuate continuously, but in fact, the technology that is impacted by both still benefits from the concentration of short-term liquidity.

2/From a factual standpoint, as we previously analyzed in the Hormuz situation, the U.S. balance sheet diseases have exceeded the scope that a Federal Reserve Chairman can solve. All of Wash’s assumptions are only likely to hold when AI changes social production relations, and until that day, countries that are mostly non-AI-led globally (almost all except for China and the U.S.) will first fall into fiscal and monetary policy disintegration. By that day, who is the Federal Reserve chairman may no longer matter.

3/From a trading perspective, there seems to be no possibility for cryptocurrency assets in the narratives mentioned above. We also see the 200-day moving average still strongly suppressing asset price movements; anything but AI, even if it spreads to anything but mines, is difficult to change this situation. There is no stage for crypto in this phase of silicon-based versus carbon-based, but there will certainly be in the future, so please rest assured.

Overall Market Review and Comments on Market Trends

Besides Hype, there is not much to comment on in the cryptocurrency market. The sluggish trading volume and lack of innovation have become old topics, and the technical suppression is also very obvious. In fact, cryptocurrency assets may be a good tool to hedge against global liquidity risks. At this moment, all market focus points are hard to directly relate to crypto, and the inflation/stagflation caused by supply chain disruptions clearly has more defined large capital receptacles such as gold and other metals, petrochemicals, and grains. From the chip perspective, Bitcoin also needs more time to consolidate, and this variable's brewing is crucial. We expect this adjustment to last until at least Q4 2026.

Looking forward, we believe three things will successively dominate future market fluctuations:

① The short-term market will highly focus on whether Wash will repeat the pitfalls of Bessent and Musk, turning his position into the next "333" plan;

② The seriousness of substantial damages to global supply chains and the time required for future recovery is clearly underestimated by the market. The medium-term market will ultimately recognize the scarcity of local resources and the price volatility far exceeds initial expectations, just like during the pandemic years;

③ Countries represented by the UK and Japan, which do not benefit from AI + inflation, will gradually experience severe fiscal and monetary policy crises as the first fallen nations. We should pray that the replacement by AI does not happen too quickly; otherwise, the existing credit system and national welfare fiscal system will collapse rapidly.

One day, the market may realize that the bursting of the AI bubble could bring contagious credit crises to some sovereign nations, and the monetary and fiscal responses at that time might be the best ignition point for Bitcoin's ultimate rally.

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