Bitcoin's New Asset Cycle: The Landscape and Understanding After This All-Time High
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Bitcoin's New Asset Cycle: The Landscape and Understanding After This All-Time High
Bitcoin is an alternative reserve asset outside the traditional financial framework, capable of hedging against risks associated with dollar-denominated debt.
Navigating Web3 tides with focused insightsAuthor: Will, Metrics Ventures
As Bitcoin hits new highs and appears to be concluding a historic six-month consolidation period, we believe it's timely to share our perspective. As previously mentioned in our monthly report, six months is long enough to confirm the arrival of a multi-year trend. This article summarizes insights gathered by the fund manager through direct market observations across primary and secondary markets over the past six months. The views expressed are highly subjective and aim to guide our future crypto asset management strategy.
Below is a one-sentence summary of the core idea of this article:
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The asset nature of Bitcoin has been redefined over the past six months, with old and new capital forces completing a handover of pricing power. A new financial scheme—centered on Bitcoin, fueled by inflows via ETFs and U.S. equities, and carried by U.S.-listed companies such as MSTR—is now actively incorporating dollar liquidity in a self-reinforcing Ponzi-like mechanism.
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Bitcoin has become the most critical dollar-denominated asset outside of leading sectors like AI within the U.S. industrial cycle, establishing a structural trend of long-term, low-volatility appreciation. Meanwhile, traditional cryptocurrency markets (altcoins) will continue to decouple from Bitcoin.
1. Bitcoin Has Established a Fundamental Turning Point During Consolidation
Bitcoin Has Found a Clear Definition of Its Asset Class
This may seem overlooked, but in our view, it’s critically important. While BlackRock may have initiated this narrative, its legitimacy requires broad validation across the entire U.S. capital system—an outcome no one expected before. However, over the past six months, we’ve accumulated sufficient evidence to clearly state:
Bitcoin is an alternative reserve asset that operates outside traditional financial frameworks and can hedge against U.S. debt risk.
This concise definition provides the most crucial foundation for Bitcoin’s role at the center of the future U.S. asset ecosystem. The U.S. debt issue is now the elephant in the room—it will remain a core challenge for U.S. fiscal and monetary policy for years to come.
In the context of Trump’s expansive government agenda, if policies turn more aggressive, we could witness significant volatility in both U.S. debt and the dollar exchange rate over the next three years. In our view, amid the broader decline of the dollar’s global influence, the U.S. debt crisis will be one of the dominant themes of the next decade.
More importantly, we’ve closely monitored whether this perception is being adopted by major players. Standing here today, facing an unexpectedly large-scale government under Trump, we’ve finally observed compelling evidence: an increasing number of founders from giant hedge funds (>$1B AUM)—including Paul Tudor Jones, Verde Asset Management, Brevan Howard, Millennium Management, and Schonfeld Strategic Advisors, representing established traditional “old money” institutions—are publicly using BTC as a hedging instrument against U.S. Treasury risks, particularly in light of recent elections.
The New Bitcoin Ponzi Model Has Gained Momentum Over the Past 6 Months
Since the approval of Bitcoin ETFs, the new Bitcoin Ponzi model led by BlackRock has taken initial shape. This system features ETFs controlled by BlackRock and MicroStrategy—where BlackRock is the second-largest shareholder—acting as perpetual buyers and long-term holders. At its core is the sustained, low-volatility upward trajectory of Bitcoin. Through MSTR’s stock performance, Bitcoin becomes a tool for equity value management, unlocking passive buying from future U.S. equity ETFs, creating a self-reinforcing, infinitely scalable Bitcoin Ponzi loop.
We believe the medium- to long-term sustainability of this model (3–5 years or longer) depends on the following conditions:
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Bitcoin’s volatility continues to decline;
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Dollar liquidity maintains the average growth rate seen since 2008;
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Bitcoin’s price achieves year-on-year growth—the rate is less important than consistency.
The following key developments have already occurred:
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Bitcoin’s volatility has reached near historical lows;
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Excluding arbitrage effects, the total market value of Bitcoin held by Bitcoin ETFs (including GBTC) and MicroStrategy exceeds $90 billion. This holding size approaches the daily average spot trading volume across all platforms (approximately $100 billion in effective liquidity during peak bull market conditions), effectively crossing the threshold for market-making dominance. Over the past six months, we’ve clearly observed liquidity concentrating further on CME and the NYSE, confirming the system’s growing control over Bitcoin supply and demand;
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BlackRock has both the willingness and full capacity to ensure MSTR’s long-term access to equity financing, enabling MSTR to continuously act as a stabilizing force on Bitcoin’s volatility through short-term leverage funded by long-term equity raises.
In conclusion, this self-sustaining engine is poised to become the most powerful capital rotation game over the next 2–3 years, especially as dollar liquidity begins a new expansion phase. It’s only a matter of time before the total value of Bitcoin held within the BlackRock ecosystem surpasses holdings in gold ETFs.
Finally, here’s a simple framework for identifying when this capital cycle might reverse—essentially the inverse of the core conditions above:
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Rising Bitcoin volatility, especially increased downside volatility;
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A turning point in dollar liquidity;
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MSTR encounters difficulties in equity-based refinancing, failing to meet its planned $42 billion capital raise over three years. Based on this logic, we expect MSTR’s stock price to peak before Bitcoin’s price does.
2. Our Outlook on Bitcoin’s Price Trajectory Over the Next 5 Years
Based on the above analysis, we believe the following three factors are essential for understanding Bitcoin’s path forward over the next five years:
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We are at a genuine inflection point in dollar liquidity, and the Republican-led big-government agenda will likely sustain looser monetary conditions than previously anticipated;
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Given current daily trading volumes and MSTR’s stock performance/market cap, the scale of capital absorbed so far remains early-stage—far from reaching a saturation point;
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Despite the above two supportive conditions, existing holders continue to exit en masse. The prolonged sideways movement near all-time highs over the past six months has, in fact, completed a historic transfer of ownership between old and new capital.
Therefore, we firmly believe that a new macro-cycle for Bitcoin as a major asset class has just begun. At the asset management level, we will apply the above understanding alongside real-time market signals to help investors ride this long-term, low-volatility upward trend—delivering a holding experience comparable to that of core U.S. equity assets.
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