Recently, I noticed a very interesting phenomenon: Bitcoin has broken through $80k, the US stock market has been surging wildly, and oil prices have been rocketing—but gold has remained eerily quiet with little reaction. So what exactly is happening behind the scenes?

First, look at US debt. The 10-year yield has already risen to 4.44%. This suggests the market is pricing in the risk of $39 trillion in US debt, meaning higher interest rates are needed for investors to be willing to take it on. Oil prices have continued to surge, driving expectations for inflation higher, and the market has quickly cut back expectations for rate cuts. Even more interesting is that a divergence of more than 20% has emerged between physical oil and Brent crude—historically, this is often an early signal of stagflation.

Physical oil is priced far higher than oil futures due to rising transportation costs. With no sign that the war in the short term is easing, oil prices are likely to stay elevated. This will directly hit the US consumer price index, leaving the economy sluggish. For the US to quickly make up for import shortfalls is basically impossible. Going forward, oil futures should gradually close the divergence through hedging and delivery, while energy stocks will get stimulated by short-term demand.

Bitcoin’s rally is actually easy to understand. It is most sensitive to liquidity. This upswing is probably based on expectations that future inflation will heat up in the market’s pricing. Bitcoin often senses the Federal Reserve’s eventual pivot to easing earlier than gold does. Gold, however, is currently a good time to participate at low levels, because the Federal Reserve will ultimately choose to ease; otherwise, they would have to face a systemic collapse of the debt system. Higher debt yields would cause debt to grow rapidly, eventually trapping the system in a cycle of issuing new debt to pay off old debt, which could bring down the entire system. So the Federal Reserve is highly likely to bet on another round of easing, and with the mid-term elections in the second half of the year layered on top, this probability will rise even further. The outlook for gold over the next decade is worth watching— even if US debt collapses and the US dollar’s credit breaks down, gold will still be the beneficiary.

This explains why both risk assets and anti-inflation assets are rising: money has become the worst asset right now. However, compared with Asia-Pacific countries that are heavily impacted by oil imports, the US dollar is still more hardline. Even though the US Dollar Index hasn’t risen, it has still appreciated relative to countries like Japan and South Korea.

My view is to stay away from “junk” tech stocks. Tech stocks with real earnings may still be chased, but the US stock market has basically entered a stage where the crowd is in full roar. Over the next one or two years, embracing anti-inflation assets such as energy, gold, and Bitcoin is a safer way to protect your capital. Historical collapses always happen in an instant—nobody knows when they will come. There’s no alternative except to prepare your asset allocation in advance. What can truly save you is having ample liquidity in your hands after the collapse. Investment opportunities in AI will appear then, and companies delivering 10x or 100x returns will emerge one after another the way they did in the internet era. If you’re interested, you can go to Gate to check the market trend dynamics of related assets.