Metrics Ventures Market Observation: The World's Fragility Is Rapidly Accumulating

null Crypto Market Secondary Fund MVC June Market Observation Guide

1/ This monthly report will focus on our thoughts on the current buildup of market risks. In short, we believe that since 2022, disruptions in the global supply chain have gradually pushed the economic resilience and the autonomy of monetary and fiscal policy in countries such as Japan, South Korea, and Europe step by step into a difficult situation—quietly accumulating momentum for future shocks in the global capital markets;

2/ The market’s trajectory has also profoundly revealed that, aside from AI and some non-ferrous industries, liquidity exhaustion is actually happening in practice. Although we do not believe the bubble is about to burst imminently, we have observed that the fragile countries mentioned above are increasingly doubling down on centralized trading. Under the current international political and economic situation, this all-in gamble is hardly likely to end well;

3/ For the crypto market, the fragile timeline of the world has already been rapidly consolidating into dark clouds above prices since the end of last year. At this very moment, we truly need to take seriously, for the first time, the possibility that MSTR could continuously sell BTC. With demand seemingly as far away as ever, the cost-effectiveness of BTC as a hedging and shorting strategy against other assets continues to rise. In the medium term, the outlook is one that can only be described as precarious—like duckweed battered by wind and rain.

Market Overview: Inventory and Commentary on Market Trends

From a technical analysis perspective, the market has already moved into the middle-to-late stage of concentrated trading. We can see that:

① Japan and South Korea’s stock markets, which have kept undergoing transfers and payments supported by national will, have reached an important pressure level in their long-term channels:

② The US Dollar Index has broken through a pressure level that has held for nearly a year:

③ While the US 10-year Treasury bond remains stable, the US 2-year Treasury bond has formed an upward trend:

At this moment, we see that SK Hynix’s leveraged fund scale exceeds that of Tesla. A huge number of white-collar workers are rapidly losing their valuation premium for unit human capital and are being forced into the endless game of the capital market. At the same time, a large number of countries deeply tied to the world trade system—trusting in capitalist globalization—are placing their past trust on the line: the collapse of the global supply chain and the unraveling of international economic and trade alliances will greatly impair their fiscal and monetary systems’ ability to actually regulate the economy. After all, printing money cannot print oil, nor can it print copper mines, and it certainly cannot print optical modules. Globalized division of labor ultimately becomes a rope around one’s own neck.

One day, when liquidity suddenly contracts again—whether expectedly or in a substantial way—a large number of leveraged funds will begin to unwind and realize liquidity algorithmically starting from the trading hours of Japan and South Korea. This shock will inevitably transmit to global fear indices and, along the way, stir up even bigger waves. The underlying turbulence and the fragile economies—fed by long-term poisoning to quench thirst—will be further exposed amid the turmoil, and that will instead intensify the ups and downs of sentiment. It won’t end beautifully.

For the non-ferrous metals we have been tracking, under this kind of macro pressure, gold and silver will be constrained in the short term by countries’ strong will to exchange dollars for commodity inventory. This is especially evident in central banks led by Turkey. But this bout of shock is precisely the deep crouch before gold and silver’s true major uptrend. The complete failure of the Strait of Hormuz is the opening prelude to the loosening of the US dollar. The market turbulence after rate hikes will ultimately point toward a future of easing. As for copper and many other small metals, the game is even more complex. We tend to believe that when the rate-hike expectation game reaches its extreme, there will be a stretch of relatively sweet time.

For Bitcoin, for the first time we truly need to evaluate seriously whether MSTR will trigger that “evil button” amid future cash-flow pressures and amid the possibility that other participants will front-run and race to reduce its 800,000 BTC holdings. In the scenario described above, BTC is obviously not going to be spared. Therefore, we need to think more carefully about BTC’s positioning and tradable directions during this round of risk release. Perhaps the bottom of this round will make everyone feel unbelievable right now, but a deeper adjustment level is not a fantasy born out of panic.

Looking back at the start of the year, it was hard to predict the occurrence of the Strait of Hormuz, and it was also hard to foresee that the global capital markets would enter H2 in this way. But risks come with opportunities. Let’s encourage one another, together.