MVC Market Observation: The Second Half of the Overall Consolidation in the Dollar Market
- Core View: The MVC Fund believes the current crypto market remains in a deep adjustment phase, with a pessimistic short-term outlook. However, it views this round of adjustment as a continuation of the consolidation since late 2024, which has not changed Bitcoin's long-term upward trend since 2022. A new allocation cycle is anticipated to potentially begin in the third to fourth quarter of this year.
- Key Factors:
- The market continues to adjust. The deleveraging by large players at the end of January only temporarily created volatility demand and accelerated the clearing of old holdings, but no clear signal of the adjustment's end has been observed.
- Despite market weakness, positive signals such as controllable outflows from crypto ETFs and no actual liquidation pressure on MSTR have been observed, indicating the market's foundation remains intact.
- In the short term, facing macro pressures including high U.S. stock market valuations, capital outflows from the crypto market, and tight dollar liquidity, a cautious stance is maintained towards mid-to-short-term crypto market performance.
- Long-term, the current trend is seen as a consolidation for Bitcoin after hitting an all-time high against a backdrop of distorted dollar liquidity, preparing for a larger-scale market move in the future.
- Looking towards 2026, among global assets, we are optimistic about the non-ferrous metals sector represented by Latin American and RMB-denominated resource stocks, as well as beneficiary companies within the AI-disruptive industries in China and the U.S.
MVC Secondary Crypto Market Fund February Market Observation Guide
1/ As the Chinese Lunar New Year approaches, we wish all our readers good health and great success in the new year.
2/ From a market perspective, although positions were cleared last year, the lifeless cryptocurrency market remains a cause for concern. As of now, there are still no signals indicating the end of this deep correction. The liquidation of leveraged large players at the end of January only temporarily created demand through high volatility, further accelerating the sell-off of old crypto holdings.
3/ Looking ahead, we are not optimistic about short-term crypto assets. However, overall, we tend to view this round of adjustment as a continuation of the consolidation that began in late 2024. For Bitcoin, which has outperformed US dollar-denominated assets for two consecutive years, this correction has not altered the upward trend that started in 2022. From an international market standpoint, we are bullish on the performance of non-ferrous metal-related industries in the capital markets and some companies benefiting from AI-disruptive sectors throughout the year.
Review and Commentary on Overall Market Conditions and Trends
The market has little to offer. We have observed Bitcoin's further decline and significant volume turnover in the market, although some optimistic signals were also noted:
① Despite record-breaking trading volumes, outflow data remains controllable, and the foundation of crypto ETFs remains solid;
② MSTR faces no actual liquidation or financing pressure;
③ On-exchange liquidation data is relatively mild compared to the 1011 event;
However, the market has not provided positive reasons. We still see US stocks at elevated levels, crypto markets continuing to bleed, the precarious situation of endogenous US dollar liquidity persisting, and no clear end signals for gold and silver. Therefore, there is little to anticipate for the short-to-medium term crypto market, which is the main reason we did not provide a separate observation on the crypto market in January.
Nevertheless, we are more inclined to view the market movement since November 2024 as Bitcoin consolidating after reaching new highs against the backdrop of distorted endogenous US dollar liquidity. For a major asset class, this trend suggests the possibility of a still magnificent future. In a speculative manner, we optimistically guess that the consolidation of crypto assets will enter a new allocation cycle in Q3-Q4 of this year, and the subsequent market movement scale will not be lower than that of the current silver rally.
Furthermore, among the global asset trends we are particularly optimistic about for the entirety of 2026 are:
① The global non-ferrous metals sector, represented by the elasticity of Latin American and RMB-denominated resource stocks;
② Beneficiaries within AI-disruptive industries, with China and the US as prominent representatives;
Standing at the beginning of 2026 and the Year of the Horse, our perception of the world's disparities is deeper than in 2025 or 2024. The existing world production order is rapidly iterating, while the silent majority may face the helplessness of having decades of effort taken away overnight by one 'seedance' after another. This round of capital market opportunities might be the best chance for the majority who have no opportunity to transform themselves into AI sensors. Among these, the once-in-15-years major opportunity in non-ferrous metals will also begin in 2026. Let's encourage each other.
Once again, we wish everyone smooth sailing and success in all endeavors.
