“1011 Insider Whale” Representative: Crypto Market Funds Flowing to AI Assets; Recovery Requires Liquidity Re-ignition in a New Cycle

Odaily Planet Daily News “1011 Insider Whale” representative Garrett Jin pointed out in his latest market commentary that the Strait of Hormuz has been effectively “blockaded” for three months amid the Middle East conflict, but the market has already become “desensitized” to this geopolitical risk. The AI narrative is reshaping traditional risk pricing logic, with AI significantly weakening the market's sensitivity to oil prices and geopolitical shocks. Since the emergence of ceasefire signals, U.S. stocks have “decoupled” from energy shocks, with gains in chip and tech stocks offsetting the impact from the energy sector, leading the market to gradually overlook risks related to the Strait of Hormuz. However, he also cautioned that the AI sector faces short-term valuation and crowded trade risks, and a correction could occur at any time.

In the energy market, the earlier assessment that the risk related to the Strait of Hormuz was not fully priced in has proven correct. Oil prices had risen due to expectations of supply shocks but subsequently topped out and declined following the release of strategic reserves and the intervention of the U.S. as the “supplier of last resort,” allowing for a successful exit on April 29-30. He believes the current risk-reward ratio for oil prices is no longer attractive.

On the macro and equity market front, U.S. household equity holdings as a proportion of financial assets have reached approximately 47%, exceeding the level seen during the internet bubble era, which means market downturns will conversely constrain policy. The VIX volatility index has triggered different policy shift thresholds near levels of 30 and 50, reflecting a “risk-off-driven policy” characteristic.

In the gold market, the recent pullback in gold prices is not due to the fading war premium but rather long-term structural demand changes. Since 2022, global central banks have been purchasing gold at an average annual rate of over a thousand tons, primarily as a hedge against de-dollarization and sanctions risks. He defines gold as an “ultimate exit tool outside the dollar system,” rather than a mere safe-haven asset.

In the crypto market, the liquidity inflection point occurred last October, with funds flowing more towards AI assets, leading to a phase of capital drain in the crypto market. However, he believes the market is currently in a cyclical bear market. Rallies are possible but do not equate to the start of a new bull run; the market must wait for liquidity to restart in a new cycle. The AI era is becoming the new dominant capital narrative. Even if a bubble exists, the structural opportunities it brings represent “a rare window of opportunity for ordinary investors,” yet market cycle discipline should not be ignored.