Random thoughts written in a messy way, just manage to read👀

I have always believed that the secondary market is the barometer of the entire crypto industry's sentiment, reflecting the value of the crypto industry. All trends, whether it is primary investment, market promotion, or mining, will clearly manifest in the secondary market.

Since the end of last year, I have been reading various market research reports from Wall Street institutions, top VC investment research reports in the crypto space, and recently looking at interviews with Binance's former BD.

Boldly share your views and thoughts on 2026

First point: Is the four-year cycle in the crypto space still valid?

Grayscale, Coinbase, Bitwise, Pantera Capital, etc., all believe that with the entry of institutions and regulatory policies, the crypto market will enter an 'institutional era,' with market valuations expected to rise and possibly break the traditional four-year cycle model.

As of now, BTC is still maintaining the trend of the previous four-year cycle, and the impact of BTC’s halving on the market is still profound.

In my opinion, the four-year cycle has not disappeared, but its influence will gradually diminish, mainly because what influences the cycle is not just the halving of BTC, but more so the loose monetary policy, primarily because the main body of the market is changing.

In this market cycle, from 2023 to 2025, Bitcoin, along with institutional entry, has also seen a market that has doubled compared to the previous peak, aligning with the four-year cycle trend, while other cryptocurrencies,

Including ETH, under the support of institutions and the implementation of RWA, there has not been a stronger market trend, which made me feel that in fact, the four-year cycle of the crypto market may have undergone some changes.

Some time ago, I watched an interview with Chase, which deepened my understanding that the prosperity of the cryptocurrency industry is the prosperity of liquidity. With the excessive issuance of currency, the crypto market has absorbed this part of liquidity.

In the 2021 bull market, with the Fed's unlimited QE (balance sheet expansion) and fiscal spending, the halving only created a supply shock in an environment of 'plenty of money.'

Scale of U.S. Treasuries at the Fed

End of February 2020: approximately 42 trillion.

End of March 2020: approximately 53 trillion (has begun to expand significantly).

June 2020: approximately 72 trillion.

Balance sheet expansion continued until March 2022, ending net purchases, and then shifted to balance sheet reduction (QT).

End of 2022/Beginning of 2023: approximately 85-89 trillion (began to decline after peak).

End of 2023: approximately 78 trillion.

Mid-2024: approximately 71-74 trillion.

End of 2024/Beginning of 2025: approximately 67-70 trillion.

Current: approximately 66 trillion

The essence of cryptocurrency is a reservoir for global 'excess dollars.'

The main reason why there has not been a frenzied market in this bull run is that although the Fed has made multiple rate cuts and has mentioned cryptocurrency in policy discussions, the technology of cryptocurrency is continuously being applied in our lives (such as the application of stablecoins and the implementation of RWA, etc.).

However, the macroeconomic situation only has rate cuts (slowing the blood draw speed) and no balance sheet expansion, so there is not much excess liquidity flowing into the crypto market.

Due to the entry of institutions, the market share of retail investors has also become smaller, with retail mainly focusing on the four-year cycle, while from institutional research reports, we can see that they pay more attention to real interest rates, liquidity, etc. This leads to the market being more influenced by the macro environment. In the future, only the entry of national sovereign funds and long-term capital such as pensions will bring liquidity that has a stronger impact on the market.

And in 2026, the current environment we are facing is

Monetary policy:

From the perspective of the Fed governors and Kevin Walsh’s policies, the Fed believes that a 3% interest rate is the neutral rate (there are expectations of future rate cuts). The main propositions of the new Fed chairman also include balance sheet reduction, believing that the Fed does not need to backstop the market, and should maintain its independence. Thus, if U.S. Treasuries fail to auction, it would lead to liquidity being drawn from risk assets (with altcoins being the first to suffer), causing risk assets to decline. This should be the main logic behind the significant drop in the crypto market after Kevin Walsh's news was announced (personal analysis; if any experts have insights, I humbly accept guidance and thank you for your teachings).

Resulting situation: unlimited QE government support for risk assets, while real interest rates determine value. In the crypto market, assets will start to be repriced, searching for true value, while core assets or protocols such as $BTC , $ETH , $HYPE that can generate real income and are tied to tokens will see price increases. Meanwhile, the vast majority of MEME and VC air projects will trend worse, and we are now in the last window period for altcoin projects to transition.

However, for the core asset BTC, since the excessive issuance of currency is a certain and unchangeable fact, its anti-inflation property remains, which means it will continue to rise.

Summary: Just look at the direction of liquidity. Release liquidity, prices go up; tighten liquidity, prices go down!

The secondary market is polarized, abandoning speculative assets and embracing core assets.