The Federal Reserve's second round of monetary easing is set! The cryptocurrency market is not a bull market; it is a short squeeze led by institutions.
By reviewing history, one can understand the present. During the 312 pandemic in 2020, the Federal Reserve initiated unlimited QE, directly injecting massive liquidity into the market.
At that time, everyone witnessed the market: BTC skyrocketed from a low of $3,800 to a peak of $69,000, and ETH rose from $80 to $4,891, leading to an epic two-year bull market in the entire cryptocurrency market. This was not a coincidence; it was an inevitable result of excessive liquidity flooding into high-elasticity assets.
However, this time is fundamentally different from 312—during 312, market chips were mainly dispersed among retail investors, and the rise was driven by “funds pushing retail investors”; whereas now, BTC and ETH have long been heavily locked up by institutions, significantly reducing the circulating supply.
Here’s a set of concrete case data:
The Grayscale Bitcoin Trust currently holds over 650,000 BTC, with less than 1% of the unlocking volume in the past six months, equivalent to locking up 650,000 BTC for the long term;
ARKK under Ark Invest has increased its holdings in ETH-related assets by 47% over the past year, and there has never been a large-scale reduction; more importantly, after the ETH merge, the validator's locked-up amount has stabilized at over 22 million, accounting for 18% of the current total circulating ETH; this portion of chips is locked for at least 2 years.
What does it mean when chips are highly controlled by institutions? Once the liquidity from the Federal Reserve continues to flow in, the market will trigger a short squeeze due to insufficient circulating chips. At that time, it won't be a “slow rise,” but rather a situation where short sellers can’t find chips to close their positions, and can only passively chase high prices, leading to a stampede-like increase—this is the logic of a short squeeze under institutional control, which is 10 times stronger than retail-driven market surges.
Lastly, a reminder for short sellers: closing positions early means just a small loss; closing positions late, when the short squeeze kicks in, leads to a complete liquidation. The so-called “short seller alliance” has long been disbanded due to differences, and what remains is just a group of disorganized soldiers relying on emotions to hold on.
The torrent of liquidity is already on its way, and the barrier of locked-up chips by institutions has been solidified. This time, it is not an ordinary bull market; it is a precise slaughter of short sellers—those who understand have already positioned themselves, while those who do not will only become cannon fodder in the short squeeze. $BTC $ETH
