The Era of Hyper-Speculative Capitalism: Market Anomalies Dominated by Liquidity

In the current abnormal economic environment, excessive speculation has become a prominent feature of the market. The fiscal and monetary policy tools that were once used to stabilize the market now show clear cracks:

• The United States maintains a 7% GDP deficit even during full employment.
• The interest rate is as high as 5%, yet Bitcoin is approaching historical highs.
• Even during economic "booms", stimulus measures are still ongoing.

The market no longer reflects the fundamentals, but rather reflects the liquidity situation.

The Madness of Bitcoin: Rational or Irrational?

The rise of Bitcoin is no longer dependent on a weak economy or expectations of interest rate cuts. In fact, the ideal macro environment may be one without new shocks, while Liquidity conditions continue to improve. Currently, Liquidity is increasing significantly:

• The global M2 money supply remains high and may have peaked.
• If Bitcoin rises by 10%, more than 13 billion USD in short positions will be liquidated, indicating that the market still has ample funds to drive its parabolic rise.
• Bitcoin typically peaks 525 to 530 days after a halving, which suggests that late September 2025 could be a critical time point.

Based on the analysis of historical halving cycles, the following predictions can be made:

Liquidity driven cycle: When M2 increases, Bitcoin performs strongly. Currently, M2 has shown a double top pattern, and the second peak is lower than the first.

Top Time Prediction:

• 525 days after the halving in 2013
• 530 days after the halving in 2017
• 2021: 518 days after the halving
• September 21, 2025

Expected top range:

Bitcoin may reach $135,000 to $150,000

However, the upside potential may be constrained by macro tightening policies.

Key conclusion:

A rebound may occur in September, followed by a possible pullback driven by liquidity.

In the context of distorted fundamentals and Liquidity becoming the dominant force, market participants are adapting to this new normal.

Macroeconomic Analysis ( as of August 3, 2025 )

US Economy: Broader Signs of Slowdown

• This week's economic data conveys a clear and consistent signal: the momentum of economic growth in the United States has sharply slowed down in the first half of this year.
• Consumer behavior is changing. Although household balance sheets are healthier, credit card usage is tightening, reflecting a rise in uncertainty rather than optimism.
• Housing affordability hits a record low: Even with a slight decline in home prices, mortgage rates and holding costs ( taxes, insurance, maintenance ) have surged. Data shows that owning a moderately priced home now consumes 53% of middle-class income, the highest on record, highlighting the structural barriers to homeownership.

Global Central Banks: Divergent Policy Paths

• Policy divergences are becoming apparent: some central banks are keeping interest rates unchanged, while others are preemptively cutting rates by 25 basis points due to slowing inflation and weak economic conditions.
• The Eurozone's second quarter GDP slightly exceeded expectations, growing 0.1% quarter-on-quarter, but core inflation remained stable at 2.3% year-on-year, indicating that the European Central Bank will remain cautious.
• China's July PMI weakened, indicating that the pace of its economic recovery is fading faster than expected, which may dampen regional demand and supply chains.

Federal Reserve: The Dilemma of Data Dependence

• The Federal Reserve has maintained interest rates at 4.25%--4.50% for the fifth consecutive meeting, reinforcing its cautious stance amid mixed signals.
• The September meeting may still adjust interest rates, but a rate cut is not certain. Federal Reserve officials have clearly stated that they need to wait for clearer evidence from the labor market, inflation, and consumer data.
• The outlook depends on the depth of the economic slowdown and whether inflation continues to ease without triggering a recession.

US-Japan Trade Agreement: Far-Reaching Adjustments

• The United States has announced a 15% tariff on all imported goods from Japan, up from the previous 10%, and significantly higher than the 2.5% at the beginning of the year.
• The previous tariff on automobiles and parts was 27.5%, now it has been unified to 15%, driving up Japanese car stocks and the stock market.
• A 15% tariff will still push up consumer prices for Japanese goods, increase inflationary pressures, and weaken the purchasing power of American households.
• Japan has committed to investing $550 billion in the United States, but the specific terms and execution details are still unclear.
• American automakers face higher costs than Japanese importers, raising concerns in the industry.
• The agreement lacks a formal treaty, and both parties have diverged in their interpretation of the terms, raising concerns about the U.S. reliance on non-binding trade commitments.

Job Market: New Graduates Facing Challenges

• The unemployment rate for recent university graduates has reached a ten-year high, just one percentage point lower than all young workers, with an unusually narrow gap.
• Although AI is accused of eliminating entry-level jobs, its impact is still limited to specific industries.
• Policy uncertainty may hinder companies from hiring, especially for technical positions.
• The long-standing shortage of university graduates is weakening, and wage premiums are stabilizing or declining.

India-UK Trade Agreement: Strategic Shift

• The UK and India have reached a landmark trade agreement, reducing tariffs on over 90% of UK exports to India.
• India has reduced the import tariff on cars from 100% to 10%, but has set quota limits.
• India benefits significantly from its own tariff reductions, including lower consumer prices, increased domestic competition, and enhanced global competitiveness of enterprises.
• About 50% of Indian export goods that previously faced tariffs of 4% to 16% will enter the UK duty-free.
• This agreement reflects global trends: countries are trying to diversify trade partnerships in response to the changes in trade patterns brought about by U.S. tariff policies.

Summary

The core characteristics of the era of hyper-speculative capitalism are liquidity-driven, finance-led, and a divergence from traditional economic logic in the market. The abnormal trends of Bitcoin, the restructuring of global trade patterns, and the evolution of the labor market all reflect this era. Investors and policymakers need to adapt to this new reality and flexibly respond to the challenges posed by liquidity fluctuations and policy uncertainties.

A significant feature of the current global economy is liquidity-driven market behavior. Traditional economic theory holds that asset prices should reflect their intrinsic value or the discounted future cash flows. However, in the era of hyper-speculative capitalism, liquidity, or the abundance of available funds, has become the core factor driving market prices.

Taking Bitcoin as an example, its price fluctuations are highly correlated with the growth of the global M2 money supply. When central banks inject large amounts of funds into the market, this capital often flows into high-risk, high-return assets such as cryptocurrencies. This phenomenon is particularly evident in 2025; despite the Federal Reserve maintaining high interest rates, Bitcoin continues to rise, reflecting the market's dependence on Liquidity has surpassed its focus on traditional economic indicators.