Garrett Jin: BTC and ETH underperform other risk assets due to deleveraging and market structure issues

Garrett Jin posted an article on social media stating that Bitcoin and Ethereum have recently underperformed compared to other risk assets, primarily due to the market being at the tail end of a deleveraging cycle and microstructural issues in the crypto market, rather than a deterioration in fundamentals.

He pointed out that the large-scale deleveraging since last October has washed out high-leverage retail funds, while AI concept stocks and precious metals have attracted a significant amount of speculative capital; the participation of professional institutions in the crypto market remains low, making it susceptible to short-term narratives and the influence of certain exchanges, market makers, and speculative funds.

Garrett emphasized that when looking at a 6-year cycle, BTC and ETH still outperform most assets, and the current performance resembles a mean reversion within a long-term trend. With improvements in the regulatory environment, marginal liquidity easing, and futures trading volumes approaching historical lows, the deleveraging process for BTC and ETH may be nearing its end.