Whale predictions on capital rotation: Why BTC and ETH are becoming the next hot topics

Well-known whale Garrett Jin recently shared an important market observation on social media: funds are rotating from large-cap stocks to small- and mid-cap stocks, reflecting an expansion of market risk appetite. He believes that BTC and ETH, as high-beta risk assets, will become the next targets for capital inflows. This view warrants in-depth understanding because it involves changes in capital flow across the entire financial market.

Market Signals of Capital Rotation

Garrett Jin’s perspective is based on a clear market phenomenon: the Nasdaq 100 index underperforms while the Russell 2000 index continues to hit new highs. The performance disparity between these two indices indicates a significant shift in capital allocation.

The Nasdaq 100 mainly consists of large technology companies, representing large-cap stocks. The Russell 2000 focuses on small- and mid-sized enterprises and is an important indicator of risk appetite. When small- and mid-cap stocks continue to strengthen while large-cap stocks lag behind, it usually means market participants are willing to take on more risk in pursuit of higher returns.

The Meaning of Expanding Risk Appetite

The expansion of risk appetite is not a coincidence; it reflects a shift in investor sentiment. When economic outlooks are relatively optimistic and liquidity is ample, capital flows from defensive assets to offensive assets. The rise of small- and mid-cap stocks is a direct manifestation of this change in mindset.

Cryptocurrencies as the Next Target

According to Garrett Jin’s logic, once risk appetite expands to small- and mid-cap stocks, the next step naturally involves moving into higher-risk, higher-reward asset classes. BTC and ETH are precisely such high-beta assets.

Current Market Performance of BTC

Data shows that BTC has already demonstrated some attractiveness. According to the latest figures, BTC is priced at $92,036.22, up 1.51% in the past 24 hours, down 0.63% over the past 7 days, and up 1.82% over the past 30 days.

More noteworthy is market activity:

• BTC market cap reaches $1.84 trillion, accounting for 58.58% of the entire crypto market
• 24-hour trading volume hits $2.533 billion, a 114.01% increase from the previous day
• Circulating supply is 19,974,746 BTC, representing 95.12% of the maximum supply

The significant increase in trading volume (114%) is especially noteworthy, indicating rising market participation and possibly signaling the start of capital inflows.

Why BTC and ETH

There are several reasons why BTC and ETH are likely to become the recipients of capital after risk appetite expands:

• High volatility: As high-beta assets, their prices fluctuate widely, aligning with the demand for high returns when risk appetite increases
• Sufficient liquidity: As the two largest cryptocurrencies by market cap, they have enough liquidity to absorb large capital inflows
• Market consensus: In the crypto market, BTC and ETH hold the most stable market positions, with relatively controllable risks

Key Focus Areas Moving Forward

According to Garrett Jin, we should pay attention to several key indicators:

• Whether the relative performance of Nasdaq 100 and Russell 2000 continues to diverge
• Whether capital flows into risk assets are truly shifting toward the crypto market
• Whether the trading volume and prices of BTC and ETH continue to rise

If this rotation logic holds, we may see a significant increase in liquidity in the crypto market, with BTC and ETH potentially entering a new upward phase.

Summary

Garrett Jin’s observation captures an important current market shift: capital is flowing from defensive assets to offensive assets, with risk appetite expanding. BTC and ETH, as high-beta assets, are poised to benefit from this wave of capital rotation. From the recent surge in BTC trading volume and market share, this logic has already been partly validated. The key going forward is to observe whether this rotation will persist and how large the capital inflows will be.