Good Morning, Asia. Here's what's making news in the markets: Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Americas.The market has been asking whether bitcoin is losing to gold. Darius Sit, co-founder and Managing Partner at QCP Capital, says the debate is often framed around price when liquidity realities matter more. Singapore-based QCP is one of Asia ...

Core Insights - Gold has outperformed bitcoin in both price action and investor confidence since the launch of spot bitcoin ETFs in early 2025, raising questions about bitcoin's status as a rival to traditional safe-haven assets [1] - Bitcoin has decreased by approximately 12% since January 2024, while gold has increased by 58% during the same period [2] - Central banks and large asset allocators still prefer gold due to its historical trust and established financial channels, while bitcoin lacks the same level of institutional acceptance [2][3] Performance Comparison - The performance gap between bitcoin and gold has widened, with bitcoin down over 30% since its peak in July, while gold has consistently gained, surpassing $4,100 per ounce [4] - The decline in bitcoin's price is attributed to a liquidity squeeze driven by U.S. fiscal policy rather than a shift in sentiment [4][5] Institutional Adoption - Institutions have not yet fully embraced bitcoin, as evidenced by the lack of significant interest in acquiring wallets for bitcoin transactions [3] - BRICS nations are increasing their gold reserves and utilizing gold for oil trade settlements, a role bitcoin has not yet fulfilled [3] Liquidity Factors - Bitcoin is particularly sensitive to liquidity changes due to its leverage structure, especially in Asia [5] - The U.S. government shutdown led to a significant increase in the Treasury's balance sheet, resulting in reduced liquidity across both traditional and crypto markets, with bitcoin experiencing a more pronounced impact [5]

Group 1: Bitcoin and Market Liquidity - Bitcoin has dropped below the $100,000 mark, signaling a systemic liquidity warning that is affecting equity and credit markets [1][2][4] - The decline in Bitcoin is correlated with a broader liquidity squeeze, as evidenced by simultaneous declines in tech indices and other asset classes [4][12] - The recent drop is characterized as a deleveraging event rather than a gradual decline due to weak fundamentals, with key support levels identified between $100,000 and $101,000 [5][6] Group 2: Credit Market Issues - The U.S. has experienced credit market problems, including the bankruptcy of a major subprime auto lender and write-downs at large banks [8][10] - Regional banks are increasingly relying on the Federal Reserve's liquidity backstops, indicating stress in their balance sheets [9][10] - Credit rating agencies have noted that downgrades in private credit are outpacing upgrades, suggesting a tightening credit environment [10][12] Group 3: Coinbase and Crypto Infrastructure - Coinbase's significant drop in stock price reflects the stress in the crypto infrastructure, which remains sensitive to liquidity changes [13][15] - The correlation between Coinbase and Bitcoin is very high, indicating that the performance of crypto infrastructure is closely tied to Bitcoin's price movements [24] - The current market conditions suggest that the crypto ecosystem is not yet stable, as Coinbase's volatility highlights its dependence on retail and speculative flows [15][26] Group 4: Broader Market Implications - The liquidity squeeze is not limited to crypto but extends to high-beta tech stocks and other speculative assets, indicating a systemic issue [12][29] - The upcoming Nvidia earnings report is seen as a potential catalyst that could influence market sentiment amid the liquidity concerns [20][30] - The overall market is undergoing a layered reset in liquidity, with various sectors experiencing stress, including subprime auto loans and regional banks [29][30]