The post by Bao Er Ye was like a deep-sea bomb, leaving me staring at the screen in a daze for quite a while. The insider slang 'oceanic fishing' is now pointing to a secret storm crossing borders, involving assets worth billions of dollars.
As a female analyst who has been navigating the cryptocurrency industry for many years, I sense something different. This is certainly not an isolated incident, but rather one of the most glaring nodes in an increasingly tightening web of global regulation and risk.
As I look out over the entire ocean of cryptocurrency, two definitive forces shaping the future are colliding fiercely: on one side is the clear direction of regulatory giants, and on the other side are the dangerous maneuvers of the market's internal whales. And between these two, there swims a group of dangerous 'hedge devils'.
The whales' 'deep-sea fishing': the undercurrents beneath the iceberg
In the past week, a silent asset transfer occurred on-chain. A whale that had been asleep for 14 years suddenly woke up, and 80,000 Bitcoins (worth about $9 billion) began to move. According to historical experience, such a volume of sell-off is enough to cause the market to plummet by 30%, but this time, Bitcoin prices only temporarily dropped by 3%-4%, and quickly rebounded within hours.
The operator of this 'deep-sea fishing' is not the giants of exchanges like Binance or Coinbase, but a Wall Street institution called Galaxy Digital. They break down large orders into hundreds of small transactions, using dark pools to match hidden order book pressures while coordinating with the Bitcoin derivatives market to hedge risks.
This reminds me of the mad games played by those contract whales earlier this year. Some whales used 5x, 10x, or even 25x leverage to establish long contract positions, like walking a tightrope at high altitude; one misstep could lead to disaster. Liang Xi made $1 million from a $2,000 principal in a short time, while another whale with 50x leverage made $6.83 million in profit within 24 hours.
But I must speak the truth: behind these so-called 'legends' is an information advantage and financial strength that most ordinary players cannot replicate. We small investors only see the success stories, while the silent majority who have been liquidated, their stories are forever unknown.
The 'lighthouse' of regulation: the strategic pivot of the Federal Reserve
Just as the whales quietly act, a profound regulatory change is quietly happening.
In April 2025, the Federal Reserve revoked the pre-approval system for banks' crypto businesses, officially ending the 'new activity supervision program'. This means that banks no longer need to obtain regulatory approval in advance when engaging in crypto asset custody, mortgage lending, and other businesses.
More importantly, Federal Reserve Governor Christopher Waller proposed a 'streamlined master account' plan at the October 'Payment Innovation Conference', allowing qualified crypto institutions to directly access the Federal Reserve's payment system. At the same time, the construction of cryptocurrency exchanges led by the Federal Reserve is also accelerating.
In my view, this marks a fundamental shift: regulatory agencies are moving from past containment strategies to guidance and integration. They realize that rather than allowing crypto businesses to grow wildly outside the system, it is better to bring them into the regulatory framework and make them a controllable extension of traditional finance.
The dangerous 'hedging devils': When whales meet new rules
In this reform, a new group of players is rising, I call them 'hedging devils'.
These devils are neither traditional whales nor simple arbitrageurs. They navigate the gray area of regulation, taking advantage of the opportunities brought by the Federal Reserve's loosening policies, engaging in complex compliance arbitrage.
Galaxy Digital is a typical example. Hidden in their board of directors is the real power code: former Deputy Assistant Secretary of the U.S. Treasury, current special advisor on digital assets to the Secretary of the Treasury, and a Texas energy lobbyist. The founder Novogratz himself is a product of 'Wall Street': an 11-year partner at Goldman Sachs, with a history as a consultant for the New York Fed that makes him proficient in the regulatory language and the gray games of sovereign debt negotiations.
To be honest, the real moat of these 'hedging devils' is not technology, but control over the regulatory path. While decentralized natives still promote 'code is law', the real winners are the political and business shuttle workers who are well-versed in regulatory arbitrage.
My view: The survival strategy in the new order
As an analyst who has been tracking the crypto market for a long time, I would like to share a few personal views:
The clarification of regulation is not the end, but the beginning of a new round of competition. As the Federal Reserve shifts its policy, traditional banks are rapidly laying out their strategies in the crypto asset field. Bank of New York Mellon has launched Bitcoin spot custody services, and JPMorgan, Wells Fargo, and others are also researching risk control requirements for crypto custody.
But I want to remind you: the road to compliance is not smooth. The risk control capabilities of banks' crypto businesses remain questionable, especially the shortcomings of small and medium-sized banks in talent, technology, and experience may become hidden dangers.
For ordinary investors, I want to emphasize: the game of whales is not your game. Those high-leverage, high-frequency trading strategies can bring huge returns in extreme market conditions but come with extremely high risks. We may not have enough capital reserves and psychological endurance to cope with the market's drastic fluctuations.
Conclusion: Between the undercurrents and the lighthouse
As I look back at this crypto ocean, the 'deep-sea fishing' beneath the iceberg continues, the 'lighthouse' of regulation shines ever brighter, while the 'hedging devils' are carving out new routes between the two.
The future crypto market will show a polarized pattern: large banks will provide comprehensive services leveraging their resources and technological advantages, while small and medium-sized banks may focus on niche markets. Compliance will become a core competitive advantage, and the market share of stablecoins that meet regulations has soared from less than 50% at the beginning of the year to 72%.
As an industry veteran, I am both gratified by the clarity of regulation and concerned about the plight of ordinary investors. In this increasingly institutionalized market, individual players need to choose their battlegrounds more cautiously.
Perhaps, as Galaxy Digital's CEO Mike Novogratz said: 'Assets are migrating from accounts to wallets, and compliance paths are the core competitive advantage.' And at this moment, we stand at the historic turning point.
The only question is: Are you ready?
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