Metrics Ventures, a secondary-market crypto fund, has published its July-August market note under the title Talk is Cheap, saying the reporting window was extended because Warsh’s remarks in July were too important to leave out of a standard monthly review.
The fund said that by the time the report was issued, Warsh’s conduct had already been priced in by a rapidly steepening spread in the bond market. In its view, the dollar’s problem is no longer something a Federal Reserve chair can change or solve on their own, and the process in between will continue to come through repeated bouts of disturbance.
Stocks, bonds and FX are reading credit risk differently
From a market perspective, Metrics Ventures said U.S. equities and bonds are still split in how they assess credit. Stocks, according to the report, carried on with what it described as a tendency to keep believing after a targeted clearing of some leverage. Bonds and foreign exchange, by contrast, kept delivering a message of distrust.
The report also argued that the early bottom in gold and silver points to a fairly clear central-bank consensus. In that framework, once Western currencies enter a phase of relative weakness against one another, markets no longer accept verbal disturbance as enough to change the direction of travel. Metrics Ventures said it is not worried that the equity bubble in U.S. stocks is about to break further in the short term. Its attention is more focused on how the liquidity release represented by FIMA will develop from here.
Q3-Q4 view: copper, electricity and gold stay preferred
Looking forward, the fund said it remains constructive on rigidly constrained resources in the global supply chain in the third and fourth quarters, specifically copper and electricity, as well as gold, which it said continues to reflect a trend of mistrust in fiat currencies. On digital assets, the report took a measured stance, saying it will be difficult for the crypto market to produce large excess returns before excess liquidity is released and the slowdown in AI’s marginal growth is fully priced in.
Metrics Ventures outlined three main market views:
- Gold and other resource commodities still rank ahead of Bitcoin as assets that absorb liquidity, and the consolidation over the past few months has, in its view, been healthy.
- The bull-market trend in renminbi-denominated assets still stands clearly and should not be doubted too much, with the STAR 50 cited as an example from the current cycle.
- It is not only spot copper that has reached new highs first; stock indexes and currencies in key resource-producing countries are also close to the end point before a directional break.
Resource equities and parts of the renminbi market are in focus
Taking current moves in FX and bonds together, Metrics Ventures said it leans toward the view that resource equities, including gold- and silver-linked stocks, have reached the end of this consolidation phase. It added that even after a rebound, valuations in some of those assets would still amount to what it described as a generous free call option on metal prices. Against a backdrop of what it sees as an unavoidable slowdown in AI’s marginal growth, the report said some nonferrous assets in the renminbi market deserve close attention.
Macro focus falls on U.S.-Japan FX intervention and the use of FIMA
On the macro side, the fund said it is paying particular attention to the latest joint U.S.-Japan currency intervention and to the way Warsh and Bessent have interacted, because both could help frame expectations for future Federal Reserve behavior. The report argued that a Fed chair trying to become a Jiajing-like figure at the end stage of an empire would be out of line with common sense, while the Treasury’s direct use of tools such as FIMA to bypass the FOMC in service of top leadership appears, in its words, to be the more honest reading of actual conduct.
The report quoted a friend as saying: 「Reduce communication, fabricate data, gloss over calm, and the Ming dynasty can keep singing and dancing.」 Based on that view, Metrics Ventures said that if it had to pick a strategy with significantly positive EV over a three-year horizon, going long nonferrous resources would be a strong choice.
Disclaimer
The note closed with a disclaimer that markets carry risk and the material does not constitute investment advice. Readers should assess whether any opinion, view or conclusion in the report fits their own circumstances, and bear responsibility for their own investment decisions.