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The Three-Body Dynamics Hypothesis of Capital Markets
Financial Market Analysis
👤 Financial researchers, quantitative analysts, market participants, economics students, and professionals interested in capital market dynamics.
This paper proposes that capital markets are a three-body system composed of momentum capital (M), value capital (V), and liquidity capital (L), analogous to the three-body problem in celestial mechanics. These three types of capital interact through positive and negative feedback, generating complex dynamics such as volatility clustering, market crashes, and recoveries. The article defines the behavioral characteristics, interaction mechanisms, and feedback loops of each capital type, introduces three core variables—premium (δ), momentum (μ), and volatility (σ)—and derives eight market phases and their transition paths. The core conclusion is that when the three types of capital are balanced, markets exhibit genuine complex dynamics; long-term prediction is impossible, but short-term characteristics and statistical patterns are robust. A healthy market requires the coexistence of all three to maintain ecological balance.
- ✨ Capital markets consist of three fundamentally different types of capital—momentum capital, value capital, and liquidity capital—forming a three-body system.
- ✨ The three types of capital interact through positive and negative feedback, generating complex dynamics such as volatility clustering, market crashes, and recoveries, as well as eight market phases.
- ✨ The system's state depends on the competition between positive and negative feedback loops; long-term prediction is impossible, but short-term characteristics and statistical patterns are robust.
- ✨ A healthy market requires the coexistence and balance of all three types of capital; dominance by any one type leads to market imbalance.
- ✨ The model describes the market using three variables—premium, momentum, and volatility—and derives a return-risk-cost matrix and phase transition paths.
📅 2026-02-07 · 3,438 words · ~16 min read
Analysis of the US Government's Seizure of Chen Zhi's $15 Billion Bitcoin
Financial Market Analysis
👤 Professionals and general readers interested in cryptocurrency enforcement, blockchain analysis, international money laundering investigations, and legal procedures.
This article systematically outlines the entire process of the US government's seizure of approximately $15 billion in Bitcoin from Chen Zhi, chairman of Cambodia's Prince Group. It begins by identifying 127,271 Bitcoins linked to Chen Zhi's telecom fraud and money laundering network through blockchain analysis, which originated from the 2020 LuBian mining company theft. The US Department of Justice obtained legal authority through criminal prosecution and civil forfeiture procedures, accusing Chen Zhi of operating forced labor scam camps and engaging in large-scale money laundering. Technically, investigators recovered seed phrases or private keys for 25 non-custodial wallets through real-world evidence collection, transferring the Bitcoin to a US government-controlled wallet in October 2025, completing the largest cryptocurrency seizure in history. The entire process combined on-chain evidence, court orders, and real-world forensics, demonstrating law enforcement's ability to track and seize crypto assets.
- ✨ The US government seized approximately 127,271 Bitcoins controlled by Chen Zhi, valued at around $15 billion.
- ✨ These Bitcoins were identified as proceeds from the 2020 LuBian mining company theft, used for telecom fraud and money laundering.
- ✨ Blockchain analysis linked 25 non-custodial wallets to Chen Zhi's criminal network.
- ✨ The US Department of Justice obtained legal authority through criminal prosecution and civil forfeiture procedures.
- ✨ Investigators recovered wallet seed phrases or private keys through real-world evidence collection.
📅 2026-02-05 · 1,857 words · ~9 min read
Volatility, Leverage, and Market Cycle Analysis
Financial Market Analysis
👤 Financial traders, market analysts, investors, and researchers interested in market dynamics and leverage effects.
This article first discusses the relationship between volatility and leverage, noting that volatility is more important for traders because profits depend on price spreads, while leverage increases trading costs. High leverage affects supply-demand balance by increasing transaction demand, weakening liquidity, and thereby raising market volatility, which essentially acts as a transfer payment, shifting opportunities from high-leverage traders to low-leverage traders and liquidity providers. Next, the article analyzes the interactions among market participants (investors, speculators, market makers), describes the cyclical market cycle from rising and falling volatility to crashes and recoveries, and mentions the possibility of market death. Finally, the article cites catastrophe theory to explain sudden market shifts.
- ✨ Volatility is more advantageous for traders than leverage because profits rely on price spreads, while leverage increases trading costs
- ✨ High leverage raises market volatility by affecting supply-demand and liquidity, forming a transfer payment
- ✨ High-leverage traders indirectly subsidize low-leverage traders and liquidity providers
- ✨ Market participants include investors, speculators, and market makers, whose interactions drive market cycles
- ✨ Markets undergo cyclical patterns of rising, falling, crashing, and recovering volatility
📅 2026-02-04 · 890 words · ~4 min read
The Nature, Types, and Risk Analysis of Leverage
Financial Market Analysis
👤 Investors, financial professionals, individuals interested in leverage and risk management
Starting from the objective existence of leverage, this article points out that leverage is ubiquitous and does not disappear due to subjective will, with risks lying in control rather than leverage itself. The article equates leverage with volatility in mathematical essence, suggesting leverage can be reduced to volatility. It distinguishes in detail between on-exchange leverage (e.g., margin trading) and off-exchange leverage (e.g., borrowing, funds), noting that on-exchange leverage has no interest cost but is limited, while off-exchange leverage is flexible but incurs interest or profit costs. It specifically analyzes the essence of fund leverage, achieving high leverage through performance fees, and provides a leverage-adjusted volatility formula. Finally, it emphasizes that individuals can obtain leverage through strategies like pyramiding, suggesting that future funds may serve more as psychological comfort than actual leverage tools.
- ✨ Leverage is objectively existing and ubiquitous, with risks stemming from control rather than leverage itself
- ✨ Leverage and volatility are consistent in mathematical essence and can be reduced to each other
- ✨ On-exchange leverage is achieved through exchange tools, typically with no interest cost
- ✨ Off-exchange leverage is obtained through borrowing or funds, incurring interest or profit costs
- ✨ Funds achieve high off-exchange leverage through performance fees, combined with on-exchange leverage to amplify volatility
📅 2026-01-24 · 816 words · ~4 min read
Insights from the 2025 Securities Private Fund In-depth Analysis Conference
Financial Market Analysis
👤 Investors interested in the securities private fund industry, financial professionals, individual investors, and industry observers.
This article records the author's reflections after attending the online conference "2025 Securities Private Fund In-depth Analysis" hosted by Guotai Haitong. The author notes that while the entry barriers for securities private funds are high, opportunities still exist through unique strategies and channels, and the unclear evaluation system for stock selection models creates differentiation opportunities. Simultaneously, the author criticizes some managers in the industry for misleading investors by packaging performance, using complex metrics, and accounting tricks, viewing this as a fundamental conflict of interest: managers pursue management scale while investors seek returns, leading to a game. Finally, the author expresses a preference for the freedom of individual investors.
- ✨ The entry barriers for the securities private fund industry are increasingly high, but issuance is still possible through unique strategies and channels.
- ✨ The evaluation system for stock selection models is unclear, creating opportunities for differentiation.
- ✨ Some managers in the industry mislead investors by packaging performance, using complex metrics, and accounting tricks.
- ✨ There is a fundamental conflict of interest between fund managers and investors: managers pursue management scale, while investors seek returns.
- ✨ This conflict of interest leads to a game between managers and investors.
📅 2026-01-22 · 263 words · ~2 min read
In-depth Analysis of Guotai Haitong's 2025 Securities Private Equity Funds
Financial Market Analysis
👤 Private equity fund investors, asset management practitioners, financial analysts, industry researchers, and professionals interested in the securities investment market.
This article provides an in-depth analysis of the overall landscape and key changes in China's securities private equity fund market in 2025. The private equity industry is shifting from scale expansion to high-quality development, with increasing concentration and survival pressures for small managers. Strategy performance shows significant divergence: market-neutral strategies benefit from the migration of traditional fixed-income funds, CTA strategies recover but represent structural opportunities, and subjective stock strategies rise approximately 33% annually. Subjective strategies are evolving towards multi-asset allocation and platformization, while quantitative strategies face intensified factor homogenization and a head concentration effect. Industry allocation is being restructured, with hard-tech sectors like electronics and non-ferrous metals, as well as resource-based industries, becoming mainstream. The Q&A session reveals deep challenges such as statistical methods and the judgment of strategy effectiveness. Overall, the industry is transitioning from performance-driven to methodology-driven, with increasing information asymmetry and an irreversible trend towards head concentration.
- ✨ Private equity industry concentration is increasing, entering a phase of consolidation and selective growth
- ✨ Growth in market-neutral strategy scale stems from the migration of traditional fixed-income funds
- ✨ Subjective strategies rise approximately 33% annually, evolving towards multi-asset allocation and platformization
- ✨ Quantitative strategies face intensified factor homogenization and a significant head concentration effect
- ✨ Industry allocation is being restructured, with hard-tech sectors like electronics and non-ferrous metals, and resource-based industries becoming mainstream
📅 2026-01-22 · 3,016 words · ~14 min read