[Urgent Commentary] Why did Bitcoin and Gold Plummet? The Culprit? Chinese Funds 🇨🇳💥
1. Political and Economic News Commentary: The “Silver Shock” from China and the Intensifying AI Investment Competition
Title: The Truth Behind the Global Stock Market Decline – Cash Selling Due to the Collapse of a Chinese Fund and Google’s Massive AI Investment
[Market Overview: Plummeting Prices for Gold, Silver, and Bitcoin] On February 6, 2026, global financial markets entered a major correction. Gold, silver, and Bitcoin all plummeted, and US stocks also fell. It became clear that the epicenter of this crash was not US economic indicators, but the collapse of a specific fund in the Shanghai market, China. Meanwhile, Japanese stocks are showing signs of rebounding due to the weakening yen and expectations of monetary easing and fiscal stimulus from the new Takaichi administration ahead of the weekend election.
[The Truth: The Collapse of China’s Silver Fund and the Liquidity Trap] The main culprit behind the market panic was the Chinese silver ETF “Guotou Rui Yin Baigin Futures (LOF: 161226)” listed on the Shenzhen market. Due to the enthusiasm of retail investors in China, this fund was trading at an abnormal premium (deviation) from the actual silver price. However, on February 2nd, the management company suddenly changed the valuation rules. By forcibly adjusting the reference price from the Shanghai price to the global price, the net asset value (NAV) fell 31.5% overnight.
This caused chaos in the market, and the fund hit a daily limit low for four consecutive days, creating a “liquidity trap” where investors could not sell even if they wanted to. [Significance: The Mechanism Behind Margin Calls and Bitcoin’s Follow-Up Fall] The fund’s collapse caused huge margin calls for investors trading on margin.
February 2nd: The start of the crash due to the rule change.
February 4th evening: The margin call deadline arrived.
February 5th (Thursday), around 11:00 AM JST: The system executed forced liquidation for investors who were unable to deposit funds in time.
Since the silver fund itself could not be liquidated due to trade failures, the system indiscriminately sold off the “sellable assets” held in investors’ accounts, such as Bitcoin and gold. This was the direct cause of the sharp decline in cryptocurrencies and precious metals during certain periods. Furthermore, with the Chinese New Year approaching, investors rushed to liquidate their positions, further exacerbating the decline.
[US Market: Google’s Earnings Reveal the Battle for AI Dominance] Google’s (Alphabet) earnings announcement caused a stir in the US market. Revenue ($113.8 billion), EPS ($2.82), and cloud growth (+48%) all exceeded market expectations. However, the stock price temporarily fell 7.5%. This is due to the company’s announcement that it will double its capital expenditures in 2026 to $185 billion (approximately ¥27 trillion), compared to the previous year.
While the market expressed concern about this huge expenditure, Google’s management asserted that “investment in AI infrastructure is not optional, but a necessary expense for maintaining our leadership.” The CEO remained bullish, stating, “The supply of chips and electricity is not keeping up with demand. If we can produce them, we can immediately monetize them.” In response to this trend, software stocks are being sold while selective investment in hardware and power infrastructure stocks such as NVIDIA is accelerating.
[Outlook] In the short term, caution is necessary until the first half of next week, when the Chinese silver fund transaction is completed and the market’s pus is drained. However, once speculative money has exited and the Lunar New Year holiday (mid-February) is over, the market is likely to resume a healthy upward trend based on intrinsic value. As the Google example shows, actual demand for AI infrastructure is extremely strong, and in the long term, this correction will likely present a great investment opportunity.
