Recently, a precious metals fund has attracted quite a bit of attention in the market — Guotou Silver LOF hit the limit-down, and was heavily pressured by a 1 billion sell order. Behind this is a phenomenon worth being cautious about: the trading price of the fund is premiumed by as much as 45% over its net asset value. How does such an extreme deviation in price occur?

In simple terms, this is caused by market speculative sentiment. The fund itself is a tool tracking silver prices, but excessive speculative capital has led to the trading price deviating significantly from its true value. When market sentiment begins to cool and macroeconomic data underperforms, those speculative funds start to take profits and exit, while late-coming retail investors end up holding the bag, ultimately getting trapped at the limit-down. This logic is actually quite common in the crypto market as well — pump and dump schemes, retail investors getting caught, and market manipulation happen every year.

This brings us back to a hotly discussed recent question: should you allocate to gold or Bitcoin? At first glance, these two assets seem very different, but the market traps they face are actually the same. Gold, as a traditional safe-haven asset, has advantages — a long history, stable demand, and physical backing; Bitcoin, as a crypto asset, has established itself as a new store of value through decentralization, scarcity, and network effects.

But here’s a key point: whether it’s precious metals or crypto assets, once their prices completely detach from fundamental support and are maintained solely by market sentiment and capital accumulation, they are ultimately doomed to collapse. Macroeconomic environment, policy changes, shifts in market risk appetite — these factors have profound impacts on both types of assets. The ability to distinguish opportunities from traps ultimately depends on whether you understand the true value behind these assets.