According to Balaji, the situation in the Red Sea highlights the US Navy's challenges in producing cost-effective, purpose-fit ships, as evidenced by the LCS (Littoral Combat Ship) debacle. In contrast, China's People's Liberation Army Navy (PLAN) is suggested to have a significant advantage, potentially up to 200 times, in this aspect. This analysis underscores the strategic implications for naval power projection and maritime security.

According to Balaji, the US Navy's defeat in the Red Sea, as indicated by the IMF Portwatch graph, has significant implications for global trade routes and, by extension, cryptocurrency markets. This situation has been evident since the announcement of the failed Operation Prosperity Guardian in late 2023, highlighting a decrease in US military and diplomatic influence. Such geopolitical shifts could lead to increased volatility in cryptocurrency markets as traders seek safe-haven assets.

According to Balaji, the US Navy's logistical challenges in the Red Sea, including difficulties against the Houthis, highlight potential weaknesses in handling larger geopolitical threats, which could impact global trade routes and logistics.