Author: @Web3_Mario

Abstract

First of all, I would like to apologize for the delay in updating last week. After briefly studying Clanker and other AI Agents, I found it very interesting, so I spent some time developing some frames. Gadgets. After clearly evaluating the development and potential cold start costs, quickly chasing market hot spots may be the norm for most small and medium-sized entrepreneurs struggling in the Web3 industry. I hope everyone will understand and continue to support it. Closer to home, this week I want to discuss with you a point of view that the author has been thinking about recently. Of course, I think this can also explain the reason for the recent violent market fluctuations, that is, after the price of BTC breaks through new highs, how to continue to capture incremental value, my point of view The key point is to observe whether BTC can take over AI and become the core of driving economic growth in the new political and economic cycle of the United States under the Trump administration. The game here has already begun with the wealth effect of MicroStrategy, but the whole process is bound to still face many challenges.

As MicroStrategy’s wealth effect unfolds, the market has begun to speculate whether more listed companies will choose to allocate BTC to achieve growth

We know that the encryption market fluctuated violently last week, with BTC prices between $94,000-$101,000. wide fluctuations. There are two core reasons. Let me briefly summarize them here.

First of all, dating back to December 10, Microsoft officially rejected the "Bitcoin Fiscal Proposal" proposed by the National Center for Public Policy Research at the annual shareholder meeting. , the think tank recommended that Microsoft diversify 1% of its total assets into Bitcoin as a potential hedge against inflation. Prior to this, Saylor, the founder of MicroStrategy, also publicly declared through Reject the proposal.

Let’s expand on this so-called American public research center. We know that think tanks are composed of industry experts and are generally funded by political parties or commercial companies. Most think tanks are non-profit organizations and It is not an official organization. This type of operation is exempt from paying taxes in the United States and Canada. Usually, the views output by think tanks need to serve the relevant interests of the sponsors behind them. The NCPPR, founded in 1982 and headquartered in Washington, DC, has a certain influence among conservative think tanks, especially in supporting free markets, opposing excessive intervention and promoting corporate responsibility issues, but its overall influence is relatively limited. Small compared to some of the larger think tanks such as the Heritage Foundation or the Cato Institute.

This think tank is known for its work on issues such as climate change and corporate social responsibility.The position on the issue has been criticized, especially its funding sources that are suspected to have interests in the fossil fuel industry, which puts NCPPR under certain restrictions when advocating. Progressives often accuse him of being an "interest group spokesman," which undermines his influence on the broader spectrum. In recent years, NCP PR has launched the FEP (Free Enterprise Project) project and frequently made proposals at shareholder meetings of listed companies, questioning the behavior of large companies on right-wing issues such as racial diversity, gender equality and social justice. For example, companies such as JPMorgan Chase have submitted proposals opposing mandatory race and gender quotas, arguing that they would lead to "reverse discrimination" and harm corporate performance. For companies such as Disney and Amazon, they questioned whether companies catered too much to progressive issues and advocated that companies should focus on making profits rather than "pleasing minorities." With Trump taking office and his support for cryptocurrency, the organization immediately promoted Bitcoin adoption to major listed companies through FEP. In addition to Microsoft, it also includes giants such as Amazon.

With the formal rejection of the proposal, the price of BTC once fell to $94,000, and then quickly pulled back. From the degree of price shock caused by this incident, it is not difficult to observe that the current market is actually in a state of anxiety, and the point of anxiety lies in the new source of growth after the market value of BTC broke through a new historical high. What is it. We have seen from recent signs that some key leaders in the crypto world are choosing to use MicroStrategy's wealth effect to promote the financial strategy of allocating BTC in the balance sheet to more listed companies to combat inflation and achieve performance. Growth effect, thereby allowing BTC to gain greater adoption. Then let’s look forward to whether this strategy can be successful.

As a substitute for gold, BTC still has a long way to go to become a global store of value in a broad sense. It is not easy to succeed in the short term

First of all, let’s analyze the first attraction of this strategy. Whether the effect of allocating BTC to combat inflation is valid in the short term. In fact, when it comes to fighting inflation, the first thing that comes to mind is gold, and when Powell answered a reporter's question at the beginning of the month, he also mentioned the view that Bitcoin is a competitor to gold. So can Bitcoin become a substitute for gold and become a global store of value in a broad sense?

This issue has actually always been the focus of discussions about the value of Bitcoin. Many people have made a lot of arguments based on the similarity of the native attributes of assets, so I will not introduce it here. What the author wants to point out is how long it will take to realize this vision, or whether this vision can support the current valuation of BTC. My answer is that it is not easy to achieve within the foreseeable four years, or in the short to medium term. , so this is not very attractive as a short-term promotion strategy.

We refer to how gold as a store of value has developed to the presentstatus. As a precious metal, gold has always been regarded as a valuable item by various civilizations and is universal. The core reasons lie in the following points:

The obvious luster and excellent ductility make it valuable as an important decoration.

The lower output value brings scarcity to gold, thus giving it financial attributes and making it easy to be selected as a class symbol in a society where class divisions have emerged.

The wide distribution of gold around the world and the low difficulty of mining make each civilization not restricted by factors such as culture and productivity development. Therefore, the spread of value culture is bottom-up and the scope of spread is wider. wide.

With these three attributes, gold has universal value, making gold play the role of currency in human civilization, and the entire development process makes gold's intrinsic value stable. Therefore, we see that even after sovereign currencies abandon the gold standard and modern financial tools acquire more financial attributes, the price of gold basically follows the law of long-term growth and can better reflect the true purchasing power of money.

However, it is unrealistic for Bitcoin to replace gold in the short term. The core reason is that as a cultural viewpoint, its value proposition must shrink rather than expand in the short and medium term. There are two reasons:

Bitcoin’s value proposition is top-down: as a As a virtual electronic commodity, the mining of Bitcoin requires competition in computing power. There are two determining factors here, electricity and computing efficiency. First, the cost of electricity actually reflects the degree of industrialization of a country, and the so-called cleanliness of the energy behind the electricity determines future development potential. Computing efficiency relies on chip technology. To put it directly, obtaining BTC is no longer something that can be achieved simply by relying on a personal PC. With the development of technology, its distribution is bound to be concentrated in a few areas, and those without competitive advantages account for the majority of the world's population. will not be easy to obtain, which has an adverse impact on the efficiency of the spread of this value proposition, because when you cannot control a certain resource, you can only become the object of its exploitation, which is why stablecoins will There is a competitive relationship with some sovereign currencies with unstable exchange rates, and thus From a benefit perspective, this naturally cannot be recognized, so it is difficult for you to see untapped encouragement of this value proposition.

The regression of globalization and the challenge of US dollar hegemony: We know that with Trump’s return, his isolationism will cause globalization to receive a relatively large blow, and the most direct impact will be on the US dollar. Its influence as a global trade settlement target. This has caused certain challenges to its hegemony of the US dollar. This trend is the so-called "de-dollarization". The entire process will hit global demand for the U.S. dollar in the short term, and Bitcoin, as a currency primarily denominated in U.S. dollars, is bound to increase its acquisition costs throughout the process, making it more difficult to promote the value proposition.

Of course, the above two points only discuss this trend from a macro level.Development challenges in the short and medium term do not affect the narrative of Bitcoin as an alternative to gold in the long term. The most direct impact of these two points in the short and medium term is reflected in the high volatility of its price, because the rapid increase in its value in the short term is mainly based on the increase in speculative value, rather than the influence of its value proposition. Enhanced. Therefore, its price fluctuations are bound to be more in line with speculative products and have high volatility attributes. Of course, due to its scarcity characteristics, if the over-issuance of the U.S. dollar continues to be serious, as the inherent purchasing power of the U.S. dollar declines, all U.S. dollar-denominated commodities can be said to have certain The anti-inflation property is just like the luxury goods market in previous years. However, this anti-inflation property is not enough to make Bitcoin more competitive with the value storage effect brought by gold.

Therefore, I think that using anti-inflation as a short-term marketing focus is not enough to attract "professional" customers to choose to allocate Bitcoin instead of gold, because their balance sheets will face extremely high volatility. , this volatility cannot be changed in the short term. Therefore, there is a high probability that in the next period of time, large listed companies with stable business development will not radically choose to allocate Bitcoin to cope with inflation.

BTC took over AI and became the core of driving economic growth in the new political and economic cycle ushered in by the United States under the Trump administration

Next, let’s discuss the second point of view, that is, some listed companies with weak growth , by allocating BTC to achieve overall revenue growth, thereby promoting an increase in market value, is this financial strategy It can be more widely recognized. I think this is the core of judging whether BTC can achieve new value growth in the short and medium term. And I think this is easy to achieve in the short term. In the process, BTC will take over AI. , has become the core of driving economic growth in the new political and economic cycle ushered in by the Trump administration.

In the previous analysis, we have clearly analyzed the successful strategy of micro-strategy, which is to convert the appreciation of BTC into the company's performance and revenue growth, thereby pushing up the company's market value, which is for some growth Weak companies do have a strong appeal. After all, it is more comfortable to just lie down and embrace a trend than to burn yourself to build a career. You can see that many companies are declining, and their main business revenue is declining rapidly. They finally choose to use this strategy to allocate the remaining output value to retain some opportunities for themselves.

With Trump’s return, his internal cuts will have a significant impact on the US economic structure. Let us look at a piece of data, the Buffett indicator of US stocks. The so-called Buffett indicator, stock god Buffett mentioned in an article in Forbes magazine in December 2001: The ratio of the total market value of the stock market to GDP can be used to judge whether the overall stock market is too high or too low, so it is generally called Buffett. index. This indicator can measure whether the current financial market reasonably reflects fundamentals. Buffett's theoretical index indicates that 75% to 90% is a reasonable range, and more than 120% indicates that the stock market is overvalued.

We can see that the current Buffett indicator of the U.S. stock market has exceeded 200%, which shows that the U.S. stock market is extremely overvalued. In the past two years, the core driving force for the U.S. stock market to avoid a correction due to monetary tightening has been in addition to That is the AI ​​sector represented by NVIDIA. However, as Nvidia's third-quarter financial report released a slowdown in revenue growth, and according to its performance guidance, revenue will slow down further next quarter. Slowing growth is obviously not enough to support such a high price-to-earnings ratio, so there is no doubt that U.S. stocks will be under significant pressure in the coming period.

For Trump, his specific impact on the economy is undoubtedly full of uncertainty in the current environment, such as whether the tariff war will trigger internal inflation, whether cutting spending will affect corporate profits, and whether it will cause The problem of rising unemployment, whether reducing corporate income tax will further increase the already serious fiscal deficit problem, etc. In addition, Trump seems to be more determined to rebuild the ethics and morals of the US Department. The promotion of some culturally sensitive issues will cause impacts such as strikes, demonstrations, and job shortages caused by the reduction of illegal immigrants. Economic development has cast a shadow.

If economic problems arise, especially the stock market crash in the current extremely financialized United States, it will have a serious impact on its support rate, thereby affecting the effectiveness of its internal reforms. Therefore, it is very cost-effective to implant a well-understood core that drives economic growth into the U.S. stock market, and for this core, I think Bitcoin is very suitable.

We know that the recent “Trump transactions” in the crypto world have fully demonstrated its influence on the industry, and most of the companies supported by Trump are local traditional industrial companies. They are not technology companies, so their businesses did not benefit directly from the entire AI wave in the last cycle. And if things develop according to what we describe, the situation will become different. Just imagine if local small and medium-sized enterprises in the United States choose to allocate a certain amount of Bitcoin reserves in their balance sheets, even if their main business is disrupted by some external factors. When it comes to influence, Trump can achieve the effect of stabilizing the stock market to a certain extent just by advocating some crypto-friendly price pulls. Moreover, this kind of targeted stimulus is extremely efficient and can even bypass the Fed's currency and is not easily constrained by the establishment. Therefore, in the next new U.S. political and economic cycle, this strategy will be of great benefit to the Trump team and many U.S. small and medium-sized enterprises. It is a good choice for everyone, and its development process is worthy of attention.