When prices continue to hit new lows, the cryptocurrency world begins a new round of bubble theories. While during Trump's tenure, the argument that the cryptocurrency space has come to an end was strongly advocated, subsequent events show that the Americans indeed want Bitcoin to take on a certain status to provide a breather for the dollar. So where is the remaining value in the cryptocurrency space at this stage? What factors can support the next bull market? Many analysts in the cryptocurrency space link the AI industry with the blockchain industry within the cryptocurrency world, believing that AI's use of distributed storage is beneficial for Bitcoin's appreciation. In fact, these things have nothing to do with the cryptocurrency space; the application of technology is merely a matter of patents among companies, and patents can be considered as Satoshi Nakamoto's profits, while who Satoshi Nakamoto is remains a mystery. Therefore, there is no direct connection between the two, and the only involving factor between AI and the cryptocurrency world is the competition for graphics cards, which has instead become a rival.
The technology of blockchain has even less to do with the cryptocurrency space; currently, blockchain technology is used in daily life, such as the so-called Internet of Things, which uses channel technology. However, it is important to clarify that the so-called channels in the domestic context are not related to the cryptocurrency space, but rather independent technologies. It is well-known that the original form of Bitcoin was published as a paper, meaning anyone with startup capital can build a blockchain channel; it just depends on how one utilizes it. As long as channels are used without issuing currency, all costs are self-borne, which will have no benefit to the cryptocurrency industry. Thus, in Trump's eyes, these two industries are gradually decoupling from the cryptocurrency space. The key factor that truly supports the cryptocurrency space to rise to the next bull market, in Trump's personal opinion, is still its unique financial attributes. Bitcoin belongs to a chaotic world and is not a product of prosperity. As long as this characteristic cannot be eliminated, its intrinsic value will gradually expand, instead, the increase in the size of gray market transactions will be its value manifestation.
The current price decline fundamentally stems from this entanglement; the easing of tensions between Russia and Ukraine, and the agreement between Iran and America are making Bitcoin's influence diminish. Perhaps due to factors related to the conflict before, there was an outflow of energy far below market value. With the overall oil production declining, countries like Russia and Iran, which are under sanctions, have more outlets. Even Japan has expressed interest in purchasing, indicating that their purchasing options will increase, allowing transactions to increasingly occur in an open manner, and the settlement method will likely choose the dollar, which will definitely still be dollar-centric. The value of Bitcoin itself is too volatile and not suitable for use as a stable currency, so future settlements may mainly utilize stablecoins. At present, stablecoins are almost equivalent to the dollar, which essentially has not escaped the dollar system. Therefore, the turning point of the next bull market depends on everyone's perception; there will definitely be a bull market, and this bull market hinges on whether future conflicts and contradictions will intensify.
If everyone believes that geopolitical conflicts will increase, then the business scope of the cryptocurrency space will expand, and prices will rise accordingly. This is the only practical value of the cryptocurrency space; discussing other viewpoints is somewhat elusive. For example, many people say that the unified currency in the future might be Bitcoin; this argument is very absurd. There may be a unified digital currency, but it certainly cannot be Bitcoin. Discussing the distant future is too speculative; discussing the present value is more pertinent. By the way, let's briefly touch upon the potential bottom of this downward trend. Fans who have consistently followed Trump's articles might have noticed that since breaking below sixty thousand, Trump has been quite cautious. This time’s decline, including the new low from the last round at sixty thousand, has somewhat exceeded Trump's expectations. This exceeded expectation is quite simple; last year, it was impossible to predict the Iran-US conflict, which led to a spike in oil prices. Another point is that the Iran-US conflict has completely shattered the rate-cutting cycle. The dot plot showed there should be a rate cut in June, at most delayed until September.
This series of mistakes stems from military deviations. As the probability of interest rate hikes continues to rise, cryptocurrency prices will gradually decline. The overall downward trend has lasted nearly nine months, which for the cryptocurrency space is a normal bear market phase, with declines never exceeding 13 months. Currently, the bottom signals have not yet emerged, which is thanks to the absence of signals capable of altering trends in the future cycle. The Iran-US situation does not provide definite signals for cessation of conflict, oil prices remain high, and gold is constantly battling at the 4000 mark, while all financial markets outperform the cryptocurrency space. For those of you holding spot assets, shorting is indeed something to consider. In this downward trend, seeing Trump's articles, you might feel this is a form of brainwashing, or perhaps it's just that Trump is unwilling to acknowledge this failure. Most friends have already lost faith in the cryptocurrency space.
In fact, there is a most intuitive benchmark in the cryptocurrency space, which is the dollar. Why does the dollar depreciate significantly yet cannot be abandoned by the world? Many friends are worried about the bubble problem in the cryptocurrency space; in my view, the dollar bubble is even larger. Many friends compare the cryptocurrency space to a reservoir before the dollar collapses; Trump also agrees with this viewpoint. An irrefutable point is that the value of the dollar is also very elusive. The dollar is anchored mainly by energy and technology. To assess a country's economic development, one does not need to look at too many indicators, just need to observe who the country’s richest person is and what industry they are in, which is evident. For instance, looking at America, one can focus on what Musk is doing; Musk's greatest achievement is transforming infinite space resources into marketable products in reality. The listing of Space X, to the average person, may merely be a rocket company, but the theory behind the market value supporting its rise is the potential to bring back resources from space, which is the ultimate goal of its aerospace industry, and also a huge positive news for the dollar.
Trump concludes: The ultimate development goal of technology requires a strong imagination. If you believe aerospace technology can be realized within your lifetime, then investing at this stage is also a worthwhile timing. If you think this technology cannot be monetized, then you might consider more easily realizable technologies, which are the foundation of future development, including the blockchain industry; even the cryptocurrency space will have its involvement. If aerospace can be realized, then the cryptocurrency space will have its own opportunities; the DOGE goal promoted by Musk will officially be put on the agenda. However, the current situation in the cryptocurrency space is similar to the aforementioned issues; technology faces bottlenecks, development encounters suppression, and these instances lie ahead for Bitcoin. How to resolve them, Trump cannot predict; as long as one crosses this mountain, higher prices will come. The survival space for Bitcoin is still being compressed, and the probability of interest rate hikes continues to rise. If there are rate hikes this year, prices will surely find lower positions; everything needs to wait for signals from the Federal Reserve. Before that, remember to short; only this path can achieve profits. As for spot users, buy when necessary; Bitcoin's journey will not end here!
Original content by WeChat official account: Blockchain Science. For assistance, please contact directly.
Trump's message: Investing is like playing chess; masters can foresee five, seven, or even ten steps ahead, while amateurs can only see two or three steps. The skilled consider the overall situation, strategize on broader trends, do not prioritize singular pieces or territories, but aim to win the game in the end. Amateurs cling to every inch of land, with frequent flipping between long and short positions, only striving for short-term gains, resulting in frequent entrapments.
This material is for study reference only, and does not constitute trading advice. Trade at your own risk!
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