Dialogue with Solv co-founder Meng Yan: What significant impacts will Trump's election have on cryptocurrency policy?

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Editor | Colin Wu on Blockchain

In this episode, Colin Wu, the founder of Wu Says, talks with Meng Yan, co-founder of Solv, mainly discussing the potential impact on the cryptocurrency industry after Trump's election victory. Meng Yan believes that Trump may partially fulfill his campaign promises by easing regulations on cryptocurrencies, such as through the FIT21 Act and the token safe harbor mechanism, thus bringing new development opportunities to the industry. The multiple factors behind Trump's shift in attitude towards cryptocurrencies include fundraising needs and possibly being influenced by right-wing economic ideas. The conversation predicts several possible future development paths, with prices potentially experiencing a brief rise under the new government, but whether it can enter a long bull market remains to be seen. The podcast also discusses the impact of prediction markets on the industry, the supply-side reforms Trump may implement, and how the cryptocurrency industry can find new development opportunities in the regulatory environment over the next few years.

The audio record was generated by GPT, so there may be some errors. Please listen to the full podcast:

Xiaoyuzhou:

https://www.xiaoyuzhoufm.com/episodes/672ce59482eb19451dfba6f5

YouTube:

https://youtu.be/ucfd_rOdQww

Opening Introduction

Colin: Welcome everyone to this episode of our podcast. As you know, today is the day the results of the U.S. election are announced. Just a few hours before we recorded, Trump had already secured 277 electoral votes and has effectively been elected as the next President of the United States. Today, we have a special guest, Meng Yan, who is a well-known cryptocurrency evangelist in the Chinese community and has many unique insights on regulation. So today, we will discuss with Meng Yan the impact of the U.S. election on the future development of the cryptocurrency industry.

Meng Yan: Thank you, Colin. My name is Meng Yan, and I am the co-founder of Solv Protocol, as well as a co-author of the ERC-3525 standard. I am very happy to participate in the Wu Says podcast and discuss the relationship between the U.S. election and our industry.

Colin: Meng Yan is being modest. He is also the vice president of CSDN, a well-known technical website in China, and has a strong technical background, having been deeply involved in blockchain evangelism for a long time.

Meng Yan: Actually, my trip to the U.S. was not primarily for exploration or learning; it was mainly because my daughter is starting college this year and will be studying in the U.S. As a parent, I was a bit worried about taking her to the U.S. for the first time, so I accompanied her. Her school is in Los Angeles, so we flew there first, and I also took her to see several major tech hubs in the U.S., including Silicon Valley and Seattle. I spent the entire month of September in the U.S., which was quite a long time, and I have many friends there. I drove from Southern California to Northern California and then to Seattle, meeting a dozen friends along the way, both old and new, including Caucasians, Indians, Japanese Americans, and of course, many Chinese, leading to a lot of exchanges. Later, I wrote a travelogue sharing some of my observations. I wouldn't say it was unexpected; I always thought Trump's victory was a high-probability event, and today's result indeed confirmed my judgment.

Observations on Trump's Support and American Discontent with Economic and Social Governance

Colin: Among the people you interacted with, were there relatively few Trump supporters? Did every friend you met support him?

Meng Yan: Not at all. Most of the people I met this time were Trump supporters, which was quite strange. We all know that, including the results of this election, the three states in the West are deep blue states (traditionally Democratic-leaning). Most people still support Hillary or Harris, but among the people I interacted with in the Western states, many expressed support for Trump.

Colin: I had a particularly interesting experience before. A senior executive from an American cryptocurrency company came to have dinner with me. She is an American woman, part of the educated class, and speaks multiple languages. She expressed very contradictory emotions; on one hand, she felt that Trump's presidency might be beneficial for the cryptocurrency industry, but on the other hand, due to personal political beliefs and various reasons, she strongly disliked Trump and hoped Harris would win. In the end, her conclusion was that for the greater good, one must support the Democratic Party and not back Trump for the sake of a small "crypto" interest. That experience was quite interesting.

In the pre-election observations, many predictions still believed that Harris would win based on polls or other factors. However, in one prediction market, Trump's lead was very clear, and his real-time data changes were relatively accurate. This should be the most closely related event between the cryptocurrency industry and the election this year; what do you think?

Meng Yan: Indeed, our prediction market has "broken out." It demonstrated a high degree of accuracy and sensitivity, forming a huge contrast with traditional prediction methods. I believe that from now on, many similar elections or major events will increasingly value such completely free prediction markets or other mechanisms developed by our industry. The reactions and data from such markets may receive greater attention and importance; this breakout is significant. Regarding what policies Trump will adopt after being elected, these are actually all positive factors for our industry. I have been paying attention to the data from this prediction market for quite some time.

However, I judged that Trump's chances of winning were relatively high mainly because I personally experienced it. I have some very simple views, or I would say I consider these common sense. I believe that inflation is the main reason the current government does not receive public support and is even rejected. My biggest impression from this trip to the U.S. is that when I talked to some friends, they expressed confusion and did not understand why there was still hesitation. If it were me, just looking at the level of inflation would be enough for me to vote against it, without needing other considerations. Of course, they told me that Americans have many other considerations, but I think it might be because these people have higher incomes, live in better areas in the U.S., have higher education levels, and more open-minded thinking. But if we look at the broader public, they cannot and should not consider so many factors; just the issue of inflation alone is enough for them to reject the government, which is a normal and legitimate reflection of public opinion. Because if the government causes inflation or cannot control it, that can be seen as a "death sentence." This has been my long-standing view.

Of course, there are many other factors that can influence voters, such as public safety, homelessness, gender and diversity equity (DEI), etc. But in my view, inflation could indeed be the decisive factor in this election.

Colin: So you believe that the core reason for Trump's victory is closely related to the domestic economy and governance situation? Other aspects, such as foreign affairs or military issues, may not have much impact on both parties, and instead, the ideological impact is smaller. After all, blue states always support the Democratic Party, while red states always support the Republican Party; the key lies in those swing states.

Meng Yan: From this perspective, we can use a saying: "There is no first in literature, no second in martial arts." In other words, there can be debates on ideology, equity issues (DEI), and foreign policy. You have your reasons, and I have mine; ultimately, who is right or wrong needs to be tested by history. But on the issue of prices and inflation, there is no room for debate. Colin, I don't know if you've been to the U.S. recently, but hotel costs there are almost twice what they were four years ago, and food prices have risen by 30% to 60%, with car rentals, alcohol, gasoline, and other expenses increasing by at least 30%.

Such a large increase, in my view, is a failure of economic governance. I particularly emphasize this factor because I see many reports, whether from Americans or Chinese living in the U.S., and very few people talk about inflation; instead, they focus on threats to democracy, foreign policy, etc.

Possible Adjustments to Federal Reserve Policy After Trump's Election

Colin: If we follow this logic, does it mean that after Trump's election, the Federal Reserve's interest rate cuts or its policy path will be affected? Or do you think the Federal Reserve's policies are relatively independent?

Meng Yan: From Trump's public statements, he believes that interest rate cuts should not only not stop but should be further lowered. So how will he control inflation? This indeed raises some concerns in the macroeconomic community, fearing that his administration may lead to a resurgence of inflation in the U.S. However, he also proposed an effective idea: allowing the U.S. to reopen domestic oil and gas extraction to suppress overall inflation by lowering energy prices. This is indeed a very reasonable idea, but whether it can offset the impact of monetary expansion caused by interest rate cuts in practice remains to be seen. However, at least he has proposed this idea, which is known as supply-side reform.

Colin: Another possibility is that if Trump engages in a trade war with China or other countries, this could also affect inflation to some extent, as the import of cheap goods may be restricted.

Meng Yan: Yes, during my time in the U.S., I met some compatriots who were fully prepared for a trade war. Trump's tariff policy targets not only China but also imposes taxes on Europe. The only exception is the North American Free Trade Agreement, which includes Canada and Mexico, where tax levels will remain very low or even zero due to agreements. Therefore, many Chinese companies are taking action to relocate their factories to Mexico. This is actually Trump's goal—to encourage the return of manufacturing to North America. So, while his policy mix may not be 100% effective, it is logically coherent. In contrast, I listened to some of Harris's speeches and felt that she did not have a clear policy logic, which I think is one of the important reasons for her eventual defeat.

Colin: Indeed, it became clear later that while Harris initially had a slight advantage in the debates with Trump, her performance began to falter as the campaign progressed. She also declined some important interview opportunities, leading to disappointment among some supporters. This may also be one of the reasons for her defeat.

Trump's Intent to Support Cryptocurrency: Fundraising and Political Strategy

Colin: Now we come to the question that listeners are most concerned about, as Meng Yan mentioned in his article, Trump's support for cryptocurrencies. In fact, although people in the crypto space are very concerned, this topic does not have a significant impact on the election results. From my understanding, the core purpose of Trump's support for the cryptocurrency industry is fundraising. Because for him, the key voter groups he needs to attract are not directly related to cryptocurrencies. However, he may have gained a lot of funds through the cryptocurrency sector, such as issuing NFTs, creating tokens, or accepting donations, especially since his overall campaign funding is significantly lower than that of the Democratic Party. Am I correct in my understanding? What do you think about why Trump suddenly shifted to support cryptocurrencies?

Meng Yan: Indeed, when he was president, someone asked him about his views on Bitcoin, and he replied, "I know a better currency called the dollar. I trust the dollar, not Bitcoin." He did say something like that. I believe this shift was driven by multiple factors. The fundraising factor you mentioned is indeed an important reason, especially since he launched an ICO project just a few weeks before the election, which is quite indicative. I think that generally cautious politicians would not easily take such actions. Of course, Trump is not a traditionally cautious politician, which is precisely what makes him special, or perhaps we can say his "toughness."

Think about how he seemed to have "stumbled into" his first presidential campaign, and even he wasn't prepared for it. After winning the election, 60% of the positions in his cabinet remained vacant, and they were never filled until the end of his term, with 40% of the positions unfilled throughout his four years in office. So, he didn't anticipate his first election victory. However, over the past few years, despite facing various lawsuits and setbacks, whether these setbacks were just or not, he has remained steadfast and unyielding. Imagine if it were you or me in such a situation; we might just say a few soft words or make a statement, and the problem would be resolved. But Trump does not compromise; he insists on fighting to the end, a level of willpower that is not something ordinary people can achieve.

In this context, supporting cryptocurrencies is undoubtedly one of the important reasons for his fundraising, but I believe there are other reasons, perhaps even more significant, that indicate a genuine change in his personal understanding of cryptocurrencies.

Multiple Factors Behind Trump's Shift in Attitude Towards Cryptocurrencies

Meng Yan: Over the past four years, one significant change in Trump from a political spectrum perspective is his relationship with the Republican establishment. During his previous term, he was at odds with the establishment, but by the 2022 midterm elections, the entire Republican Party had gradually become "Trumpified." However, we can also say that as the Republican Party became "Trumpified," Trump has, to some extent, also become "Republicanized." I believe this is true.

Trump already possessed some basic ways of thinking aligned with the Republican Party, and through mutual influence with the party, he gradually aligned more with the establishment. In our terms, it is a case of "moving towards each other." As he moved closer to the Republican Party, traditional right-wing thoughts and views had a greater impact on him. We all know that many ideas in blockchain and digital currencies actually stem from Hayek's free market economic thoughts, which belong to the right-wing Austrian school in the spectrum of economics. Through this interaction, Trump gradually accepted these theoretical concepts.

This also involves deeper issues. The supporters behind the Democratic Party are mainly Wall Street financial capital, with the most representative being Jewish financial capital forces like Soros. This class is the main financial backer and supporter of the Democratic Party. In fact, there are also contradictions within the Jewish community, such as the complex relationship between the state of Israel and Wall Street's Jewish financial capital. Additionally, there is significant conflict between traditional "Anglo-Saxon" industrial capital and Jewish financial capital. Trump clearly stands on the side of traditional industrial capital, representing manufacturing and the middle-class white Americans. Cryptocurrencies pose a disruptive challenge to the traditional financial system, especially to Wall Street financial capital. For Trump, this "nuclear weapon" has become a highly valuable political bargaining chip. He may fulfill some promises to promote the development of the crypto industry, but he may also remain silent on certain issues, using cryptocurrencies as a card to negotiate with Wall Street financial capital.

From these perspectives, I have analyzed three reasons, including the fundraising factor you mentioned. I believe that for Trump, playing the "cryptocurrency" card is a brilliant move. Although cryptocurrencies may only be a small factor in his victory, even less important than the horse-and-buggy voters in Pennsylvania, it is still a striking move. Once this "window" is opened, he may implement a series of policies favorable to our industry in the coming years. Whether intentional or not, this could bring historic development opportunities for the industry. Therefore, the next few years are particularly crucial for our industry.

Discussion on the Likelihood of Policy Fulfillment After Trump's Election

Colin: There are indeed two completely different viewpoints. One holds that the promises made before the election and the performance after the election are often two different things, especially for a "small" industry like cryptocurrencies, where Trump has no necessity or pressure to fulfill those promises. But many people, including yourself, hope that he will fulfill these promises to some extent. For example, he mentioned that he would immediately fire the SEC chairman, stop selling government-held bitcoins, and even proposed establishing a strategic bitcoin reserve, among other specific measures. However, some have pointed out that Trump does not actually have the direct power to fire the SEC chairman and can only wait for the chairman to resign voluntarily; he might influence the leadership of the SEC in other ways. From your perspective, what practical actions do you think Trump is most likely to take after being elected?

Meng Yan: Let me share my views. First, I believe Trump will partially fulfill his promises, but he will not fulfill them all. During his last term, he was perhaps one of the most diligent presidents in U.S. history in fulfilling campaign promises. There are many reasons for this, one important factor being that he is not a typical politician, and he consciously wants to showcase his differences from traditional politicians to voters. Therefore, he has a relatively high execution rate for his promises. For example, although he was unable to successfully repeal "Obamacare," he did make significant efforts to push for it, only to be ultimately blocked by Congress. If we consider all the promises that were implemented or attempted to be implemented, he indeed performed quite well.

So, will it be the same this time? I think we shouldn't be overly optimistic. Over the past few years, as I mentioned earlier, he has gradually become more like a traditional politician, reaching a certain degree of reconciliation with the Republican establishment, with both sides learning from each other and complementing each other's strengths. He is now more familiar with the "saying one thing and doing another" approach of politicians, and I believe he is not lacking in skills in this regard. He is not a simple and straightforward person; on the contrary, he is very smart and shrewd. In his previous term, he intentionally highlighted his commitment to fulfilling promises as a basis for seeking re-election. But this time is different; after four years of hardship, he has been re-elected and may choose and implement policies more according to his own will.

Based on this starting point, I believe he will fulfill a considerable number of promises, but not all of them. I mentioned earlier that he genuinely recognizes the concepts of digital currencies, digital assets, blockchain, and DeFi; he seems to have been persuaded by these ideas. I have heard some of his speeches at bitcoin conferences, and it is evident that he has a deeper understanding and awareness of these issues. However, it is somewhat naive and optimistic to think that he will completely fulfill all his promises, as he is now a seasoned politician.

The second point is, what specific actions will Trump take? I can say with certainty that he will prioritize promoting the FIT21 Act. What stage is this act at? It has passed the House of Representatives, but due to the Senate's recess and the election, it has not yet received attention from the Senate. The act passed in the House in May, and now the situation is that Trump has not only won the electoral votes and the popular vote but also gained support from both the Senate and the House of Representatives, which is extremely rare in modern times. Given that his governing foundation is so solid, I believe he will push for the passage of the FIT21 Act, which will have a far greater impact on the crypto industry than simply changing the SEC chairman.

We need to understand that the SEC chairman must act according to the law, and the existing laws are established by Congress, and the SEC merely executes the laws as stipulated. Changing the chairman does not alter the constraints of the regulations. If we change the law itself through legislation, then even if the current chairman remains, their actions will change significantly. Therefore, I believe Trump will prioritize promoting the FIT21 Act.

The Possibility of Changing the SEC Chairman: Impact on Regulation

Meng Yan: Regarding the SEC chairman, as far as I know, the U.S. president cannot directly remove the SEC chairman, but if the chairman resigns or passes away, the president has the authority to nominate a new candidate and submit it to Congress for approval. Now, with the White House and Congress controlled by the Republican Party, there are various means to facilitate the chairman's departure, so when Trump says he wants the current chairman to "get lost," it is not entirely empty talk. I believe he is likely to push for this change, but this is not because cryptocurrency policies cannot be advanced; rather, it is more of a symbolic action to appease the dissatisfaction of the cryptocurrency community and Wall Street.

This is similar to Cao Cao's use of a scapegoat; the purpose is not to address fundamental personal or policy issues but to give the cryptocurrency industry and its supporters a clear signal of his stance and determination.

When we combine these actions, the impact on our industry is already very significant. We can discuss this further later. However, there is also a "half" action, as many speculate that he will appoint that female SEC commissioner as the next SEC chairman. I think the likelihood of that is low and uncertain. Trump may not appoint her as chairman just to please the cryptocurrency community. I don't think he will necessarily make such a decision, so we can wait and see.

Therefore, I believe these "two and a half" actions—promoting the FIT21 Act, changing the SEC chairman, and the "possible" appointment of the female commissioner—are the main actions he may take. There is also a very interesting topic regarding his attitude towards ICOs. When he launched an ICO just a few weeks before the election, I felt both happy and anxious for him. This action indeed seemed somewhat risky, but upon further reflection, Trump is no longer the same; his team, think tank, and family members must have thought this through carefully.

In hindsight, my concerns proved to be unnecessary. However, this matter has had a significant impact on our industry, as our industry itself is constantly evolving and changing.

The Global Regulatory Impact of the FIT21 Act

Colin: Regarding the core content of the FIT21 Act, it actually provides a solution, mainly focusing on whether cryptocurrencies fall under the category of securities, registration processes, and other fundamental issues. The proposal of the act is that as long as a project's degree of decentralization reaches a certain standard, it can obtain a few years of exemption. I understand it this way; do you think this act itself is important? Or does it have a practical chance of being implemented? If it can be implemented, will it provide a relatively clear standard for the entire industry?

Meng Yan: Yes, this is indeed very important. We can look at the FIT21 Act in conjunction with the token safe harbor act. Let me briefly describe the context. The core of the FIT21 Act is to determine under what circumstances a token can be considered a commodity and under what circumstances it must be regarded as a security. The basic principle is that if no single entity controls more than 20% of a token, including situations of covert control by alliances, then it may be recognized as a commodity and subject to CFTC regulation. This will create a more lenient environment for project teams, allowing for various derivative operations in commodity trading. If control exceeds 20%, then the token will be regarded as a security and subject to stricter securities law regulation.

Most blockchain and crypto projects typically have a team control ratio that far exceeds 20% at the beginning, which means that most projects may be classified as securities. However, this is where the token safe harbor act becomes particularly important. This act has been personally revised twice by the "crypto mom," and its core is that even if a project is recognized as a security, as long as the team commits to achieving decentralization in the future, they will receive a few years of "safe harbor" exemption. During this period, even though the project is regarded as a security, regulatory agencies will not interfere excessively according to securities law, allowing the project team to develop according to their own plans. For example, after three or five years, the project must submit an application, and if decentralization has been achieved, they can "set sail," and any violations of securities law during the safe harbor period can be disregarded; if decentralization has not been completed, they may face refunds or other legal consequences.

If these two acts can indeed be implemented, their impact will be global. Although these acts cannot directly regulate projects in China, Singapore, or Japan, once implemented, regulatory agencies in other countries will also be influenced, and exchanges will be more inclined to support only projects that meet the standards of these two acts. In this way, all project teams will actively adhere to these standards, and the entire industry will undergo a significant transformation in a short period. This is where I see the global influence of the FIT21 Act and the token safe harbor act.

For example, the Reserve Bank of Australia currently does not have a formal regulatory framework for stablecoins, only a draft. Nevertheless, Australia already has several "compliant" stablecoins operating fully according to the draft's content, even though the draft has not yet been submitted to Parliament. However, these stablecoin operators are unwilling to take the risk of being held accountable later, so they prefer to adhere to a draft that has not yet officially come into effect. This indicates that even in non-U.S. jurisdictions, once these regulations are implemented, their influence will be very profound.

Colin: I understand. However, I am not very optimistic about this. Looking back over the past few years, during Trump's previous term, there were indeed some tokens registered with the SEC, but the results were poor, and many projects even chose to terminate their token issuance on their own. These processes were very cumbersome, leading to almost no one registering with the SEC afterward, resulting in some regression. Now that Trump is back in office, whether he can untie this regulatory knot is very important. First, I hope he will not pursue legal responsibilities for those old projects, allowing DeFi, NFT, and other platforms to no longer be under the "sword of Damocles," afraid to innovate, empower tokens, or even issue tokens. If this constraint can be lifted, that would be the first step; the second step would be to establish clear rules that allow new users and participants to enter the market more smoothly.

Trends in Crypto-Related Litigation: The Crypto Industry Environment Under New Laws

Colin: Do you think that after Trump's election, the numerous crypto-related lawsuits will ease? Or do you think there will still be many similar lawsuits in the future?

Meng Yan: I believe there will be some easing. As you mentioned, the main reason those registered tokens could not continue back then was that projects like RDRA, which were supposed STO (Security Token Offering) projects, rigidly applied securities laws, imposing traditional securities requirements on tokens while completely ignoring the characteristics of tokens themselves. When I register a token according to the securities process, what significance does the token have? Ultimately, these projects were required to trade on specific STO exchanges, but the traffic and liquidity of these exchanges were far inferior to traditional markets. Since the entire registration process is no different from securities registration, why would project teams choose a less liquid traditional stock market instead of going to an obscure STO exchange? This was the main issue at the time.

In this situation, projects attempting to pursue the STO path quickly cooled off after experiencing a setback. However, the current FIT21 Act and the token safe harbor act significantly relax these requirements, taking into account the unique characteristics of tokens, including how to operate compliantly in DeFi and centralized exchanges. These new laws indeed provide more feasible guidance for the industry. On this point, I remain relatively optimistic. I believe that after the new laws are enacted, the number of related lawsuits will decrease. Of course, specific cases still need to be analyzed individually, but in recent years, certain hawkish regulatory attitudes have intensified the scrutiny of both actionable and non-actionable cases.

Colin: However, we must also acknowledge that the approval of Bitcoin and Ethereum ETFs is indeed a landmark development for the industry. Although there are also some court factors involved, such as the court ruling in favor of Grayscale that propelled this process.

Meng Yan: Yes.

Support for Solana and Future Market Outlook

Colin: It seems that Trump's election could be a positive for Solana, as the U.S. appears to be particularly focused on supporting both Wall Street and the cryptocurrency industry while also paying special attention to Solana. Do you think this election will bring more support for Solana's future development?

Meng Yan: I agree with this view. We were all excited when the U.S. approved Bitcoin and Ethereum ETFs, and sometimes jokingly said that "insiders" were helping our industry. But in reality, what this industry truly needs is not recognition of individual assets, especially not post-facto recognition. The most important thing is to provide an orderly product for this industry, which I call a "virtuous order product." Currently, only the U.S. has the capability to provide such an order for the crypto industry.

Of course, whether this virtuous order can be effectively applied requires close interaction between the government, the market, and the industry; it cannot be achieved by Trump alone. However, having such actions and efforts is still very important for the industry. This order means much more to our industry than the performance of individual assets. If everyone is just speculating on Bitcoin or Ethereum, we don't need such an industry; we could directly treat them as soybean oil or crude oil for trading. The reason we have built a new industry around blockchain technology is that we believe this technology can bring unprecedented innovation, which is why we need a brand new industry and rules. Personally, I hope the Trump administration can provide such rules for the industry, rather than just approving more ETFs; otherwise, it would be like playing around, giving a little sweetener without real support.

Indeed, Solana holds a certain symbolic significance in the industry. If Solana's token also gets an ETF, it would merely replicate the models of Bitcoin and Ethereum. The impact of Bitcoin's ETF is substantial, while Ethereum's relative decline means that Solana's approval for an ETF would not bring about a qualitative change. However, Solana's uniqueness lies in its currently very active innovation ecosystem. If the Trump administration can interact with the Solana community and even support the development of the Solana ecosystem through legislation or administrative measures, then it could achieve the direction I just mentioned—truly providing a virtuous order for the industry, which is the more important support.

Price Trend Predictions for Bitcoin and Ethereum After Trump's Election

Colin: Finally, let me ask you a question that everyone is very concerned about. Based on your personal experience and understanding of the market, what kind of price fluctuations do you expect for Bitcoin and Ethereum after Trump's election? Which sectors do you think are worth paying attention to?

Meng Yan: Actually, the older I get, the less I want to make predictions. There are two reasons: first, predictions themselves are not easy, and second, they are not very necessary. Of course, I know everyone likes to hear predictions, so I will still share my views. This does not constitute financial advice, and I do not have a historical track record in this area.

Making predictions is not easy because very few people can make accurate predictions; countless experts and influencers have "failed" in this regard. But more importantly, I feel that making precise predictions is not necessary. Over time, I have found a better way of thinking, which in academic terms is called "Bayesian thinking." You don't need to predict the future specifically, but you can build a model. For example, after Trump takes office, the development of the crypto market may have three scenarios: the first, second, and third. Then you can design strategies and observe what signals and events would occur if the first scenario happens; what signals would the second and third scenarios present. By modeling in this way, closely monitoring market signals, and continuously adjusting your probability judgments about these scenarios, you can be more flexible and effective than making precise predictions.

I have found that especially in the crypto space, many people hesitate even about events that have already occurred. For instance, when Trump won, many believed that Bitcoin and Dogecoin would surge, but when the signals actually appeared, many still hesitated. If you can act when others hesitate, this approach is more effective than having predictive abilities. This is my methodology in the market. Based on this methodology, I have three possible judgments about the future of the industry.

The first possibility is the most ideal scenario: Trump fully fulfills his promises and promotes industry development, such as restarting ICOs, implementing the FIT21 Act, and the token safe harbor act. In this case, the market would first see a significant rise, possibly entering a long-term bull market after some fluctuations, similar to the internet industry after 2004. This is the situation I most hope to see, but I believe its likelihood is low.

The second possibility is a relatively bad scenario, where a "crazy bull" market emerges, excessively overextending market confidence and momentum, followed by a market crash that could even bring negative pressure on Trump, leading to tighter regulations again. This situation could resemble the collapses of Three Arrows Capital and FTX in 2022, potentially resulting in a regulatory backlash against the industry. This "crazy bull" market would recreate a vicious cycle of dramatic ups and downs, hindering the long-term development of the industry.

The third possibility, which I believe is the most likely to occur, is that Trump partially fulfills his promises, and the industry experiences a decent rise, but it will not be a crazy bull market. This means the market will have cyclical fluctuations but will overall develop in a healthy direction, gradually maturing, though it will still need to undergo one or two cycles of adjustment. In this scenario, the industry will grow steadily but has not completely escaped the characteristics of volatility.

In terms of probability, I estimate the distribution of these three possibilities to be about 20%, 30%, and 50%. I will closely monitor market signals to determine which path is more likely and adjust my operational strategies accordingly. Some may think that I least want to see the second scenario, but frankly, there is no "like" or "dislike," only facing objective reality. If the industry truly enters a "crazy bull" state and then crashes, bringing a series of problems, we also need to find adaptive strategies. For example, decisively cashing out when the "crazy bull" is about to end to protect oneself is an acceptable strategy.

Looking back at the last bull market, my biggest mistake was prematurely judging that the industry would move towards a healthy and sustainable development path, resulting in several major crashes that caught me off guard, and I did not exit at the best time. This time, I will adjust my strategy based on this way of thinking to avoid repeating the same mistakes.

Colin: Alright, let's wrap up our discussion here today. I also wish for the successful development of Meng's projects, and I hope everyone pays attention to Meng's Twitter and his projects. Thank you, everyone!

Meng Yan: Thank you, Colin. Goodbye, everyone!

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