Original title: The Genie
Original author: Arthur Hayes
Original translation: TechFlow
(The opinions expressed in this article are solely those of the author and should not be used as a basis for investment decisions, nor should they be considered as advice or recommendations for participating in investment transactions.)
Pax Americana Make-A-Wish Corporation in Mar-a-Lago receives a large number of wishes every day. People in the cryptocurrency field, like everyone else, line up to try to grab a chance to make one or more wishes come true. The fickle genie - the master known as the Orange Man - holds court every week in his private club that combines country style and nightclub style in the swamps of South Florida, accompanied by classic pop music from the 1980s and surrounded by a group of fawning followers.
The spirits themselves are neither good nor evil. What we really need to judge is whether the wish of the wisher is reasonable. Every culture in the world has a morality tale about wrong wishes, those wishes that try to shortcut success, wealth or personal happiness, often with unexpected consequences.
The core moral of these stories is: there is no shortcut button in life, and all good things come from hard work and dedication.
There are two high-profile wishes in the global cryptocurrency industry that are worth discussing - one is to establish a Bitcoin Strategic Reserve (BSR), and the other is to promote Pax Americana-style cryptocurrency regulation. In general, many crypto practitioners hope that the US government will buy Bitcoin as part of the national reserve by printing money, and at the same time hope to establish favorable regulatory barriers for the crypto-related businesses they hold. I believe that these wishes are in the wrong direction. We should choose the harder but more meaningful path and make a request to the genie that cannot be easily overturned even if the next government (regardless of its political party) comes to power.
In the first part of this article, I will argue why the BSR and the patchwork of crypto regulation bills are negative for the industry, both locally and globally, before offering some suggestions for more valuable wishes for those who line up in their striped suits or summer dresses every day to make a wish to the “orange genie.”
Bitcoin Strategic Reserve (BSR)
Anything that can be bought can also be sold. The core problem when governments hoard an asset is that the buying and selling is usually for political purposes rather than economic interests. In the framework of the current global economic system, can Bitcoin bring any direct effect to the US government? The answer is no. Bitcoin is just another financial asset. While some readers may think that Bitcoin is the hardest currency in history created by the only true god Satoshi Nakamoto, I can tell you for sure that the actions of the elf (implying politicians) are not derived from the reverence for the gods, but to cater to the voters who put him in power.
Suppose Trump really succeeds in establishing a Bitcoin Strategic Reserve (BSR). The government buys one million Bitcoins as proposed by U.S. Senator Lummis. What will happen? Bitcoin prices soar quickly, and the market goes into a frenzy, but as the government completes the purchase, Bitcoins only rise but no fall trend comes to an abrupt end.
Fast forward two to four years. In 2026, voters may be disappointed with Trumps failure to effectively control inflation, end endless wars, improve food safety, or address government corruption, and the Democrats may return to power. What if they have a supermajority in the House of Representatives that is enough to override the presidents veto? Suppose that in 2028, a Democratic president is elected, such as Gavin Newsom, who may rise like a phoenix. At the same time, certain controversial policies, such as allowing minors to undergo sex reassignment surgery without parental consent, may become a reality again. Some voters may cheer for this.
For a Democratic-controlled government that is about to take office, finding ready-made funds to meet the needs of its supporters is the top priority. This is not only the Democratic Party, but in fact any political party can hardly avoid this logic. At this time, the governments Bitcoin reserves - one million coins are lying there quietly, and they can be used as a cash machine with just a signature. The market will naturally worry about when and how these Bitcoins will be sold. Will the government minimize the impact on the market and maximize the benefits of the US dollar, or will it deliberately suppress cryptocurrency holders who support the Orange Man for political purposes? We dont know. But this uncertainty will severely hit the markets confidence in Bitcoin and the entire cryptocurrency industry.
If the US government decides to hoard shitcoins, including Ripple, these cryptocurrencies will inevitably be transformed into a powerful political tool. However, as a purely political strategy, will the US government really seriously participate in the crypto community? Will they donate to support the work of Bitcoin Core developers? Will they run Bitcoin nodes? Maybe... but judging from the current discussion about BSR, it is more like a buy it and forget it plan. Trump and the Republican Party may see the price of Bitcoin soar, then declare mission accomplished and use this opportunity to collect more campaign funds from David Bailey at a fancy dinner with $10,000 per plate. Dont blame the players, blame the rules of the game. However, making such a wish to the genie may cause unnecessary pain to the crypto industry in two years.
Frankenstein of encryption laws
The easiest way to understand what regulation a crypto holder (Hodler) wants is to look at their portfolio. From my perspective away from the noise around the Elf, those with large investments in centralized crypto financial intermediaries are often the group most likely to achieve their regulatory wishes because they have the loudest voice. Unfortunately, developers who are committed to building truly decentralized technologies and applications do not have enough financial resources to participate in political games during this cycle. The richest crypto practitioners currently usually control exchanges, brokerage services, or some kind of lending platform.
Therefore, if crypto regulation is indeed granted, it will likely be in the form of complex and highly prescriptive regulations that only large, centralized companies with deep pockets can afford to comply with. This is because the only people who can understand these laws are professional corporate lawyers who navigate the various regulatory agencies. And these lawyers don’t come cheap—up to $2,000 per hour. Maybe that’s “cheap” in Dubai, but in my opinion, it’s a hefty expense.
Is this really what the broader crypto community wants from the genie? Is this all just to make Brian Armstrong and Larry Fink richer? Im not criticizing them; theyre just doing their job dutifully - maximizing shareholder value by building a monopoly structure that makes their business stand out. Maybe those Coinbase and BlackRock shareholders do want to see such a Frankenstein crypto bill. But in my opinion, this kind of regulation is not a game changer. While it has no direct negative impact on the crypto industry, it definitely doesnt have any positive effects either.
For entrepreneurs who choose to relocate to the United States because they think it has a crypto-friendly government, please think twice. If you acquiesce to this situation, your startup is likely to fail. Monopolies that rely on complex and cumbersome regulatory barriers to protect themselves have no interest in real innovation. They will use their unique privileged position to shut out potential competitors. As an entrepreneur, you may fly to JFK airport in business class, but when you finally leave, you may only be able to fly back in economy class.
Make a wish
If I could make a wish, what would it be? I will tell you the answer. But in my style, before I reveal it, we need to review financial history and interpret some key events from my perspective.
The core of the problem is, why would the genie grant my wish, or at least a close variant? The genie and those assistants who actually control the operation of the country will only agree to my wish if it helps to achieve their goals.
The main goal of Trumps two key assistants, US Treasury Secretary Scott Bessent and US Secretary of State Mark Rubio, is to consolidate the position of the dollar and maintain US hegemony by reforming the global economic order. As I mentioned in my previous article The Ugly, the dollar system actually consists of two parts: one is the currency and the other is the reserve asset. Since the signing of the Bretton Woods Agreement in 1944, the US dollar has been the worlds reserve currency, but the form of reserve assets has changed with the times.
The evolution of the US dollar system’s reserve assets
1944-1971: Gold
During this period, the value of the dollar was fixed at $35 per ounce of gold. Sovereign states that allied themselves to the Pax Americana could redeem their dollars for gold at this price.
1971-1994: Oil
To pay for the huge expenses of the Vietnam War and the massive social welfare programs promoted by his predecessor, President Lyndon B. Johnson, President Richard Nixon decided to end the gold standard. From then on, the reserve assets shifted to petrodollars. Saudi Arabia became the first country to explicitly agree to price oil in dollars and invest its dollar surplus from oil revenues in U.S. Treasuries. This arrangement allowed the U.S. Treasury to issue bonds that were actually backed by oil flows from the worlds largest marginal oil producer.
1994 - 2025: Foreign exchange reserves of global exporters
In the 1980s, the United States significantly strengthened its economic resilience by increasing oil production and improving the energy efficiency of the economy. At the same time, the rise of China and the Asian Four Little Dragons of South Korea, Taiwan, Japan, Malaysia, and Thailand enabled goods to be produced at very low cost for consumers in the United States and Western Europe. In 1994, China adopted a strategy of large-scale devaluation of the RMB and officially joined the global mercantilist race to exchange exports for foreign exchange reserves. These exporters were allowed to enter the huge Western consumer market, but on the condition that they must price their goods in US dollars and invest their surplus dollars in US Treasury bonds.
2025 - The Future: Bitcoin/Gold
However, China is not content to continue playing a subordinate role in the Pax Americana system. For China, the 20th century was a century of humiliation when the weak Qing emperors signed unequal treaties with the great powers, and the ensuing two world wars and a civil war plunged the country into the abyss. In its long history before the European Renaissance, China was the worlds largest economy. Therefore, the Chinese Communist Party (CCP) regards realizing the great rejuvenation of the Chinese nation as a core goal. In fact, the idea of Make America Great Again (MAGA) is not unique to the United States - China has been pursuing its own national rejuvenation since 1949.
To achieve this goal, China successfully transformed itself from a low-cost, low-quality manufacturer to a low-cost, high-quality producer. However, when the Chinese leadership realized that using its surplus to buy more U.S. Treasuries would only further consolidate its position as a secondary power to the United States, they decided to stop accumulating debt. Under the tacit understanding in the past, every dollar of export surplus had to be used to buy an equivalent amount of U.S. Treasuries. However, according to public data over the past 12 months, while China earned $1 trillion through export surpluses, its U.S. Treasury reserves decreased by $14 billion.
This trend has also attracted the attention of other exporting countries. Among the rapidly developing countries in the global South, most of their trade with China has exceeded that with the United States, although most of this trade is still denominated in US dollars. De-dollarization does not mean completely abandoning the US dollar, but investing the surplus in assets that are not dominated by American peace, such as Bitcoin and gold. This marks a potential transformation of the global economic order.
Trump’s aides face a thorny problem: They need to design a new system that retains the dollar as the main currency for global trade while finding a suitable reserve asset to keep the U.S. Treasury market functioning. If they are really capable, they may be able to quickly reduce the U.S. public debt to around 30% of GDP, the level the United States was at in 2000.
However, global markets are no longer willing to consider US Treasuries as a savings vehicle. This is why a neutral reserve asset is needed. No country is trying to replace the dollar with its own currency because the decline of the Pax Americana is obvious, and this decline is caused by the economic imbalances brought about by the dollar as the global reserve currency.
Before I go on to discuss my desire, I want to talk about how one of the top strategists in the traditional finance (TradFi) money markets sees this issue.
DeepSeek
Zoltan Pozsar is a former Dallas Fed staffer and Credit Suisse strategist who currently writes a blog that is popular among the Pax Americana financial elite. His solutions (which I will discuss in detail later) may be put into practice, so they are worth discussing. But I will also point out where I disagree with his views. Ultimately, I think his solutions are more suitable for the 1980s than for 2025.
Many strategists who believe in American exceptionalism believe that reclaiming the power and prestige of Pax Americana is like the plot of the movie Top Gun. In their imagination, a dashing Tom Cruise pilots an F-14 fighter jet and easily defeats his Russian and Chinese opponents. However, this idea is obviously wrong.
The recent Top Gun sequel may be more reflective of the current international situation, with only a few minor adjustments. Replace the nearly $75 million F-18 fighter jets with Iranian-made Shahed drones. These drones cost only $50,000 and are widely sold in countries in the global south. Tom Cruise, despite being over 60, still flies these overly expensive fighters, while his opponents are a swarm of drones connected by AI technology, which cost only a fraction of the fighter jets. In the battlefields of Ukraine, both Russia and the United States have witnessed how powerless 20th century traditional weapons are in a battlefield dominated by modern drones.
Which brings me to DeepSeek. If you’ve been too absorbed in the world of TikTok, you may not know that DeepSeek is a revolutionary AI Large Language Model (LLM). It performs as well as ChatGPT or Claude, but costs 95% less to train. More importantly, it’s open source. So far, no CEO of a tech giant, like NVIDIA’s Jensen Huang or Microsoft’s Satya Nadella, has come out to question the veracity of its results or the justification of its costs.
The significance of DeepSeek is that it was developed by a Chinese hedge fund practitioner from Hangzhou. Against the backdrop of the U.S. economic blockade of high-performance semiconductors against China, the U.S. logic holds that it is impossible for Chinese entrepreneurs to train and deploy LLMs with performance close to those trained on high-performance U.S. chips. However, the success of DeepSeek directly shatters the deep-rooted idea that whoever spends the most money has the best LLM performance. This also once again verifies the old saying: Demand is the mother of invention. Even in the face of economic sanctions, a small Chinese entrepreneurial team of only 200 people still made a breakthrough with determination. If Chinas production capacity cannot be destroyed through ground warfare, then the era of American exceptionalism may really have come to an end. In fact, there is nothing wrong with being an ordinary country, unless your entire national identity is based on a fictitious sense of national superiority and you think you are superior just because you were born in the United States.
When non-American elites see themselves as inherently inferior, they tend to obey. This mentality makes it easy for American financial elites to dominate global policy, such as deciding the currency a country uses in trade and how to invest its national surplus. However, if non-Americans begin to see themselves as equals to Americans, they may no longer be so easily dictated to by American diplomats. This is particularly important for Zoltans policy proposals, because his measures are based on bilateral cooperation. Bessent If a do it request is made, a countrys finance ministry or treasury may comply, but if the country refuses, then nothing can be said. This is the fatal weakness of Zoltans policy proposal.
Zoltans goal is the same as mine: to weaken the value of U.S. Treasury bonds. In addition, Zoltan correctly points out that the United States needs to extend the duration of its debt and pay less interest. Assuming Bessent wants to reduce the debt-to-GDP ratio from 100% to 30%, if GDP remains unchanged, the actual value of the debt needs to be reduced by 70%. Zoltans core idea is to require foreign creditors to replace their short-term Treasury bonds with 100-year Treasury bonds. This 100-year Treasury bond cannot be traded, but if the creditor country needs cash, it can be repurchased at face value.
Let me explain how this mechanism works:
Suppose you are a Southern country (a term with obvious insulting connotations) and you hold a 10-year US Treasury bond with a face value of $100, which also has a face value of $100.
1. According to Bessents requirements, you need to exchange this 10-year Treasury bond for a zero-coupon 100-year Treasury bond (the so-called 100-year Treasury bond). The actual market value of this 100-year Treasury bond is only $30, but the par value is still $100. For the sake of illustration, I have simplified the mathematical calculation of the bond. A bond with no coupon income and a longer maturity must have a lower intrinsic value than a bond with a coupon and a shorter maturity.
2. Through this replacement, the actual value of your debt is reduced by 70%, but the face value remains unchanged at $100.
3. If you are an obedient ally (such as Europe... although it is a bit unreliable) or a loyal vassal (such as the Philippines... in fact, Europe may also belong to this category), you can contact the Federal Reserve at any time to exchange this 100-year Treasury bond for US dollars at par value, and you dont need to pay any fees. For example, when you need to buy oil from Saudi Arabia with US dollars, the actual market value of this 100-year Treasury bond is only US$30, but the Federal Reserve will exchange it for you at the par value of US$100 today, and it will not charge interest.
4. But from now on, any of your dollar surplus can only be used to purchase 100-year Treasury bonds in future trade. You are not allowed to purchase any other financial assets.
This deal has both advantages and disadvantages. The disadvantage is that the actual value of your debt has been cut by 70%, which is equivalent to a heavy blow to your national savings system. Worse, you agree to get liquidity support only from the issuer of the debt, that is, the Federal Reserve, and cannot trade freely through the global market. But on the other hand, if you be obedient, the Federal Reserve will provide you with an interest-free loan at face value.
The benefit of this deal is that if you are willing to accept this naked humiliation, you can enter the circle of common prosperity of American peace. The penalty is that if you refuse to accept this deal, your exports will be suppressed by high tariffs or even blocked completely, and you will not be able to obtain American weapons to deal with conflicts at home and abroad.
However, there are several points that need to be pointed out in particular, which combined may make this deal unacceptable to many countries. First, for many countries, China has now replaced the United States as their largest trading partner. Second, the US arms supply is already stretched thin, as almost all of it is used to arm Ukraine. In addition, many of the US weapons are just re-exported Chinese intermediate products, so why not go directly to China to buy? Finally, from a psychological perspective, if a country has gotten rid of the slave mentality, why should it voluntarily accept this naked humiliation?
My Vision
Can I improve on Zoltans idea? The answer is clearly yes.
Our core goals remain the same: to weaken the real value of existing U.S. Treasury bonds, maintain the dollar as the main settlement currency for global trade, and extend the maturity of Treasury bonds to 100 years. At the same time, I have also proposed a new goal: to make Bitcoin a global neutral reserve currency.
The choice of reference for devaluing fiat currencies is critical. If the reference is a commodity with real uses, such as oil or food, it may cause social unrest due to inflation. Therefore, the devaluation must be against an asset that will not materially damage the living standards of ordinary people.
Zoltans solution is to devalue with time as the reference. His idea is to replace a 10-year bond with a 100-year bond. According to the time value theory of money, the intrinsic value of an asset that can only be redeemed after 100 years is much lower than an asset that can be redeemed after 10 years. But this replacement requires the consent of the counterparty. I think the reference for devaluation should be Bitcoin. More importantly, this devaluation can be implemented unilaterally, and the final effect is the same as Zoltans method.
My plan:
Step One: Public Statement
Bessent gave a speech announcing that the United States plans to restructure the global reserve currency system. The US dollar will continue to be the currency for global trade, but the reserve asset will be replaced by Bitcoin.
Step 2: Gradual devaluation
The U.S. Treasury will purchase Bitcoin at a price higher than the current market price. In this way, the total market value of Bitcoin will gradually increase to a level large enough to serve as a global reserve asset. For example, if the market value of Bitcoin is to reach a size comparable to that of the U.S. Treasury market, its price must rise to $1.8 million.
Example:
Assuming that the current price of Bitcoin is $100,000, Bessent announced that the Treasury will buy Bitcoin for $200,000. However, unlike traditional purchases, the Treasury will not pay cash, but will provide a 100-year zero-coupon bond (100-year Treasury bond) based on the blockchain. In addition, anyone who meets the identity verification requirements can repurchase these bonds at par value without interest, and the repurchase period is a rolling one-year period. In other words, Bitcoin sellers ostensibly obtain US dollars, but actually hold 100-year Treasury bonds in the form of loans.
Market reaction:
Since the Treasurys bid is higher than the spot market price, this provides an arbitrage opportunity for traders. Traders can borrow US dollars, buy Bitcoin at a spot price lower than the Treasurys bid, then sell it to the Treasury in exchange for 100-year Treasury bonds, then convert the bonds into US dollars through a repurchase mechanism, and finally use these US dollars to repay the loan. Since all this is done on the blockchain, anyone in the world can participate in this transaction, and the price of Bitcoin will quickly rise to the Treasurys bid level.
criticize:
Why would a Bitcoin holder be willing to exchange Bitcoin for a not attractive 100-year Treasury bond? The reason is simple: the price is high enough. Its just like many people think its a good idea to hand over Bitcoin to BlackRock. If the price is attractive enough, most idealism and common sense will be thrown out the window.
Step 3: Extend the term of the national debt
At this point, the U.S. Treasury holds Bitcoin on the asset side and 100-year Treasury bonds on the liability side. The market will expect Bessent to continue to raise its bid and take action in advance. At this time, the Treasury can sell Bitcoin for dollars at a higher price. For example, when the market price rises to $300,000, and the Treasury previously purchased Bitcoin for $200,000, the $100,000 profit can be used to repurchase 10-year Treasury bonds. In this way, Bessent can gradually extend the weighted average maturity (WAM) of the national debt.
Treasury bond holders will not suffer losses because they know that the Treasury will use trading profits to purchase non-circulating Treasury bonds. This is critical because it maintains the confidence and stability of traditional financial institutions (TradFi) in Treasury bonds as collateral and loan pricing mechanisms.
Step 4: Social Media Bank
To further consolidate the dollar’s dominance outside of China (due to large American social media platforms such as Facebook and X being banned in China), Bessent proposed that Zuck (Facebook’s CEO) and Musk (X’s CEO) introduce transfer functions for USD stablecoins in their respective applications. Of course, the ideal option would be to use Ethena’s synthetic USD stablecoin USDe. In this way, the whole world, especially the Global South (where Facebook, WhatsApp, and Instagram are the main online communication and business platforms), would be included in the USD system. This strategy could effectively offset any attempts by these countries to de-dollarize.
What’s more, there is little the leaders of these countries can do to stop this trend. If they try to deprive ordinary people of their reliance on social media, it could cause social unrest overnight. Just like the United States itself cannot ban Chinese-owned TikTok, because the younger generation will oust any politician who pushes for a ban at the next election.
As digital dollars gradually accumulate around the world, these dollar surpluses may be stored in Bitcoin or other cryptocurrencies. If the price of Bitcoin continues to rise, small holders will naturally be attracted to sell Bitcoin back to the Treasury in exchange for 100-year Treasury bonds. In this way, the holders of U.S. Treasury bonds will shift from a few countries to ordinary people around the world. Instead of persuading a few countries not to sell their debts, it is better to let billions of ordinary people hold debts in a dispersed manner, because this is almost impossible to trigger the risk of simultaneous selling. Ultimately, the Treasurys goal is to ensure that debt holders are willing to hold these bonds for a long time.
Technology Blueprint
Regardless of what World Liberty Financial (WLF) claims to investors that they are developing, this is what they should really be doing. If you don’t know, World Liberty Financial is a cryptocurrency organization associated with the Trump family. Its goal is to use Web3 technology and WLF to build infrastructure to bring direct reforms to the US Treasury. This approach will bypass the traditional too big to fail banks, but what have these banks done besides causing financial crisis after financial crisis and requiring money printing to save them? Ultimately, the monetary inflation they create is eroding the economic foundation of the United States.
Just take a trip to New York City, the financial center of Pax Americana, and you’ll see the reality for yourself. Nightclubs may be brightly lit, but poverty, homelessness, and crime are everywhere. And it’s all due to the traditional banking system, which includes JP Morgan Chase.
Web3s technology stack should be powered by public blockchains. You know the answer: never stop pushing! Aptos is the ideal choice from this perspective. It is currently the fastest (800 milliseconds), cheapest (only $0.00005 per transaction), and most reliable (99.99% uptime) public blockchain capable of supporting high-performance financial transactions.
And Aptos is showing that. According to RWA.xyz, Aptos is quietly becoming one of the top three networks with the most on-chain institutional assets, while also establishing partnerships with the likes of Franklin Templeton, Brevan Howard, and Microsoft. Its MOVE architecture, designed internally by Facebook specifically for handling financial transactions for the world’s largest social network, is fully up to the task.
Maelstrom will not work for free. First of all, we need to state that we hold a lot of assets in Aptos and Ethena.
The U.S. Treasury Department needs to build an on-chain exchange for trading digital dollars, 100-year Treasury bonds, and Bitcoin.
Step 1: Launch a digital dollar. The Treasury Department needs to choose two digital dollars: Tethers USDT and Ethenas USDe. USDT is essentially U.S. dollars deposited in the U.S. banking system, while USDe is a synthetic dollar generated by a combination of long cryptocurrencies and short perpetual swaps; all of its assets are hosted on large cryptocurrency exchanges. The essence of politics is exchange of interests, so how can the existing government benefit from these two options? U.S. Secretary of Commerce Howard Lutnick holds a stake in Tether, while World Liberty Financial (WLF) holds millions of dollars worth of Ethenas governance token $ENA. If Tether and Ethena are selected as digital dollars recognized by the Treasury Department, both their equity and token holders will benefit. This self-interest is the fundamental driving force behind the development of human society.
Step 2: Tokenize the 100-year Treasury bond. The Treasury can issue a token (TSY 100) for each 100-year Treasury bond. Users can purchase these tokens through the Aptos blockchain using wrapped Bitcoin (wrapped Bitcoin is currently available through tools such as Wormhole, Celer, and LayerZero). Next, a repo mechanism needs to be established that allows users to pledge TSY 100 and obtain USDT or USDe loans.
Technical description: From a technical perspective, the Treasury cannot directly create USDT or USDe. Therefore, if a user needs USDT, the Treasury needs to mint USDT by transferring money to Tethers bank account. If a user needs USDe, the Treasury needs to mint USDT first and then generate USDe through Ethenas mechanism. This process can be automated through the APIs provided by Tether and Ethena and completed in the form of atomic transactions.
Step 3: Build a Web3 Money Market Exchange. The Treasury needs to build a permissioned Web3 Money Market Exchange, which we can call EagleSwap. The Treasury already has an identity service called ID.me (an example of an online identity verification service). This service can be expanded to enable users around the world to add their Aptos wallet to a whitelist by signing in. When a user connects their Aptos wallet to EagleSwap via desktop or mobile, they can freely trade between USDT, USDe, TSY 100, and Wrapped Bitcoin if they are whitelisted. Since the Treasury buys and sells Bitcoin, USD, and Treasuries on a global scale, EagleSwap will soon become the most liquid venue for trading these assets.
Next stage: connecting social media platforms. The Treasury can also work with social media platforms controlled by oligarchs around the world. Facebook and X are the best candidates for social media platforms to launch crypto wallet functionality. By connecting their users to EagleSwap in an abstract way, these users will be able to easily transfer, trade, and store digital dollars, 100-year bonds, and wrapped bitcoins. For the Global South, the most pressing need is to be able to conduct business in US dollars outside of their traditional financial system. Although the US dollar may have problems, it is still a more stable option than other fiat currencies. Building the technical infrastructure for this connection should be done using the Aptos blockchain.
The oligarchs’ control is unquestionable, as evidenced by their prominent position at Trump’s inauguration. Next, they need to take further steps to weaken the parasitic traditional finance (TradFi) banks.
I have previously discussed how this strategy can be implemented through unilateral devaluation of the dollar and related technical means. Next, I will explore why the United States can gain a unique advantage in the production of a neutral reserve asset by enacting appropriate laws.
Neutral Reserve Assets: America’s Potential Advantage
For the elites who control Pax Americana to accept this plan, the United States must have some unique competitive advantage in Bitcoin mining. As we all know, Bitcoin mining requires a lot of energy to solve complex mathematical problems. So the question is, does the United States have a cheap and abundant supply of energy? The answer is yes, the United States has two significant advantages in energy production.
First, the United States is rich in hydrocarbon resources. The United States is home to a vast amount of untapped hydrocarbon resources, which are distributed within what we call national borders. All that is needed is sufficient capital and a government permit to drill. More importantly, drilling activities to power Bitcoin mines are not limited by the geographic location of energy. Typically, energy reserves are located far from major population centers, and the transportation costs of transporting these resources to cities are sometimes even higher than the mining costs. However, if power plants are built directly where the resources are located to provide electricity for Bitcoin mines, the trouble of transportation can be completely eliminated.
Although many remote areas are rich in energy resources, these resources are often not effectively utilized due to the lack of pipelines and transportation infrastructure. By establishing localized power stations and Bitcoin mines in these areas, these trapped energy resources can be fully utilized. For example, Alaska is not only remote and extremely rich in hydrocarbon resources, but also has a cold climate, which is very suitable for building Bitcoin mines. The cold climate can significantly reduce the cooling cost of mining equipment, making Alaska an ideal Bitcoin mining base.
Second, the capitalist tradition of the United States. The capitalist system of the United States is another major advantage. Whether or not capitalism is morally controversial, the existence of this system is an undeniable fact. The United States is a country founded by a group of tax-evading slave owners who, through the formulation of the Constitution, ensured that their capital would continue to appreciate and that their descendants would continue to be in power economically and politically. Under such a system, it is undoubtedly the most appropriate choice to carry out a large-scale capital investment project for many years, such as drilling for hydrocarbons and mining Bitcoin.
Another point is the new advantages brought by the construction of semiconductor factories in the United States. TSMC is close to completing the construction of several state-of-the-art wafer factories in Arizona. At the same time, other semiconductor foundries will be encouraged to build factories in the United States with the incentive of government subsidies and tax breaks. This means that Bitcoin ASIC chips (application-specific integrated circuit chips) can be produced in the United States. Even if the rise in Bitcoin prices in the future leads to a surge in global demand, the United States can ensure that there is an adequate supply of chips and there will be no shortage.
But there is a major challenge: while traditional fiat capital enjoys top policy treatment in the United States, Bitcoin and other cryptocurrencies have not received the same support. To solve this problem, the United States needs to provide protection for Bitcoin and cryptocurrencies at the constitutional level. The core principles of Bitcoin miners are decentralization and uncensorability, but there is currently a possibility that legislators may require miners or node operators to perform some form of censorship. Therefore, public encrypted ledgers (such as blockchains) need to be considered a protected form of speech. This view is reasonable because the public blockchain is essentially a decentralized network driven by miners through the consumption of electricity, and at its core is an immutable digital speech chain.
If the United States wants to become the global center for Bitcoin mining, it can do so by passing a bill of less than 200 words: Cryptocurrencies and their blockchain-based tokens shall be considered protected forms of speech. All laws applicable to free speech shall also apply to users or intermediaries of public blockchain technology. Cryptocurrencies and public blockchains are private domains, and no government agency may compel intermediaries, participants, or blockchain node operators to collect or provide data about participants and transactions.
If the United States has a pro-energy government, coupled with a cryptocurrency legislation that supports permissionless innovation, it will lay a solid foundation for attracting global crypto activity. Energy production and ASIC chip manufacturing require huge capital expenditures (CAPEX), and the United States not only has sufficient capital markets but also provides legal protection for the operation of peer-to-peer decentralized networks. These conditions will make the United States the main concentration of Bitcoin network computing power. Ultimately, neutral reserve assets will be produced within the United States, which will bring huge strategic advantages to the United States in the global economy.
Once the relevant legislation is passed, it will be extremely difficult to overturn it. Just as many politicians have complained about the negative impact of large technology companies and social media, there has been little substantive progress in repealing Section 230 of the Communications Bill since it came into effect in 1996. The provision gives technology platforms immunity from liability for content and activities on their networks, and this status quo is too profitable for all parties involved. A similar alliance of interests may also form between cryptocurrencies and politicians, while also bringing practical benefits to businesses and individuals who need high-paying jobs and tax increases.
The rise of the coin holders
If Bessent can successfully push the price of Bitcoin above $1.8 million, it will create a group of the richest people in human history. Currently, some of the largest holders of Bitcoin are either US residents or US-registered companies. For example, BlackRock has accumulated nearly 600,000 Bitcoins, worth nearly $60 billion, in less than a year since launching the Bitcoin ETF. Considering that political power in the United States relies heavily on wealth, these Bitcoin holders will be able to exert a huge influence on politics. If the Republican Party adopts policies that support cryptocurrencies, these holders may become its staunch supporters for many years or even decades to come.
For politicians, reelection is their core goal. In addition to Trump, Republicans who agree with his political ideas are likely to be re-elected in 2026 or 2028. Making American cryptocurrency holders extremely wealthy while further consolidating the global hegemony of the US dollar is undoubtedly one of the best strategies for Republican politicians to ensure re-election.
Global Acceptance of Bitcoin as a Reserve Asset
Will other countries with large trade surpluses accept Bitcoin as a reserve asset to replace government bonds? The answer is yes.
Assuming that Bitcoin’s market capitalization is large enough to support trillions of dollars in international trade, Bitcoin has the following significant advantages over national debt:
1. Bitcoin’s code cannot be changed unilaterally.
Bitcoins decentralized design ensures that no one can unilaterally change its code. Even if some US miners try to change the blockchain through a hard fork, such as excluding certain transactions or modifying the total supply of Bitcoin, this will only cause the value of Bitcoin on the new chain to return to zero, making their assets instantly worthless. The economic game theory behind the Bitcoin blockchain ensures that this will not happen.
2. Bitcoin transactions are borderless. As long as there is an Internet connection, Bitcoin can be accessed and traded without permission at any time and anywhere.
3. Bitcoin is the purest derivative of monetary energy. It can effectively preserve the energy value of trade surplus over time, thus becoming an ideal reserve asset.
No country, not even China, is willing to assume the role of the issuer of the global reserve currency and make its bond market the global reserve asset. This is because this role naturally requires an open capital account, and at the same time, when a country stops producing real goods and turns to financial engineering, most ordinary people will face serious adverse effects. This is obviously contrary to the idea of common prosperity. Therefore, an improved system might be: continue to use the US dollar for trade, or allow bilateral exchange of local currencies, but store trade surpluses in Bitcoin. This system is good for everyone...except those traditional financial institutions that are too big to fail (TradFi). These institutions will have to face the gradual decline of their own power and prestige, while the influence of decentralized finance (DeFi) will grow day by day.
The right desire
Stacking sats is my hobby, and I hope it’s yours too, so if you get the chance to sit at the Elf’s Table and dress up, make sure you make the right wish.
Postscript: Naivety and reality in the cryptocurrency world
People in the cryptocurrency community are often some of the smartest people in the world, but also the most naive. Trump is giving them a crash course in politics.
Behind the surge in the price of Bitcoin from $70,000 to $110,000 in less than 60 days is the widespread belief in the crypto community that all their wishes will be met under the framework of Pax Americana. However, there is a key problem with this idea: in any bilateral exchange of value, the rational choice is to receive the goods first and then pay for them. Trump and the Republicans obviously got what they wanted from the crypto community first - enough votes to win the presidency and gain partisan majorities in the House and Senate. Now its their turn to pay, but their timetable is obviously completely different from the eager mentality of us speculative maniacs staring at the one-second candlestick chart.
Trump is currently setting up task forces and Senate subcommittees, but no real action has been taken. When Trump does want to act, he does it quickly. For example, he imposed a 25% tariff on the United States largest trading partner, which took only a few days from announcement to implementation; he quickly abolished ESG (environmental, social and governance) and DEI (diversity, equity and inclusion) policies in government agencies. These examples show that it is not that Trump will not take positive action for cryptocurrencies, but that cryptocurrency regulation or Bitcoin strategic reserves are not a priority for him or the Republican Party. This is a pity because, at the margin, the single-issue voters of cryptocurrency are the key force that brought them to power.
Will Bitcoin prices fall?
As the world realizes that U.S. politics has not fundamentally changed with Trump’s election, cryptocurrency prices could fall back to Q4 2024 levels. I am still holding on to my prediction that Bitcoin will retest the $70,000 to $75,000 range.
How can the cryptocurrency market escape the downturn?
For the market to pick itself up again, it will probably take several things to happen: some form of monetary easing from the likes of the Fed, the U.S. Treasury, China, or Japan, or legislation that explicitly supports permissionless crypto innovation. However, if this bill is cobbled together like a Frankenstein, simply to cater to the interests of Coinbase, BlackRock, and traditional stock investors, it will neither propel the market to new heights nor achieve the goal of “decentralizing everything” for us crypto degens. Such a bill would be not only a departure from crypto ideals, but an affront to the “spirit of decentralization,” and the consequences would be swift and severe.
Take action and speak up for the future of encryption
Still, there is hope. If you are a crypto holder in the United States, now is the time to act! Let your elected representatives know that you will not tolerate the political status quo. Email them, write them, or visit their local offices in person. Politicians usually respond to those who care about policy. If you think a strategic reserve of Bitcoin is necessary, speak up now, not just like a comment on Twitter.
The problem is that digital devices allow us to express our outrage freely in our own echo chambers, but rarely prompt us to take real action in the real world. In fact, everything you truly value was earned through some kind of effort and cost. There is no easy button for the political path of cryptocurrency - open your eyes and take action, otherwise the market may continue to fall.
