Using a trendy darling—Bitcoin—to tie up the old and tired relic—US treasury bonds, this is the latest harvesting machine produced by Wall Street...
Some friends who read my previous article are still entangled in Bitcoin's technical characteristics, truly falling into the American-style GPS packaging bomb technological sensation, not understanding what I am saying.
The dollar is a debt currency; Americans must continue to issue debt to spend money, but the scale of debt has expanded too rapidly in the past decade. To maintain the dollar's status as an international reserve currency, the US must consistently run a large trade deficit, leaving the domestic economy reliant on high-tech to survive. Boeing, Intel, Google, Microsoft, Meta—these companies are highly profitable, but where are all these high-paying jobs in the US? Aside from Wall Street, law firms, and doctors, the average median wage for ordinary people is around $40,000 to $50,000. Previously, Cao Dewang opened a glass factory in the US; reportedly, the local government supported it because it could create jobs, but the union was difficult and wanted to negotiate better conditions. Boss Cao never gave in. This is the dilemma of US manufacturing—if manufacturing is to return, it must endure low wages and high-intensity labor, otherwise, it will lead to 'friend-shoring.' But everyone hopes for a good life; if life is so good in the US, the friends—Mexico is the closest friend-shore, right?—naturally want to jump the wall and outsource directly; why stay on the friend-shore? Trump wants to eliminate illegal immigrants, but ultimately, he wants to control the total number and levels of immigrants; those who can bring wealth and technology to the US are naturally welcome, while those who come with families to take advantage of welfare are kicked out. The collateral damage is a shortage of labor in the service industry, which will raise hourly wages, but the backlash will be a rise in inflation. This is a vicious cycle, unless low-income groups are allowed to enter the US.
There is no solution, but there is a clever way; you see, Bitcoin has really gotten above itself...
Bitcoin has been a freak since its inception; you might consider it a technological and financial innovation, but can you look at history and find a period where a currency had such a crazy price as Bitcoin?
The underlying reasons are not hard to imagine. Why doesn’t Satoshi Nakamoto reveal his true identity? He still holds over a million Bitcoins; even cashing out one-tenth would cause a significant drop in Bitcoin prices. So what is the purpose of holding so many Bitcoins without cashing them out?
With 21 million Bitcoins, at the current price of 100,000 dollars, that would be about 21 trillion dollars. What if it rises to a million? What if it rises to ten million? Think about it: if the vast majority of Bitcoins can only lie as numbers on a balance sheet, is it not equivalent to lying in the basement vault of the Federal Reserve in Fort Knox?
Of course, many investors in gold started buying gold long ago, and central banks around the world generally allocate gold reserves as a last means of payment. However, who will continuously support Bitcoin, daring to keep buying without cashing out?
From being unrecognized to being worth hundreds of dollars, many holders may have been satisfied and exited. The newcomers who continuously flow in will hold for a while and cash out directly when they feel fear. The wealth effect of Bitcoin is like cocaine; many people find it hard to let go after just a taste, but no matter how much they profess to love Bitcoin, their inner fears will be exposed, because even the die-hard Bitcoin supporters know it's just a half-time comedy, and there won't be any audience when the curtain falls.
The excitement on Bitcoin trading platforms is largely manipulated by a few big players. A daily trading volume of hundreds of millions of dollars is trivial in the futures market; why is it that such a promising thing has no super funds stepping in? Because the scale is not sufficient. Once tens or hundreds of billions enter the game, Bitcoin's final outcome will be a return to 2010. Short selling will undoubtedly yield profits.
So why haven't super funds entered to short it? Because the current players do not allow it; the biggest potential player is Satoshi Nakamoto, who reportedly holds a million, and the other is the US Treasury, which is said to hold more than Satoshi. Who are the other potential big players? Recently, the German government sold tens of thousands, causing a significant drop; it’s obvious who still has stock.
Some friends are unconvinced, saying Bitcoin is decentralized and has no government control. I say you are naive; Bitcoin will never enter the actual circulation field; it will only be traded on trading platforms, and the price is undoubtedly dominated by the dollar. So do you think the US government lacks the ability to regulate Bitcoin? Anything involving the dollar will be supervised by the US government; if it wants to, your Bitcoin wealth is just an illusion, only to be gazed upon but never touched.
As long as Bitcoin is linked with the US dollar and US treasury bonds, it grants the US Department of Justice and the IRS global jurisdiction. Some people think the FBI and CIA are powerful, but it's actually the IRS that holds real power ❌, with its own armed forces and weaponry comparable to the US military. Except for missiles, nuclear weapons, and aircraft carriers, if it wants, it can be fully equipped with heavy weapons. When you trade Bitcoin and dollars appear in your account, it falls under the jurisdiction of the IRS. Given the trends in the US Congress in recent years, taxing Bitcoin is only a matter of time, and global regulation must be accepted.
Speculation about the identity of Bitcoin's creator, Satoshi Nakamoto, has never stopped. I think rather than searching everywhere for verification, it's better to paint a picture of this mysterious figure through some details. Satoshi set the smallest unit of Bitcoin as one hundred millionth of a Bitcoin (satoshi), and according to calculations, around the year 2140, the last Bitcoin will be mined. Therefore, based on the growth rate of global wealth over the past hundred years, by 2140, the total GDP of the world will be about less than 100 billion dollars. In 2020, it was about 85 trillion dollars, corresponding to Bitcoin being about 40,000 dollars each, while that year the highest Bitcoin transaction was about 28,000 dollars each. So, by 2140, the global GDP will be around 72 trillion dollars; if Bitcoin still exists, how much will it be worth? 3.4 billion dollars each, a single Bitcoin would be about 34 dollars, truly unimaginable!
US treasury bonds are currently the second-best long-term investment target after gold, with excellent liquidity and can be cashed in anytime on the bond market; whereas Bitcoin is highly speculative, its price has risen rapidly in recent years, but it can only be traded on specific platforms for cashing out. Using dollars to connect Bitcoin and US treasury bonds—allowing Bitcoin to purchase a certain amount of US treasury bonds (like 10% or 15% of the total) is equivalent to indirectly allowing a tool that can hardly be liquidated outside the speculative market to directly enter the real economy for circulation.
Of course, someone must benefit from this. With US treasury bonds supporting Bitcoin, the monetary systems of major economies will be infiltrated by Bitcoin. Even countries that reject Bitcoin cannot escape this fate as long as they have relations with US treasury bonds. In the basket of currencies, the euro, yen, and renminbi will be constrained. In the future, the US will not need to mobilize the Federal Reserve to adjust interest rates; as long as it uses the Bitcoins and US treasury bonds it holds to offset each other, it will cause fluctuations in the dollar, and the dollar will pull other major currency exchange rates. Now the US Treasury has indirectly grasped the tool for controlling interest rates.
For three thousand years, gold has maintained its value through purity and quality, and people have continuously attempted various methods of counterfeiting. Using lead or brass to wrap pure gold, using copper, zinc, and tin alloys to impersonate gold, etc., while humanity has continually tried to verify through biting, burning, submerging in water, and colorimetric methods.
The fate of Bitcoin is similar; there has never been anything or technology in human history that can remain timeless. According to this pattern, Bitcoin's final outcome will also become history, perhaps in ten years, perhaps in a hundred years, perhaps even next year. However, before the Bitcoin myth is broken, it will certainly go wild once, reaching the pinnacle of humanity's most illusory grand dream, allowing as many people's wealth as possible to be wiped out.