Editor | Wu Says Blockchain
In this episode, Colin Wu, the founder of Wu Says, talks with Meng Yan, co-founder of Solv, mainly discussing the potential impacts of Trump's victory in the election on the cryptocurrency industry. Meng Yan believes that Trump may partially fulfill his campaign promises and loosen 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 cryptocurrency include fundraising needs and possibly the influence of right-wing economic thoughts. The dialogue predicts several possible future development paths, with prices possibly experiencing a brief surge under the new government, but whether it can enter a long-term 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 is generated by GPT and may contain some errors. Please listen to the complete podcast:
Xiaoyuzhou:
https://www.xiaoyuzhoufm.com/episodes/672ce59482eb19451dfba6f5
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Opening introduction
Colin: Welcome everyone to this episode of our podcast. As you all know, today is the day the results of the US election are announced. Just a few hours before we recorded, Trump has secured 277 electoral votes and has effectively been elected as the next president of the United States. Today, we have invited Mr. Meng Yan, a well-known cryptocurrency evangelist in the Chinese community, who has many unique insights on regulation. So today we will discuss the impact of the US election on the future development of the cryptocurrency industry with Mr. Meng.
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 glad to participate in the Wu Says podcast and discuss the relationship between the US election and our industry.
Colin: Mr. Meng is being modest. He is also the vice president of the well-known technical site CSDN in China, has always had a technical background, and has been deeply involved in the blockchain field for a long time.
Meng Yan: Actually, this trip to the US was not just for exploration or learning; it was mainly because my daughter is starting college this year and is going to study in the US. As a parent, I was a bit worried about accompanying her for the first time. Her school is in Los Angeles, so we first flew to Los Angeles, and I also took her to see several major tech hubs in the US, including Silicon Valley and Seattle. I was in the US for the entire month of September, which was quite a long time, and I have quite a few friends there. I drove from Southern California to Northern California, then went to Seattle, during which I met several friends, both old and new, including white Americans, Indians, Japanese Americans, and of course, a lot of our Chinese community, so there were many exchanges. Later, I wrote a travelogue to share some of my observations. I can't say it was unexpected; I already thought it was very likely that Trump would win, and today’s result indeed confirmed my judgment.
Observations on Trump's support, public dissatisfaction with economic and social governance
Colin: Among the people you interacted with at that time, were there relatively few Trump supporters? Did every friend you met support him?
Meng Yan: No, most of the people I met this time were Trump supporters, which is 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 states). Most people still support Hillary or Harris, but among the population of the western states I interacted with, many expressed support for Trump.
Colin: I also had a particularly interesting experience before. A high-ranking female executive from an American crypto company came to have dinner with me; she is an American woman, also part of the educated class, and speaks multiple languages. She expressed very contradictory emotions; on one hand, she felt that Trump's rise might benefit the cryptocurrency industry, while on the other hand, due to her personal political beliefs and various reasons, she did not like Trump at all and hoped Harris would be elected. Her conclusion was that for the greater good, she must support the Democratic Party and cannot support Trump for a small 'crypto circle' interest. This experience was quite interesting.
In pre-election observations, many predictions still believed Harris would be elected based on polls or other factors. However, on some prediction markets, Trump's lead was very obvious, and his real-time data changes were relatively accurate. This should be the closest connection between the cryptocurrency industry and the election this year; I wonder what you think?
Meng Yan: Indeed, this time our prediction market has 'broken the circle.' It has shown a high degree of accuracy and sensitivity, forming a stark contrast with traditional prediction methods. I think from now on, many similar elections or major events will place increasing importance on such completely free prediction markets, or other mechanisms developed by our industry. The reactions and data from such markets may receive greater attention and significance, and this breakout is of great significance. For Trump's policy attitude after his election, these are actually all plus points for our industry. In fact, I noticed these data on the prediction market a long time ago.
However, I believe the reason Trump had a higher chance of winning was mainly because I personally experienced it. I have some very basic viewpoints, or I think of them as common sense. I believe inflation is the main reason the current government lacks public support, and even faces rejection. During this trip to the US, my biggest feeling was that when I talked to some friends, they expressed confusion and didn't understand why there was hesitation. If it were me, just looking at the level of inflation, I would have voted against it without any other considerations. Of course, they told me that Americans have many other considerations, but I think perhaps these people have higher incomes, live in better areas of the US, have higher education levels, and are more open-minded. But for 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-held viewpoint.
Of course, there are many other factors that will influence voters, such as social security, homelessness, gender, and diversity equity (DEI), etc. But in my view, inflation could indeed be the decisive factor in this election.
Colin: So do you believe the core reason for Trump's victory is closely related to domestic economic and governance conditions? Other aspects, such as foreign affairs or military issues, may not have much impact on either party, and rather, ideological influences are smaller. After all, blue states always support the Democratic Party, while red states consistently support the Republican Party; the key still lies in those few swing states.
Meng Yan: From this perspective, we can apply a saying: "There is no first in literature, no second in martial arts." This means that there can be debates on ideology, equality issues (DEI), and foreign policy. You have your reasons, I have mine, and who is right or wrong needs to be tested by history. However, there is no room for debate on the issues of prices and inflation. Colin, I don't know if you've been to the US recently, but hotel costs there are almost twice what they were four years ago, food prices have risen by 30% to 60%, and rental cars, alcohol, gasoline, and other areas have all increased 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 Americans or Chinese living in the US, very few talk about inflation issues, but instead focus on threats to democracy, foreign policy, etc.
Possible adjustments to Federal Reserve policies after Trump's election
Colin: If we follow this logic, does it mean that after Trump's election, the Fed's interest rate cut process or its policy path will be affected? Or do you think the Fed'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 reduced. So, how will he control inflation? This indeed raises some concerns in the macroeconomic community, fearing that his governance may lead to a resurgence of inflation in the US. However, he has also proposed an effective idea, which is to allow the US to reopen domestic oil and gas extraction to curb overall inflation by lowering energy prices. This is indeed a very reasonable idea, but whether it can offset the monetary issuance effects brought about by rate cuts in actual operations remains to be observed. However, at least he has put forward this idea, which is what is called supply-side reform.
Colin: There is also a possibility that if Trump engages in a trade war with China or other countries, it might also affect inflation to some extent, as the import of cheap goods may be restricted.
Meng Yan: Yes, during my time in the US, I met some compatriots who were well-prepared for the trade war. Trump's tariff policy is not only targeted at China; it will also impose tariffs on Europe. The only exception is the North American Free Trade Agreement, meaning Canada and Mexico, where tax levels will remain very low or even at zero tariffs based on the agreement. Therefore, many Chinese companies are taking action in advance to relocate their factories to Mexico. This is actually Trump's goal — to promote the return of manufacturing to North America. So, although his policy mix may not be 100% effective, the logic is indeed self-contained. In contrast, I listened to some speeches by Harris and felt that she lacked a clear policy logic, which I think is one of the important reasons for her eventual defeat.
Colin: Indeed, it became apparent later that Harris, although initially had a slight advantage in debates against Trump, began to perform unsatisfactorily as the campaign progressed. She also declined some important interview opportunities, which led 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 mentioned by Mr. Meng in his article, Trump's support for cryptocurrency. Actually, although people in the crypto space are very concerned, this topic does not have a significant impact on the election results. From my understanding, Trump's core purpose in supporting the cryptocurrency industry is fundraising. Because for him, the key voter groups he needs to appeal to are not directly related to cryptocurrency. However, he may have gained a considerable amount of funding through the cryptocurrency sector, such as issuing NFTs, creating coins, or accepting donations, especially since there is a significant gap between his overall campaign funding and that of the Democratic Party. I wonder if my understanding is correct? What do you think about why Trump suddenly shifted to support cryptocurrency?
Meng Yan: Indeed, when he was president, someone asked him about his views on Bitcoin, and he responded, "I know a better currency called the dollar. I trust the dollar, not Bitcoin." He indeed said such words. I think this shift was prompted by multiple factors. As you just mentioned, the fundraising aspect is indeed an important reason, especially since he launched an ICO project just a few weeks before the election, which is quite indicative. I believe cautious politicians typically would not easily take such actions. Of course, Trump is not a traditionally cautious politician, which is what makes him special, or say, his 'toughness.'
Think about when he first ran for president; it seemed like he 'accidentally' hit the jackpot, and even he wasn't prepared. After winning the election, 60% of his cabinet positions were vacant, and he never filled them until the end of his term, always having 40% of the positions undecided throughout his four-year term. So, when he was first elected, he did not anticipate it. However, over the past few years, despite facing various lawsuits and attacks, regardless of whether those attacks were just, he has remained steadfast and unyielding. Imagine if it were you or me facing such a situation; we might just say a soft word or show a stance, and the problem would be resolved. But Trump does not compromise; he insists on fighting to the end, which is a level of determination that is not achievable by ordinary people.
In this context, supporting cryptocurrency is undoubtedly one of his important reasons for fundraising, but I believe there are other reasons, and even possibly more important reasons, that his personal understanding of cryptocurrency has indeed changed.
Multiple factors behind Trump's shift in attitude towards cryptocurrency
Meng Yan: Over the past four years, from a political spectrum perspective, a significant change for Trump has been 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 the Republican Party has 'Trumpified'; has Trump, to a certain extent, also become 'Republicanized'? I believe so.
Trump already possesses some basic Republican ways of thinking, and through mutual influence with the Republican Party, he has gradually aligned with the establishment. In our terms, it is 'moving toward each other.' As he moves closer to the Republican Party, some traditional right-wing thoughts and views have had a greater impact on him. We all know that many ideas in blockchain and digital currency actually come from Hayek's free-market economic thought, belonging to the Austrian school of economic thought on the right spectrum. Through this interaction, Trump gradually accepted these theoretical concepts.
This also involves deeper issues. The supporters behind the Democratic Party are primarily Wall Street financial capital, among which the most representative is figures like Soros and other Jewish financial capital forces. This class is the main financier 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. Furthermore, the conflict between traditional Anglo-Saxon industrial capital and Jewish financial capital is also significant. Trump clearly stands on the side of traditional industrial capital, representing manufacturing and the middle-class white Americans. Cryptocurrency poses 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 commitments to promote the development of the crypto industry, but he may also choose to remain silent on certain issues, using cryptocurrency as a card to negotiate with Wall Street financial capital.
From these perspectives, I analyzed three reasons, including the fundraising factor you mentioned. I believe that playing the 'cryptocurrency' card is a clever move for him. Although cryptocurrency may only be a small factor in his victory, even less important than the horse-drawn voters in Pennsylvania, it remains a striking move. Once this 'window' is opened, he may adopt a series of favorable measures for our industry in policy over the next few years. Whether intentionally or unintentionally, this could bring historic development opportunities for the industry. Therefore, the next few years are particularly critical for our industry.
Discussion on the potential fulfillment of policies after Trump's election
Colin: There are indeed two completely different viewpoints now. One believes that the promises made before the election and the performance after the election are often two different matters, especially for a 'small' industry like cryptocurrency, where Trump has no necessity or pressure to fulfill those promises. However, many people, including yourself, hope he can fulfill these promises to some extent. For example, he mentioned that he would immediately dismiss the SEC chair, would no longer sell the Bitcoin held by the government, and even proposed to establish a strategic Bitcoin reserve and other specific measures. However, some have pointed out that Trump does not have the direct power to dismiss the SEC chair, and can only wait for the chair to resign voluntarily; he may influence the SEC's leadership in other ways. From your perspective, what actual actions do you think Trump is most likely to take after being elected?
Meng Yan: Let me share my views. Firstly, I believe Trump will partially fulfill his promises, but not all of them. During his last term, he may have been one of the most diligent presidents in fulfilling campaign promises in US history. 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 in front of voters. Therefore, his commitment to executing promises is quite strong. For instance, although the repeal of 'Obamacare' was unsuccessful, he indeed made efforts to push it, only to be blocked by Congress in the end. If we consider all the fulfilled and attempted commitments, he did perform quite well.
So, will this time be the same? I think we shouldn't be overly optimistic. In the past few years, as I mentioned, he has gradually become more like a traditional politician, reaching some degree of reconciliation with the Republican establishment, learning from each other and complementing each other's strengths. He is now more familiar with the 'speak softly while carrying a big stick' approach of politicians, and I believe he does not lack skills in this area. He is not a straightforward person; on the contrary, he is very smart and slick. In the last term, he deliberately highlighted his commitment to execution 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 in accordance with his own will.
Based on this starting point, I believe he will fulfill quite a number of his promises, but not all of them. I mentioned earlier that he genuinely recognizes concepts like digital currency, digital assets, blockchain, and DeFi; he seems to be persuaded by these ideas. I have heard some of his speeches at Bitcoin conferences, and it is clear that he has a deeper understanding and recognition of these issues. However, to think he will completely fulfill all promises is somewhat naive and optimistic, especially since he is now a seasoned politician.
The second point is what specific actions Trump will take. I can say for certain that he will prioritize promoting the FIT21 act. How far has this act progressed? It has passed in the House of Representatives, but due to the Senate's recess and the election, it has not yet received attention in the Senate. The act passed in the House in May this year, and now the situation is that Trump has not only won the electoral votes and popular votes but has also gained support from both the Senate and House, which is a rare occurrence in modern times. Since his governing foundation is so solid, I believe he will smoothly push for the passage of the FIT21 act, which will have a far greater impact on the cryptocurrency industry than simply changing the SEC chair.
We need to understand that the SEC chair must act according to the law, and existing laws are established by Congress; the SEC merely executes according to legal stipulations. Changing the chair does not alter the constraints of the regulations. If we change the law itself through legislation, then even if the current chair remains, their actions will undergo significant changes. Therefore, I believe Trump will prioritize promoting the FIT21 act.
The possibility of replacing the SEC chair: impact on regulation
Meng Yan: Regarding the SEC chair issue, as far as I know, the US president cannot directly dismiss the SEC chair, but if the chair 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 chair's departure. So when Trump says he wants the current chair to 'roll', it is not entirely empty talk. I believe he is likely to push for this change, but it is not because cryptocurrency policies cannot advance, but more as a symbolic action to appease the dissatisfaction of the cryptocurrency community and Wall Street.
This is like Cao Cao borrowing a head for use; the purpose is not in the fundamental issues of personal or policy, but rather to give the cryptocurrency industry and its supporters a clear signal, indicating his position and determination.
If we combine these actions, the impact on our industry has already been very significant. We can further discuss this later. However, there is also a 'half' action; many people speculate he might appoint that female SEC commissioner as the next SEC chair. I think the possibility is low and uncertain. Trump may not make that decision just to please the cryptocurrency community, so we can wait and see.
Therefore, I believe these 'two and a half' initiatives — promoting the FIT21 act, replacing the SEC chair, and the 'possible' appointment of a female commissioner — will be his main actions.
In terms of results, it turned out that my concerns were unnecessary. But this incident has had a significant impact on our industry because our industry is constantly evolving and changing.
Global regulatory impact of the FIT21 act
Colin: Regarding the core content of the FIT21 act, it actually provides a solution that mainly focuses on whether cryptocurrencies belong to securities, registration processes, and other fundamental issues. The act's suggestion is: as long as the degree of decentralization of the project reaches a certain standard, it can obtain several years of exemption. I understand it this way; do you think this act itself is important? Or does it have a practical possibility of being implemented? If it can be implemented, will it form a relatively clear standard guidance for the entire industry?
Meng Yan: That's right, this is indeed very important. We can look at the FIT21 act and the Token Safe Harbor act together. Let me briefly describe the context. The core of the FIT21 act is to solve under what circumstances a certain token can be considered a commodity, and under what circumstances it must be regarded as a security. The basic principle is: if no single entity controls more than 20% of a token, including situations of covert control by alliances, then it may be classified as a commodity, subject to CFTC regulation. This will create a more relaxed environment for project parties, such as allowing various derivative operations in commodity trading. If control exceeds 20%, then the token will be deemed a security, subject to stricter securities law regulation.
Most blockchain and crypto projects typically have a team control ratio that far exceeds 20% at the beginning, meaning that most projects could be classified as securities. However, at this point, the Token Safe Harbor Act becomes particularly important. This act has been personally modified by the 'crypto mom' twice, and its core is: even if a project is deemed a security, as long as the team commits to achieving decentralization in the future, they will be granted a 'safe harbor' exemption period of several years. During this time, even though the project is considered a security, regulators will not overly interfere 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; if it has completed decentralization, it can 'leave the harbor,' and any violations of securities law during the safe harbor period can be wiped clean; if decentralization has not been completed, they may face refunds or other legal consequences.
If these two acts can really be introduced, their impact will be global. Although these acts cannot directly regulate projects in China, Singapore, or Japan, once implemented, the regulatory agencies in other countries will also be affected, and exchanges will be more inclined to only support projects that meet the standards of these two acts. As a result, all project parties will proactively comply with these standards, and the entire industry will be rejuvenated in a short time. This is the global influence I see in the FIT21 act and the Token Safe Harbor Act.
For example, the Reserve Bank of Australia currently has no formal regulatory framework for stablecoins, only a draft. Nevertheless, Australia already has several "compliant" stablecoins operating fully according to the content of the draft, even though the draft has not yet been submitted to Parliament. However, these stablecoin operators are unwilling to take the risk of subsequent accountability, so they prefer to follow a draft that has not yet officially taken effect. This shows that even in non-US jurisdictions, once these regulations are implemented, their influence will also be profound.
Colin: Understood. However, I am not very optimistic about this. Looking back over the past few years, during Trump's previous term, several tokens were indeed registered with the SEC, but the ultimate outcome was 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, which rather resulted in some setbacks. Now that Trump is newly elected, whether he can untie this regulatory bondage is a very important matter. First, I hope he does not pursue the legal responsibilities of those old projects, allowing DeFi, NFTs, and other platforms no longer to be under the looming 'Damocles sword' and dare not innovate or empower tokens, or even dare to issue tokens. If this bondage can be lifted, that would be the first step; the second step would be to establish clear rules, allowing new users and participants to enter the market more smoothly.
Trends in cryptocurrency-related litigation: The environment for the cryptocurrency industry under new laws
Colin: Do you think Trump's election will alleviate the many ongoing cryptocurrency-related lawsuits? Or do you believe there will still be many similar lawsuits in the future?
Meng Yan: I believe there will be some relief. As you mentioned, the reason those registered tokens could not continue in the past was mainly that projects like RDRA, the so-called STO (Security Token Offering), rigidly applied securities laws, completely ignoring the unique characteristics of tokens. If I register a token according to the securities process, then what significance does the token have? Ultimately, these projects were required to trade on specific STO exchanges, but the traffic and liquidity of those exchanges were far less than that of traditional markets. Since the entire registration process is no different from that of securities registration, why would project parties not choose the more liquid traditional stock market instead of running to a neglected STO exchange? This was the main problem at that time.
In this case, projects attempting to pursue the STO path quickly encountered a cooling off after experiencing a round of setbacks. However, the current FIT21 act and the Token Safe Harbor Act have significantly relaxed these requirements, taking into account the unique characteristics of tokens, including how to operate in compliance within DeFi and centralized exchanges. These new acts indeed provide more feasible guidance for the industry. On this point, I am relatively optimistic. I believe that after the new laws are promulgated, the number of related lawsuits will decrease. Of course, specific cases still need to be analyzed individually, but in the past few years, certain hawkish regulatory attitudes have also intensified the frequent pursuit of both actionable and non-actionable cases.
Colin: However, we must also admit that the ETFs for Bitcoin and Ethereum have been approved, which is indeed a landmark progress for the development of the industry. Although there are also some court factors involved, such as the court ruling in favor of Grayscale, which has propelled this process.
Meng Yan: Yes.
Support for Solana and future market outlook
Colin: It seems that Trump's election may be a boon for Solana, as the US seems 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 the future development of Solana?
Meng Yan: I agree with this view. When the US approved ETFs for Bitcoin and Ethereum, we were all excited, sometimes joking privately that it was 'insiders' helping our industry. However, in reality, what this industry really needs is not the recognition of individual assets, especially such post-facto recognition. What is most important is to deliver an order product to this industry, which I refer to as a 'healthy order product.' Currently, only the US has the capability to provide such an order for the cryptocurrency industry.
Of course, whether this healthy order can be effectively applied still requires close interaction between the government, market, and industry; it cannot be accomplished by Trump alone. However, having such actions and efforts is still very important for the industry. This order's significance for our industry far exceeds the performance of individual assets. If everyone is just speculating on Bitcoin or Ethereum, we do not need such an industry; we can directly treat them as cooking oil or crude oil. 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 completely 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 teasing, giving a little sweetness without real support.
Indeed, Solana holds a certain symbolic significance in the industry. If Solana's token also has an ETF, that would merely replicate the models of Bitcoin and Ethereum. The impact of Bitcoin's ETF is tremendous, while Ethereum's relative decline means that even if Solana's ETF is approved, it will not bring about a qualitative change. However, the uniqueness of Solana lies in its status as a very active innovation ecosystem. If the Trump administration can interact with the Solana community, or even support the development of the Solana ecosystem through legislation or administrative measures, then this could potentially achieve the direction I mentioned earlier—truly providing a healthy 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 many are concerned about. From your personal experience and understanding of the market, how do you think Bitcoin and Ethereum prices will fluctuate after Trump's election? Which track do you think is worth everyone's attention?
Meng Yan: Actually, the older I get, the less I want to make predictions. There are two reasons: first, predictions are inherently difficult, and second, they are not necessarily necessary. Of course, I know everyone likes to hear predictions, so I will share my views. This does not constitute financial advice, and I do not have a historical track record in this area.
Predicting is difficult because very few people can make accurate predictions; countless experts and big names have 'flipped' in this regard. But more importantly, I think making precise predictions is not necessary. Over time, I have found a better way of thinking, which in academic terms is referred to as 'Bayesian thinking.' You do not 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, the second, and the third. Then you can design strategies to observe what signals and events would occur if the first scenario happens; what signals would the second and third scenarios bring. By adopting this modeling approach and closely monitoring market signals while continuously adjusting the probability judgments of these scenarios, it becomes more flexible and effective than making precise predictions.
I found that especially in the crypto space, many people also have a hesitation period regarding already occurred events. For instance, when Trump won, many generally believed that Bitcoin and Dogecoin should surge, but when the signal actually appeared, many still hesitated. If you can act while others hesitate, this method is more effective than having predictive abilities. This is my methodology in the market. So, based on this methodology, I have three possible judgments about the future of the industry.
The first possibility is the ideal scenario: Trump fully fulfills his promises, promotes industry development, such as restarting ICOs, implementing the FIT21 act and the Token Safe Harbor Act, etc. In this case, the market would first experience a significant surge, then possibly enter a long-term bull market after slight fluctuations, similar to the internet industry after 2004. This is the scenario I hope to see most, but I think its likelihood is low.
The second scenario is a relatively poor situation, where a 'crazy bull' market occurs, excessively overdrawing market confidence and momentum, leading to a market collapse that might even bring negative pressure on Trump, causing regulations to tighten again. Similar to the collapses of Three Arrows Capital and FTX in 2022, this situation may lead the industry to face regulatory backlash. Such a 'crazy bull' market would reintroduce the vicious cycle of dramatic rises and falls, hindering the long-term development of the industry.
The third scenario is what I consider the most likely to occur, where Trump partially fulfills his promises, and the industry experiences a decent rise, but it will not be a 'crazy bull' market. This means that the market will have periodic fluctuations but will overall move toward a healthy direction, gradually maturing, though still needing to undergo one or two cycles of adjustment. In this scenario, the industry will grow steadily but will not have completely escaped the characteristic of volatility.
In terms of probabilities, I believe the distribution of the three possibilities is approximately 20%, 30%, and 50%. I will closely monitor market signals to determine which path is more likely and adjust my operational strategy accordingly. Some may think I least want to see the second scenario, but frankly speaking, there is no 'liking' or 'disliking', only facing objective reality. If the industry truly enters a 'crazy bull' state and then collapses, leading to a series of problems, we also need to find adaptive strategies. For example, decisively securing profits 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 toward a healthy and sustainable development path, resulting in several major crashes that caught me off guard, and I didn't exit at the best timing. This time, I will adjust my strategy based on this way of thinking to avoid repeating the same mistakes.
Colin: Alright, let's wrap it up here today. I also wish Mr. Meng's projects develop smoothly, and I hope everyone pays attention to Mr. Meng's Twitter and his projects. Thank you, everyone!
Meng Yan: Thank you, Colin, goodbye everyone!