Author: @Web3_Mario Abstract: First of all, I apologize for the delay in updating last week. After briefly studying AI Agents such as Clanker, I found them very interesting, so I spent some time developing some frame gadgets. After evaluating the development and potential cold start costs, I think it may be the norm for most small and medium-sized entrepreneurs struggling in the Web3 industry to quickly chase market hotspots. I hope everyone will understand and continue to support. Getting back to the point, this week I hope to discuss with you a point of view that I have been thinking about recently. Of course, I think this can also explain the recent sharp market fluctuations, that is, after the BTC price breaks through a new high, how to continue to capture incremental value. My point of view is that the focus should be on observing whether BTC can take over AI and become the core of driving economic growth in the new political and economic cycle in the United States under Trump’s administration. The game here has already started with the wealth effect of MicroStrategy, but the whole process is bound to still face many challenges. As MicroStrategy's wealth effect unfolds, the market has begun to speculate whether more listed companies will choose to allocate BTC to achieve growth. We know that the crypto market fluctuated violently last week, and the price of BTC fluctuated widely between $94,000 and $101,000. There are two core reasons, which I will briefly sort out here. First of all, it can be traced back to December 10, when Microsoft formally rejected the (Bitcoin Fiscal Proposal) proposed by the National Center for Public Policy Research at its annual shareholders' meeting. In the proposal, the think tank suggested that Microsoft invest 1% of its total assets in Bitcoin as a potential means of hedging inflation. Prior to this, Saylor, the founder of MicroStrategy, also publicly declared through X that he was the FEP representative of the NCPPR and gave a 3-minute public online presentation. Therefore, the market had some hope for the proposal, although the board of directors had clearly recommended rejecting the proposal before. Let’s talk a little bit more about the so-called National Center for Public Policy Research. We know that think tanks are composed of industry experts and are generally funded by governments, political parties or commercial companies. Most think tanks are non-profit organizations, not official agencies. This type of operation is tax-free in countries such as the United States and Canada. Normally, the views output by think tanks need to serve the relevant interests of the sponsors behind them.The NCPPR, founded in 1982 and headquartered in Washington, D.C., has a certain influence among conservative think tanks, especially in supporting free markets, opposing excessive government intervention, and promoting corporate responsibility, but its overall influence is relatively limited and is smaller than some larger think tanks (such as the Heritage Foundation or the Cato Institute). The think tank has been criticized for its positions on issues such as climate change and corporate social responsibility, especially its suspected funding sources with interests in the fossil fuel industry, which has limited the NCPPR in policy advocacy. Progressives often accuse it of being a "spokesperson for interest groups," which weakens its influence in the broader political spectrum. In recent years, the NCPPR has frequently proposed at the shareholders' meetings of various listed companies through the FEP (Free Enterprise Project) project, questioning the policies of large companies on right-wing issues such as racial diversity, gender equality, and social justice. For example, for companies such as JPMorgan Chase, they submitted proposals opposing mandatory racial and gender quotas, arguing that these policies would lead to "reverse discrimination" and harm corporate performance. Targeting companies such as Disney and Amazon, they questioned that companies are too catering to progressive issues, and advocated that companies should focus on profits rather than "pleasing minorities". With Trump's inauguration and his support for cryptocurrency policies, the organization immediately promoted Bitcoin adoption to major listed companies through FEP, which included giants such as Amazon in addition to Microsoft.     With the formal rejection of the proposal, the price of BTC fell to $94,000, and then quickly pulled back. The second impact came from MicroStrategy. According to Bloomberg analyst James Seyffart, MicroStrategy's eligibility to be included in the Nasdaq 100 Index may be affected by its ICB classification as a technology company, but its current main business direction makes it a financial stock. The analyst was very active in the BTC ETF review process at the beginning of the year and received a lot of attention as a mouthpiece for relevant institutions and sources. Therefore, this will also have a certain impact on the price of BTC for a period of time, because if MSTR can be included in the Nasdaq, then a large number of index ETFs will bring more sufficient liquidity to MSTR, and benefiting from MSTR's business model, the price of BTC will rise further.   From the price fluctuations caused by these two events, it is not difficult to observe that the current market is actually in a state of anxiety, and the point of anxiety is what the new source of growth will be after BTC's market value breaks through the historical high. And we have seen from some recent signs that some key leaders in the crypto world are choosing to use MicroStrategy's wealth effect to promote the financial strategy of allocating BTC in the balance sheet to more listed companies to achieve the effect of fighting inflation and performance growth, so as to make BTC more adopted. Then let's look forward to whether this strategy can succeed. As a substitute for gold, BTC still has a long way to go to become a global value storage target in a broad sense, and it is not easy to succeed in the short term. First, let's analyze the first attraction of this strategy, whether the effect of allocating BTC to fight inflation is established in the short term. In fact, usually when it comes to fighting inflation, the first thing that comes to mind is gold, and Powell also mentioned the view that Bitcoin is a competitor to gold when answering reporters' questions at the beginning of the month. So can Bitcoin become a substitute for gold and a global value storage target in a broad sense? In fact, this question has always been the focus of discussions about the value of Bitcoin. Many people have made many arguments based on the similarity of the original attributes of assets, which will not be introduced here. What I want to point out is how long it will take to realize this vision, or whether this vision supports the current valuation of BTC. My answer is that it is not easy to achieve in the foreseeable four years, or in the short and medium term, so it is not very attractive as a promotion strategy in the short term. Let's refer to how gold has developed to its current status as a store of value. As a precious metal, gold has always been regarded as a precious item by various civilizations and is universal. The core reasons are as follows: l The obvious luster and excellent ductility make it valuable as an important ornament. l The low output value brings scarcity to gold, which gives it financial attributes and makes it easy to be chosen as a class symbol in a society after class division.l The wide distribution of gold around the world and its low mining difficulty make all civilizations not restricted by factors such as culture and productivity development. Therefore, the dissemination of value culture is bottom-up and has a wider range.   With the universal value formed by these three attributes, gold has played the role of currency in human civilization, and the entire development process has made the intrinsic value of gold stable. So we see that even after sovereign currencies abandon the gold standard and modern financial instruments give it more financial attributes, the price of gold basically follows the law of long-term growth and can better reflect the real purchasing power of currency.   However, it is unrealistic for Bitcoin to replace the status of gold in the short term. The core reason is that its value proposition, as a cultural viewpoint, must be contracted rather than expanded in the short and medium term. There are two reasons:   l Bitcoin's value proposition is top-down: as a virtual electronic commodity, Bitcoin mining needs to rely on computing power competition. There are two determining factors here, electricity and computing efficiency. First of all, the cost of electricity actually reflects the degree of industrialization of a country, and the cleanliness of the energy behind the so-called electricity determines the future development potential. And computing efficiency needs to rely on chip technology. To put it bluntly, obtaining BTC is no longer something that can be achieved simply by relying on a personal PC. With the development of technology, its distribution is bound to be concentrated in a few regions, and it will not be easy to obtain it in undeveloped countries with a large global population distribution without competitive advantages. This has an adverse impact on the efficiency of the dissemination of this value proposition, because when you cannot control a certain resource, you can only become the object of its exploitation. This is why stablecoins will compete with the sovereign currencies of some countries with unstable exchange rates. From the perspective of national interests, this naturally cannot be recognized, so it is difficult to see undeveloped countries encouraging this value proposition.   l The decline of globalization and the challenge of US dollar hegemony: We know that with the return of Trump, the isolationism he promotes will deal a relatively large blow to globalization. The most direct impact will be the influence of the US dollar as the subject of global trade settlement.This has caused certain challenges to the hegemony of the US dollar, and this trend is the so-called "de-dollarization". The whole process will hit the global demand for the US dollar in the short term, and Bitcoin, as a currency mainly denominated in US dollars, will inevitably increase its acquisition cost in the whole process, which will increase the difficulty of promoting its value proposition. Of course, the above two points only discuss the development challenges of this trend in the short and medium term from a macro perspective, and do not affect the narrative of Bitcoin as a substitute for gold in the long term. The most direct impact of these two points in the short and medium term is reflected in the high volatility of its price, because the rapid increase in its value in the short term is mainly based on the improvement of speculative value rather than the increase in the influence of its value proposition. Therefore, its price fluctuations are bound to be more in line with speculative products and have high volatility properties. Of course, due to its scarcity, if the over-issuance of the US dollar continues to be serious, as the purchasing power of the US dollar decreases, all US dollar-denominated commodities can be said to have a certain degree of anti-inflation, just like the luxury market in previous years. However, this anti-inflation is not enough to make Bitcoin more competitive than the storage effect brought by gold. Therefore, I believe that using anti-inflation as the focus of short-term promotion and marketing is not enough to attract "professional" customers to choose to allocate Bitcoin instead of gold, because their balance sheets will face extremely high volatility, which cannot be changed in the short term. Therefore, it is highly likely that in the next period of time, large listed companies with stable business development will not aggressively choose to allocate Bitcoin to cope with inflation. BTC takes over AI and becomes the core of driving economic growth in the new political and economic cycle in the United States under Trump's administration. Next, let's discuss the second point, that is, some listed companies with weak growth can achieve overall revenue growth by allocating BTC, thereby driving up market value. Whether this financial strategy can be more widely recognized, I think it is the core of judging whether BTC can obtain new value growth in the short and medium term in the future, and I think this is easy to achieve in the short term. In this process, BTC will take over AI and become the core of driving economic growth in the new political and economic cycle in the United States under Trump's administration. In the previous analysis, we have clearly analyzed the successful strategy of micro-strategy, which is to convert the appreciation of BTC into the company's performance and revenue growth, thereby boosting the company's market value. This is indeed very powerful for some companies with weak growth. After all, it is more comfortable to lie down and embrace a trend than to burn yourself to build a career. You can see that many companies are declining, and their main business revenue is declining rapidly. They finally choose to use this strategy to allocate the remaining output value to retain some opportunities for themselves. With Trump's return, his internal cuts in government policies will have a significant impact on the U.S. economic structure. Let us look at a piece of data, the Buffett indicator of US stocks. The so-called Buffett indicator, stock god Buffett mentioned in an article in Forbes magazine in December 2001: The ratio of the total market value of the stock market to GDP can be used to judge whether the overall stock market is too high or too low, so it is generally called Buffett. index. This indicator can measure whether the current financial market reasonably reflects fundamentals. Buffett's theoretical index indicates that 75% to 90% is a reasonable range, and more than 120% indicates that the stock market is overvalued. ​We can see that the current Buffett index of the US stock market has exceeded 200%, which shows that the US stock market is in an extremely overvalued state. In the past two years, the core driving force that has pushed the US stock market to avoid a correction due to monetary policy tightening is the AI ​​sector represented by Nvidia. However, with the slowdown in revenue growth in Nvidia's third-quarter financial report, and according to its performance guidance, revenue in the next fiscal quarter will slow further. The slowdown in growth is obviously not enough to support such a high price-earnings ratio, so there is no doubt that US stocks will be under pressure for some time to come.   For Trump, the specific impact of his economic policies is undoubtedly full of uncertainty in the current environment, such as whether the tariff war will trigger internal inflation, whether cutting government spending will affect domestic corporate profits and cause the unemployment rate to rise, and whether reducing corporate income tax will further increase the already serious fiscal deficit problem. In addition, Trump seems to be more determined to rebuild the ethics and morality of the United States. The promotion of some culturally sensitive issues, such as strikes, marches, and labor shortages caused by the reduction of illegal immigrants, will cast a shadow on economic development. If economic problems are triggered, in the current extremely financialized United States, the stock market crash will specifically affect its support rate, which will in turn affect the effectiveness of its internal reforms. Therefore, it is very cost-effective to implant a core that has been mastered and drives economic growth into the U.S. stock market, and I think Bitcoin is very suitable for this core. We know that the "Trump deal" that has recently occurred in the crypto world has fully demonstrated its influence on the industry, and most of the companies supported by Trump are local traditional industrial companies, not technology companies, so their businesses did not directly benefit from the entire AI wave in the last cycle. If things develop as we described, the situation will be different. Imagine if local small and medium-sized enterprises in the United States choose to allocate a certain amount of Bitcoin reserves in their balance sheets, even if their main business is affected by some external factors, Trump can achieve the effect of stabilizing the stock market to a certain extent by advocating some crypto-friendly policies to drive prices.Moreover, this kind of targeted stimulus is extremely efficient and can even bypass the Federal Reserve’s monetary policy. It is not easily constrained by the establishment. Therefore, in the next new U.S. political and economic cycle, this strategy is a good choice for the Trump team and many U.S. small and medium-sized enterprises, and its development process is worthy of attention.

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