Many people still naively believe that the value of Bitcoin comes from the loss or even collapse of the US dollar credit system.

Because Bitcoin is not issued indiscriminately, not only is it limited, but it also has to be halved, making it a scarce commodity. It has both asset attributes and currency attributes, which has driven up the price of Bitcoin. It should be over US$100,000 per coin in the next few days.

The weaker the credit of the US dollar, the higher the value of Bitcoin.

Is this really the case? Yang Dan said that he completely disagrees with the logical narrative of Bitcoin back then.

Let me first state the conclusion: the current value of Bitcoin and the exaggerated price of $100,000 are not because they hedge against the credit impairment of the U.S. dollar; on the contrary, they enhance the credit of the U.S. dollar, thereby replacing gold and oil and becoming the new global reserve currency.

Why are we so foolish not to foresee its arrival?

Many people say that U.S. debt has already reached a scale of $35 trillion, and the interest on U.S. debt each year accounts for 20% of GDP.

Everyone should remember: borrowing small amounts must be repaid, but if you borrow massive amounts, it's impossible to repay the principal. First, you don't want to repay; second, you know you can't repay it at all.

Therefore, the U.S. probably never thought about repaying the massive amount of U.S. debt to the world; otherwise, it would have to cut spending, tighten its belt, and its economy would be sluggish while repaying debt. How could that be possible? No U.S. president would be foolish enough to repay debt in such a self-destructive economic manner; they would definitely be ousted.

With Trump in office, rest assured that the expansion of dollar debt will continue; repaying debt is impossible.

However, how should this Ponzi scheme of U.S. debt continue? The U.S. government is clear in its mind, and the countries holding U.S. debt are even clearer, so they not only bought U.S. debt but also bought gold like crazy, in order to enhance the credibility of their own currency and hedge against the credibility of U.S. debt, leading to a surge in gold prices over the past two years.

Of course, the price of gold is not driven up by retail investors; how much money do retail investors have? It’s all those governments hoarding it.

So how should this massive amount of U.S. debt Ponzi scheme continue? Previously, the dollar was tied to gold, but after the Bretton Woods system collapsed in the 1970s, it was found that the U.S. didn't have that much gold, and the dollar was exposed; thus, relying on its number one military and economic hegemony, the U.S. forcibly tied the dollar to oil, continuing to export petrodollars to the world.

So the anchor of the dollar has shifted from gold to oil, and now it seems that even the oil anchor cannot be played with anymore.

At this moment, the dollar urgently needs a new anchor for currency binding to absorb the massive amounts of dollars being exported to the world.

By the way, Trump said he wants to bring American manufacturing back. I think this is impossible and not cost-effective.

The essence of the decline of American manufacturing is due to the strength of the dollar; the dollar is not only a currency but also a commodity. The U.S. can export its almost costless printed dollars to the world, so why should it labor to manufacture and export goods?

The efficiency of the dollar is too high, and the cost is too low; no one can resist such temptation. Moreover, only the U.S. has the conditions to treat currency as a commodity for export. Who would want to engage in the laborious and exhausting work of manufacturing?

Thus, the dollar has become like a drug for the U.S. government, always giving pleasure. Until one year, too many dollars were exported, and the U.S. debt was about to collapse.

At this moment, the U.S. urgently needs an anchor asset that can absorb the excess printed dollars, like a black hole that absorbs and releases massive amounts of dollars.

China relies on real estate, while the dollar is eyeing Bitcoin.

Look at recent companies like BlackRock, Grayscale, Coinbase, and Microstrategy, why have they swallowed so many Bitcoin assets? They probably see that the U.S. has no better alternatives and is moving towards treating Bitcoin as a reserve currency.

So Wall Street's shout of Bitcoin reaching $1,000,000 is essentially based on this logic.

But there is a risk point here: the consensus on gold is a choice made over thousands of years of human civilization, the consensus on oil is a choice made over hundreds of years of industrial revolution, but can the consensus on Bitcoin really become the consensus of everyone in the digital civilization era?

This is probably why Bitcoin is still $100,000 now, and hasn't reached $1,000,000 yet.

Finally, I want to tell everyone that investment carries risks, and you really need to be cautious. For Yang Dan, the joy of investing comes not only from the rise in asset prices but also from validating your predictions based on the underlying logic behind those asset prices.$BTC #市场波动，加仓还是观望？