*《The Year of the Yin Earth Snake Welcomes the God of Wealth》**

The green dragon spreads its wings to break the cold clouds,
Four horses adorned with gold descend upon the nine palaces.
Jade cups pour stars to add fortune and wealth,
Red talismans guide cranes to deliver riches at the door.

Firecrackers in a thousand streets urge the New Year,
Ten thousand trees of coral transform into red silver.
Look, the Heavenly Official holds the ledger and smiles,
In the human world, there are countless golden touchers.

When the funding rate of Bitcoin contracts turns negative, the bottom of Bitcoin has arrived!
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**Historical Review of Negative Funding Rates in Bitcoin Perpetual Contracts and Market Insights**

**1. Formation Mechanism of Negative Funding Rates**
In the perpetual contract market, the funding rate is settled every 8 hours. When the market experiences **extreme bearish sentiment**, contract prices are significantly lower than the spot index (Funding Rate = (Contract Price - Spot Price) / Spot Price). At this time, shorts must pay fees to longs, resulting in a negative funding rate. Its essence is that exchanges guide the rebalance of long and short forces through economic incentives.

**2. Major Historical Negative Value Events**
- **March 12, 2020, "Black Thursday"**
The funding rate for BitMEX's XBTUSD perpetual contract plummeted to **-0.35%** (8-hour rate), creating a historical extreme. On that day, Bitcoin flash-crashed from $7,900 to $3,800, liquidating over $1 billion in long positions, and panic selling led to a significant discount in contract premiums.

- **May 19, 2021, China's Mining Ban Impact**
The funding rates of the three major exchanges turned negative simultaneously, with Binance's BTCUSDT contract reaching **-0.21%**. Policy panic triggered $5 billion in long liquidations, and the open interest in contracts dropped sharply by 35% in one day, causing a "long squeeze" in the market.

- **November 2022, FTX Collapse Incident**
Deribit's perpetual contract funding rate remained at **-0.15% to -0.18%** for three consecutive days, reflecting institutional investors hedging their spot exposure through contracts. During this period, Bitcoin fell from $20,000 to $15,500, and the derivatives market saw an unusual structure of "spot leading the decline, contracts following the decline" for the first time.

**3. Market Signal Value of Negative Rates**
- **Extreme Sentiment Indicator**: When the 8-hour funding rate ≤ -0.1% and lasts for more than 2 periods, it often corresponds to a short-term oversold condition. After Binance experienced a **-0.12%** negative rate in January 2023, Bitcoin rebounded 23% in the following 7 days.
- **Arbitrage Opportunity Window**: Holding spot while going long on contracts during negative rate periods can yield an annualized rate of approximately **45%** (calculated based on June 2022 data).
- **On-chain Data Validation**: Glassnode data shows that when negative rates coincide with **aSOPR < 1** (all holders are at a loss), the probability of a mid-term rebound reaches 78%.

Digital Dollar: Could it force China to abandon foreign exchange controls, and what huge changes could it bring? The Federal Reserve's upcoming digital dollar plan not only signifies a digital leap for the dollar system but may also become a key pivot in reshaping the international monetary order. In this wave of transformation, China's foreign exchange control system is facing its most severe challenge since joining the WTO in 2001.
The distributed ledger technology of the digital dollar enables cross-border payments to be settled in seconds, compared to the traditional SWIFT system's 3-5 day settlement period, resulting in over a 1000-fold increase in transaction efficiency. The Cedar project, a collaboration between the New York Federal Reserve and Singapore's Monetary Authority, shows that blockchain-based wholesale digital currencies can reduce cross-border transaction costs to one-sixth of their original amount. This revolutionary change is dismantling the traditional international trade settlement system dominated by correspondent banking.
The digital upgrade of dollar hegemony brings more covert financial control. The traceability of the digital dollar allows the U.S. Treasury to monitor global funds in real time. Simulation by the International Monetary Fund shows that the digital dollar could increase the speed of cross-border capital flows by four times and expand volatility by 60%. The technical defenses of China's current foreign exchange controls are at risk of failing. The anonymity and distributed nature of digital wallets render traditional bank account-based regulatory measures ineffective. Research from Cambridge University indicates that privacy-preserving coin mixing solutions could increase the probability of avoiding regulation for cross-border transfers of $100,000 to 78%.
The competition in digital currencies is essentially a contest of institutional innovation capability. As the digital dollar returns with technological advantages, China's traditional foreign exchange controls face enormous challenges.

MSTR is one step closer to bankruptcy and death. Now MSTR has also started to play with contracts. As we all know, contracts have always been the focus of investors' liquidation due to high leverage and high funding rates. Many investors have gone bankrupt and died because of playing with contracts. Now MSTR has also started to play with contracts. Since its financing ability has reached its limit, but it cannot stop the madness of continuing to buy Bitcoin, just like drug addiction, it has even launched preferred stocks with an annual interest rate of 10%. This preferred stock is like a blood-sucking worm or a drug addict's drug addiction. It will always be attached to MSTR and continue to suck MSTR's cash flow and profits. It seems that MSTR is one step closer to bankruptcy and death!

Through studying Deepseek's Bitcoin price prediction for this year, I somewhat understand why many famous investment institutions provide some particularly outrageous prediction models. For example, predicting Bitcoin's peak position in 2025, some institutions give $750,000, some give $500,000, and many give $250,000. This seems completely unreasonable to us now, and we don't understand the reasons these well-known institutions make such absurd price predictions.
In fact, their outrageous predictions are meant to influence the data analysis of mainstream AI today, as the vast majority of AI data learning comes from the predictions of these well-known institutions on the internet. Each prediction carries a certain weight, and by influencing AI, they can impact the quantitative trading programs behind AI, thereby guiding the market in a certain direction.
Currently, Deepseek is clearly under this influence, so its prediction for Bitcoin this year is also highly likely in the $200,000 to $250,000 range.
Many brokerage firms' quantitative programs are precisely built on the analysis of these AI programs, so the outrageous predictions from these renowned institutions are not aimed at influencing retail investors, but rather at affecting AI weight, ultimately directing the market to develop in the direction these mainstream institutions desire. It doesn't necessarily have to reach the so-called heights they predict, and it may even be to cash out the chips they hold.
So, everyone should not be too superstitious about the predictions of famous institutions, nor should they be too superstitious about AI predictions. Behind it all could just be a trap, a pit, but this pit is for AI.

Domestic withdrawals definitely have issues with entrapment in law enforcement. The reasoning is simple: almost every withdrawal involves fraudulent funds. However, everyone should be very clear that this money is transferred through bank accounts. How is it so coincidental that the money arrives in your account and then gets frozen? Were these funds not frozen in the bank before? Can't it be traced as being related to fraud? How come it is only discovered when it reaches your account? Is there really such a coincidence? The only explanation can be entrapment.

It is clear that China is not lacking in money or talent; even a small county government has a fiscal budget exceeding 10 billion RMB each year. The question arises: why does it feel like the technology industry is short on funds? For example, DeepSeek only spent a few million dollars. Why aren't so many state-owned enterprises and governments investing money to develop AI technology? Many people are proud of DeepSeek, but it is estimated that soon these talents will be poached by foreign tech companies, and this company will also be acquired by international giants. Without a conducive environment for technological survival, even if they manage to create a low-cost algorithm through good luck, what difference will it make? It won't change the overall situation, right?

Unfortunately, the people's income is difficult to catch up with others, this kind of self-satisfaction has no value

Some people believe that the scale of the U.S. government issuing dollar stablecoins cannot exceed one trillion, as the total market value of all cryptocurrencies is only 3.6 trillion dollars. This perspective is too narrow. In the future, dollar stablecoins will become digital dollars, which not only the U.S. government can use to pay salaries and for procurement, but will also require all banks to accept digital dollar settlements and exchange traditional dollars at a one-to-one ratio. Moreover, all international trade will need to use digital dollars. Do you think one trillion dollars in stablecoins will be enough then? One's vision should not be limited to Bitcoin, but rather to the entire world's new version of the dollar replacing traditional dollars. It should be noted that the total amount of traditional dollars is 22 trillion dollars. So how many digital dollars will replace traditional dollars? As long as the U.S. government issues dollar stablecoins, surpassing ten trillion in a few years will be an easy task.

USDT and USDC will gradually shrink, and ultimately, the stablecoin issued by the U.S. Treasury will dominate the world.

Trump's approach to developing cryptocurrency to address the U.S. national debt has finally become clear: it is to launch a dollar stablecoin, and the traditional dollars exchanged for the stablecoin will be entirely used to purchase U.S. Treasury bonds. This operation has two obvious effects. First, in the future, the issuance of digital dollars will not require the consent of the Federal Reserve; the U.S. Treasury can issue them directly. Second, all digital dollars will be used to purchase U.S. Treasury bonds, and as the scale of digital dollars grows larger, the purchasing of U.S. Treasury bonds will also increase. Currently, both USDT and USDC have surpassed $100 billion in scale, so it can be imagined that the U.S. government's stablecoin could easily exceed $1 trillion in scale, thus bringing significant changes to the world of digital currency and even the global financial landscape!

There will be new US dollar stablecoins issued by the US government itself, which will eventually replace USDT and USDC

The comprehensive promotion of decentralized digital dollar stablecoins will inevitably force Dongda to abandon foreign exchange control. I really look forward to the day when this will come. The day of Dongda's full openness is finally approaching. I never expected that in my lifetime I would see foreign exchange control being forced to be lifted.

The intention behind Xiang Zhuang dancing with a sword is aimed at Pei Gong; Trump's development of Bitcoin has the ultimate goal of launching a USD stablecoin. This new digital dollar completely bypasses the Federal Reserve's control over traditional dollars and firmly reestablishes the issuance rights of the new digital dollar in the hands of the U.S. government. Now everything is ready, just waiting for the U.S. Congress to approve it. Once the U.S. Congress agrees, this USD stablecoin will be launched soon and will replace USDT and USDC. Are you all ready? Prepare to welcome the new USD stablecoin issued by the U.S. government, and the large-scale application of true digital currency will also be fully rolled out. The U.S. government will have a new stablecoin for salary payments, procurement, and international trade. Can Dongda still maintain foreign exchange controls?

Trump first overthrew Biden's digital dollar OCBC, then prepared to issue a dollar stablecoin himself. In fact, the two are essentially the same thing; Trump just wants the credit for it. Therefore, the new name for the digital dollar is the dollar stablecoin. It is estimated that one trillion dollars will need to be issued each year just to keep up. The traditional dollars exchanged for the stablecoins will be used to purchase U.S. Treasury bonds as reserves for the stablecoin, which means it effectively bypasses the Federal Reserve to directly issue new digital dollars. Do you think this new dollar stablecoin will bring about new changes?

The foreign exchange surplus is definitely real, otherwise the United States would not be asking us to reduce the surplus. Each of these countries has data to prove this, the key question is where did the foreign exchange from the surplus go?

Where has our foreign exchange gone? At the beginning of this year, many friends said that exchanging currency feels more tense. To know that last year our trade surplus was one trillion dollars, such a huge foreign exchange income, where has it all gone? It is still very difficult for the public to exchange currency at banks. Who knows where these trade surpluses have gone?

It turns out that today's addition of 4 million stocks by MSTR is not new capital prepared to buy Bitcoin, but rather the conversion of convertible bonds into stocks. 400 million dollars converted into 4 million stocks, which calculates to a conversion price of 260 yuan per share. Compared to the latest MSTR stock price of 370 yuan, there is a significant profit margin. It cannot be ruled out that these millions of stocks may be sold for cash. Therefore, MSTR's stock price is under pressure recently.

Bitcoin has been fluctuating wildly recently. Do you know why? Let me tell you the logic behind the recent market. The main reason is MSTR's issuance of new shares and purchase of Bitcoin. Every time MSTR issues new shares, such as issuing 4 million shares today to raise 1.5 billion yuan in funds, MSTR's stock price falls, and then Bitcoin also falls. However, since MSTR has raised more than 1 billion yuan in funds, it can buy more than 10,000 Bitcoins this week, so Bitcoin will suddenly rise sharply at a low level. This situation will continue for a while until MSTR's premium over Bitcoin is completely broken or the capital chain is broken, and it will no longer be able to issue new shares to buy Bitcoin. Therefore, the best strategy recently is to short MSTR stocks and go long on Bitcoin for hedging, and combine the high-selling and low-buying strategy to basically win.

I have always emphasized that MSTR will face serious corporate capital gains tax issues. The original prediction was that capital gains tax would be incurred only when the capital chain was broken after the Bitcoin bear market and it was forced to sell Bitcoin. However, according to the latest US corporate capital gains tax law, even if MSTR does not sell Bitcoin, it will face capital gains tax issues due to the rise in Bitcoin. Let's see how it will be handled this time. This type of corporate rolling investment in Bitcoin model will face many problems in the future. In fact, it is not as good as the individual rolling purchase of Bitcoin model.