Chainfeeds Briefing:
Under the premise of instability in core US stock assets, crypto would naturally become a "safe-haven asset".
Article Source:
https://x.com/tmel0211/status/1908346012814762259
Article Author:
Haotian
Perspective:
Haotian: This issue is fundamentally putting the cart before the horse. From the day Satoshi Nakamoto launched Bitcoin, crypto was positioned as a decentralized currency issuance method, an independent monetary system separate from traditional financial systems, and should not be controlled by a single market. After all, crypto's cross-border free circulation, independence from any national credit endorsement, decentralized mining governance mechanism, and especially its technically fixed total issuance volume all suggest it should remain independent. However, for a long time, crypto has maintained a strong correlation with US stocks, not demonstrating its independent monetary aspect, because early crypto profits potentially came from tech stock investors, with significant overlap in investment demographics. Compared to the traditional US stocks and bonds trust system, crypto is too fragile, which is why people say Americans sell crypto assets for hedging when US stocks drop or Los Angeles experiences wildfires (increasing holdings in stocks or Treasury bonds?). This association has been a spiritual sustenance for many crypto practitioners, but strictly speaking, it goes against the original crypto ethos. Currently, the crypto market is greatly influenced by a series of US policies; on one hand, spot ETFs have provided US stock investors with a normal channel to invest in crypto, and under the premise of instability in core US stock assets, crypto would very naturally become a safe-haven asset. The fundamental reason lies in investors' uncertainty about the future US economic expectations, such as potential economic recession or weakening of the US dollar hegemony. Therefore, crypto's independent market performance at this moment precisely indicates that tariff impacts are too far-reaching and highly uncertain, to the extent that crypto is viewed as an effective hedging asset; on the other hand, while tariffs seem to increase import and export commodity costs and directly drive inflation, such inflation is often temporary. If tariffs interfere with citizens' normal consumption expenditure and overall consumer demand shrinks, this short-term inflation will be "deflationary" in the long run, even at the cost of economic recession, which explains why some traders have raised predictions of rate cuts. Thus, the macro expectation of rate cuts and liquidity has not weakened but instead strengthened, despite Powell's silence, and Trump's maverick spirit will certainly further promote this move. Most critically, the long-term impact of tariff policies is on the monetary issuance systems of medium or weak countries. Clearly, with increased tariffs, these countries' costs of reserving US dollars through export goods will rise, and the trust guarantee of their domestic currencies pegged to the US dollar will weaken. In other words, these countries' already overly dependent monetary issuance systems on the US dollar will become more fragile, potentially even collapsing. At this point, wouldn't crypto, with more open international circulation and globalization compared to the US dollar, become a reasonable alternative? Of course, one could also choose euros, RMB, or other currencies with strong sovereign endorsement, but such currency pegging relationships won't happen quickly, and in the short term, the more independent crypto will benefit, after all, crypto is also a channel to the US economic system.
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