The Bear Market: A Temporary Phase
Right now, we are experiencing a bear market. It may seem like it's been going on for a long time, but don't worry, it won't last forever. The rules of the financial world are set by people on Wall Street and in America, but China won't let them control everything. This clash between the West and the East has caused some tension.
Printing Money to Solve Economic Crises
Whenever there's an economic crisis, the United States tends to print more money as a solution. They believe that once the money is printed, the crisis will be over. The president, whether re-elected or not, always focuses on economic development, U.S. stocks, U.S. bonds, and the U.S. dollar. The Federal Reserve, or the Fed, can only adjust things by raising interest rates and shrinking its balance sheet.
The Logic of a Bear Market
In a bear market, it's really hard for anyone to make money. Everyone is losing money. But what we need to do now is accumulate funds. It's important to remember that the bear market will eventually pass, and a bull market will come. In the next bull market, the price of cryptocurrencies like Bitcoin may rise significantly. Bitcoin might become the only token that can pass through ETF, which is like a decentralized version of gold. Gold has already risen 30 times, so Bitcoin might follow a similar path.
Bitcoin and the Mainstream Capital
Through ETF, mainstream capital in the United States can be invested in Bitcoin. Right now, pension funds, sovereign funds, and other big investors can't buy Bitcoin. The U.S. dollars printed all over the world mainly go to a few countries, including China. But only a small number of people and regimes hold these dollars and invest them in U.S. stocks and bonds. This creates a cycle of bubbles. However, if Bitcoin passes through ETF, it will experience an unprecedented surge, and other cryptocurrencies will also rise.
The Connection Between Bitcoin and Economic Rescues
Bitcoin's three major bull markets in 2013, 2017, and 2020 happened to coincide with three major economic rescues. Two were done by the United States, and one was done by China. China printed 4 trillion yuan, while the United States kept printing money. It's hard to say if there will be a fourth rescue, but if it continues, it might hinder human society's development. In the past, major wars or natural disasters have led to a restart of society.
The Role of China in the Global Supply Chain
The United States relies heavily on Silicon Valley technology, New York finance, and Los Angeles culture. These three things cut off the rest of the world. Before globalization, East Asia, including the four Asian tigers, provided labor and fed the Western world. But now, East Asia is developing and doesn't want to be just a source of cheap labor. This creates a social problem. China is the only country that can guarantee the world supply chain's continued operation.
The Future: A Bigger Bubble and a Huge Rebound
This time, the financial crisis will trigger a bigger bubble. The recession in the United States will affect the entire Western world. Everything linked to the dollar will plummet, while the dollar itself will rise. This rise is due to the so-called interest rate hike, which attracts hot money from around the world. However, China is now a new choice for investors. If both sides bet on it, we might witness the largest recession in history. After this recession, there will likely be a massive rebound, but only time will tell how big it will be.