Arthur Hayes New Post: Beyond Bitcoin Reserve, the US Cryptocurrency Hegemony Has Another Goal

Original Title: The Genie

Original Author: Arthur Hayes

Original Translation: Deep Tide TechFlow

(The views expressed in this article are solely those of the author and should not be taken as investment advice, nor should they be considered as recommendations to engage in investment transactions.)

The Pax Americana Make-A-Wish Corporation, located in Mar-a-Lago, receives a large number of "wishers" every day. People from the cryptocurrency field, like others, stand in line, trying to seize the opportunity to make one or more wishes. The capricious "genie"—referred to as the "Orange Man" host, holds court every week in the swampy backwaters of South Florida at his rural and nightclub-style hybrid private club, accompanied by classic pop music from the 1980s, surrounded by a group of sycophantic followers.

The genie itself is neither good nor evil; what we truly need to judge is whether the wish of the wisher is reasonable. Every culture in the world has moral stories about "misguided wishes," where wishes seeking success, wealth, or personal happiness through shortcuts often lead to unforeseen consequences.

The core lesson of these stories is: there is no "easy button" in life, and all goodness stems from effort and dedication.

In the global cryptocurrency industry, there are two prominent "wishes" worth discussing—one is the establishment of a Bitcoin Strategic Reserve (BSR), and the other is the promotion of a Pax Americana-style cryptocurrency regulation. Overall, many crypto practitioners hope that the U.S. government will buy Bitcoin through money printing as part of the national reserve, while also aiming to establish favorable regulatory barriers for their crypto-related businesses. I believe these wishes are misguided. We should choose a more challenging but more meaningful path and present a request to the "genie" that cannot be easily overturned even after the next government takes office, regardless of its political affiliation.

In the first part of this article, I will argue why BSR and piecemeal cryptocurrency regulatory efforts would have a negative impact on the industry's development, whether locally or globally. Following that, I will offer some advice to those in pinstripe suits or summer dresses who queue up every day to make wishes to this "Orange Genie," telling them what more valuable wishes they should make.

Bitcoin Strategic Reserve (BSR)

Anything that can be bought can also be sold. When a government hoards a particular asset, the core issue is that such buying and selling behavior is usually driven by political motives rather than economic interests. Within the current global economic framework, can Bitcoin directly benefit the U.S. government? The answer is no. Bitcoin is merely another financial asset. While some readers may consider Bitcoin to be the "hardest money in history" created by the "one true god" Satoshi Nakamoto, I can confidently tell you that the actions of that "wizard" (referring to a political figure) are not rooted in reverence for a deity but rather to cater to the voter base that elevated him to the throne of power.

Let's assume that Trump actually succeeds in establishing a Bitcoin Strategic Reserve (BSR). Following the proposal by U.S. Senator Lummis, the government purchases one million Bitcoins. What would be the outcome? Bitcoin's price skyrockets, the market turns frenzied, but as the government completes the purchase, Bitcoin's trend of "only going up" comes to a halt.

Fast forward two to four years. By 2026, voters may be disappointed in Trump for failing to effectively control inflation, end endless wars, improve food security, or address government corruption, allowing the Democratic Party to potentially regain power. If they secure an absolute majority in the House that is enough to override a presidential veto, what then? Moving forward to 2028, a Democratic president gets elected, such as Gavin Newsom, who might rise in a phoenix-like manner. Meanwhile, certain controversial policies, like allowing minors to undergo gender confirmation surgeries without parental consent, could become a reality again. Some voters may rejoice at this.

For an incoming Democratic-controlled government, finding ready-made funds to meet the demands of its supporters is a top priority. And this is not unique to the Democratic Party; in fact, any party struggles to avoid this logic. At this point, the government's Bitcoin reserves—lying dormant with one million coins—simply need a stroke of a pen to be used as a "cash machine." Naturally, the market will be concerned about when and how these bitcoins will be sold. Will the government seek to minimize its impact on the market and maximize dollar returns, or will it purposefully suppress cryptocurrency holders who support the "orange man" for political reasons? We cannot predict. However, such uncertainty would severely undermine the market's confidence in Bitcoin and the entire cryptocurrency industry.

If the U.S. government decides to hoard "shitcoins," including Ripple, these cryptocurrencies will inevitably be transformed into a potent political tool. Nevertheless, as a purely political strategy, would the U.S. government truly engage with the crypto community? Would they donate to support Bitcoin core developers' work? Would they run Bitcoin nodes? Perhaps they might... But based on the current discussions regarding the BSR, it appears more like a "buy-and-hold" plan. Trump and the Republican Party might witness Bitcoin's price surge, declare "mission accomplished," and use this opportunity to raise more campaign funds from David Bailey at $10,000-a-plate luxury dinners. Don't blame the players; blame the game rules. However, presenting such a wish to the "wizard" could bring unnecessary pain to the crypto industry within two years.

Frankensteinian Cryptocurrency Regulation

To understand what a cryptocurrency holder (Hodler) desires in terms of regulation, the simplest way is to look at their investment portfolio. From my vantage point far away from the hustle and bustle of the "Crypto Wizard," those who have a significant investment in centralized crypto financial intermediaries are often the most likely group to see their regulatory wishes come true, as their voice is the loudest. Unfortunately, developers dedicated to building truly decentralized technology and applications do not have enough financial resources to participate in the political game during this cycle. The wealthiest current crypto practitioners usually control exchanges, brokerage services, or some form of lending platform.

Therefore, if cryptocurrency regulatory desires are indeed met, it may manifest in a complex and highly prescriptive form of regulation, where only those well-funded large centralized companies can afford the compliance costs. This is because the only people who can understand these laws are professional corporate lawyers who navigate between various regulatory bodies. And these lawyers' fees are not cheap—up to $2,000 per hour. Perhaps in Dubai, this is considered a bargain, but in my opinion, it is a costly expense.

Is this really the outcome that the broader crypto community hopes to get from the "Crypto Wizard"? Is all this just to make Brian Armstrong and Larry Fink even richer? I am not criticizing them; they are just diligently doing their job—by building a monopolistic structure to maximize shareholder value and make their business stand out. Perhaps the shareholders of Coinbase and BlackRock indeed want to see such a Frankensteinian cryptocurrency regulation. But in my view, this kind of regulation will not change the existing industry landscape. Although it has no direct negative impact on the crypto industry, it certainly does not have any positive impact either.

For those entrepreneurs who chose to relocate to the US because they believed it has a "crypto-friendly" government, please think twice. If you accept such a situation, your startup is likely to end in failure. Those relying on complex and burdensome regulatory barriers to protect their monopolistic businesses have no interest in real innovation. They will use their unique privileged position to shut potential competitors out. As an entrepreneur, you may have flown into JFK Airport in business class, but when you leave, you may only be able to fly back in economy class.

Make a Wish

If I were to make a wish, what would it be? I will tell you the answer. But in my style, before revealing it, we need to first review financial history and interpret certain key events from my perspective.

At the core of the issue is why would the "Genie" grant my wish, or at least a close variant? The "Genie" and the helpers who actually control the workings of the state would only agree if my wish helps further their own objectives.

Donald Trump's two key aides—the U.S. Secretary of the Treasury Scott Bessent and the U.S. Secretary of State Mark Rubio—aim to strengthen the dollar's status and maintain U.S. hegemony by reforming the global economic order. As I mentioned in the previous article, "The Ugly," the dollar system is actually composed of two parts: one is a currency, and the other is a reserve asset. Since the signing of the Bretton Woods Agreement in 1944, the dollar has been the global reserve currency, but the form of the reserve asset has changed over time.

Evolution of the Dollar System's Reserve Asset

1944 - 1971: Gold

During this period, the value of the dollar was fixed at $35 per ounce of gold. Sovereign nations aligned with the "Pax Americana" could exchange dollars for gold at this price.

1971 - 1994: Oil

To pay for the massive expenses of the Vietnam War and the large-scale social welfare programs implemented by his predecessor, President Lyndon B. Johnson, U.S. President Richard Nixon decided to end the gold standard. Since then, the reserve asset shifted to the petrodollar. Saudi Arabia became the first country to explicitly agree to price oil in dollars and invested its dollar surplus from oil revenue in U.S. Treasuries. This arrangement allowed the U.S. Treasury to issue bonds backed by the flow of oil from the world's largest marginal oil-producing nation.

1994 - 2025: Foreign Exchange Reserves of Exporting Nations

In the 1980s, the U.S. significantly strengthened its economic resilience by increasing oil production and improving energy efficiency. At the same time, China's rise, along with the emergence of the Asian "Four Asian Tigers" such as Korea, Taiwan, Japan, Malaysia, and Thailand, enabled goods to be produced at very low costs for consumption by U.S. and Western consumers. In 1994, China adopted a large-scale devaluation strategy for the Renminbi and officially joined the global mercantilist competition of exporting for foreign exchange reserves. These exporting nations were allowed access to the vast Western consumer market but on the condition that they price goods in dollars and invest their dollar surplus in U.S. Treasuries.

2025 - Future: Bitcoin/Gold

However, China is not willing to continue playing a subservient role in the "Pax Americana" system. For China, the 20th century was a "century of humiliation," where the weak Qing emperors signed unequal treaties with Western powers, leading to two World Wars and a civil war that plunged the country into chaos. Prior to the European Renaissance, China was the world's largest economy. Therefore, the Chinese Communist Party (CCP) sees the "great rejuvenation of the Chinese nation" as a core goal. In fact, the idea of "Make America Great Again" (MAGA) is not unique to the United States—China has been pursuing its own national rejuvenation since 1949.

To achieve this goal, China successfully transformed from a low-cost, low-quality manufacturing country to a low-cost, high-quality production country. However, when the Chinese leadership realized that buying more U.S. Treasury bonds with their surplus would only further solidify their position as a "second-tier power" to the U.S., they decided to stop accumulating debt. Under the previous tacit agreement, every dollar of export surplus had to be used to buy an equivalent amount of U.S. Treasury bonds. However, based on public data from the past 12 months, although China earned $1 trillion through export surplus, its U.S. Treasury bond reserves decreased by $14 billion.

This trend has also caught the attention of other exporting countries. In rapidly developing global South countries, most have seen their trade with China surpass their trade with the U.S., although much of this trade is still priced in dollars. "De-dollarization" does not mean completely abandoning the dollar but rather investing the surplus in assets not dominated by the "Pax Americana," such as Bitcoin and gold. This marks a potential transformation of the global economic order.

Trump's aides are facing a tricky issue: they need to design a new system that can retain the dollar as the main pricing currency for global trade while finding a suitable reserve asset to maintain the normal operation of the U.S. Treasury market. If they truly have enough capability, perhaps they can manage to quickly reduce the U.S. public debt-to-GDP ratio to around 30%—the level the U.S. had in 2000.

However, the global market is no longer willing to consider U.S. Treasury bonds as a savings tool. This is why the introduction of a "neutral reserve asset" is needed. No country is trying to replace the dollar with its own currency because the decline of Pax Americana is evident, a decline caused by the economic imbalances brought about by the dollar as the global reserve currency.

Before continuing the discussion of my wish, I would like to talk about how a top strategist in the Traditional Finance (TradFi) money market space views this issue.

DeepSeek

Zoltan Pozsar is a former Federal Reserve (Fed) staffer and currently a strategist at Credit Suisse. A blog post he recently wrote has been highly praised by the "American Way of Peace" financial elites. His proposed solution (which I will detail later) may be put into practice, making it worth exploring. However, I will also point out where I disagree with his views. Ultimately, I believe his solution is more suited to the 1980s rather than 2025.

Many strategists who believe in the "American Exceptionalism" view think of regaining the power and prestige of the "American Way of Peace" as in the plot of the movie "Top Gun." In their imagination, a heroic Tom Cruise flies an F-14 fighter jet, effortlessly defeating his Russian and Chinese adversaries. However, this idea is clearly mistaken.

A sequel of "Top Gun" might better reflect the current international situation with slight adjustments. The $75 million F-18 fighter jets could be replaced with Iranian-made Shahed drones. These drones sell for only $50,000 and are widely deployed across Southern nations globally. Tom Cruise, now in his 60s, still flies these overly expensive jets while his adversaries are a swarm of drones interconnected through AI technology, costing only a fraction of the jets. In the Ukraine battlefield, both Russia and the USA have seen how 20th-century conventional weapons are powerless in a modern drone-dominated battlefield.

This brings to mind DeepSeek. If you are too immersed in the TikTok world, you may not be aware that DeepSeek is a revolutionary AI Large Language Model (LLM). Its performance rivals that of ChatGPT or Claude, but with 95% lower training costs. More importantly, it is open source. So far, no tech giant CEOs like NVIDIA's Jensen Huang or Microsoft's Satya Nadella have come forward to question the authenticity of its results or the reasonableness of its costs.

The significance of DeepSeek lies in the fact that it was developed by a hedge fund professional from Hangzhou, China. Against the backdrop of the US imposing a high-performance semiconductor blockade on China, the American logic was that Chinese entrepreneurs could not train and deploy LLMs that perform close to those relying on US high-performance chips. However, DeepSeek's success directly shatters the entrenched belief that "who spends the most money has the best LLM performance." This once again proves the saying, "Necessity is the mother of invention." Even facing economic sanctions, a small Chinese entrepreneurial team of only 200 people managed to break through with determination. If China's production capacity cannot be destroyed through ground warfare, perhaps the era of American Exceptionalism has truly come to an end. Being an ordinary country is not a problem unless your entire national identity is built on a fictional sense of national superiority, simply because you were born in the "United States."

When non-American elites consider themselves inherently inferior, they often choose to comply. This mindset allows American financial elites to easily dominate global policies, such as deciding which currency a country uses in trade and how to invest its national surplus. However, if non-Americans begin to realize their equality with Americans, they may no longer readily accept directives from American diplomats. This is particularly important for Zoltan's policy recommendations, as his measures are based on bilateral cooperation. If Bessent were to make a "just do it" request, a country's treasury or exchequer might comply, but if the country refuses, then there is no room for further discussion. This is precisely the fatal flaw in Zoltan's policy proposal.

Zoltan's goal and my goal are aligned: to weaken the value of U.S. Treasury debt. Additionally, Zoltan correctly points out that the U.S. needs to lengthen the duration of its debt and reduce interest payments. Assuming Bessent wishes to decrease the debt-to-GDP ratio from 100% to 30%, if GDP remains unchanged, then the actual value of the debt needs to decrease by 70%. Zoltan's core idea is to ask foreign creditors to swap their short-term Treasuries for hundred-year Treasuries. These hundred-year Treasuries are non-negotiable, but if a creditor country needs cash, they can be repurchased at face value.

Let me explain how this mechanism works:

Suppose you are a Southern country (a derogatory term), holding a $100 10-year U.S. Treasury bond in hand, with a face value of $100 as well.

1. As per Bessent's requirement, you need to exchange this 10-year Treasury for a zero-coupon 100-year Treasury (aka the hundred-year Treasury). The actual market value of this hundred-year Treasury is only $30, but the face value remains $100. For illustrative purposes, I have simplified the bond's math calculations. A bond with no coupon income and a longer term must inherently have a lower intrinsic value than a bond with a coupon and a shorter term.

2. Through this exchange, your debt's actual value is reduced by 70%, but the face value remains at $100.

3. If you are a "compliant ally" (like Europe...somewhat unreliable) or a "loyal vassal" (like the Philippines...actually, Europe might also fall into this category), you can contact the Fed at any time to convert this hundred-year Treasury into dollars at face value, with no fees. For example, when you need dollars to purchase oil from Saudi Arabia, the actual market value of this hundred-year Treasury is only $30, but the Fed will exchange it for dollars today at the $100 face value, interest-free.

4. However, from now on, any surplus dollars you have can only be used to purchase Century Bonds for future trades. You are not allowed to purchase any other financial assets.

This transaction has both benefits and drawbacks. The drawback is that the actual value of your debt has been reduced by 70%, which is equivalent to a severe blow to your national savings system. What's worse is that you have agreed to only receive liquidity support from the debt issuer—the Federal Reserve—and not through free trading in the global market. However, on the other hand, if you "behave," the Federal Reserve will provide interest-free loans to you at face value.

The benefit of this transaction is that if you are willing to accept this "barefaced humiliation," you can enter the circle of "American peace" and shared prosperity. The punishment is that if you refuse this transaction, your export goods will face high tariffs or even complete blockage, and you will also be unable to obtain U.S. weapons to address domestic and international conflicts.

However, there are a few points to note that, when combined, may lead to many countries not accepting this transaction. Firstly, for many countries, China has now replaced the United States as their largest trading partner. Secondly, the supply of U.S. weapons has been stretched thin as they have almost all been used to arm Ukraine. Additionally, many of the U.S. weapons are simply re-exported Chinese intermediate products, so why not just buy directly from China? Finally, from a psychological perspective, if a country has already rid itself of a "slave mentality," why would it willingly accept this kind of "barefaced humiliation"?

My Vision

Can I improve on Zoltan's idea? The answer is obviously yes.

Our core goal remains unchanged: to devalue existing U.S. debt, maintain the dollar as the primary global trade settlement currency, and extend the maturity of the debt to 100 years. Additionally, I have proposed a new goal: to establish Bitcoin as a global neutral reserve currency.

The choice of reference for currency devaluation is crucial. If a tangible commodity like oil or food is chosen as the reference, it may lead to social unrest due to inflation. Therefore, devaluation must target an asset that will not substantially harm the standard of living of the general public.

Zoltan's plan involves using time as a reference for devaluation. His idea is to exchange a 10-year bond for a 100-year bond. According to the time value of money theory, an asset that can only be redeemed after 100 years will have a much lower intrinsic value than an asset redeemable after 10 years. However, this exchange requires the consent of the counterparty. I believe that the reference for devaluation should be Bitcoin. More importantly, this type of devaluation can be implemented unilaterally, with the ultimate effect being the same as Zoltan's method.

My Plan:

Step One: Public Declaration

Bessent delivers a speech, announcing the United States' plan to restructure the global reserve currency system. The US dollar will continue to serve as the global trade settlement currency, but reserves will be held in Bitcoin.

Step Two: Gradual Depreciation

The US Treasury will purchase Bitcoin with US dollars at a price higher than the current market price. Through this method, the total market value of Bitcoin will be gradually increased to a level where it can serve as a global reserve asset. For example, if Bitcoin's market value needs to match the size of the US Treasury market, its price must rise to $1.8 million.

Example:

Assuming Bitcoin's current price is $100,000, Bessent announces that the Treasury will purchase Bitcoin at $200,000. However, unlike traditional purchases, the Treasury will not pay in cash but will offer a 100-year zero-coupon bond (Century Bond) based on the blockchain. Moreover, anyone meeting the identity verification requirements can repurchase these bonds at face value with no interest, with a rolling one-year buyback period. In other words, the Bitcoin seller seemingly receives dollars but actually holds Century Bonds in the form of a loan.

Market Reaction:

As the Treasury's bid is above the market spot price, this provides arbitrage opportunities for traders. Traders can borrow dollars to buy Bitcoin at a spot price lower than the Treasury's bid, sell to the Treasury for Century Bonds, then exchange the bonds back to dollars through the buyback mechanism, and finally repay the loan with those dollars. Since all of this is done on the blockchain, anyone globally can participate in this transaction, and the Bitcoin price will rapidly rise to the Treasury's bid level.

Criticism:

Why would Bitcoin holders be willing to exchange Bitcoin for an "unattractive" Century Bond? The reason is simple: the price is high enough. It's like many people thinking it's a good idea to give Bitcoin to BlackRock. If the price is attractive enough, most idealism and common sense will be thrown out the window.

Step Three: Extend Bond Maturity

At this point, the US Treasury's asset side holds Bitcoin, while the liability side holds Century Bonds. The market will anticipate Bessent continuing to increase the bid, prompting early action. At this point, the Treasury can sell Bitcoin for dollars at a higher price. For example, when the market price rises to $300,000, and the Treasury previously bought Bitcoin at $200,000, the $100,000 profit can be used to repurchase 10-year bonds. Through this method, Bessent can progressively extend the Weighted Average Maturity (WAM) of national debt.

Bond holders will not suffer because they know the Treasury will use trading profits to buy back non-circulating bonds. This is crucial as it maintains Traditional Finance's (TradFi) confidence and stability in bonds as collateral and loan pricing mechanisms.

Step Four: Social Media Banking

To further solidify the dominance of the US dollar outside of China (due to the ban of major US social media platforms like Facebook and X in China), Bessent proposes that Zuck (CEO of Facebook) and Musk (CEO of X) introduce a US dollar stablecoin transfer feature in their respective apps. Of course, the ideal choice would be to use Ethena's synthetic US dollar stablecoin, USDe. Through this approach, the entire world, especially the Global South regions (where Facebook, WhatsApp, and Instagram are key online communication and business platforms), will be brought into the dollar system. This strategy can effectively counter any attempts at de-dollarization in these countries.

More importantly, the leaders of these countries will hardly be able to stop this trend. If they try to deprive the common people of their reliance on social media, it could ignite social unrest overnight. Just like the US cannot ban TikTok owned by China because the younger generation will vote out any politician pushing for a ban in the next election.

With the gradual accumulation of digital dollars globally, these dollar surpluses may be stored in Bitcoin or other cryptocurrencies. If the price of Bitcoin continues to rise, small holders will naturally be enticed to sell Bitcoin back to the Treasury in exchange for century bonds. This way, holders of US debt will shift from a handful of countries to ordinary people worldwide. Rather than convincing a few countries not to sell their debt, it's better to have billions of ordinary people holding debt in a distributed manner, as this almost eliminates the risk of simultaneous sell-offs. Ultimately, the Treasury's goal is to ensure that debt holders are willing to hold these bonds long term.

Technical Blueprint

No matter what World Liberty Financial (WLF) claims to investors they are developing, this is what they should truly be doing. If you're not yet aware, World Liberty Financial is a cryptocurrency organization associated with the Trump family. Its aim is to utilize Web3 technology and WLF to build infrastructure that brings direct reform to the US Treasury. This approach will bypass the traditional "too big to fail" banks, but what have these banks done besides triggering one financial crisis after another, requiring bailouts through money printing? In the end, the currency inflation they create is eroding the economic foundation of the United States.

Just take a trip to the "American Peace" financial center of New York City, and you will see the reality with your own eyes. While the nightclubs may be brightly lit, the shadows of poverty, homelessness, and crime are everywhere. All of this can be attributed to the traditional banking system of JP Morgan & Chase and others.

The Web3 technology stack should be supported by public blockchains. You know what the answer is: never stop pushing forward! From this perspective, Aptos is the ideal choice. It is currently the fastest (800 milliseconds), lowest-cost (only $0.00005 per transaction), and most reliable (99.99% uptime) public blockchain, capable of supporting high-performance financial transactions.

Furthermore, Aptos's performance speaks for itself. According to RWA.xyz data, Aptos is quietly climbing to be among the top three networks with the most on-chain institutional assets, while also forming partnerships with institutions such as Franklin Templeton, Brevan Howard, and Microsoft. Its MOVE architecture was designed internally at Facebook to handle financial transactions for the world's largest social network, fully capable of handling this task.

Maelstrom will not work for free. It must first be stated that we hold a significant amount of Aptos and Ethena assets.

The U.S. Treasury Department needs to establish an on-chain exchange for trading digital dollars, century bonds, and Bitcoin.

Step One: Launch the digital dollar. The Treasury Department needs to choose two digital dollars: Tether's USDT and Ethena's USDe. USDT is essentially the U.S. dollar held in the U.S. banking system, while USDe is a synthetic dollar generated through longing cryptocurrencies and shorting perpetual swaps; all of its assets are held in major cryptocurrency exchanges. Politics at its core is about "exchange of interests," so how can the current government benefit from these two proposals? U.S. Commerce Secretary Howard Lutnick holds equity in Tether, while World Liberty Financial (WLF) holds millions of dollars' worth of Ethena governance token $ENA. If Tether and Ethena are selected as the Treasury Department's approved digital dollars, both their equity and token holders will benefit. This "self-interest" is the fundamental driving force behind human social development.

Step Two: Tokenize century bonds. The Treasury Department can issue a token (TSY100) for each century bond. Users can purchase these tokens using wrapped Bitcoin on the Aptos blockchain (currently achievable through tools like Wormhole, Celer, and LayerZero). Next, a buyback mechanism needs to be established, allowing users to collateralize TSY100 and receive loans in USDT or USDe.

Technical Note: From a technical standpoint, the Treasury cannot directly create USDT or USDe. Therefore, if a user needs USDT, the Treasury needs to mint USDT by transferring funds to Tether's bank account. If a user needs USDe, the Treasury needs to first mint USDT and then generate USDe through Ethena's mechanism. This process can be automated through APIs provided by Tether and Ethena and completed in the form of atomic transactions.

Step Three: Build a Web3 Currency Market Exchange. The Treasury needs to establish a licensed Web3 currency market exchange, which we can call EagleSwap. The Treasury already owns an identity verification service called ID.me (an example of an online identity verification service). This service can be extended to allow global users to whitelist their Aptos wallets through signature. When users connect their Aptos wallet to EagleSwap via desktop or mobile, if whitelisted, they can freely trade between USDT, USDe, TSY100, and wrapped Bitcoin. Due to the Treasury's large-scale trading of Bitcoin, USD, and treasury bonds globally, EagleSwap will quickly become the most liquid venue for trading these assets.

Next Phase: Integrate Social Media Platforms. The Treasury can also collaborate with globally dominant-controlled social media platforms. Facebook and X are prime candidates to roll out cryptocurrency wallet features. By abstractly connecting their users to EagleSwap, these users will be able to easily transfer, trade, and store digital dollars, century bonds, and wrapped Bitcoin. The most pressing need for the global Southern Hemisphere region is to conduct business activities in USD outside their traditional financial systems. Despite potential issues with USD, it remains a more stable choice compared to other fiat currencies. Building the technical infrastructure for this connection should be accomplished using the Aptos blockchain.

The dominance of the few is undeniable, as seen from their prominent positions at the Trump inauguration. Next, they need to take further action to weaken the parasitic existence of Traditional Finance (TradFi) banks.

I have previously discussed implementing this strategy through unilateral devaluation of the dollar and related technical means. Next, I will explore why the U.S. can gain a unique advantage in the production of "neutral reserve assets" by enacting appropriate laws.

Neutral Reserve Asset: Potential Advantage for the United States

If those elites who control the Pax Americana are to accept this proposal, the United States must have a unique competitive advantage in Bitcoin mining. As is well known, Bitcoin mining requires a significant amount of energy to solve complex mathematical problems. So the question is, does the United States have a cheap and abundant energy supply? The answer is yes, the United States has two significant advantages in energy production.

First, the United States has abundant hydrocarbon resources. There is a large amount of untapped hydrocarbon resources within the United States, distributed within what we call the "national boundaries." All that is needed is sufficient capital and government drilling permits. More importantly, the drilling activities to provide energy for Bitcoin mining are not restricted by the geographical location of the energy. Typically, energy reserves are often far from major population centers, and the cost of transporting these resources to cities is sometimes even higher than the extraction cost. However, by building power plants directly at the resource location to power Bitcoin mining, the transportation hassle can be completely avoided.

Many remote areas, despite being rich in energy resources, often cannot be effectively utilized due to a lack of pipelines and transportation infrastructure. By establishing localized power stations and Bitcoin mining facilities in these areas, these "stranded" energy resources can be fully utilized. For example, Alaska is not only remote and rich in hydrocarbon resources but also has a cold climate, making it ideal for building Bitcoin mining facilities. The cold climate can significantly reduce the cooling costs of mining equipment, making Alaska an ideal Bitcoin mining location.

Second, the United States' capitalist tradition. The capitalist system of the United States is another major advantage. Regardless of the moral controversies surrounding capitalism, the existence of this system is an undeniable fact. The United States is a nation founded by a group of tax-evading slaveholders who, through establishing the Constitution, ensured the continuous appreciation of their capital and maintained their descendants' dominance in the economy and politics. Under such a system, engaging in a long-term large-scale capital investment project, such as drilling for hydrocarbons and mining Bitcoin, is undoubtedly the most appropriate choice.

Another point is the new advantage brought by the construction of domestic semiconductor factories in the United States. Taiwan Semiconductor is nearing completion of its state-of-the-art wafer fabs in Arizona. Meanwhile, with incentives such as government subsidies and tax breaks, other semiconductor foundries will also be encouraged to build factories in the United States. This means that Bitcoin ASIC chips (Application-Specific Integrated Circuit chips) can be produced domestically in the United States. Even if a future surge in Bitcoin prices leads to a global demand spike, the United States can ensure an adequate chip supply, avoiding any shortage issues.

However, there is a significant challenge: While traditional fiat capital enjoys top-tier policy treatment in the United States, Bitcoin and other cryptocurrencies have not received the same level of support. To address this issue, the United States needs to provide constitutional protection for Bitcoin and cryptocurrency. The core principle of Bitcoin mining is decentralization and censorship resistance, but there is currently a possibility that legislators may require miners or node operators to perform some form of censorship. Therefore, a public encrypted ledger (such as the blockchain) needs to be viewed as a protected form of speech. This view is reasonable because a public blockchain is essentially a decentralized network driven by miners through power consumption, at its core being an immutable digital speech chain.

If the United States wishes to become the global hub for Bitcoin mining, it can achieve this through a bill of fewer than 200 words: "Cryptocurrency and its tokens based on blockchain operation should be considered a protected form of speech. All laws applicable to freedom of speech also apply to users or intermediaries of public blockchain technology. Cryptocurrency and public blockchain are private domains, and no government agency shall compel intermediaries, participants, or blockchain node operators to collect or provide data about participants and transactions."

If the United States has a government that supports energy development, coupled with legislation supporting permissionless innovation in cryptocurrency, it can establish a solid foundation to attract global crypto activities. Energy production and ASIC chip manufacturing require significant capital expenditure (CAPEX), and the United States not only has abundant capital markets but can also provide legal protection for the operation of peer-to-peer decentralized networks. These conditions will make the United States a major hub for Bitcoin network hashrate. Ultimately, the production of a "neutral reserve asset" will take place within the United States, bringing a significant strategic advantage to the country in the global economy.

Once the relevant legislation is passed, overturning it will become extremely difficult. Just as many politicians, while critical of the negative impact of large tech companies and social media, have had little progress in abolishing Section 230 of the 1996 Communications Bill since its enactment. This section grants tech platforms immunity from liability for content and activities on their networks, a status quo that is highly profitable for relevant parties. Similar "interest alliances" could also form between cryptocurrency and politicians, while also providing tangible benefits to those in need of high-paying jobs and tax revenue growth.

Rise of Hodlers

If Bessent can successfully drive the Bitcoin price above $1.8 million, it will create a group of the wealthiest people in human history. Currently, some of the largest Bitcoin holders are either U.S. residents or U.S.-registered companies. For example, BlackRock, in less than a year since launching a Bitcoin ETF, has accumulated nearly 600,000 bitcoins worth close to $60 billion. Considering that U.S. political power is largely dependent on wealth, these Bitcoin holders will be able to exert significant political influence. If the Republican Party adopts cryptocurrency-friendly policies, these holders may become staunch supporters for many years or even decades to come.

For politicians, reelection is their core goal. Aside from Trump, those who align with his political ideology are likely to be reelected in 2026 or 2028. By making American cryptocurrency holders extremely wealthy and further solidifying the global dominance of the US dollar, undoubtedly, one of the best strategies for Republican politicians to ensure reelection.

Global Acceptance of Bitcoin as a Reserve Asset

Will other major trade surplus countries accept Bitcoin to replace government bonds as a reserve asset? The answer is yes.

Assuming Bitcoin's market cap is large enough to support trillions of dollars in international trade, Bitcoin has the following significant advantages over government bonds:

1. Bitcoin's code cannot be unilaterally changed.

Bitcoin's decentralized design ensures that no one can unilaterally change its code. Even if some US miners attempt to change the blockchain through a hard fork, such as excluding certain transactions or modifying Bitcoin's total supply, this would only result in the value of Bitcoin on the new chain going to zero, rendering their assets instantly worthless. The economic game theory behind the Bitcoin blockchain ensures that this situation will not occur.

2. Bitcoin transactions are borderless. With an internet connection, Bitcoin can be accessed and transacted at any time, anywhere without permission.

3. Bitcoin is the purest form of monetary energy derivative. It can effectively store the energy value of a trade surplus over time, making it an ideal reserve asset.

No country, including China, is willing to take on the role of the global reserve currency issuer and make their bond market a global reserve asset. This is because this role naturally requires an open capital account, and when a country stops producing actual goods and turns to financial engineering, most ordinary people will face severe adverse effects. This is clearly contrary to the concept of "shared prosperity." Therefore, an improved system may be: continue to trade using the dollar or allow the exchange of bilateral local currencies, but store the trade surplus in Bitcoin. This system benefits everyone... except for those "too big to fail" traditional financial institutions (TradFi). These institutions will have to face the gradual decline in their own power and prestige, while the influence of decentralized finance (DeFi) will continue to grow.

The Right Wish

Stacking sats is my hobby, and I hope it's yours too. So, if you ever have the opportunity to sit at the "Wizard's Table," dressed to impress, make sure you make the right wish.

Epilogue: The Innocence and Reality of the Cryptocurrency Community

People in the cryptocurrency community are often the smartest in the world, yet also the most naive. And Trump is giving them a crash course in politics.

The price of Bitcoin surged from $70,000 to $110,000 in less than 60 days. Behind this phenomenon is the widespread belief in the cryptocurrency community that all their wishes will be fulfilled within the framework of Pax Americana. However, this idea faces a key problem: in any bilateral value exchange, the rational choice is to receive the commodity before payment. Trump and the Republicans have clearly already received what they wanted from the cryptocurrency community—enough votes to win the presidency and gain party majorities in the House and Senate. It is now their turn to "pay," but their timetable is clearly very different from ours, the "speculative maniacs," with our eager eyes on one-second candlesticks.

Trump is currently setting up working groups and Senate committees, but has not taken any actual action. When Trump really wants to act, he acts quickly. For example, he imposed a 25% tariff on the United States' largest trading partner, from announcement to implementation in just a few days; he quickly repealed ESG (Environmental, Social, and Governance) and DEI (Diversity, Equity, and Inclusion) policies within government agencies. These examples indicate that Trump is not reluctant to take positive action on cryptocurrency, but that cryptocurrency regulation or a Bitcoin strategic reserve is not his or the Republicans' top priority. This is regrettable, as at the margin, the single-issue cryptocurrency voter was a key force in getting them elected.

Will Bitcoin's Price Fall?

As the world gradually realizes that U.S. politics has not fundamentally changed due to Trump's election, the price of cryptocurrency may fall back to the levels of the fourth quarter of 2024. I still stand by the prediction that Bitcoin will retest the range of $70,000 to $75,000.

How Can the Cryptocurrency Market Recover from its Slump?

To revive the market, the following scenarios may need to occur: The Federal Reserve, the U.S. Treasury, institutions in China or Japan, etc., introduce some form of monetary stimulus policy, or enact legislation explicitly supporting Permissionless Crypto Innovation. However, if this bill is cobbled together like "Frankenstein" just to cater to the interests of Coinbase, BlackRock, and traditional stock investors, it will not only fail to propel the market to new heights for us crypto degens, but it will also fail to achieve the goal of "decentralizing everything." Such a bill would not only deviate from the ideals of crypto, but would also offend the spirit of decentralization, with rapid and severe consequences.

Rise Up and Advocate for the Crypto Future

Nevertheless, there is still hope. If you are a cryptocurrency holder in the United States (Hodler), now is the time to take action! Let your elected representatives know that you will not stand for the status quo. Email them, write letters, or visit their local offices in person. Politicians often respond to those who care about policy. If you believe that establishing a Bitcoin Strategic Reserve is necessary, now is the time to speak up loudly, instead of just liking a post on X platform (formerly Twitter).

The issue is that digital tools allow us to express anger within our own echo chambers at will, but they rarely prompt us to take real-world action. Yet, in reality, everything you truly value has come through some form of effort and sacrifice. The political journey of cryptocurrency is not a "one-click" process—open your eyes, rise up, or the market may continue to slide.

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