Arthur Hayes New Article: Bitcoin will replace the US dollar and become a global reserve currency

Author: Arthur Hayes

Compiled by: TechFlow

Pax Americana Make-A-Wish Corporation, located in Mar-a-Lago, receives a large number of "wishers" every day. People in the cryptocurrency world, like everyone else, line up in long lines trying to seize opportunities to fulfill one or more wishes. The fickle "elves" - the owner of "Orange Man", will "open court" every week in a private club that combines country style and nightclub style in South Florida's swamp area, accompanied by A classic 1980s pop music surrounded by a group of flattering followers.

Since there is no distinction between good and evil in the elves itself, what we really need to judge is whether the wisher's wish is reasonable. Every culture in the world has moral stories about “wrong wishes”, and those who try to achieve success, wealth or personal happiness through shortcuts often have unexpected consequences.

The core meaning of these stories is: there is no "shortcut button" in life, and all the beauty comes from hard work and dedication.

In the global cryptocurrency industry, there are two highly-watched "wishes" worth discussing - one is to establish Bitcoin Strategic Reserve (BSR), and the other is to promote Pax Americana-style cryptocurrency regulation. Overall, many crypto practitioners want the U.S. government to buy bitcoin by printing money as part of the national reserves, while also hoping to establish favorable regulatory barriers for the crypto-related businesses they hold. I think these wishes are in the wrong direction. We should choose a more difficult but meaningful path to make a request to the "elves" that cannot be easily overturned even if the next government (regardless of its political parties) comes to power.

In the first part of this article, I will argue why BSR and the patchwork crypto-regulatory bills have negative impacts on industry development, both locally and globally. Then I will provide some advice for those who wear striped suits or summer dresses every day waiting to make wishes to this "orange elf" and tell them what more valuable wishes should be made.

Bitcoin Strategic Reserve (BSR)

Anything that can be purchased can also be sold. When a government hoards an asset, the core problem is that this kind of buying and selling is usually for political purposes, not for economic gain. Under the framework of the current global economic system, what direct effect can Bitcoin bring to the US government? The answer is no. Bitcoin is nothing more than another financial asset. While some readers may think that Bitcoin is "the hardest currency in history" created by Satoshi Nakamoto, the only true god, I can tell you with certainty that the "elves" (also referring to politicians) did not act like this. It originates from admiration for the gods, but to cater to the elected group who gave him to the throne of power.

Suppose Trump has really successfully established a Bitcoin Strategic Reserve (BSR). The government purchased one million bitcoins as proposed by U.S. Senator Lummis. What will be the result? Bitcoin price soared rapidly and the market fell into fanaticism, but as the government completed its purchase, Bitcoin's "only rise but not fall" trend also came to an abrupt end.

Fast forward two to four years. By 2026, voters may be disappointed by Trump’s failure to effectively control inflation, end endless wars, improve food safety or resolve government corruption, and the Democrats may take this opportunity to regain power. What if they received an absolute majority in the House that was enough to overturn the president's veto? Suppose that in 2028, a Democratic president, such as Gavin Newsom, may rise in a "phoenix nirvana". Meanwhile, some controversial policies, such as allowing minors to undergo sex change surgery without their parents’ consent, may become a reality again. Some voters may cheer.

For an upcoming Democratic-controlled administration, finding ready-made funds to meet the needs of its supporters is a priority. And this is not only the Democratic Party, but in fact, it is difficult for any political party to avoid this logic. At this time, the government's Bitcoin reserves - one million lying quietly, just a piece of paper signing, can be used as an "ATM". The market will naturally worry about when and in what way these Bitcoins will be sold. Will the government minimize the impact on the market and maximize the US dollar's returns, or will it deliberately suppress cryptocurrency holders who support "orange people" for political purposes? We don't know. But this uncertainty will seriously hit 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 converted into a powerful political tool. However, as a purely political strategy, will the U.S. government really be seriously involved in the crypto community? Will they donate to support the work of Bitcoin core developers? Will Bitcoin nodes be run? Maybe it is possible... But judging from the current discussion about BSR, this is more like a "buy it and leave it alone" plan. Trump and the Republicans may see the price of Bitcoin soar, then announce the "mission is completed" and take the opportunity to raise more campaign funds from David Bailey at a luxury dinner of $10,000 per set. Don't blame the players, blame the rules of the game. However, making such a wish to "Elf" may cause unnecessary pain to the crypto industry within two years.

Frankenstein-style crypto bill

The easiest way to understand the regulatory policies a cryptocurrency holder (Hodler) hopes is to look at their portfolio. From my perspective of staying away from the hustle and bustle around the “elves,” those who have a lot of investment in centralized crypto financial intermediaries are often the most likely groups to realize their regulatory desires because they have the biggest voices. Unfortunately, developers who are committed to building truly decentralized technologies and applications do not have enough financial resources to participate in the political game in this cycle. The wealthiest crypto practitioners currently usually control exchanges, brokerage services or some kind of lending platform.

Therefore, if the desire for crypto-regulation is truly met, it may be presented in a complex and highly normative form of regulations that only large centralized companies with strong capital can afford the compliance costs. This is because the only people who can understand these laws are professional corporate lawyers who wander among various regulatory agencies. And these attorneys are not cheap – up to $2,000 per hour. Maybe this is considered a "bad price" in Dubai, but in my opinion, it is an expensive expense.

Is this really the result the broader crypto community wants from "Elf"? Is this all just to make Brian Armstrong and Larry Fink richer? I'm not criticizing them; they're just doing their jobs conscientiously—maximizing shareholder value by building a monopoly structure that will make their business stand out. Perhaps those Coinbase and BlackRock shareholders do want to see such a Frankenstein-style crypto bill. But in my opinion, such regulations cannot change the existing industry landscape. Although it has no direct negative impact on the crypto industry, it definitely has no positive effect.

For entrepreneurs who choose to relocate here because they believe the United States has a "crypto-friendly" government, be sure to think twice before doing it. If you acquiesce to this situation, your startup will likely end in failure. Those monopoly companies that rely on complex and cumbersome regulatory barriers to protect themselves have no interest in real innovation. They will use their unique privileged position to keep potential competitors out. As an entrepreneur, you may have flew to JFK Airport in business class, but when you finally leave, you may have to go back in economy class.

Make a wish

If I were asked to make a wish, what would I hope? I will tell you the answer. But in my style, before it is revealed, we need to review the history of finance and interpret certain key events from my perspective.

The core of the question is, why does the "Elf" satisfy my wish, or at least a close variant? "Elf" and those assistants who actually control the operation of the country will only agree if my wishes help achieve their goals.

The main goal of Trump’s two key aides, U.S. Treasury Secretary Scott Bessent and U.S. Secretary of State Mark Rubio, is to consolidate the dollar’s ​​position and maintain U.S. hegemony by reforming the global economic order. As I mentioned in my previous article The Ugly, the US dollar system is actually composed of two parts: one is currency and the other is reserve assets. Since the signing of the Bretton Woods Agreement in 1944, the US dollar has been the global reserve currency, but the form of reserve assets has changed with the times.

The evolution of reserve assets of the US dollar system

1944 - 1971: Gold

During this period, the value of the dollar was fixed at $35 per ounce of gold. Sovereign states that are allied with "Pax Americana" can exchange US dollars for gold at this price.

1971 - 1994: Oil

To cover the huge expenses of the Vietnam War, and the massive social welfare program implemented by its former President Lyndon B. Johnson, U.S. President Richard Nixon decided to end the gold standard. Since then, reserve assets have been transformed into petrodollars. Saudi Arabia became the first country to explicitly agree to price oil in US dollars and invest its dollar surplus in U.S. Treasury bonds. This arrangement allows the U.S. Treasury Department to issue bonds, which are actually supported by oil flows from the world's largest marginal oil producers.

1994 - 2025: Foreign exchange reserves of global exporters

Entering the 1980s, the United States greatly enhanced its economic resilience by increasing oil production and improving its economy's energy efficiency. At the same time, the rise of the "Four Little Dragons" in Asia such as South Korea, Taiwan, Japan, Malaysia, and Thailand has enabled the products to be produced at extremely low costs for consumers in the United States and Western Europe to consume. In 1994, China adopted a strategy of large-scale RMB depreciation and officially joined the global mercantilist competition for exports to exchange for foreign exchange reserves. These exporters are allowed to enter the vast Western consumer market, provided that the goods must be priced in US dollars and invest the surplus dollars in U.S. Treasury bonds.

2025 - Future: Bitcoin/Gold

However, China is not willing to continue to act as an affiliated role in the Pax Americana system. For China, the 20th century was a "humiliation century". The weak Qing emperor signed unequal treaties with the great powers, and the two world wars and a civil war that followed made the country fall into the abyss. In the long history before the European Renaissance, China was once the world's largest economy. Therefore, the Communist Party of China (CCP) regards "achieving the great rejuvenation of the Chinese nation" as its 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 has successfully transformed from a low-cost, low-quality manufacturing country to a low-cost, high-quality producer. However, when Chinese leadership realized that buying more U.S. Treasury bonds with surplus would only further consolidate its status as the U.S. "Sub-power", they decided to stop accumulating Treasury bonds. Under the past tacit understanding, every dollar's export surplus must be used to purchase equivalent U.S. Treasury bonds. However, according to public data over the past 12 months, China has earned $1 trillion from its export surplus, but its U.S. Treasury reserves have dropped by $14 billion.

This trend has also attracted the attention of other exporting countries. Among the rapidly developing southern countries in the global world, most trade with China has exceeded trade with the United States, although most of these trades are still denominated in US dollars. "De-dollarization" does not mean abandoning the dollar completely, but investing surplus in assets that are not dominated by "American peace", such as Bitcoin and gold. This marks a potential transformation of the global economic order.

Trump aides face a difficult problem: they need to design a new system that can retain the dollar as the main denominated currency for global trade and find a suitable reserve asset to maintain the normal operation of the U.S. Treasury market . If they really had enough capacity, they might also be able to try to quickly reduce the U.S. public debt to around 30% of GDP – the level of the U.S. in 2000.

However, global markets are no longer willing to regard U.S. Treasury bonds as a savings vehicle. This is exactly why a "neutral reserve asset" is needed. No country has tried to replace the dollar with its own currency, because the recession of "Pax Americana" is already obvious, and this recession is caused by the economic imbalance caused by the US dollar as a global reserve currency.

Before continuing to discuss my wishes, I would like to talk about how a top strategist in the traditional finance (TradFi) money market viewed this issue.

DeepSeek

Zoltan Pozsar is a former Dallas Federal Reserve (Fed) staff member and a Credit Suisse strategist. A blog he currently writes is highly sought after by the "American Peace" financial elite. His solution (which I will go into more detail later) may be put into practice and therefore worth exploring. But I will also point out where my differences with his views lie. Ultimately, I think his solution is more suitable for the 1980s than for 2025.

Many strategists who believe in the "American Exceptionism" believe that regaining the power and prestige of "American peace" is like the plot of the movie Top Gun. In their imagination, a heroic Tom Cruise flew an F-14 fighter and easily defeated his Russian and Chinese opponents. However, this idea is obviously wrong.

The recent Top Gun sequel may better reflect the current international situation, just a little adjustment is required. Replace the nearly $75 million worth of F-18 fighter jet with Iran-made Shahed drone. The drone is priced at just $50,000 and is widely sold in southern countries around the world. Tom Cruise, although he is over 60 years old, is still flying these overpriced fighter jets, while his opponent is a group of drones connected through AI technology, which costs only a small part of the fighter jets. On the Ukrainian battlefield, Russia and the United States have witnessed how powerless the traditional weapons of the 20th century are on the battlefield dominated by modern drones.

This reminds me of DeepSeek. If you are too addicted to the world of TikTok, you may not know yet that DeepSeek is a revolutionary AI Big Language Model (LLM). Its performance is comparable to ChatGPT or Claude, but its training costs are 95% lower. More importantly, it is open source. As of now, no CEO of any tech giant, such as NVIDIA's Jensen Huang or Microsoft's Satya Nadella, has come forward to question the authenticity of the results or the rationality of the cost.

The significance of DeepSeek is that it was developed by a Chinese hedge fund practitioner from Hangzhou. Against the backdrop of the US's high-performance semiconductor economic blockade on China, the US's logic believes that it is impossible for Chinese entrepreneurs to train and deploy LLMs that rely on US high-performance chip training. However, DeepSeek's success directly shattered the ingrained concept of "who spends the most money, who has the best LLM performance". This also verifies the old saying: "Demand is the mother of invention." Even with economic sanctions, a small Chinese entrepreneurial team with only 200 people has made a breakthrough with determination. If China's production capacity cannot be destroyed through ground wars, then the era of American exceptionalism may really be coming to an end. In fact, there is nothing wrong with being an ordinary country unless your entire national identity is based on a fictional sense of national superiority and consider yourself superior just because you were born in "America".

When non-American elites think they are inherently inferior, they often choose to obey. This psychology makes it easy for the U.S. financial elite to dominate global policies, such as deciding what currency a country uses in trade, and how to invest in its national surplus. However, if non-Americans begin to realize that they are equal to Americans, they may no longer easily accept orders from American diplomats. This is especially important for Zoltan's policy recommendations, as his measures are based on bilateral cooperation. Bessent If a country's finance ministry or treasury may obey, but if the country refuses, there is nothing to talk about. This is the fatal weakness of Zoltan's policy plan.

Zoltan’s goal is consistent with mine: to weaken the value of U.S. Treasury bonds. In addition, Zoltan correctly pointed out that the United States needs to extend the lifetime of its debt and reduce the interest paid. Assuming Bessent wants to reduce debt to GDP from 100% to 30%, if GDP remains the same, the actual value of debt needs to be reduced by 70%. Zoltan's core idea is to require foreign creditors to replace their short-term government bonds with centennial government bonds. This century-old government bond is not traded, but if the creditor country needs cash, it can repurchase it at face value.

Let me explain how this mechanism works:

Suppose you are a southern country (with a clearly insulting name) and hold a 10-year U.S. Treasury bond with a face value of $100, with a face value of $100.

1. As required by Bessent, you need to replace this 10-year Treasury bond with a zero-interest 100-year Treasury bond (the so-called a century-old Treasury bond). The actual market value of this century-old Treasury bond is only US$30, but the face value is still US$100. For ease of illustration, I simplified the mathematical calculations of bonds. A bond with no coupon income and a longer term must have an intrinsic value that is less than a bond with a coupon and a shorter term.
2. With this replacement, your debt’s actual value was cut by 70%, but the face value remained unchanged at $100.
3. If you are an "obedient ally" (such as Europe... although a little unreliable) or a "loyal vassal" (such as the Philippines... in fact, Europe may also belong to this category), you can contact the Federal Reserve at any time and take this 100-year-old photo. Futures Treasury bonds are exchanged for US dollars at face value, and no fees are required. For example, when you need to buy oil from Saudi Arabia in US dollars, the actual market value of this century-old Treasury bond is only $30, but the Fed will exchange it for you at a face value of $100 today, and there is no interest.
4. But from then on, any of your dollar surplus can only be used to purchase centenary treasury bonds in future trade. You are not allowed to purchase any other financial assets.

This deal has both benefits and disadvantages. The downside is that your debt is cut by 70%, which is equivalent to causing your national savings system to suffer a heavy blow. Worse, you agree that you can only get liquidity support from debt issuers, that is, the Federal Reserve, and not trade freely through global markets. But on the other hand, if you are "obedient", the Fed will provide you with interest-free loans at face value.

The advantage of this deal is that if you are willing to accept this "naked humiliation", you can enter the common prosperity circle of "American peace". The punishment is that if you refuse to accept this transaction, your exported goods will be suppressed by high tariffs or even completely blocked, and you will not be able to obtain American weapons to deal with conflicts at home and abroad.

However, there are several points that need to be pointed out in particular that these factors combined may cause the deal to not be accepted by many countries. First, for many countries, China has now replaced the United States as their largest trading partner. Secondly, the United States' arms supply is already stretched, as they are almost all used to arm Ukraine. In addition, many of the US weapons are just Chinese intermediate products that are re-exported, so why not just go to China to buy them? Finally, from a psychological perspective, if a country has escaped its "slave mentality", why should it still voluntarily accept this "naked humiliation"?

My Vision

Can I improve Zoltan’s idea? The answer is obviously OK.

Our core objectives remain unchanged: to weaken the actual value of existing U.S. Treasuries, to maintain the dollar as the main settlement currency for global trade, and to extend the maturity of Treasuries to 100 years. At the same time, I also proposed a new goal: to build Bitcoin into a global neutral reserve currency.

Choosing a reference for depreciating fiat currency is very critical. If the reference selected is a commodity with practical uses such as oil or food, social unrest may be caused by inflation. Therefore, devaluation must be directed at an asset that does not substantially harm the standard of living of the general public.

Zoltan's plan is to depreciate with time as a reference. His idea was to replace a 10-year bond with a 100-year bond. According to the time value theory of currency, assets that can only be cashed out after 100 years have an intrinsic value that is much lower than those that can be cashed out after 10 years. But this replacement requires the consent of the counterparty. And I think the reference for depreciation should be Bitcoin. More importantly, this devaluation can be implemented unilaterally, with the final effect the same as Zoltan’s approach.

My plan:

Step 1: Public statement

Bessent delivered a speech announcing the U.S. plans to restructure the global reserve currency system. The U.S. dollar will continue to be the denominated currency for global trade, but reserve assets will be replaced by Bitcoin.

Step 2: Gradually depreciate

The U.S. Treasury Department will buy Bitcoin in US dollars higher than the current market price. In this way, the total market value of Bitcoin is gradually increased so that it can be large enough to be competent for the role of global reserve assets. For example, if Bitcoin’s market value is to reach a scale comparable to that of the U.S. Treasury market, its price must rise to $1.8 million.

Example:

Assuming Bitcoin’s current price is $100,000, Bessent announced that the Treasury Department will buy Bitcoin for $200,000. But unlike traditional purchasing methods, the Ministry of Finance does not pay cash, but provides a 100-year zero-interest bond based on blockchain (centennial Treasury bond). In addition, anyone who meets the identity certification requirements can repurchase these bonds at face value with interest-free repurchase periods of a rolling one year. In other words, Bitcoin sellers appear to have obtained US dollars, but actually hold centenary Treasury bonds in the form of loans.

Market reaction:

This provides traders with arbitrage opportunities as the Treasury bid is higher than the market spot price. Traders can borrow dollars, buy bitcoin at a spot price lower than the Treasury bid, and then sell it to the Treasury for centenary Treasury bonds, then convert the bonds into dollars through a repurchase mechanism, and finally use these dollars to repay the loan. Since this is all done on the blockchain, anyone around the world can participate in the transaction, and the price of Bitcoin will quickly rise to the Treasury bid level.

criticize:

Why would Bitcoin holders be willing to exchange Bitcoin for a "unattractive" century-old Treasury bond? The reason is simple: the price is high enough. It's like many people think it's a good idea to hand over Bitcoin to BlackRock. If the price is attractive enough, most idealism and common sense will be left behind.

Step 3: Extend the Treasury Bond Maturity

At this time, the US Treasury Department held Bitcoin on the asset side, while the liability side was a century-old Treasury bond. The market will expect Bessent to continue to raise bids and thus take action in advance. At this time, the Ministry of Finance can sell Bitcoin at a higher price for USD. For example, when the market price rose to $300,000, and the Treasury previously purchased Bitcoin for $200,000, the $100,000 profit could be used to buy back 10-year Treasury bonds. In this way, Bessent can gradually extend the weighted average maturity (WAM) of state debt.

Treasury bond holders will not suffer any losses because they know that the Ministry of Finance will use trading profits to purchase non-circulating Treasury bonds. This is crucial because it can maintain the confidence and stability of traditional financial institutions (TradFi) in Treasury bonds as collateral and loan pricing mechanisms.

Step 4: Social Media Banking

To further consolidate the dollar's dominance outside China (due to large U.S. social media platforms such as Facebook and X are banned in China), Bessent proposes that Zuck (CEO of Facebook) and Musk (CEO of X) introduce in their respective applications Transfer function of US dollar stablecoins. Of course, the ideal option is to use Ethena's synthetic dollar stablecoin USDe. In this way, the world, especially the global southern region (Facebook, WhatsApp and Instagram are the main online communication and business platforms in these regions), will be included in the US dollar system. This strategy can effectively offset any attempt to de-dollarize these countries.

More importantly, leaders of these countries are hardly able to stop this trend. If they try to deprive ordinary people of their dependence on social media, it could trigger social unrest overnight. Just like the United States itself can’t ban China-owned TikTok, as the younger generation will oust any politicians pushing the ban in the next election.

As digital dollars accumulate over the world, these dollar surpluses may be stored in Bitcoin or other cryptocurrencies. If the price of Bitcoin continues to rise, small holders will naturally be attracted to sell the Bitcoin back to the Ministry of Finance for a century-old Treasury bond. In this way, holders of U.S. Treasury bonds will transform from a few countries to ordinary people around the world. Rather than convince a few countries not to sell their debts, let billions of ordinary people diversify their debts, because it is almost impossible to trigger the risk of simultaneous selling. Ultimately, the Treasury’s goal is to ensure that debt holders are willing to hold these bonds for a long time.

Technical blueprint

Whatever World Liberty Financial (WLF) claims to investors what they are developing, that's what they really should do. If you don't know yet, World Liberty Financial is a cryptocurrency organization associated with the Trump family. Its goal is to build infrastructure with Web3 technology and WLF, bringing direct reforms to the U.S. Treasury. This approach will bypass traditional "big and cannot be destroyed" banks, but what else have these banks done besides triggering one financial crisis after another and needing to print money to help? Ultimately, the monetary inflation they create is eroding the economic foundations of the United States.

Just take a trip to New York City's "American-style peace" financial center and you can see the reality with your own eyes. Even though nightclubs are brightly lit, the shadows of poverty, homelessness and crime are everywhere. All of this is to blame for traditional banking systems such as JP Morgan & Chase.

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

And, Aptos' performance proves this. According to RWA.xyz, Aptos is quietly among the top three networks with the largest number of on-chain institutional assets, and has also established partnerships with Franklin Templeton, Brevan Howard and Microsoft. Its MOVE architecture is designed internally by Facebook for the world's largest social network to handle financial transactions, and is fully qualified for this task.

Maelstrom won't do anything for free. First of all, we need to declare that we hold a large number of assets in Aptos and Ethena.

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

Step 1: Launch Digital Dollars. The Treasury needs to choose two digital dollars: USDT of Tether and USDe of Ethena. USDT is essentially the USD stored in the U.S. banking system, while USDe is a synthetic USD generated by a combination of long cryptocurrencies and short perpetual swaps; all its assets are entrusted in large cryptocurrency exchanges. The essence of politics is "interchange of interests", so how can existing governments benefit from these two solutions? U.S. Secretary of Commerce Howard Lutnick holds a stake in Tether, while World Liberty Financial (WLF) holds millions of dollars in Ethena governance tokens $ENA. If Tether and Ethena are selected as digital dollars recognized by the Treasury Department, their equity and token holders will benefit from it. This kind of "self-interest" is the fundamental driving force for the development of human society.

Step 2: Tokenize the centenary treasury bonds. The Ministry of Finance can issue one token (TSY100) for each centennial government bond. Users can purchase these tokens through the Aptos blockchain using Wrapped Bitcoin (Wrapped Bitcoin can now be packaged through tools such as Wormhole, Celer and LayerZero). Next, a repurchase mechanism is needed to allow users to mortgage TSY100 and obtain USDT or USDe loans.

Technical Note: From a technical point of view, the Ministry of Finance cannot directly create USDT or USDe. Therefore, if the user needs USDT, the Ministry of Finance needs to mint USDT by transferring money to Tether's bank account. If the user needs USDe, the Ministry of Finance needs to mint USDT first, 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 3: Build a Web3 money market exchange. The Ministry of Finance needs to establish a licensed Web3 money market exchange, which we can call EagleSwap. The Ministry of Finance already has an identity authentication service called ID.me (this is an example of an online identity authentication service). The service can be extended to enable users around the world to add their Aptos wallet to the whitelist by signing. When a user connects his Aptos wallet to EagleSwap via desktop or mobile, if whitelisted, he can trade freely between USDT, USDe, TSY100 and packaging Bitcoin. As the Treasury Department sells Bitcoin, USD and Treasury bonds on a large scale global basis, EagleSwap will soon become the most liquid place for trading these assets.

Next stage: Connecting to social media platforms. The Ministry of Finance can also work with social media platforms controlled by oligarchs around the world. Facebook and X are the best candidates for social media platforms to launch crypto wallet features. By connecting their users to EagleSwap in an abstract way, these users will be able to easily transfer, trade and store digital dollars, centenary Treasury bonds, and package Bitcoin. For the global southern region, the most urgent need is the ability to conduct business activities in US dollars outside its traditional financial system. Although the U.S. dollar may have problems, it is still a more stable option compared to other fiat currencies. The technical infrastructure for building this connection should be done using the Aptos blockchain.

The control of the oligarchs is beyond doubt, as can be seen from their prominent position at Trump's inauguration. Next, they need to act further to weaken those traditional financial (TradFi) banks that are parasitic.

I have discussed previously how to implement this strategy by unilaterally devaluing the US dollar and related technical means. Next, I will explore why the United States can gain unique advantages in the production of "neutral reserve assets" by enacting appropriate laws.

Neutral reserve assets: potential advantages of the United States

If the elites who control Pax Americana are to accept this plan, the United States must have some unique competitive advantage in the mining of Bitcoin. As we all know, Bitcoin mining requires a lot of energy to solve complex mathematical problems. So the question is, does the United States have cheap and sufficient energy supply? The answer is yes. The United States has two significant advantages in energy production.

First, the United States has rich hydrocarbon resources. The United States is home to a large number of untapped hydrocarbon resources that are distributed within what we call "national boundaries." All that is needed is sufficient capital and government drilling permits. More importantly, drilling activities that provide energy to Bitcoin mines are not limited by energy geographic location. Often, energy reserves are often far from the main population centers, and the transportation cost of transporting these resources to cities is sometimes even higher than the cost of mining. However, if power plants are built directly at the resource location to provide power to the Bitcoin mine, the transportation hassle can be completely saved.

Although many remote areas have abundant energy resources, these resources are often unable to be effectively utilized due to the lack of pipelines and transportation infrastructure. By establishing localized power stations and Bitcoin mines in these areas, these "trapped" energy resources can be fully utilized. For example, Alaska is not only located in a remote location, with extremely abundant hydrocarbon resources, but also has a cold climate, making it very suitable for building Bitcoin mines. The cold climate can significantly reduce the cooling costs of mining equipment, making Alaska an ideal Bitcoin mining base.

Second, the American capitalist tradition. The capitalist system of the United States is another major advantage. Whether capitalism is morally controversial or not, the existence of this system is an undeniable fact. The United States is a country built by a group of tax evasion slave owners who made a constitution to ensure that their capital could continue to increase in value and allow their descendants to remain in power economically and politically. Under such a system, carrying out a large-scale capital investment project for many years, such as drilling hydrocarbons and mining Bitcoin, is undoubtedly the most appropriate option.

Another point is the new advantages brought by the construction of local semiconductor factories in the United States. Taiwan Semiconductor is close to completing several of its state-of-the-art fabs in Arizona. Meanwhile, other semiconductor foundries will also be encouraged to build factories in the United States under the incentives of government subsidies and tax relief. This means that Bitcoin ASIC chips (application-specific integrated circuit chips) can be produced locally in the United States. Even if the rise in Bitcoin prices will lead to a surge in global demand in the future, the United States can ensure that chip supply is sufficient and there will be no shortage problem.

But there is a major challenge at the moment: While traditional fiat capital enjoys top policy treatment in the United States, Bitcoin and other cryptocurrencies have failed to receive the same support. To solve this problem, the United States needs to provide constitutional security for Bitcoin and cryptocurrencies. The core principle of Bitcoin miners is decentralization and non-censorialization, but there is currently a possibility that legislators may require miners or node operators to perform some form of censorship. Therefore, public crypto ledgers (such as blockchains) need to be considered as a protected form of speech. This view is reasonable, because public blockchains are essentially a decentralized network driven by miners through power consumption, and at the core is an immutable digital speech chain.

If the United States wants to be the global hub for Bitcoin mining, it can be achieved by passing a bill of less than 200 words: “Cryptocurrencies and their tokens operated on blockchain should be considered as protected forms of speech. All laws applicable to freedom of speech also apply to users or intermediaries of public blockchain technology. Cryptocurrencies and public blockchains are in the private sector and no government agency shall compel intermediaries, participants or blockchain node operators to collect them. or provide data about participants and transactions. ”

If the United States has a government that supports energy development, coupled with a cryptocurrency legislation that supports permissionless innovation, it can lay a solid foundation for attracting global crypto activities. Energy production and ASIC chip manufacturing require huge capital expenditures (CAPEX), and the United States not only has an adequate capital market, but also provides legal protection for the operation of point-to-point decentralized networks. These conditions will make the United States the main concentration of Bitcoin network computing power. Ultimately, "neutral reserve assets" will be produced in the United States, which will bring huge strategic advantages to the United States in the global economy.

Once relevant legislation is passed, overturning it will become extremely difficult. Just as many politicians, while complaining about the negative impact of large tech companies and social media, have hardly any substantial progress since Section 230 of the Communications Bill came into effect in 1996. This clause gives tech platforms immunity from liability for content and activities on their network, and this status is too profitable for all parties involved. Similar “interest alliances” may also form between cryptocurrencies and politicians, while also bringing practical benefits to businesses and individuals who require high-paying jobs and tax growth.

The Rise of Coin Holders

If Bessent can successfully push the price of Bitcoin to exceed $1.8 million, a group of the richest people in human history will be born. Currently, some of the largest holders of Bitcoin are either U.S. residents or U.S. registered companies. For example, BlackRock has accumulated nearly 600,000 Bitcoins worth nearly $60 billion in less than a year after launching its Bitcoin ETF. Given that American political power depends largely on wealth, these Bitcoin holders will be able to exert huge influence on politics. If the Republicans adopt policies that support cryptocurrencies, these holders may become their staunch supporters for many years or even decades to come.

For politicians, re-election is their core goal. Apart from Trump, Republicans who agree with his political philosophy are likely to be re-elected in 2026 or 2028. And by making US cryptocurrency holders extremely wealthy while further consolidating the dollar's global hegemony is undoubtedly one of the best strategies for Republican politicians to ensure reelection.

Global acceptance of Bitcoin as a reserve asset

Will other large trade surplus countries accept Bitcoin to replace Treasury bonds as reserve assets? The answer is yes.

Assuming that Bitcoin’s market value is large enough to support trillions of dollars in international trade, Bitcoin has the following significant advantages over Treasury bonds:

The code of Bitcoin cannot be changed unilaterally.

Bitcoin’s decentralized design ensures that no one can change its code unilaterally. Even if some American miners try to change the blockchain through Hard Fork, such as excluding certain transactions or modifying the total supply of Bitcoin, this will only cause the value of Bitcoin on the new chain to zero, causing them to The assets immediately become worthless. The economic game theory behind the Bitcoin blockchain ensures that this does not happen.

Bitcoin trading has no borders. As long as you have an internet connection, Bitcoin can conduct permissionless access and transactions at any time and anywhere.

Bitcoin is the purest derivative of currency energy. It can effectively preserve the energy value of the trade surplus over time, thus becoming an ideal reserve asset.

No country, even China, is willing to assume the role of a global reserve currency issuer and make its bond market a global reserve asset. This is because this role naturally requires the opening of capital accounts, and at the same time, when a country stops producing actual goods and turns to financial engineering, most ordinary people will face serious adverse effects. This is obviously contrary to the concept of "common prosperity". Therefore, an improved system might be to continue using the US dollar for trade, or allow the exchange of bilateral local currencies, but store the trade surplus in Bitcoin. This system is good for everyone...except for traditional financial institutions (TradFi) that are "too big to go bankrupt". These institutions will have to face a gradual decline in their power and reputation, while the influence of decentralized finance (DeFi) will grow day by day.

The right wish

Stacking sats is my hobby, and I hope it is yours. So, if you have the opportunity to sit in front of the "Elf's Table" and dress up, make sure you make the right wish.

Postscript: Naivety and reality in the cryptocurrency circle

People in the cryptocurrency circle are often the smartest people in the world and the most innocent people. And Trump is giving them a political crash course.

The price of Bitcoin soared from $70,000 to $110,000 in less than 60 days, behind which is the general belief that all their wishes will be met under the framework of Pax Americana. However, there is a key problem with this idea: In any bilateral exchange of value, the rational choice is to receive the goods first and then pay. And Trump and the Republicans obviously got what they wanted from the cryptocurrency circle first — enough votes to win the presidency and gain a partisan majority in the House and Senate. It's their turn to "pay", but their schedule is obviously completely different from the eagerness of us "speculative tyrants" staring at the candlestick chart for a second.

Trump is currently setting up a working group and a Senate subcommittee, but has not taken practical action. And when Trump really wants to act, he will execute it quickly. For example, he imposed a 25% tariff on the largest trading partner of the United States, which took only a few days from announcement to implementation; he quickly abolished the ESG (Environmental, Social and Governance) and DEI (Diverency, Equity and Inclusion) in government agencies policy. These examples show that Trump is not not going to take positive action for cryptocurrencies, but rather that cryptocurrency regulation or Bitcoin strategic reserves are not his or the Republican Party’s top priorities. This is regrettable because on the margin, the single issue of cryptocurrency voters are the key force in getting them to power.

Will Bitcoin price fall?

As the world gradually realizes that US politics has not changed fundamentally due to Trump’s election, the price of cryptocurrencies may fall back to the fourth quarter of 2024. I still insist that Bitcoin will retest the forecast for the $70,000 to $75,000 range.

How can the cryptocurrency market get rid of its downturn?

To get the market back on its feet, the following situations may be needed: the Federal Reserve, the U.S. Treasury Department, China or Japan introduce some form of monetary easing, or introduce legislation that explicitly supports Permissionless Crypto Innovation . However, if the bill was pieced together like Frankenstein, just to cater to the interests of Coinbase, BlackRock and traditional stock investors, it would neither be for us crypto degens. To push the market to new heights, it is impossible to achieve the goal of "decentralizing everything". Such a bill is not only a deviation from the crypto ideal, but also an offense to the "decentralized spirit", and the consequences will be rapid and severe.

Take action and speak out for the future of encryption

Despite this, we still have hope. If you are a cryptocurrency holder in the United States, it's time to act! Let the representatives you choose know that you will not tolerate the unchanging political status quo. Email them, write them, or visit their local office in person. Politicians usually respond to those who care about policies. If you think building a strategic reserve of Bitcoin is necessary, speak up now instead of just like a comment on X platform (formerly Twitter).

The problem is that digital devices allow us to express our anger at will in our echo chamber, but rarely prompt us to take real action in the real world. In fact, everything you really cherish is obtained through some effort and cost. There is no "simple button" to the political path of cryptocurrencies -open your eyes and act, otherwise the market may continue to decline.