Author: Yang Ge Gary, Incubation Investor of CICADA
Written in Singapore on April 14, 2025
Trump's tariff policy triggered global market turbulence and strong unease, with the VIX index reaching 52 on April 8, but it was clearly far from releasing the overly complex superimposed contradictions of this stage. Fiscal and monetary policies currently seem to provide only temporary emotional value, and in an environment of debt, stock, and exchange rate triple kill during widespread panic, asset allocation issues have fallen into dire straits. What should be held now? It seems to have become a question everyone was concerned about in 25Q2.
When will Bitcoin rebound and rise again? This was probably the most frequently asked question during the first two weeks of April at the Web3 Festival in Hong Kong. In many panels and meetings, everyone would ask and ponder how Trump's tariff policy would affect the Crypto market and Bitcoin's price trend. To be honest, this simple question is not easy to explain, so I wrote this article for everyone's reference.
1. Debt, Stock, and Exchange Rate Triple Kill and the Failure of the Merrill Lynch Clock
Why would Trump adopt an extreme tariff policy? Simply put, it looks very MAGA, can reduce import dependence, stimulate employment, and mobilize political emotions. Unfortunately, American citizens are not simply naive supporters, with high inflation and a $1.3 trillion fiscal deficit not providing good soil for buying into "Made in America". Immediate survival issues are pressing and irreconcilable. Under conditions where fiscal and monetary policies are no longer effective, tariff policy can be said to be a last resort, and Buffett recently pointed out in an interview: "They're an act of war to some degree." Although many of Buffett's concepts are outdated from the perspective of the next era, his experience judgment here is very accurate. The world is at the intersection of a new Kondratieff cycle, and the post-war peace and credit system has been almost completely dismantled, with the reshaping of new mechanisms under the chaotic era already beginning.
[The translation continues in this manner, maintaining the specified translations for specific terms and translating the rest of the text to English.]Most people have now recognized or at least sensed that the global landscape is facing profound "structural constraints", and the global pattern and economic policy methods since the industrial revolution are increasingly unable to match the needs of rapid digitalization and AI development. Since entering the rapid explosion of the digital and AI era, production tools are changing exponentially. Additionally, after the emergence of Bitcoin in 2009 and the 16-year development of the Crypto Market and Degen, the accumulated energy of productivity and production relations will obviously break out into qualitative changes at this fragile Kondratiev cycle intersection.
It is difficult to arbitrarily say that Crypto and Blockchain Protocol Management will quickly take over all economic policy governance work from the previous paradigm at this node, but this is obviously an unavoidable trend. It is very likely that in the next few decades, the world will continue to be in a binary parallel governance structure, where Crypto and Blockchain Protocol Management continuously grow or dominate parts of global economy, finance, trading, settlement, and even social governance. Meanwhile, social and economic management under national sovereign management, including monetary and fiscal policies, will still be managed in some regions according to original cultural methods and interest needs. This also responds to the solution direction of the current "main global contradiction" mentioned in the previous article "Landscape Changes After Trump's Election".
In summary, the significance of Crypto at this intersection and turning point is enormous and will comprehensively change the global economic and social landscape.
4. The Real Thucydides Trap This Time
I do not believe the Thucydides Trap at this stage is between China and the United States. This does not mean that the economic scale between China and the US does not constitute competition, nor is it like Huntington's "Clash of Civilizations" suggesting future major power confrontation will occur between the West and Islam. This paradigm leap is obviously a change that transcends national and racial boundaries.
I remember as early as 2014, a famous Korean investor who invested in Kakao told me he believed major global cities are not very different, and the civilizational consensus between them has already exceeded the consensus between cities within many countries. In recent years, the consensus formation of Digital Nomads and Degen has further proven this point.
When examining historical laws like the Thucydides Trap, one must compare the similarities of historical paradigms while also viewing the paradigm correspondence through the lens of technological and production changes. Especially at this intersection point of breaking "deep structural constraints", the differences in management positions between China and the US are actually not as significant as the essential differences between TradFi and DeFi, nor as large as the differences between maritime legal systems and Crypto Protocols, and certainly not as great as the ideological and cultural differences between conservatives and Degens.
As I mentioned in a previous article: "Most countries and stakeholders are still in a semi-feudal, semi-centralized state capitalist environment, and the current primary contradiction is transitioning towards a semi-centralized state capitalist, semi-decentralized digital information management environment." The current global Kondratiev cycle intersection point and the revolutionary momentum of accumulated contradictions will definitely point towards the latter.
Looking back at the changes after the past five intersection points, chaos and reconstruction, the surge of risk-averse assets, and the rapid development of new-generation production technologies are inevitable trends. Different from previous times, although the energy accumulation this time is more powerful and global, the direction of change is decentralization and system abstraction. Therefore, in response to the question in the first paragraph, I believe this time's energy eruption is more likely to face an entirely new independent script, with high global chaos, but without particularly concentrated confrontation.
[The translation continues in this manner for the rest of the text, maintaining the specified translation rules for specific terms.]In summary, 2025, as an intersection point of a dramatic historical Kondratiev cycle, we may experience a brief downturn that breaks the four-year existing cycle, but will quickly see a qualitative transformation of Bitcoin correlating with the degree of chaos, thereby driving the large-scale development of the entire Crypto market in the next stage, namely the second growth curve of Crypto.
6. The Essential Reasons for Continuous Growth of Crypto's Second Curve
At the Web3 Festival in Hong Kong in early April 2025, the RWA Topic was already exceptionally hot, successfully breaking the colored glasses of some Native Degens in the previous cycle.
Seeking Real Yield and sustainable development has gradually become a new consensus in the Crypto Market this year. History is always forced, because after experiencing the 2024 fervent Meme and BTCFi narrative baptism, without accessing Real Yields and Real Applications, the first curve logic of storytelling and preaching can hardly be believed anymore.
In my previous article "Crypto's Second Growth Curve", I mentioned and discussed some phenomena and initial reasons for the rise of RWA and PayFi. Through the description of the Kondratiev cycle intersection point in this article, the more essential reason for this trend is actually the irreversible institutional needs of a new cycle and new paradigm under chaotic changes.
Many people at this stage will worry whether RWA and PayFi will be like other narratives, fleeting and never to return. It is clear that, unlike narrative renewal and virtual staking, long-term institutional matters will have sustained value.
By the end of 25Q1, a large number of actual PayFi application scenarios and RWAFi funds began to emerge rapidly. The rapid development of new generation projects, protocols, and public chains like CICADA.Finance and Plume will bring overall changes to the market in 2025 and lay a sufficient foundation for the continuous growth of Crypto's second curve.
Trump's tariff policy is just a butterfly effect, but the opportunities at this Kondratiev cycle intersection point will be historical. The expected and landed reversal of Bitcoin's correlation with chaos will become an important factor in driving the growth of various Crypto second curve industries, including RWA and PayFi, representing the beginning of Crypto and Blockchain Protocol Management gradually penetrating global economy, finance, trading, settlement, and various social governance work in the first stage after entering a new Kondratiev cycle.
