Author: Yang Ge Gary
Kondratiev Node, Bit Transformation.
Trump's tariff policy triggered global market turbulence and strong unease, with the VIX index reaching 52 on April 8th, but it was obviously far from releasing the overly complex superposition state contradiction of this stage. Fiscal and monetary policies currently seem to only provide temporary emotional value. In an environment of debt, stock, and exchange rate triple kill, when panic is widespread, asset allocation issues have fallen into a dead end. 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, people would ask and ponder how Trump's tariff policy would affect the Crypto market and Trump's price trend. To be honest, this simple question is not easy to explain, so I wrote this article for everyone's reference.
tl;dr
- Debt, stock, and exchange rate triple kill problem and Merrill Clock failure
- Thucydides Trap and comparison with the end of 5 historical Kondratiev cycles
- Greenspan's prophecy and Crypto's significance at the Kondratiev cycle intersection
- What is the true Thucydides Trap this time
- Bitcoin's correlation with chaos: Transformation of inertial cognition and similarities with Merrill Clock issues
- The essential nature of Crypto's second growth curve's continuous growth
1. Debt, Stock, and Exchange Rate Triple Kill Problem and Merrill Clock Failure
Why would Trump adopt extreme tariff policies? Simply put, it looks very MAGA, can reduce import dependence, stimulate employment, and mobilize political emotions. Unfortunately, American citizens are not simply naive supporters. High inflation and a $1.3 trillion fiscal deficit are not good soil for everyone to "Buy-in" American manufacturing. 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 the last resort. Buffett recently pointed out in an interview: "They(Tariffs)'re an act of war to some degree." Although many of Buffett's concepts are outdated from the next era's paradigm, his experience judgment is still very accurate. The world is at the intersection of a new Kondratiev cycle, and the post-war peace and credit system have been almost completely dismantled. The reconstruction of new mechanisms under the chaotic era has begun.
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 evolved 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 four-cycle development of the Crypto Market and Degen, the accumulated energy of productivity and production relations will obviously burst 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 it 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, while simultaneously, 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 "main contradiction of the global world" 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. What is the Real Thucydides Trap This Time
I do not believe that the Thucydides Trap at this stage is between China and the US. This is not to say 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 nationality and race.
I remember as early as 2014, a famous Korean investor who invested in Kakao told me that he believed major global cities are not very different, and the civilizational consensus between them has already surpassed the consensus between cities within many countries. In recent years, the consensus formation of Digital Nomads and Degen has further proven this point.
When viewing historical laws like the Thucydides Trap, one must compare the similarities of historical paradigms while also wearing a perspective of technological and production changes. Especially at this node that breaks "deep structural constraints", the differences in management positions between China and the US are actually not as large as the essential differences between TradFi and DeFi, nor as large as the differences between maritime legal systems and Crypto Protocols, and even less significant than the ideological and cultural differences between conservatives and Degens.
As I mentioned in a previous article: "Most countries and interest subjects are still in a semi-feudal, semi-centralized state capitalist environment, and the current main contradiction is transitioning towards a semi-centralized state capitalist, semi-decentralized digital information management environment". The current global Kondratiev cycle intersection and the transformative momentum of accumulated contradictions will definitely point to the latter.
Looking back at the changes after the past 5 intersections, 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, responding to the question in the first paragraph, I believe this time's energy burst is more likely to face an entirely new independent script, with high global chaos, but without particularly concentrated confrontation.
[The translation continues in the same manner for the remaining paragraphs.]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 positively correlated with the degree of chaos, thereby driving the great development of the entire Crypto market in the next stage, namely the second curve of Crypto growth.
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 backward; because after experiencing the 2024 frenzy of Meme and BTCFi narrative baptism, without accessing Real Yields and Real Applications, the first curve logic of storytelling and preaching can barely convince anyone.
In my previous article "The Second Curve of Crypto Growth", I mentioned and discussed some phenomena and initial reasons for the rise of RWA and PayFi. Through the description of the intersection point of the Kondratiev cycle 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, a flash in the pan that never returns. Clearly, 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 have begun 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 intersection point of the Kondratiev cycle will be historic. The expectation and landing of Bitcoin's reversal and qualitative transformation related to 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 after entering the new Kondratiev cycle.
