2025 April 14, written in Singapore
Kondratieff wave node, Bit transformation.
Trump's tariff policy triggered global market turbulence and strong unease, with the VIX index reaching 52 on April 8, but it is obviously far from releasing the superimposed contradictions 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 problems have also fallen into a dead end. What should be held now? It seems to have become a question everyone was concerned about in 25 Q2.
When will Bitcoin rebound and rise again? This was the most frequently asked question in the first two weeks of April at the Web3 Festival in Hong Kong. In many Panels and Meetings, everyone would ask and think about how Trump's tariff policy would affect the Crypto market and Bitcoin price. To be honest, this simple question is not easy to explain, so I wrote this article for everyone's reference.
tl;dr
1. Debt, stock, and exchange rate triple kill problem and the failure of Merrill Lynch Clock
2. Thucydides Trap and comparison with the end of 5 historical Kondratieff wave cycles
3. Greenspan's prophecy and the significance of Crypto at the intersection of Kondratieff wave cycles
4. What is the true Thucydides Trap this time
5. Bitcoin's correlation with chaos change: Transformation of inertial cognition and similarities with Merrill Lynch Clock problem
6. The essential reason for the continuous growth of Crypto's second growth curve
(The translation continues in the same manner for the rest of the text, maintaining the specified translations for specific terms)"We must accept that monetary and fiscal policy cannot permanently boost economic growth in the presence of deeply rooted structural constraints."
Most people have now recognized or at least felt that the global landscape is facing very "deep-rooted structural constraints". The global pattern and economic policy methods since the industrial revolution are increasingly unable to match the needs of rapid digital and AI development. Since entering the rapid explosion of the digital and AI era, production tools have been changing exponentially. 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 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 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 parallel according to the original cultural methods and interest needs in some regions. This also responds to the direction of solving 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 United States. 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 that future major power confrontations will unfold 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 exceeded the consensus between cities within many countries. The consensus formation of Digital Nomads and Degen in recent years has further proven this point.
When looking at historical laws like the Thucydides Trap, we must compare the similarities of historical paradigms while also viewing the correspondence of paradigms from the perspective of technological and production changes. Especially at this node that breaks "deep-rooted 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 revolutionary momentum of accumulated contradictions will inevitably 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 during the transformation 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 (the energy eruption at the node) is more likely to face an entirely new independent script, with high global chaos, but without particularly focused confrontation.
[The translation continues in the same manner for the remaining text, maintaining the specified translations for specific terms.]Similar to the Merrill Lynch clock, Bitcoin has also formed a four-year bull and bear market transformation cycle due to its halving, and from the perspective of emotional changes and asset class preference selection, the process is very similar, just 2.5 times faster. However, after experiencing 16 years of four cycles, this year also shows irregular characteristics, to the extent that many people believe it is a real bear market, attributing the strategy failure to ETF entry and meme confidence collapse. In fact, from my essential understanding, this is all related to the energy intervention at the intersection of Kondratieff cycles, meaning that the current global chaos is also disrupting the original rules of the Crypto market. The past 4 cycles have familiarized people with the operation rules of Bitcoin and the Crypto Market, and successfully reached the strategic reserves and professional institutional allocations of countries worldwide. Breaking the rules at this clever Kondratieff cycle intersection point may be the best moment for Bitcoin to emerge as digital gold.
In summary, 2025, as a dramatic historical Kondratieff cycle intersection point, we may experience a brief decline that breaks the four-year cycle experience, but will quickly see Bitcoin's qualitative change positively correlated with the degree of chaos, and thereby drive the next stage of the entire Crypto market's major development, namely the second growth curve of Crypto.
6. The Essential Reasons for Continuous Growth of Crypto's Second Growth Curve
At the Hong Kong Web3 Festival in early April 2025, the RWA Topic was actually 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 hot 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 "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 Kondratieff cycle intersection point in this article, the more essential reason for this trend can be understood as the irreversible institutional needs of new cycles and new paradigms under chaotic changes.
Many people at this stage will worry about whether RWA and PayFi will be like other narratives, fleeting and never recurring. Clearly, unlike narrative renewal and virtual staking, long-term institutional matters will have sustained value.
By the end of Q1 2025, a large number of actual PayFi application scenarios and RWAFi funds have begun to rapidly emerge. The rapid development of new generation projects, protocols, and public chains like CICADA.Finance and Plume will bring overall changes to the 2025 market 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 Kondratieff cycle intersection point will be historic. The expectation and landing of Bitcoin's reversal and qualitative change in 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 Kondratieff cycle.
