Chainfeeds Preface:
Even in a stagflation scenario, Bitcoin can still be the fastest-growing asset.
Article Source:
https://www.techflowpost.com/article/detail_25008.html
Article Author:
TechFlow
Perspective:
Jeff Park: From a positive perspective, I hope to mark the market bottom for future reference. Overall, cryptocurrencies and Bitcoin have been the focus of investor attention, and their role in investment portfolios continues to change. Since the ETF launch, mainstream investors can more effectively incorporate Bitcoin as part of global assets, which is why Bitcoin's correlation with risk appetite and risk aversion has strengthened. Particularly, Bitcoin's characteristics as a store of value are similar to gold, with investors primarily considering volatility when choosing. Therefore, older individuals tend to prefer gold, while younger people favor Bitcoin. Young people's preference for Bitcoin is largely due to its volatility. If you believe this is one of the key factors driving Bitcoin's value. Altcoins are quite complex, facing two main challenges. First, unlike Bitcoin, other Altcoins differ significantly in consensus mechanisms, requiring more maintenance. Bitcoin is like a cold wallet you can place under a mattress, usually without issues. The problem with Altcoins is that if they are proof-of-stake tokens, investors must participate in the ecosystem to earn returns, which reduces investor costs. But if you're an institutional investor unable to participate in this value accumulation mechanism, it's like missing a special dividend on a stock because your stock holdings are with a custodian that doesn't allow on-chain operations. In such cases, investors naturally feel resistant, as they don't want to be in an unfair competitive environment. In the Altcoin market, such unfairness sometimes exists. The second factor is that many investors view Altcoins as a leveraged trading tool. They are excited about Bitcoin's volatility, believing Altcoins can provide higher capital efficiency, higher leverage, and greater volatility. What concerns me is that if the global community begins to re-evaluate the role of the US dollar and the US-dominated global financial system, various alternatives might emerge. One we can discuss is the impossible trinity theory, which suggests that after the Bretton Woods system ended, we face an impossible trinity where only two of three elements can be chosen: open capital flows, independent central banks, and floating exchange rates. If you abandon one, the other two must adjust. For example, the US chose open capital flows and an independent Federal Reserve, thus needing to let the dollar float freely. China adopted a different strategy, not opening capital flows, with the People's Bank managing exchange rates, thus maintaining a fixed exchange rate. The Eurozone chose open capital flows and floating rates but lacks an independent central bank, with national policies aggregated into a larger Eurozone. Therefore, global monetary systems can be designed in multiple ways, and now people are questioning whether there might be more effective systems than the US-endorsed free-floating model.
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