Bitcoin Surpasses $98,000!

1. Introduction

In the grand tapestry of the global financial markets, Bitcoin's recent performance undeniably resembles a brilliant yet enigmatic meteor. When the price of Bitcoin surged past $98,000, the global cryptocurrency market capitalization skyrocketed, surpassing $3 trillion, plunging the entire crypto ecosystem into a frenzy of cheers and boundless imagination. Numerous investors and cryptocurrency enthusiasts seemed to glimpse the dawn of financial freedom, eagerly proclaiming that Bitcoin was on the verge of crossing the $100,000 threshold, as if a brand-new financial era were about to unfold.

Yet behind this apparent prosperity lies a myriad of perplexing enigmas. Is Bitcoin, touted as a revolutionary digital asset, genuinely skyrocketing due to its unique non-replaceability or its substantial future stored value?

2. The Financial Logic Behind Bitcoin's Surge: Lessons from America's Historical Defaults

In the 1970s, the United States shocked the global financial system by decoupling the dollar from gold. Prior to this, the dollar enjoyed a hegemonic position in the global monetary system due to its fixed exchange rate with gold. However, as the economic landscape shifted and the balance of payments became imbalanced, the U.S. found it increasingly difficult to maintain its commitment to redeeming dollars for gold. Therefore, through a series of political and economic maneuvers, the dollar decisively separated from gold and instead became linked to oil, establishing the petrodollar system.

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This transformation was, in effect, a massive default by the U.S. within the international financial arena. By decoupling the dollar from gold, the U.S. successfully liberated itself from the limitations on currency issuance imposed by insufficient gold reserves, while simultaneously placing numerous nations and investors holding dollars in a relatively passive position, as the value of their dollar assets faced reassessment and potential devaluation risk. Moreover, those investors who had purchased U.S. Treasury bonds based on the stability of the gold-dollar exchange also incurred significant losses in this process, allowing the U.S. to effectively default on its substantial debt obligations.

Today, history seems to be repeating itself, albeit with the U.S. choosing Bitcoin as its new financial tool. Similar to the earlier decoupling of the dollar from gold, Bitcoin lacks the extensive and robust backing of a physical economy like oil. Instead, Bitcoin is a digital asset generated by a complex algorithm, its value largely contingent on market speculation and investor psychological expectations. The U.S. aims to create a new financial landscape by attempting to establish some degree of link between Bitcoin and the dollar, in order to achieve its strategic objectives in the global financial arena.

Bitcoin's Fragile Nature

Bitcoin emerged from a complex set of cryptographic algorithms, initially perceived as highly confidential and secure, capable of ensuring the anonymity and immutability of Bitcoin transactions. However, with rapid technological advancements, particularly breakthroughs in quantum computing, Bitcoin's so-called "confidentiality" faces unprecedented challenges. China has achieved a leading position in quantum computing, and the immense computational power of quantum computers may allow for the cracking of the cryptographic algorithms upon which Bitcoin relies.

Should Bitcoin’s cryptographic algorithms be compromised, the entire transaction system underpinning Bitcoin would face collapse, rendering its functionality as a store of value and medium of exchange utterly defunct. In light of emerging advanced weaponry, Bitcoin's inherent fragility becomes starkly evident, significantly diminishing its credibility as a long-term stable financial asset.

The Credibility Issues Surrounding Bitcoin as a Reserve Currency

In recent years, the U.S. government's regulatory actions targeting Bitcoin and other cryptocurrencies have intensified, and this series of regulatory efforts has unveiled credibility flaws in Bitcoin's status as a reserve currency. These incidents indicate that transactions involving Bitcoin and other cryptocurrencies are not as entirely anonymous and traceable as advertised. The U.S. government’s ability to intervene in the crypto sphere through various regulatory means suggests that Bitcoin transactions can be monitored and traced to some extent, thus contravening the high credibility and stability that a reserve currency should inherently possess.

3. The True Objective Behind Bitcoin's Surge: Concealing the Crisis in U.S. Debt

Currently, the scale of U.S. national debt has surpassed $36 trillion and continues to grow at an alarming rate. Such substantial debt burdens the U.S. government with enormous repayment pressure. From the perspective of the U.S. fiscal situation, the fiscal deficit continues to expand, tax revenues struggle to meet government expenditure demands, and the hope for repaying national debt becomes increasingly dim. In this context, the credibility of U.S. national debt is gradually teetering on the brink of bankruptcy.

To prevent global investors from losing faith in U.S. debt, the United States urgently needs to find a method to divert global attention and mask the debt crisis. Bitcoin's meteoric rise has conveniently transformed into a superb tool for the U.S., creating a narrative around Bitcoin's price myth, thereby drawing global capital into the crypto sphere, allowing investors to concentrate their substantial funds and attention on Bitcoin, and temporarily disregarding the significant risks facing U.S. debt.

The Strategy of Capital Diversion

The Federal Reserve's monetary policy has always been a crucial factor influencing global capital flow. When the Federal Reserve lowers interest rates, U.S. stocks typically attract investments and rise. However, in recent years, U.S. stocks have been at historical highs, with excessive valuations and increasingly apparent bubbles. In this scenario, even a rate reduction by the Federal Reserve may fail to sustain the elevated stock market levels, while emerging economies like China continue to exhibit robust economic growth and improving investment environments, attracting an increasing influx of international capital.

To prevent large-scale capital outflows to countries like China, the U.S. has manipulated Bitcoin narratives, creating an illusion of limitless appreciation potential. Many investors, drawn by Bitcoin's high returns, have funneled their funds into the crypto sphere, thus delaying the capital outflow from the U.S. to China.

The Ultimate Aim of Exploiting Investors

Behind the Bitcoin surge lies the ultimate aim of the U.S. to exploit global investors, using El Salvador as a case in point. This Central American nation plays a unique role in the Bitcoin wave. El Salvador introduced a program enabling the purchase of U.S. debt using Bitcoin, appearing to be an innovative financial move, yet in reality, it is a component of the U.S. financial strategy. By promoting Bitcoin globally, the U.S. attracted substantial capital inflows.

Such capital not only comes from ordinary investors but also includes institutional investors and national sovereign wealth funds. Once Bitcoin's price is inflated to a significantly high level, the U.S. can utilize nations like El Salvador or other channels to direct this capital into the U.S. debt market, thereby “extending the life” of the debt crisis.

4. Crisis Signals from Bitcoin's Surge and its Similarity to Historical Financial Crises

During the period of 1906-1907, the U.S. financial market experienced a serious crisis. At that time, the U.S. economy appeared prosperous, yet the internal financial system harbored numerous issues. The U.S. attracted substantial international capital through various means. However, when this capital was over-absorbed, the financial market ultimately succumbed to pressure, leading to a circuit-breaker-style collapse. This crisis not only inflicted tremendous economic losses on the U.S. itself but also had far-reaching implications for the global economy. Similarly, during the Great Depression of 1929, the U.S. had also gone through a period of false prosperity, with stock market bubbles considerably inflated.

Today’s overheating of Bitcoin bears a number of resemblances to these historical precedents preceding financial crises. The frenzy surrounding Bitcoin's price surge attracts a flurry of global investors, leading to an influx of funds into the crypto sphere, thereby creating a vast speculative bubble. Such excessive speculation often foreshadows a financial crisis. Should market sentiment reverse or a triggering event occur, Bitcoin’s price could plummet dramatically, akin to past stock market crashes, resulting in a series of ripple effects that could severely impact global financial markets.

Characteristics of the U.S. as a Source of Financial Crises

Historically, the U.S. has often acted as a source of global financial crises, frequently instigating these crises through various “capital schemes.” The meteoric rise of Bitcoin merely reflects the underlying instability within the U.S. financial system. U.S. financial institutions, government regulatory bodies, and certain interest groups have played significant roles in the speculation surrounding Bitcoin. They have manipulated markets and generated public narratives to drive Bitcoin's price upward, not for the purpose of promoting healthy global finance, but rather to fulfill their own interests, even if such actions pose significant risks to the global financial market.

5. Warnings to Investors: Steer Clear of Bitcoin and Dollar Assets

Bitcoin's price fluctuations are extremely volatile, and its value foundation is exceedingly fragile, posing an ever-present threat of plummeting. U.S. stocks, while historically favored by global investors, are now overvalued, and U.S. national debt faces considerable repayment pressures and credibility crises. If investors continue holding these dollar assets, particularly by blindly chasing Bitcoin investment, they risk becoming the "bagholders" for an impending U.S. financial crisis. Thus, investors should maintain a clear mindset, objectively assess the risks associated with these assets, and distance themselves from Bitcoin and dollar assets to safeguard their wealth.

Unveiling the Motivations Behind U.S. Manipulation

Investors need to recognize that the Bitcoin myth is nothing more than a “ruse” by the U.S. to attract global capital. By creating a frenzy around Bitcoin, the U.S. exploits investors' greed and thirst for wealth, drawing substantial capital into financial traps it has set. When making investment decisions, investors must not allow themselves to be misled by short-term returns but should conduct thorough analyses of the assets’ fundamentals, the economic logic behind them, and their potential risks.

Monitoring Changes in the Global Capital Landscape

While the U.S. may temporarily influence global capital flows through manipulating narratives about Bitcoin and similar means, thus delaying capital outflow, the long-term trend of capital reallocating eastward is unlikely to change. Emerging economies like China hold clear advantages in economic growth, technological innovation, and market potential that will continue to draw international capital. Investors should be attentive to changes in the global capital landscape and seize investment opportunities in emerging economies.

6. Conclusion: Escalating Risks in the Global Capital Market

With the surge of Bitcoin and the exposure of risks associated with U.S. debt and stocks, the risks within the global capital market are intensifying. Investors must exercise greater caution in selecting investment targets, focusing on asset safety and stability, prioritizing low-risk assets. In this intricate global financial contest, maintaining awareness and making rational decisions are key to preserving wealth and achieving asset value retention and appreciation amid turbulent financial markets.