If we take Bitcoin's halving cycle as a time anchor ⚓️, the Federal Reserve's rate-cutting cycle should have occurred in Q4 of 2023.

However, at that time, the Biden administration distorted non-farm data by allowing illegal immigrant employment and expanding the government workforce, stubbornly refusing to cut interest rates. But due to the U.S. Treasury's need to issue a large amount of government bonds to fund Biden's Keynesian policies, the 10-year Treasury yield (the market's real interest rate) experienced a steep decline, creating a seasonal bull market spanning Q4 of 2023 and Q1 of 2024.

Entering Q2 of 2024, as the Treasury's bond issuance slowed and systemic risks in non-U.S. countries (the East Asian housing market + the Japanese bond market) erupted, there was a strong demand for safe-haven assets. The dollar, U.S. Treasuries, and gold became scarce commodities. Coupled with the historical tradition of a lack of market activity in Q2, the entire cryptocurrency market entered a period of depression.

By Q3 of 2024, in order to save the Biden/Harris election prospects, the Federal Reserve began the rate-cutting process, but the 10-year Treasury yield surged in the opposite direction, resulting in a bizarre phenomenon where nominal rates were lowered while real rates approached historical highs. Therefore, the market in Q4 of 2024 was not driven by external hot money but rather by the "Trump trade" combined with autumn volatility. In fact, since Trump was elected President of the United States, the liquidity on-chain was drained when he issued the eponymous meme coin.

As time progressed to Q1 of 2025, the main contradiction in the market was no longer between non-farm payrolls, CPI, and the Federal Reserve's expectation management, but rather the contradiction between the White House, the Department of Efficiency, and the Federal Reserve. The intensity of this contradiction, combined with DeepSeek piercing through U.S. AI hegemony, led to a rapid sell-off of U.S. Treasuries. This decline in real interest rates caused by panic did not help the spring market but instead prompted a significant outflow of capital.

Now we face a fundamental fact: the United States has entered a state of unprecedented change not seen in a century. If Musk's innovation, supported by the "understanding king," succeeds, it could extend the life of this world empire for another 100 years; if it fails, I dare not imagine what will happen.

In the face of such enormous systemic risks and the uncertainty of the U.S. cryptocurrency regulatory framework in July, major players in the cryptocurrency market, caught in a prisoner's dilemma, chose to act first and prioritize draining liquidity.

Binance's contradictory calls regarding its own meme coin follow this logic, and OKX's bold move to launch PI also adheres to this reasoning. A plethora of top-tier projects in the primary market bleeding during their TGE also reflects this logic.

In the midst of stormy weather, unfavorable for the great, it is wise to preserve principal.

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