I. Formation mechanism of the bubble cycle (2020-2022)

Under extraordinary monetary policy stimulus, the global market formed distortions in value perception across three dimensions:

1) Labor market: Forming an inertia expectation of 20%+ wage growth

2) Traditional capital markets: The emergence of an abnormal standard yielding 30% annual returns in US stocks

3) Emerging markets in cryptocurrency: Manufacturing a pipeline for incubating projects valued in the billions (VC factory)

II. Lagging effects of policy regulation

The previous decision-makers attempted to achieve three strategic goals through a combination of gradual monetary tightening and fiscal tools:

1) Maintaining the appearance of stability in economic recovery post-pandemic

2) Delaying the concentrated release of systemic risks

3) Establishing a multi-level risk mitigation mechanism

This strategy objectively prolongs the valuation adjustment cycle, resulting in a "soft landing" market state

III. Catalyst for market clearing

The political cycle transition in 2024 becomes an important market turning point:

1) Policy shift accelerates the liquidity contraction process

2) Regulatory paradigm shift breaks the existing valuation system

3) The market expectation management mechanism has undergone fundamental changes

Such upheavals trigger nonlinear adjustments in asset prices, forming three major market characteristics:

- Adjustment amplitude shows overshoot characteristics

- Risk transmission shows cross-market linkage

- Valuation repair shows structural differentiation

IV. Specific performance of the cryptocurrency market

As an "extreme stress testing ground" for the bubble economy, the digital asset market presents:

1) Delay in liquidation phenomenon: #FTX /$LUNA events that should have completed market clearing were delayed by VC liquidity intervention

2) Reconstruction of the valuation system: The severe fluctuations in cryptocurrency market value in Q1 2024 are essentially a reset of the market pricing mechanism

3) End of regulatory arbitrage: Acceleration of the global compliance process leads to the elimination of pseudo-innovation projects

V. Evolution path of adjustment cycles

The current market is in the process of "triple bubble extrusion":

1) Reduction of liquidity premium (2023-2024)

2) Risk premium repricing (2024-2025)

3) Growth premium recalibration (2025-)

Complete market clearing requires experiencing:

- 12-18 months of market volatility release

- 2-3 rounds of liquidity stress testing

- Global coordination of regulatory frameworks

This round of adjustment is essentially a total liquidation of unconventional policies after the pandemic, with its intensity positively correlated with the distortion of previous policies. Although short-term pain is significant, a quick clearing is more beneficial compared to a long-term decline:

1) Improvement of resource allocation efficiency

2) Restoration of the market pricing mechanism

3) Rational return of innovation directions.

After 2025, we may welcome a new cyclical starting point truly based on fundamental pricing.