Original text: The Round Trip
整理: Yuliya, PANews
In an era where cryptocurrency and AI intersect, the truly important stories often lie beneath the surface. To uncover these overlooked truths, PANONY has partnered with Web3.com Ventures to launch an English video program (The Round Trip). Co-hosted by John Scianna and Cassidy Huang, this episode will deeply analyze key trends in the global market, from the India-Pakistan conflict to breakthroughs in cryptocurrency, from Sino-U.S. trade negotiations to global monetary policy divergence, providing readers with comprehensive market insights.
Token2049 Dubai现场: 热度重燃，建设情绪回归
Token2049 Dubai现场人流密集，交易所高调亮相，优质项目也不少。去年困扰活动的暴雨未再重现，整体体验大幅提升。市场情绪显著回暖，项目方重返“建设模式”，展示出信念与愿景。
However, the activities on the sidelines were overly dense, and with the traffic congestion in Dubai, it often took thirty to forty minutes to shuttle between events. Nevertheless, the execution power and long-term thinking of some founders were still impressive. Additionally, there was an interesting anecdote: there is currently a 'pistachio shortage' globally, partly due to the popularity of a pistachio chocolate in Dubai. It is reported that this chocolate is sold at Costco for $10, up from $7, while the Dubai-produced version is as high as $20 per piece.
Geopolitical turmoil: Escalation of India-Pakistan conflict
Last week, the most concerning serious event was the full escalation of tensions between India and Pakistan. The roots of this conflict date back to the partition of British India in 1947, after which the two countries have engaged in four major wars: the 1947-48 Kashmir War, the 1965 Second Kashmir War, the 1971 Bangladesh Liberation War, and the 1999 Kargil War. Notably, since 1998, both India and Pakistan have become nuclear powers, making any conflict potentially more severe.
This round of tensions originated from a terrorist attack on April 22 in Indian-controlled Kashmir, which resulted in the deaths of 26 tourists (mostly Hindus). The attack was claimed by the 'Resistance Front,' an organization linked to the 'Lashkar-e-Taiba' (LeT), which was responsible for the 2001 Indian Parliament attack and the 2008 Mumbai attacks. India subsequently accused Pakistan of harboring terrorists.
Earlier last week, India launched a military operation codenamed 'Operation Sindoor' targeting nine locations in Pakistan-administered Kashmir. The Indian side emphasized that this was a precision strike against terrorist infrastructure, avoiding Pakistani military targets. However, Pakistan condemned it as 'an act of war,' reporting civilian casualties, including women and children, and claimed to have shot down Indian aircraft and carried out retaliatory strikes.
The conflict continues to escalate, with both sides exchanging fire near the Line of Control (LOC), leading to mass civilian evacuations. China, as a close ally of Pakistan, expressed serious concern, and Western intelligence even reported that Chinese J-10 fighter jets shot down an Indian Rafale fighter. The international community, including UN Secretary-General Guterres and U.S. President Trump, has called for restraint from all parties, but under the influence of populist leaders like Modi, both sides find it difficult to back down without a 'victory.'
Divergence in macroeconomic policies: Global liquidity and interest rate trends
Global macroeconomic policies are showing clear divergence. The People's Bank of China lowered the reserve requirement ratio, injecting $143 billion into the system, initiating a liquidity release mode. Whether this liquidity injection is in response to the trade war context or a silent panic in the market remains unclear. Meanwhile, despite falling oil prices, OPEC member countries agreed to increase production, a decision that may aim to stimulate global economic growth.
In the U.S., Federal Reserve Chairman Powell maintained interest rates at 4.25%-4.5% despite negative GDP growth in the first quarter, and it remains to be seen whether inflation is controlled or economic growth is sacrificed. In contrast, the UK chose to lower its interest rate to 4.25%, demonstrating different monetary policy paths.
Additionally, U.S. President Trump has reached a trade agreement with the UK, marking the first formal agreement since Trump initiated a global tariff offensive. Both sides agreed to lower trade barriers on automobiles, agriculture, and steel, with U.S. tariffs on UK steel reduced from 25% to 0%, and auto tariffs from 27.5% to 10%. In exchange, the UK will ease access for U.S. automobiles, ethanol, agricultural products, and industrial equipment. This agreement provides targeted tariff reductions but falls short of a comprehensive trade agreement, resembling the first step in a long negotiation process.
Chip diplomacy and the strategic shift in AI.
Interestingly, the Trump administration suggested last week that it might withdraw or not enforce the AI diffusion framework established during the Biden era. This framework aims to control the global distribution of American AI chips by categorizing countries into three tiers, imposing export limits even on long-term allies, with enforcement set to begin on May 15.
This shift is strategically significant and can serve as leverage in trade negotiations. For instance, secondary countries like Israel, India, and Switzerland are purchasing American F-35 fighter jets but are facing restrictions on buying NVIDIA chips. The contradiction lies in the fact that you trust them to use your most advanced stealth jets but not to use GPUs? This strategic shift indicates that the current administration plans to use AI chip exports as a tool in trade negotiations rather than implementing comprehensive restrictions. By granting allies greater access, American companies like NVIDIA and AMD can expand their markets, increase profits, and reinvest in next-generation hardware, ensuring that the U.S. maintains its technological edge.
This is not just about trade and the economy; it is also about strategic momentum. Restrictive measures may backfire and stimulate innovation instead. Take Tencent as an example: in response to chip restrictions, they developed the Hunyuan Turbo S, an ultra-efficient AI model that can respond to queries in less than a second, combining elements of Mamba and Transformer. They also launched the Hunyuan T1, utilizing expert mix systems for event reasoning and problem-solving. As the saying goes: 'Necessity is the mother of invention.'
At last week's ICLR conference, representatives from OpenAI, Google's DeepMind, and universities from the U.S., China, and around the world attended to showcase their research achievements. A large number of Chinese students and corporate representatives emphasized that their models use less memory. China is not waiting for access but is innovating out of necessity. If the U.S. implements excessive restrictions, it may only temporarily slow the development of these countries, potentially accelerating their progress inadvertently. Therefore, changing this policy is not a sign of weakness but a move towards strategic clarity.
The fluctuations of the Taiwanese New Dollar and capital flows
The market has reacted to this, with the New Taiwan Dollar skyrocketing over 10% in just two trading days, marking the most intense volatility since the 1980s. Foreign capital has poured into the Taiwanese stock market, particularly in the semiconductor sector. Taiwan chose not to intervene, signaling a willingness to allow the New Taiwan Dollar to appreciate. However, the appreciation of the New Taiwan Dollar could harm exports, and Taiwan's economy is heavily reliant on exports. Other Asian currencies have also experienced fluctuations, with traders predicting that other central banks may take similar actions. Analysts are divided; some believe the New Taiwan Dollar will continue to appreciate, while others predict an upcoming correction. The rise of the New Taiwan Dollar is driven by the AI boom and inflows of foreign capital, but there are hidden risks; if export data deteriorates, policies may adjust accordingly.
New developments in Sino-U.S. trade negotiations
On May 12, following economic and trade talks between the U.S. and China in Geneva, a joint statement was released announcing adjustments to certain tariffs. According to the statement, the U.S. will cancel 91% of the additional tariffs and suspend 24% of the 'reciprocal tariffs' for 90 days, reducing the current 'reciprocal tariffs' on China to 10%. China also correspondingly canceled and suspended certain countermeasures. This negotiation primarily focused on tariff reductions and did not involve the tariffs imposed by the U.S. on China concerning fentanyl or certain countermeasures from China. Both sides also agreed to establish a mechanism to continue negotiating economic and trade relations to resolve differences through a formal communication mechanism. The Ministry of Commerce stated that the ultimate goal is to completely correct the error of unilateral tariff increases and continuously strengthen mutually beneficial cooperation, maintaining the healthy, stable, and sustainable development of Sino-U.S. economic and trade relations.
Since the U.S.-China trade war, substantial impacts have been felt on both economies: American companies face rising costs, which are passed on to consumers, leading to price increases and supply chain delays; Chinese factory activities have slowed, with exports declining. Beijing has responded with interest rate cuts, capital injections, and a series of stimulus measures, but the ripple effects of the trade war have surpassed tariffs themselves, affecting global trade stability.
The Bitcoin business trend: from Strategy to MetaPlanet
Bitcoin has recently surpassed the $100,000 mark, with the current trading price around $101,000, reflecting the market's heightened enthusiasm for crypto assets. The trend of enterprises holding Bitcoin continues to strengthen:
Strategy (formerly MicroStrategy) held its fifth 'Corporate Bitcoin Conference' in Florida, where CEO Michael Saylor emphasized the importance of Bitcoin as a corporate reserve asset. At the conference, it was announced that an additional 1,895 Bitcoins were purchased, bringing the total holdings to 555,450, maintaining the position of the world's largest corporate Bitcoin holder.
Tokyo-listed company MetaPlanet also purchased 555 Bitcoins last week, bringing its total holdings to 5,555. This number has symbolic meaning in Japanese, as '5' is pronounced 'Go,' and 5-5-5-5 symbolizes 'Go! Go! Go! Go!' (Let's go!). This purchase is valued at approximately $53 million, and the company's stock price subsequently rose by 13%. MetaPlanet has become the largest publicly traded Bitcoin holding company in Asia and ranks 11th globally, aiming to hold 10,000 Bitcoins by the end of the year.
David Bailey, CEO of Bitcoin Magazine and advisor to MetaPlanet, announced the establishment of 'Nakamoto Company,' focused on Bitcoin media, mining, and infrastructure development, aiming to acquire struggling Bitcoin companies and restart their assets, backed by institutional and sovereign funds, reportedly capable of mobilizing billions of dollars in capital.
Cryptocurrency Policy Watch: South Korean ETFs Shift and Divergence in National Reserve Attitudes
The 21st presidential election in South Korea will be held on June 3, 2025. The campaign for the presidential election will officially kick off on May 12, with 7 candidates engaging in a fierce 22-day campaign battle. Lee Jae-myung of the Democratic Party is leading in the polls and is designated as candidate 1, while his main opponent, Kim Woong-soo of the ruling People Power Party, is candidate 2.
Leftist Democratic candidate Lee Jae-myung and right-wing party candidate Kim Woong-soo have both committed to promoting the legalization of Bitcoin ETFs, forming a rare bipartisan consensus. This policy aims to facilitate wealth accumulation for the middle class and provide more opportunities for the younger generation. Financial Services Commission (FSC) Chairman Kim Byung-hwan expressed willingness to discuss implementation plans with the new government, marking a significant shift in policy attitude. The FSC had previously been clearly opposed to spot cryptocurrency ETFs, citing excessive volatility. The success of the U.S. spot cryptocurrency ETFs (with net inflows exceeding $43 billion) has been a key factor for South Korea to reevaluate such products.
Meanwhile, some U.S. states are gradually embracing Bitcoin: New Hampshire has approved legislation allowing the state to invest up to 5% of public funds in Bitcoin, while Arizona allows unclaimed digital assets to be staked or earn rewards before being transferred to reserve funds.
However, Florida has withdrawn its Bitcoin strategic reserve bill, and UK Treasury Economic Secretary Emma Reynolds has clearly stated that the volatility of Bitcoin makes it unsuitable as a reserve for public funds. Similarly, countries like Japan, Switzerland, and Russia have also ruled out Bitcoin reserves, emphasizing the importance of stability in public finance management.
