Introduction: When "Digital Gold" Encounters Sovereign Credit Crisis.
On May 17, 2025, after Bitcoin sharply fluctuated upon reaching $105,000, market sentiment was ignited by a prophecy — legendary trader Arthur Hayes claimed that "Bitcoin will break $1 million by 2028." Behind this prediction of over 900% growth lies a long-ignored truth: although China bans cryptocurrency trading, it has never prohibited private ownership. In the whirlpool of global debt crisis and geopolitical splits, this policy "gray area" is becoming a strategic pivot in the capital's shadow war.
One, The Core Logic of the Prophecy: Two Historic Catalysts Are in Place.
1. The "Ponzi Dilemma" of U.S. Treasury Bonds.
The U.S. debt-to-GDP ratio has surpassed 123%, with annual interest expenditures consuming 12% of fiscal revenue. This unsustainable debt game forces the Federal Reserve to continuously print money to dilute the value of debt. Hayes points out: "The collapse of dollar credit will force $33 trillion of overseas capital to seek new safe havens; even if 10% flows into Bitcoin, its price will easily break a million dollars."
2. The "Iron Curtain Cracks" of Global Capital Controls.
Against the backdrop of accelerated decoupling between China and the U.S., the proportion of local currency settlements in BRICS countries has risen to 12%, and the Digital Renminbi cross-border payment system (CIPS) has covered over 100 countries. When traditional cross-border channels are obstructed, Bitcoin's "anti-censorship" attribute becomes an "underground river" for cross-border capital flows. Q1 2025 data shows that Bitcoin OTC trading volume completed by Chinese companies through offshore exchanges has increased by 83% year-on-year.
Two, Global Policy Game: The "Three Kingdoms Kill" Between China and the West.
1. China's "External Tightening, Internal Loosening" Strategy.
Despite the comprehensive ban on cryptocurrency trading since 2017, China has never defined private ownership of Bitcoin as illegal. This policy ambiguity hides deep meaning:
Technical Positioning: Digital Renminbi pilots in Shenzhen and Shanghai have integrated smart contract technology, forming a technical resonance with the Bitcoin Lightning Network.
Capital Diversion: Hong Kong compliant exchanges' daily trading volume exceeds $500 million, providing a compliant outbound channel for domestic funds.
Data Sovereignty: Real-time tracking of 26,000 cross-border fund flows per second through regulatory nodes, leading to a 63% decrease in underground bank case amounts in 2024.
2. The "Split Personality" of Regulation in Europe and America.
United States: The Trump administration promotes Bitcoin ETF scale to exceed $125 billion, but the Democrats may reverse the policy.
European Union.: The MiCA bill requires 80% of stablecoin reserves to be euro assets, attempting to build a "digital euro moat."
This policy oscillation has instead intensified capital anxiety, with the Bitcoin holdings of European investors increasing by 37% against the trend in 2025.
Three, China's Market "Gray Prosperity": The Invisible Trillion-Dollar Reservoir.
1. The "Underground Ecology" of Private Wallets.
Despite the exit of exchanges, there is still a large group of Bitcoin holders in China:
Hardware Wallet Sales: Q1 2025 sales grew by 120% year-on-year, with a monthly shipment volume surpassing 500,000 units from a manufacturer in Guangzhou.
OTC Trading Network: Trading through e-commerce platform secret codes, with Shenzhen Huaqiangbei's daily off-exchange trading volume exceeding 30 million yuan.
Mining Heritage: Mining sites in Inner Mongolia, Sichuan, and other regions have transformed into "Hash Power Banks," providing hosting services for global miners.
2. The "Compliance Flexibility" at the Enterprise Level.
Four, Institutional Shadow Wars: Trillions of Capital Restructuring the Crypto Landscape.
1. Wall Street's "Obvious Capital Seizure."
BlackRock ETF: Management scale exceeds $125 billion, with daily net inflow 16 times that of miners' daily output.
MicroStrategy: Holding exceeded 250,000 coins, with a locked-in cost price of $78,000 forming an "iron bottom."
Hedge Fund Strategy: Bridgewater established a $12 billion short position to hedge spot volatility through the futures market.
2. The "Covert Maneuvers" of Asian Capital.
Singapore Family Office: The proportion of cryptocurrency allocation increased from 5% to 22% in 2025.
Japan Trust Fund: Attracting retirement funds through "Digital Gold Trust" products, with a management scale surpassing $30 billion.
Middle Eastern Sovereign Fund: Abu Dhabi Investment Authority includes Bitcoin in reserve assets, with an initial allocation ratio of 1.5%.
Introduction: When "Digital Gold" Encounters Sovereign Credit Crisis.
On May 17, 2025, after Bitcoin sharply fluctuated upon reaching $105,000, market sentiment was ignited by a prophecy — legendary trader Arthur Hayes claimed that "Bitcoin will break $1 million by 2028." Behind this prediction of over 900% growth lies a long-ignored truth: although China bans cryptocurrency trading, it has never prohibited private ownership. In the whirlpool of global debt crisis and geopolitical splits, this policy "gray area" is becoming a strategic pivot in the capital's shadow war.
One, The Core Logic of the Prophecy: Two Historic Catalysts Are in Place.
1. The "Ponzi Dilemma" of U.S. Treasury Bonds.
The U.S. debt-to-GDP ratio has surpassed 123%, with annual interest expenditures consuming 12% of fiscal revenue. This unsustainable debt game forces the Federal Reserve to continuously print money to dilute the value of debt. Hayes points out: "The collapse of dollar credit will force $33 trillion of overseas capital to seek new safe havens; even if 10% flows into Bitcoin, its price will easily break a million dollars."
2. The "Iron Curtain Cracks" of Global Capital Controls.
Against the backdrop of accelerated decoupling between China and the U.S., the proportion of local currency settlements in BRICS countries has risen to 12%, and the Digital Renminbi cross-border payment system (CIPS) has covered over 100 countries. When traditional cross-border channels are obstructed, Bitcoin's "anti-censorship" attribute becomes an "underground river" for cross-border capital flows. Q1 2025 data shows that Bitcoin OTC trading volume completed by Chinese companies through offshore exchanges has increased by 83% year-on-year.
Two, Global Policy Game: The "Three Kingdoms Kill" Between China and the West.
1. China's "External Tightening, Internal Loosening" Strategy.
Despite the comprehensive ban on cryptocurrency trading since 2017, China has never defined private ownership of Bitcoin as illegal. This policy ambiguity hides deep meaning:
Technical Positioning: Digital Renminbi pilots in Shenzhen and Shanghai have integrated smart contract technology, forming a technical resonance with the Bitcoin Lightning Network.
Capital Diversion: Hong Kong compliant exchanges' daily trading volume exceeds $500 million, providing a compliant outbound channel for domestic funds.
Data Sovereignty: Real-time tracking of 26,000 cross-border fund flows per second through regulatory nodes, leading to a 63% decrease in underground bank case amounts in 2024.
2. The "Split Personality" of Regulation in Europe and America.
United States: The Trump administration promotes Bitcoin ETF scale to exceed $125 billion, but the Democrats may reverse the policy.
European Union: The MiCA bill requires 80% of stablecoin reserves to be euro assets, attempting to build a "digital euro moat." This policy oscillation has instead intensified capital anxiety, with the Bitcoin holdings of European investors increasing by 37% against the trend in 2025.
Three, China's Market "Gray Prosperity": The Invisible Trillion-Dollar Reservoir.
1. The "Underground Ecology" of Private Wallets.
Despite the exit of exchanges, there is still a large group of Bitcoin holders in China:
Hardware Wallet Sales: Q1 2025 sales grew by 120% year-on-year, with a monthly shipment volume surpassing 500,000 units from a manufacturer in Guangzhou.
OTC Trading Network: Trading through e-commerce platform secret codes, with Shenzhen Huaqiangbei's daily off-exchange trading volume exceeding 30 million yuan.
Mining Heritage: Mining sites in Inner Mongolia, Sichuan, and other regions have transformed into "Hash Power Banks," providing hosting services for global miners.
2. The "Compliance Flexibility" at the Enterprise Level.
Cross-Border Settlement: A cross-border e-commerce platform completes 23% of Southeast Asia's payment settlements through Bitcoin, circumventing foreign exchange controls.
Asset Allocation.: Public companies hold Bitcoin through offshore SPVs, with Q1 2025 disclosed holdings surging by 215% year-on-year.
Four, Institutional Shadow Wars: Trillions of Capital Restructuring the Crypto Landscape.
1. Wall Street's "Obvious Capital Seizure."
BlackRock ETF: Management scale exceeds $125 billion, with daily net inflow 16 times that of miners' daily output.
MicroStrategy: Holding exceeded 250,000 coins, with a locked-in cost price of $78,000 forming an "iron bottom."
Hedge Fund Strategy: Bridgewater established a $12 billion short position to hedge spot volatility through the futures market.
2. The "Covert Maneuvers" of Asian Capital.
Singapore Family Office: The proportion of cryptocurrency allocation increased from 5% to 22% in 2025.
Japan Trust Fund: Attracting retirement funds through "Digital Gold Trust" products, with a management scale surpassing $30 billion.
Middle Eastern Sovereign Fund: Abu Dhabi Investment Authority includes Bitcoin in reserve assets, with an initial allocation ratio of 1.5%.
Five, Risk Warning: Three Major Killers Behind the Carnival.
1. The Risk of "Policy Backfire."
The U.S. Treasury has placed the Digital Renminbi system on the "Special Attention List," prohibiting U.S. institutions from participating in related clearing. If China strengthens regulation on private wallets, it may trigger panic selling in the market.
2. Technological "Dimensionality Reduction" Crisis.
IBM's thousand-qubit quantum computer is about to go commercial, while Bitcoin's anti-quantum signature solutions are lagging behind in upgrades. If algorithm migration is not completed within three years, a market value of $2 trillion could evaporate in an instant.
3. The "Leverage Death Spiral" Trap.
The open interest of Bitcoin perpetual contracts reached $63.2 billion, with 21,000 sell orders stacked at the $100,000 level. If it falls below the key support level, it may trigger a multi-billion dollar long and short explosion.
Conclusion: Written on the Eve of the Collapse of the Old Order.
When Arthur Hayes' million-dollar prophecy ignites the market, and the "gray area" of private holding in China becomes a strategic pivot for capital, the essence of this Bitcoin frenzy is, in fact, just the tip of the iceberg of the global credit system's reconstruction.
Just as Satoshi Nakamoto inscribed the (Times) headline in the genesis block - "Chancellor on brink of second bailout for banks," today, sixteen years later, Bitcoin itself has become the "bailout plan" for the old financial system. The subtle balance of China's private holding policy may be the most intriguing footnote in this transformation.
For ordinary investors, the most realistic insight from this game is: in the struggle between sovereign credit and crypto consensus, the biggest risk is not volatility, but understanding the new world with old thinking.
