Source: Talk about Li and the outside world
Today (April 7), we welcomed Black Monday again, with almost all global markets falling, not just the crypto market. People’s panic seems to have further fermented, and a bearish sentiment pervades the market.
Many people say: The market is going to be completely ruined.
Trump said: I did it on purpose.
Powell said: We'll think about cutting interest rates.
Under such highly uncertain market conditions, large funds seeking safety will become the top priority. I just took a quick look at the yield of the U.S. 10-year Treasury bonds, which has dropped to 3.88. As shown in the figure below.
This week is destined to be another week of potential big fluctuations, and there are many news points to pay attention to, for example (only listing those from the U.S.):
- On April 9, reciprocal tariffs officially take effect (will trade negotiations ease?), and the House will hold hearings (aiming to promote crypto asset regulatory legislation)
- On April 10, the unadjusted CPI annual rate will be announced (market expectation is 2.6%), and the Fed's new monetary policy meeting minutes
- On April 11, PPI annual and monthly rates, one-year inflation rate expected initial value
Still, if you don't know what to do, then in the current drastic fluctuations, the best action is to do nothing.
If you still have spare positions for long-term investment, and these funds will not affect your real life, then the upcoming decline is still an opportunity for you to gradually increase your Bitcoin holdings (reserves). In other words, as a regular investor, using your core position to continue to accumulate more Bitcoin during dips is still a relatively safe and simple operational strategy.
Of course, this premise is that you continue to be optimistic about the future opportunities in the crypto market. The above is just our perspective shift; that is, if I were in a completely empty position right now, this is what I would choose to do. It's just a thought-sharing, not an investment suggestion.
Just this morning, a partner left a message saying: I have been in this circle for almost a year, and during this year, I have been persistently learning various crypto knowledge and have done many transactions on the chain. Now I finally understand what I should do next, but when I look back, I find that not only have the profits disappeared, but my principal is almost gone. Now, I want to sell but feel reluctant, and I want to buy but have no money, which feels quite frustrating.
This might also be the current state of many newcomers.
As described by a partner in the group today: Today, Bitcoin is $66,000, finally approaching $70,000, and you are happy and expectant. This time last year, Bitcoin was $76,000, finally approaching $70,000, but you feel desperate and fearful. Bitcoin is still the same Bitcoin, you are still you, but the difference is that you can no longer feel happy.
Most people, when they first enter this field, if someone told them that they just need to persistently hold Bitcoin, they definitely wouldn't do it, because this seems boring and lacks any high multiple returns. Only after experiencing 1-2 rounds of baptism will they take holding coins seriously. I am the same; I learned to buy Bitcoin for the first time in 2017, but it wasn't until 2019 that I started customizing my dollar-cost averaging strategy. The transitional process in between also resulted in overall losses.
Returning to the current market environment, after experiencing the phased climax of 2024, Bitcoin has fallen from around $109,000, and altcoins have plummeted severely. Many people are once again on a roller coaster, watching their gains slowly diminish or even turn to zero, and many people have started to reflect deeply, deciding what to do differently if given another chance. But, as we mentioned in our last article, whenever a major market movement comes, the market will always find a way to make you forget the past or continue to lose yourself.
As the saying goes, the world is ever-changing, but there is also a saying that nothing new under the sun. Perhaps, when the spear and shield coexist, there is no contradiction after all.
Perhaps, in a few years, when we look back, the market in 2025 should be very interesting, and the current market will probably be recorded in history. The next action of the Fed may continue to put an end to the current crisis.
Because the recent market is quite boring, I haven't paid much attention to the fluctuations in my Bitcoin holdings. So aside from my usual outdoor activities and writing articles at home, I occasionally watch Douyin or video accounts for entertainment. Thus, I discovered some interesting things.
For example, some domestic media or self-media have been posting videos of American citizens protesting against Trump/Musk. These videos look quite 'spectacular,' with crowds of people, and the comments below are mostly criticizing Trump, saying he is a big fool.
For example, a few days ago, Trump's 'reciprocal tariff' list included an uninhabited island (only penguins on the island), which was mocked by many media and self-media, saying Trump is taxing Penguin Island, which is simply insane. Moreover, the data in the tariff table presented by Trump was directly pulled by interns using Excel. Many comments on this matter also said that Trump’s team is indeed a bunch of amateurs.
This is also the reason why I usually don't like to watch such news and comments, because much of the content pushed is too subjective and purposeful, and the comment section is extremely restless, lacking some basic verification or thought, and many comments are just spontaneous. I don't understand why Douyin doesn't push more videos of beautiful women with long legs to me, but insists on pushing those seemingly 'positive energy' anti-American videos.
Of course, I am definitely not trying to defend Trump here. To be honest, from my standpoint, I also really dislike Trump; I liked him as much before he took office as I dislike him now. But, as we mentioned in previous articles, objectively speaking, Trump is a successful businessman and a successful politician. He is surrounded by successful businessmen like Musk at the level of billionaires and a bunch of smart people. If you think Trump is a fool and his team is a bunch of amateurs, then why don't you, as a genius, go become a president or the world's richest person yourself?
When looking at any problem, we should try to be as objective as possible in our analysis, and we can even consider some necessary thinking through a 'perspective shift'. This will help our rational judgment. Judgments can be right or wrong, but we need to avoid making completely subjective judgments right from the start.
Let's continue discussing the example above. Why are ordinary Americans protesting (some reports say 20,000 participated in the protests, while others say it could exceed 3 million; I can't be bothered to check the specifics, as I'm not too interested in such numbers)?
Some domestic media reported that the protests are to resist Trump's tariff policies. Some mainstream media said that Trump is shooting himself in the foot, and in the face of American bullying, China has taken the lead in showing strategic determination and wisdom. Trump has no good outcome by making enemies of the people of the world.
However, after looking at some foreign media and asking ChatGPT, the reasons given for this protest seem to mainly focus on restricting abortion rights, immigration policies, and limiting transgender rights, all related to democratic system issues. In other words, although the tariff issue is one of the reasons for the protests (after all, it is true that eggs in American supermarkets have become expensive), Americans currently seem to care more about democratic system issues.
So, why did Trump have to be an unpopular president after officially taking office?
This issue has actually been mentioned in our previous articles. The core problem seems to still stem from the U.S. debt issue. Simply put, the U.S. government is indeed out of money. Since Trump is in charge, he needs to solve the basic issues of finance.
Direct ways to address this issue include:
- Let the Fed cut interest rates (reduce interest rates, alleviate debt pressure)
- Reduce some related government expenditures
- Subsidizing expenditure pressure by collecting more taxes
- Other methods, etc. (such as a $5 million immigration golden card)
The first method above seems to be that Powell 'doesn't give face'. The second method is something Trump has been pushing for; for example, what Musk has been doing since taking office is this, but it seems there are also significant barriers. As for the third option, emergency measures regarding tax issues seem to be a choice, although this approach also comes with considerable risks and could lead to some potential economic issues or other problems (such as a stock market crash, global tensions, etc.). But apart from that, there seems to be no better or faster way to generate income. We can't really send all American aircraft carriers and planes out to forcibly seize resources, can we?
I just checked some data briefly. The total tax revenue of the U.S. federal government for the fiscal year 2024 is approximately $4.9 trillion, with the main sources including the following components:
- Individual income tax approximately $2.4 trillion
- Social security and retirement taxes approximately $1.7 trillion
- Corporate income tax approximately $530 billion
- Other income approximately $253 billion
However, the budget deficit of the U.S. government for the fiscal year 2024 has already reached $1.8 trillion, with total expenditures of approximately $6.75 trillion. According to the latest data from the CBO (Congressional Budget Office), the budget deficit for the fiscal year 2025 will reach $1.865 trillion. At the same time, nearly $3 trillion of U.S. debt will mature in 2025.
A relatively important issue can be seen directly: the U.S. has the world's most profitable companies (such as Apple and other large enterprises), but these large companies 'almost' do not pay taxes.
For a simple example, if the cost of producing one iPhone in China is $300, but to evade taxes, Apple will first sell the iPhone produced in China to its Irish subsidiary for $700, and then export it to a company in the Netherlands (a tax haven) that may also be registered in Ireland, and then from the Netherlands, it will be exported to the U.S. and sold to the American public at a market price of $750. This way, even though Apple only makes $50 profit in the U.S., in reality, $400 profit has already been perfectly shifted, avoiding taxes in the U.S.
Of course, the above is just a simple example; the actual operation process will be more complicated than what I mentioned.
At this point, it should not be difficult to understand the difficulties Trump faces while in charge. The government's expenses are huge, but it can't collect a single cent in taxes from those affluent conglomerates, as these large companies always have countless ways to perfectly evade the U.S. tax system (the same applies to large companies in other countries; many well-known companies are registered in some small islands). If Trump directly confronts the conglomerates for money, he probably wouldn't even know how he would die. Therefore, Trump is more willing to achieve his goals through other countries (which at least won't get him assassinated), like implementing a comprehensive so-called 'reciprocal tariff' policy, which seems to be one method. No matter where these companies are registered, even if they are registered on an island with only penguins, they must at least pay 10% tax.
If the above situation is valid, then the conglomerates should also understand Trump's 'calculations', but everyone just doesn't want to tear their faces directly at home.
However, speaking of which, the above are just our speculations. As for what Trump (and his think tank) is thinking and what new things they will come up with next, no one can know. Whether it is Bitcoin, gold, or U.S. stocks, the current market seems completely influenced by Trump's policies. Now it seems everyone is waiting for the Fed's next move; let's leave this to time to verify.
In reality, this is how society works; the rich and the rich fight for their respective interests or positions, and in the end, it is often the poor (ordinary people) who get hurt.
In short, we may still face greater levels of storms and rain ahead, but after the storm, there will still be opportunities to see new rainbows. The key is whether you can relatively intactly 'live' to that time. The market has reached its most difficult moment, but the big opportunities in the market often emerge from sharp declines. You must strictly manage your position, strictly adhere to your trading discipline, continue to maintain patience, do not get overly excited due to surges, and do not panic excessively due to plunges. Always face the short-term market fluctuations with your 'most comfortable' position.