Why does a long-term bull market in the crypto market still exist?

Recently, many KOLs have held a pessimistic attitude towards the crypto market, mainly for two reasons: First, the increasing risk of an economic recession in the United States may trigger a global demand contraction; second, resilient inflation or restrictions on the Federal Reserve's policy space may result in interest rate cuts that are less than expected. Although these concerns are not without merit, combining them with our previous analytical framework, Bitcoin is likely to demonstrate unique anti-fragility in this cycle.

Firstly, under the policy combination of "manufacturing return + high tariffs," the dollar will enter a depreciation cycle, and the hedging demand for traditional safe-haven assets (gold) and emerging digital assets (Bitcoin) will significantly increase. Due to the strong control of U.S. capital over Bitcoin, they are more inclined to promote Bitcoin as a replacement for gold, becoming the new king of safe-haven assets.

Secondly, the prosperity of the crypto market objectively provides a strategic buffer for the dollar system. The U.S. debt solution proposed by Miran, chief economist of the Trump team—levying a "seigniorage tax" on dollar users and forcing them to purchase long-term U.S. Treasury bonds—was difficult to implement in the traditional financial system but has been perfectly realized in the crypto market. Stablecoins like USDT and USDC are essentially zero-yield U.S. dollar bonds, and investors exchange the sacrifice of returns for liquidity and market access (on-chain dollars), which essentially constitutes a "dollar usage fee" for global users. As long as stablecoin issuers are required to hold U.S. Treasury bonds as reserve assets, the growth of stablecoins will also become a “perpetual motion machine” for the demand increase of U.S. Treasury bonds.

The "U.S. Dollar Payment Stablecoin Act" passed by the U.S. House of Representatives on April 2 provides a key patch to this institutional closed loop, explicitly stating that: the reserve assets of stablecoins are limited to cash, short-term U.S. Treasury bonds, and highly liquid assets such as repurchase agreements backed by U.S. Treasury bonds, while strictly prohibiting the use of reserves for lending, investment, or other purposes. This regulation will directly lead to the standardization of the reserve structure of issuers like Tether and Circle to a configuration ratio of 0.8 U.S. Treasury bonds + 0.2 cash (not mandatory but is the optimal solution). In other words, for every additional dollar of stablecoin issued in the future, U.S. dollar stablecoin issuers will simultaneously increase their holdings of 0.8 dollars of U.S. Treasury bonds as underlying reserves.

Therefore, under the generally pessimistic market sentiment, Bitcoin, due to its unique monetary attributes and strategic position in the dollar system, may instead achieve excess performance.