Amid a turbulent macro environment, what should crypto investors do?
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Amid a turbulent macro environment, what should crypto investors do?
Dark and stormy, unfavorable for the wise, it is advisable to preserve principal.
Navigating Web3 tides with focused insightsAuthor: NingNing
If using Bitcoin's halving cycle as the time anchor ⚓️, the Fed's rate-cutting cycle should have occurred in Q4 2023.
But at that time, the Biden administration distorted non-farm payroll data by loosening employment for undocumented immigrants and expanding the size of government employees, stubbornly resisting rate cuts. However, since the U.S. Treasury needed to issue large amounts of Treasury bonds to finance Biden's Keynesian policies, the 10-year Treasury yield (the market's real interest rate) saw a sharp decline, creating a seasonal bull market spanning Q4 2023 and Q1 2024.
Entering Q2 2024, as Treasury bond issuance slowed and systemic risks outside the U.S. erupted (China's property market + Japan's bond market), demand for safe-haven assets surged, making the dollar, U.S. Treasuries, and gold highly sought after. Combined with the historical trend of risk markets being flat in Q2, the entire crypto market entered a depression period.
By Q3 2024, to salvage the electoral prospects of Biden/Harris, the Fed initiated its easing process, but the 10-year Treasury yield unexpectedly rose strongly, resulting in the bizarre phenomenon of falling nominal rates alongside real rates nearing historic highs. Thus, Q4 2024's market movement wasn't driven by external hot money, but rather by "Trump trades"叠加秋季躁动. In fact, the rally began with Trump’s election as U.S. President and ended when he launched his namesake meme coin, draining on-chain liquidity.
As we move into Q1 2025, the market's primary conflict is no longer about data like non-farm payrolls or CPI versus the Fed's forward guidance, but rather the tension between the White House, the Department of Government Efficiency, and the Federal Reserve. This conflict, intensified by DeepSeek puncturing America's AI dominance, triggered a rapid sell-off in U.S. Treasuries. This panic-driven drop in real rates failed to fuel a spring rally; instead, it prompted massive capital outflows.
We now face a fundamental reality: the United States has entered a period of transformation unseen in a century. Elon Musk's reform, backed by Trump, could extend the life of this global empire by another 100 years if successful; if it fails, I dare not imagine what follows.
Facing such immense systemic risks and uncertainty around the U.S. crypto regulatory framework in July, major players in the crypto market—trapped in a prisoner's dilemma—have chosen to strike first and drain liquidity preemptively.
Binance reneging on its promises to promote its own memes follows this logic; OKX defying widespread opposition to list PI follows this logic; a flood of top-tier Tier-1 projects conducting hemorrhaging TGEs follows this logic.
Dark and stormy times, unfavorable to great men, favor preserving principal.
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