Trump's true intention is not to promote Bitcoin, but to achieve his political goals by creating market volatility.

Author: Jeff Park

Translation: Deep Tide TechFlow

Since last November, I have been one of the few voices cautiously skeptical about SBR (Strategic Bitcoin Reserve). Therefore, it is not surprising to me that we are currently experiencing one of the fastest declines in Bitcoin's history.

However, for those with foresight, now is a rare opportunity. Next, I will share the specifics of this opportunity with you. But before that, we need to clarify the root of the problem in order to address it effectively.

The failure of SBR lies in its hasty announcement, which did not pave the way for Bitcoin's ultimate adoption as a global store of value (SoV).

This is because a true SBR must rely on multilateral cooperation. It is precisely this lack of cooperation that has led to today's market sell-off, led by Japan.

As a crucial part of the global financial system, Japan cannot be left behind in the new era of Bretton Woods 2.0. In this new system, the entire globally arbitrage-dependent financial structure needs to be readjusted.

However, the current conditions clearly do not allow for this goal to be achieved, so I am more inclined to stop efforts to treat SBR as the ultimate goal. Once it is clear that the SBR project is entirely politically motivated, it loses the "decentralized" and "apolitical" characteristics that Bitcoin should have. At the same time, we risk angering Japan, as Japan has funded the U.S. for decades through its own financial repression.

A suitable strategic reserve should possess the following characteristics:

• Legislative Support: It must be backed by legislation to ensure the long-term stability of policies. Looking back at the rapid collapse of ESG (Environmental, Social, and Governance) policies after the new president took office, we can see the limitations of executive orders. This is why I refer to the current SBR as the BITO (Bitcoin Options ETF) moment, rather than the IBIT (Bitcoin Spot ETF) moment. This transition, while imperfect, is still part of progress.

• Programmatic Solutions: A collective programmatic mechanism must be adopted, rather than discretionary policies. This can avoid concentrating risks on public officials. After all, no one wants to take risks at Bitcoin's peak, especially when such risks could lead to personal losses while benefiting the public.

• Global Collaboration: There must be a requirement for multilateral collaboration on a global scale to ensure that our allies are not left behind while exploring new realms beyond the Bretton Woods system (see my Venn diagram).

Currently, Japan is fully rejecting the global arbitrage system. Just as the U.S. cannot tolerate long-term interest rates above 4.5%, Japan similarly cannot bear long-term interest rates above 1.5%.

When Trump threatened to impose tariffs on Japan, potentially leading to an increase in Japan's long-term interest rates, it negatively impacted the U.S. stock market. But the impact on the cryptocurrency market was even more severe. The reason is that when stocks become exceptionally cheap, the capital cost for institutional investors increases, making it more difficult to invest in Bitcoin.

For example, Tesla's (TSLA) stock price has fallen over 50% from its historical peak, which means the appeal of Bitcoin needs to compete with Elon Musk's capital, which is clearly an undesirable situation.

Trump is well aware of this, which is why he sarcastically said at the White House Crypto Summit, "Who knows," and mocked the motto of the strategic reserve: "Never sell your Bitcoin."

His true intention is not to promote Bitcoin, but to achieve his political goals by creating market volatility. This dramatic maneuvering has also led me to foresee the market's decline.

However, there is good news. Ultimately, market liquidity will recover. We know that Trump will push the economy at all costs, and the global M2 liquidity indicator has already begun to rise. Once the market can rationally accept lower 10-year interest rates, Bitcoin will become the fastest "tax-free racehorse." While we cannot know exactly when this moment will arrive, the good news is: we actually do not need to know. Why? Because the answer has already been written in my article:

"The launch of Bitcoin ETF options marks the first time in the financial world that regulated leveraged trading has been achieved on a truly scarce permanent commodity. Options do not create 'the value of money,' but rather create 'the liquidity of money,' and the delta's multiplier effect may be extremely favorable for those betting on 'extremely unlikely long-term events.'"

Formula:

lim (x→∞) ((x+0)/2) = ∞ (and the price of x has just significantly decreased)

Deep Tide Note: This formula expresses the potential appreciation space of Bitcoin's price. The "x" in the formula represents Bitcoin's current price, while "lim (x→∞)" indicates the possibility of the price tending toward infinite growth over time.

In other words, the current market adjustment has made Bitcoin's price cheaper, providing a low-cost entry opportunity for long-term investors. The meaning of the formula emphasizes that Bitcoin's long-term value may far exceed the current market volatility.

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