📝 Recording this trip to Shanghai and some interesting conversations with old colleagues from the brokerage.

Taking advantage of the F1 Shanghai Grand Prix, I arranged to meet with old colleagues I hadn't seen in years over the weekend at a tea house in the bustling city of Shanghai, which has a very elegant and retro design. These old colleagues, who I worked with a decade ago, are now vice presidents of brokerage branches or second-in-command at various asset management firms. We discussed many topics, and I want to highlight two interesting discussions.

First, the A-shares have been very profitable in the past two years. This may break many people's perceptions, as they think that with the A-share index dropping so much and being stuck around 3000 points, how can it still be profitable? In fact, A-shares are quite similar to the cryptocurrency market, where there are many buyers but few sellers, and the funds are severely dispersed, leading to a distorted index that doesn't hold much reference value. The truth and facts lie in the specifics, where institutions band together, such as the four major banks in China over the past two years, high-dividend stocks like China Shenhua and Yangtze Power, etc. Meanwhile, retail investors group together to speculate on themes, such as the Nezha concept in early this year with Light Media and the recent speculation on robotics with Southern Precision. The core is collaboration; one cannot go solo or act recklessly. Therefore, in recent years, the Chinese financial sector has popularized playing 'guandan' (a card game), where the question is whether you have the awareness to collaborate. First, you play 'guandan' with the big players for a few weeks, and if they find your logic and collaborative spirit strong, future cooperation in the capital market will naturally follow. Retail investors, on the other hand, are at a disadvantage, lacking both the awareness to collaborate and better information channels, which is why they have suffered the most losses in the past two years!

Second, #BTC may have a long-term trend similar to A-shares. Although I don't fully agree with this logic, it's worth discussing together (if anyone has new arguments or evidence, feel free to share in the comments). One asset management friend mentioned a point: 'When the pricing power of an asset is firmly controlled by someone, why spend capital to drive up the price when you can obtain huge profits through volatility and derivative leverage?' The brilliance of Wall Street in the U.S. lies in the fact that they hardly use their own money; they just need to establish effective regulations and systems to firmly control the pricing power of an asset. For example, early gold and today's BTC are both managed through ETFs, combined with various financial derivative products from firms like BlackRock, Vanguard, and Fidelity. In simple terms, they represent the national will of the U.S., whether in regulatory policies or the development and circulation of various financial products, everything is green-lighted with a well-structured, exclusive, and self-serving plan. The spot ETF plan allows them to control pricing power without spending a dime, ultimately profiting through hedge funds in the derivatives market, and this process only requires significant volatility. This is similar to gold ETFs, where gold has been in a sideways state for a long time, only showing remarkable short-term increases during major crises, such as after 2008, 2018, and 2023. One conclusion is that the Federal Reserve is deliberately suppressing gold prices to effectively slow down the depreciation of the dollar caused by inflation, and this logic applies to BTC as well. Any asset that undermines dollar hegemony will first be promoted and then suppressed to achieve effective control and avoid the diversion of dollar hegemony. Therefore, my friend proposed a bold hypothesis: in the future, we might see a phenomenon where, 5 to 10 years from now, the price of BTC may still fluctuate in the range of $100,000 to $150,000, but this won't affect profitability.

Interesting exchanges and discussions, what do you all think?! 🧐

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