On January 22, 2026, Eastern Standard Time, former U.S. President Trump was reported by multiple media outlets as threatening to implement "massive retaliation" against Europe for reducing their holdings of U.S. Treasury bonds and other dollar assets. The phrase "If they really do that, then let them go" quickly spread. Currently confirmed financial actions only involve individual European pension funds reducing their U.S. Treasury holdings by a total of several billion dollars, far from any "systematic sell-off." However, after simultaneous reports from Chinese crypto media such as Planet Daily and Golden Finance, sentiments in the crypto community like "collapse of dollar credit" and "Europe joining forces to crash U.S. Treasuries" were rapidly ignited, with market imaginations far exceeding the verified facts. The real question that needs to be answered is: is this an early signal of a crack in dollar credit, or yet another amplified panic narrative?
From a Threat to a Global Panic Amplification Chain
● The event chain can be broken down into three levels: the first level is individual European pension funds reducing their U.S. Treasury holdings by several billion dollars over a period of time, which is an asset allocation adjustment rather than a public political declaration of war; the second level is Trump’s statement on January 22, 2026, when asked about Europe’s reduction of U.S. Treasuries, being reported by multiple sources as a "massive retaliation" threat; the third level is that this statement, lacking an official verbatim record, was quickly pieced together by social media and financial media into a dramatized story of "Europe's collective sell-off + U.S. retaliation."
● In the reports from various media, "If they really do that, then let them go" became the most disseminated fragment, on one hand continuing Trump’s consistent hardline, emotional language style, and on the other hand providing the market with enough interpretive space: is this a confident disregard for threats, or a sarcastic indirect warning? When this ambiguous statement is placed under the assumption of "Europe crashing U.S. Treasuries," it is easily packaged as the opening act of a U.S.-Europe financial war.
● Chinese crypto media, with incomplete information, almost simultaneously pushed the narrative, placing "Trump's threat of retaliation" and "European pension funds selling U.S. Treasuries" in the same headline, objectively reinforcing the causal association between the two. For crypto investors accustomed to trading driven by narratives, this headline-level collage is enough to trigger a chain of associations, extrapolating from "U.S. Treasuries being sold" all the way to "dollar credit crisis" and "funds flowing into crypto assets," far exceeding the boundaries of currently verified information.
● In the absence of original records and complete Q&A videos from the White House, the market can only rely on "reports from multiple sources" to understand Trump's statement, which itself brings narrative noise. Faced with this second-hand or even third-hand information, participants in the crypto market need to acknowledge: we can only confirm the general meaning and attitude, and cannot accurately restore the context and tone; therefore, any trading decisions based on subtle semantic differences are essentially amplifying the risks brought by information asymmetry.
Exaggerated Sell-off Scale and Real Financial Actions
● The currently confirmable fact is: the actual reduction actions are concentrated in individual European pension funds, with a scale in the range of several billion dollars, which is insufficient to fundamentally impact the $27 trillion U.S. Treasury market structure. There is no confirmed chain of "systematic sell-off" from Europe, nor any credible evidence supporting the extreme claim of "cross-regional coordinated reductions," which means that many widely circulated alarming narratives remain at the level of speculation.
● Compared to the calm industry voices stating that "the current sell-off scale is severely exaggerated," the emotional interpretations in the market are clearly ahead: social platforms are filled with statements like "Europe abandons the dollar" and "no one wants U.S. Treasuries," upgrading isolated asset allocation adjustments to a geopolitical financial rupture. This disparity reflects the consistent path of macro events entering the crypto sphere—facts are simplified into negative labels, then layered into prophecies of a "major storm" to satisfy traders' dual demands for volatility and narrative.
● Even under the premise of explicitly prohibiting exaggerated figures like "trillion-dollar sell-offs" and only being able to describe it as "several billion dollars," these marginal signals are still worth noting. The reason is that the sensitivity of such a massive asset pool like U.S. Treasuries to marginal selling is reflected in trends and participant structures: when long-term funds like pension funds begin to slightly adjust their duration and exposure, it may not immediately move prices, but it could signal a reassessment of future interest rate paths and fiscal risks.
● The specific sell-off numbers and timelines surrounding Sweden's Alecta and Denmark's Akademiker Pension remain unverified information, and public channels cannot provide complete, cross-verified details. In this case, treating them as "ironclad evidence" to tell the story of "Europe's collective crash" is irresponsible, and it is even more inappropriate to piece together exaggerated total scales without verification. A rational approach is to acknowledge the incompleteness of information and only observe "some European pension funds reducing U.S. Treasuries" as a marginal phenomenon, rather than directly elevating it to a systemic crisis.
Imagination of Dollar Asset Cracks and Crypto Hedging Sentiment
● The long-term game between the U.S. and Europe on interest rates, fiscal issues, and security topics has provided fertile ground for this event: from the uncertainty of the duration of high interest rates to the disputes over the U.S. fiscal deficit and bond issuance pace, to the repeated tug-of-war over defense and energy security burdens, there has long been an internal concern in Europe about the "over-concentration of dollar assets." After years of accumulating this structural contradiction, any reduction action from pension funds is easily interpreted as a "vote on the safety of dollar assets."
● The crypto market is particularly sensitive to narratives like "dollar sell-off," partly because assets like Bitcoin were early on packaged as tools to "combat fiat currency over-issuance," and partly because the crypto industry has personally experienced several rounds of "dollar liquidity tightening → price crashes" in recent years. Therefore, whenever keywords like "sovereign funds reducing U.S. Treasuries" appear, the market easily associates them with "increased demand for safe-haven assets," "loss of fiat currency credit," and "decoupling from traditional systems," instinctively placing crypto assets in a position of potential benefit.
● There is often a significant time lag and mismatch between political rhetoric and real asset reallocation: a strong statement from a leader can spread globally within minutes, triggering violent fluctuations in futures and derivatives markets, while institutions like pension funds adjusting duration and asset structures typically undergo multiple rounds of committee decisions and compliance assessments, with cycles measured in quarters or even years. If traders simply overlay these two rhythms, they can easily mistake volatility for a trend during the phase when "voices" are loudest, while "funds" have not yet truly acted.
● For crypto investors, it is crucial to distinguish between two types of logic when interpreting such macro risks: structural de-dollarization refers to the long-term rebalancing in trade settlements and reserve assets among Eurasia, the Middle East, and others, which is often slow but difficult to reverse; while tactical reductions are more of a phase response to interest rate cycles and valuations, reversible and limited in scale. The former may shape the narrative soil for crypto assets over a ten-year scale, while the latter is more about short-term trading noise; conflating the two will only lead to positions being ravaged by emotions during the rumor phase.
Illusion of Hedging Under Pantera's Harsh Restructuring Warning
● Behind the clamor about the risks of dollar assets, Pantera Capital has issued a verified warning that the digital asset industry may face a "harsh restructuring" in 2026, adding another layer of shadow to the entire picture. Simply put, even if there is a trend of some funds fleeing dollar assets at the macro level, it does not mean that these funds will unconditionally and indiscriminately flow into any crypto project; on the contrary, the valuation compression and project clearing faced by the crypto industry itself may be equally severe.
● For the same pool of global liquidity, on one side are the fluctuations of U.S. Treasuries and dollar assets under interest rate and fiscal pressures, while on the other side is the internal reshuffling of the crypto industry after tightening regulations and market saturation, both constituting a dual squeeze on risk capital. Fund managers must evaluate both the yield-risk ratio of U.S. Treasuries and the industry outlook for crypto assets simultaneously, rather than automatically "going all in" on one dimension when under pressure in another; this multidimensional weighing itself means that the linear logic of "if the dollar has issues → must buy crypto" does not hold.
● Equating "dollar credit risk" directly with the simple hedging logic of "buying crypto to win" is particularly worth cautioning against in the current cycle. Once the "harsh restructuring" warned by Pantera truly unfolds around 2026, projects with high valuations and weak cash flow support may face concentrated clearing; even if fiat assets are under pressure at the macro level, on-chain assets may not necessarily be a natural safe haven. For investors who blindly view crypto assets as "the only way out," the internal credit collapse within the industry often occurs faster and more violently than macro risks.
● During the industry restructuring cycle, treating crypto assets as a one-way hedging tool is a dangerous cognitive trap. The truly mature approach is to recognize that crypto assets possess both "highly elastic risk assets" and "long-term hedging tools": in the short cycle, they resemble a highly liquidity-sensitive leveraged stock, while over a longer time dimension, they may play the role of hedging against fiat currency over-issuance. Ignoring the former and solely emphasizing the latter will only expose the fragility of position management during market corrections.
Short-term Flight Under Zama's Heat and Regulatory Clouds
● Alongside the narrative of dollar risk, the Zama Protocol token public sale has gained traction, bringing a wave of enthusiasm. According to the verified timeline, after Zama announced its public sale arrangements recently, it quickly attracted significant attention from secondary markets and over-the-counter funds, with enthusiasm for subscriptions and participation evident in the community. This timing coincides with Trump’s threat of retaliation against the sell-off of U.S. Treasuries, during a window of heightened market uncertainty.
● On one side, the long-term game between the U.S. and Europe on interest rates, fiscal issues, and security topics has been amplified into a "dollar risk story," while on the other side, high-risk new narrative projects like Zama are crazily attracting funds at the same time. This contrast reflects the true preferences of crypto capital: compared to abstract and slow macro risks, "new stories" that can deliver short-term gains and narrative dividends are often more easily granted immediate votes of confidence from funds. This creates a subtle contradiction with the apparent "surge in hedging sentiment."
● New tracks like privacy computing bear more of the function of absorbing speculative funds during periods of macro uncertainty, rather than providing a true long-term safe haven for funds. For some funds, withdrawing from the old tracks under increasing regulatory pressure and slowing growth, and then betting on new narratives with complex technological paths and unclear regulatory attitudes, is a gamble attempting to "bet on future standards," rather than a hedge against systemic risks. This game is less about defense and more about high-leverage offense.
● For ordinary investors, the key is to distinguish between narrative-driven short-term enthusiasm and projects that genuinely possess long-term value accumulation capabilities under the dual pressures of regulation and macro risks. Cases like Zama illustrate that even if the topic of dollar risk is loudly discussed at the macro level, market funds are still willing to pay for high volatility and high uncertainty stories, indicating that so-called "hedging" is often just emotional packaging, with an underlying thirst for high returns. In this environment, blindly following trends poses risks comparable to leveraging bets on U.S. Treasuries.
Training Risk Perception in Amplified Panic
The essence of this event is the combination of limited-scale reductions in U.S. Treasuries and high-decibel political rhetoric, which, after being amplified through media and social networks, has ultimately been packaged as a rehearsal for the "collapse of dollar credit," rather than a real systemic crash. Even as we deliberately avoid exaggerating the scale of the sell-off in our writing and analysis, and refuse to fabricate any details of official EU responses, we must still acknowledge: in an environment of high debt, high interest rates, and geopolitical games, dollar credit is undergoing a slow yet real long-term erosion, and this change does not require sensational numbers to continue influencing asset pricing over the next decade.
In the face of similar macro conflicts, crypto investors can at least calibrate their risk perception along three steps: First, verify the scale, clarifying whether it is "a marginal adjustment of several billion dollars" or an imagined massive amount propagated by the media; Second, differentiate the voices, separating the high-profile statements of political figures, the emotional packaging by the media, and the actual flow of funds; Third, observe the long-term rhythm, looking at trends in interest rates, fiscal policy, and regulation on a quarterly and annual basis, rather than being swayed by every "sensational headline."
Against the backdrop of Pantera's warning of a "harsh restructuring" in 2026 and the simultaneous advancement of the U.S.-Europe geopolitical financial game, what is truly scarce in the crypto market is not more stimulating hedging stories, but rather the ability to exercise restraint in risk narratives and position management. Learning to maintain quantitative thinking, a sense of time, and a structural perspective amid amplified panic may be the most valuable training this storm offers participants.
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