The starting point of the structural slow bull for Bitcoin has been formed

I believe we are at the starting point of a slow bull market cycle for Bitcoin that spans a long period, even up to ten years. Phenomenally, the key turning point that has led to this trend is the approval of the Bitcoin ETF at the end of 2023. From that moment on, the market attributes of Bitcoin began to undergo a qualitative change, transitioning step by step from a purely risk asset to a safe-haven asset. Currently, it is in the early stages of becoming a safe-haven asset, but at the same time, the United States is entering a rate-cutting cycle, thus Bitcoin is in a good growth space. The role of Bitcoin in asset allocation has shifted from "speculative object" to "asset allocation tool," stimulating longer-term demand growth.

The evolution of this asset attribute happens to occur at a turning point where monetary policy is about to shift from tight to loose. The Federal Reserve's interest rate cut cycle is not an abstract macro background, but a funding price signal that has a substantial impact on Bitcoin.

Under this mechanism, Bitcoin will exhibit a new operational characteristic: whenever the market shows signs of correction after emotional overheating, a wave of "liquidity" will enter just as the price is about to edge into a bear market, interrupting the downward trend. We often say that the market has "ample liquidity but is unwilling to bet", but this statement is not entirely accurate. Other altcoins lack mid-term allocation logic due to evaporating valuation bubbles and unproven technology, failing to find PMF; at this moment, Bitcoin becomes the "only certain asset to bet on". Therefore, as long as loose expectations persist and ETFs continue to absorb funds, Bitcoin is unlikely to form a traditional bear market throughout the entire interest rate cut cycle, at most experiencing a stage correction, or a localized bubble clearing due to sudden macro events (such as tariff shocks or geopolitical hedging).

This means that Bitcoin will traverse the entire interest rate cut cycle as a "safe-haven asset," and its price anchoring logic will also change accordingly—gradually transitioning from "risk appetite driven" to "macro certainty supported." Once this interest rate cut cycle ends, over time, with the maturity of ETFs and the increase in institutional allocation weights, Bitcoin will also complete its preliminary transformation from a risk asset to a safe-haven asset. Next, when the next interest rate hike cycle begins, Bitcoin is likely to be genuinely trusted by the market as a "safe haven under interest rate hikes" for the first time. This will not only enhance its allocation position in traditional markets but may also allow it to gain some capital siphoning effect in competition with traditional safe-haven assets like gold and bonds, thus initiating a structural slow bull cycle spanning a decade.

Looking ahead to the development of Bitcoin many years or even 10 years from now is too far-fetched. It is better to first examine the potential triggers that could lead to a significant drop in Bitcoin before the United States truly shifts towards consistent easing. In the first half of this year, tariffs have undoubtedly been the most disruptive event to market sentiment. However, if we view tariffs as a benign adjustment tool for Bitcoin, we might be able to examine the potential impacts it could have on its future from a different perspective. Furthermore, the passage of the GENIUS Act signifies the inevitable decline of the dollar's status in the U.S., and actively embraces the development of Crypto finance, amplifying the multiplier effect of the dollar on-chain.

Treat tariffs as a positive adjustment tool for Bitcoin, rather than a black swan trigger.

In the past few months of the tariff process, it can be seen that the primary policy direction considered by policymakers is the return of manufacturing and improvement of finances, while also targeting major rival countries in this process. Under the goal of improving the government's financial situation, the stability of prices or economic growth can be sacrificed. Thus, the financial condition of the U.S. government has rapidly deteriorated during the pandemic, and the surge in 10-year Treasury bond yields over the past few years has more than doubled the government's interest expenses in three years. The revenue generated from tariffs accounts for less than 2% of the federal tax structure, and even if tariffs are raised, the revenue it brings is negligible compared to the enormous interest expenses. So why keep making a fuss over tariffs?

The purpose of tariffs is to determine the allies' attitudes and to exchange for security protection.

According to the role of tariffs as described by relevant economists, it can be understood that tariffs are an "abnormal tool for market intervention", used in special circumstances during crises or confrontations. The strategic logic of U.S. tariff policy is increasingly approaching the route of "financial weaponization", that is, by levying tariffs not only to "self-generate revenue" financially but more importantly to "collect rent externally" on a global scale. Some viewpoints suggest that, in the context of a new Cold War, the U.S. no longer pursues global free trade but instead attempts to restructure the global trading system into a "friend-shoring trade network" centered around the U.S., which means forcing key industrial chains to shift to allied countries or back to the U.S. itself, and maintaining the exclusivity and loyalty of this network through means such as tariffs, subsidies, and restrictions on technology transfer. In this framework, high tariffs do not mean that the U.S. is withdrawing from globalization; on the contrary, it is a hegemonic tool that seeks to regain control over the direction and rules of globalization. The proposal to impose high tariffs on all imported goods is essentially not a complete decoupling, but rather an attempt to force global manufacturers to "take sides", shifting production capacity from certain regions to other countries, including back to the U.S. Once the global manufacturing system is forced to reorganize around the U.S., it can continuously extract financial rents from foreign production capacity through "geopolitical tariff rents" in the medium to long term. Just as the dollar settlement system allows the U.S. to tax the global financial system, the tariff system is also becoming a new financial weapon used to bind and exploit the manufacturing capabilities of peripheral countries.

The side effects of tariffs make decision-makers hesitant to act

Tariffs are a double-edged sword. While they restrict imports to promote the return of manufacturing, increase government tax revenue, and limit benefits to rival countries, they also come with potential side effects that could erupt at any time. The first issue is imported inflation. High tariffs may raise the prices of imported goods in the short term, stimulating inflationary pressures, which pose a challenge to the independence of the Federal Reserve's monetary policy. Secondly, there could be a fierce counterattack from rival countries, and allied nations may protest or even retaliate against the unilateral tariff policies of the United States.

When tariffs threaten the capital markets and the interest costs for the U.S. government, decision-makers become very anxious and will immediately release positive news about tariffs to salvage market sentiment. Therefore, the destructive power of tariff policies is limited. However, whenever sudden news about tariffs comes out, the stock market and the price of Bitcoin tend to pull back. Thus, viewing tariffs as a benign adjustment tool for Bitcoin is an appropriate perspective. The likelihood of tariffs alone creating a black swan event is very low under the premise of declining recession expectations in the U.S., as decision-makers will not allow the negative impacts of such events to increase interest costs.

The inevitable decline of the dollar's status has led to a greater mission for dollar stablecoins.

To achieve the goal of bringing manufacturing back, a reasonable sacrifice of the dollar's position in international currency reserves is acceptable. This is because part of the reason for the hollowing out of the manufacturing sector in the U.S. stems from the strength of the dollar. When the dollar remains strong, the global demand for the dollar continues to rise, which also leads to a persistent financial surplus, and ultimately contributes to the ongoing trade deficit, causing U.S. manufacturing to flee. Therefore, to ensure the return of manufacturing, tariffs will be frequently used as a weapon, but this process will accelerate the decline of the dollar's status.

It can be said that against the backdrop of the rapid evolution of the global financial landscape, the relative weakening of traditional dollar control has become an undeniable fact. This change does not stem from a single event or policy misstep, but is the result of the long-term accumulation and evolution of multiple structural factors. Although, on the surface, the dollar's dominant position in international finance and trade remains solid, a deeper examination from the perspectives of underlying financial infrastructure, capital expansion paths, and the effectiveness of monetary policy tools reveals that its global influence is facing systemic challenges.

It must be acknowledged that the trend of multipolarization in the global economy is reshaping the relative necessity of the US dollar. In the past globalization paradigm, the United States, as the center of technology, institutions, and capital export, naturally held a dominant voice, thereby promoting the dollar as the default anchor currency for global trade and financial activities. However, with the rapid development of other economies, especially the growth of financial self-organizing systems in Asia and the Middle East, this dollar-centered single settlement mechanism is gradually facing competitive alternative choices. The traditional global liquidity advantage and settlement monopoly position of the dollar are beginning to be eroded. The decline in dollar control does not equate to a collapse of its status, but its "uniqueness" and "necessity" are being weakened.

The second important dimension comes from the trend of credit overextension exhibited by the United States in its fiscal and monetary operations in recent years. While past credit expansion and the excessive issuance of dollars are not unprecedented, their side effects have been significantly amplified in the context of a more synchronized global market in the digital age. Especially as the traditional financial order has not yet fully adapted to the new growth model led by the digital economy and AI, the inertia of the United States' financial governance tools is glaringly evident.

The US dollar is no longer the only asset carrier that can provide global settlement and value storage; its role is gradually being diluted by a variety of protocol assets. The rapid evolution of the Crypto system is also forcing sovereign currency systems to make strategic compromises. The oscillation between passive responses and active adjustments further exposes the limitations of the traditional US dollar governance system. The passage of the GENIUS Act can be seen, to some extent, as a strategic response and institutional concession by the US federal system to the financial logic of this new era.

In summary, the relative decline of traditional dollar dominance is not a dramatic collapse, but rather a gradual disintegration that is institutional and structural. This disintegration arises from the multipolarity of global financial power, the lagging financial governance model of the United States itself, and more fundamentally, the ability of the Crypto system to reconstruct new financial instruments, settlement pathways, and currency consensus. During this transitional period, the credit logic and governance mechanisms upon which traditional dollars depend need to be profoundly reshaped, and the GENIUS Act is a prelude to this reshaping attempt. The signals it emits are not simply about tightening or expanding regulation, but a fundamental shift in the paradigm of currency governance thinking.

The GENIUS Act is a strategic compromise of "retreat to advance".

The GENIUS Act embodies not just a conventional regulatory move, but rather a strategic "retreat to advance" proactive compromise. The essence of this compromise lies in the United States' clear recognition of the paradigm shift in currency governance triggered by Crypto, and the beginning of attempts to achieve a form of "leveraging strengths" through institutional design for future financial infrastructure. The widespread distribution of dollar assets within the Crypto system makes it impossible for the United States to simply block its development with a regulatory decree; instead, it needs to ensure through institutional "inclusive regulation" that dollar assets are not marginalized in the next phase of on-chain currency competition.

The strategic significance of the GENIUS Act lies precisely in the fact that it no longer takes "suppression" as its main objective, but rather aims to reintegrate the development of USD stablecoins into the federal perspective by constructing a predictable compliance framework. If signals accepting the logic of Crypto finance are not proactively released, there is a risk of being forced to accept a non-USD dominated on-chain financial system. Once the USD loses its status as an anchor asset in the on-chain world, its global clearing capacity and ability to export financial instruments will also decline. Therefore, this is not out of goodwill for openness, but out of the need to defend monetary sovereignty.

The GENIUS Act cannot simply be classified as an acceptance or tolerance of Crypto; it is more like a "tactical retreat" of sovereign currency under a new paradigm, aimed at reintegrating resources and reanchoring the on-chain monetary power structure.

Crypto brings not only a new market or a new asset class but also a fundamental challenge to the logic of financial control and the way value is empowered. In this process, the United States did not choose direct confrontation or forced regulation, but made a trade-off through the GENIUS Act—sacrificing direct control over the marginal aspects of crypto assets in exchange for legitimacy empowerment over stablecoin dollar assets; ceding part of the on-chain order construction rights in exchange for the continuation of anchoring rights over core assets.

The Role of Shadow Currency Amplified by Crypto Tools

The introduction of the GENIUS Act appears to be an adjustment to the order of stablecoin issuance, but its deeper significance lies in the fact that the structure of the US dollar is exploring a new expansion mechanism.