In the midst of strategizing, we can win from a thousand miles away. Hello everyone, I am Lin Chao, a global financial market observer, focusing on cryptocurrency market analysis, bringing you the most in-depth trading information analysis and technical teaching.

If you can clearly identify the trading logic of the market, then Lin Chao believes these years should be a time for everyone to make significant profits.

Because there will be many macro fluctuations from top to bottom, and the macro environment will become different from the past. Therefore, Lin Chao suggests that everyone should learn to look at the long term and focus on the big picture while letting go of the small details. If there is a high level of uncertainty in the short term, or if you are unfamiliar with the overseas cryptocurrency market, then create a safe combination of spot and contracts; this logic is actually very simple. Lin Chao has mentioned this repeatedly in previous articles, but if everyone wants to make "big" money, they must understand the impact of the macroeconomic cycle.

So Lin Chao's article a few days ago also mentioned the concept of the "Kondratiev Wave" (see previous article "The Century Cycle Guide, Bitcoin Must Break 500K"), which belongs to the era of transformation. Currently, humanity is in a great change that has not been seen in a century. Many people do not understand what a great change is. So today, Lin Chao will specifically talk about one of the great changes: global debt restructuring.

Lin Chao knows that many people are worried about a potential default on U.S. Treasury bonds. I can tell everyone, it is impossible.

In fact, the problems we are experiencing now have been faced by the U.S., Europe, and Japan before. The issues the U.S. faced in 2008 essentially mirror what Europe and Japan experienced in the 1990s, and what China is facing now: the leverage on household balance sheets can no longer be increased, it has exploded. So what everyone refers to as the economic cycle is actually a debt cycle. Within the debt cycle, it is important to understand that leverage is the most wonderful term in the world. Any country, enterprise, or individual that wants to develop cannot escape leverage. Enterprises need leveraged financing, buying a house requires leverage, and personal financial transactions require futures, which in the cryptocurrency world is contracts. The same goes for countries; if they want to develop, they will incur debt. However, the use of leverage by a country is different from that of an individual because every person has a limited lifespan, so when increasing leverage, the core consideration is: can I afford it? We consider the cost and whether we can repay it within our lifetime.

But for the government, it does not consider this; the government is perpetual. From the moment it borrows money, it does not need to consider repayment. Since the Bretton Woods system was abolished in the 1970s and the gold standard was removed, domestic currency bonds cannot default. Will Chinese government bonds default? No. They can roll over for 20 years and issue another bond that does not pay interest for the first ten years; there are certainly ways to resolve this. So the U.S. will not default; everyone should not worry. It can certainly roll over interest payments and issue new bonds, and the central bank will become the ultimate backstop. Because the central bank has the unlimited right to print money. The only two consequences of printing money are inflation and depreciation, which are inconsequential and not to be feared. Which is more dangerous: a debt explosion or currency depreciation and inflation? Of course, a debt explosion is more dangerous. If sovereign credit is lost, then the entire global financial and military system built will cease to exist. Who will the U.S. prioritize protecting? Of course, it will prioritize protecting its debt. So everyone does not need to worry too much about this issue. Since there is no need to worry about debt default, the smart money globally will buy U.S. stocks and bonds. The U.S. has opened the cryptocurrency market, allowing stablecoins to be linked to U.S. Treasury bonds, and it is likely to directly open C-end trading in the future; the purpose is clear. It is to make it easier for more people to buy U.S. Treasury bonds. This is why Lin Chao says that once stablecoins are linked to U.S. Treasury bonds, the market value of cryptocurrencies will definitely surge.

But when will it rise? This brings us to the game between the U.S. Federal Reserve and Trump. Previously, the global financial market traded in accordance with U.S. policy rates; the Federal Reserve pointed and everyone followed. When the dollar interest rate decreases, global stocks and bonds rise together. When the dollar interest rate increases, they all fall, and in 2022, there was a tightening. From the annual data of Bitcoin, this becomes even more intuitive. The only year of Bitcoin's bear market was 2022. Recently, you may have seen news about Waller and Bowman, both of whom strongly support interest rate cuts, but Powell has been saying to observe further. Powell's term as chairman ends in May next year. So are all current monetary and fiscal policies objective? No, they are not. Are the statements of these committee members objective? No, they are not. Both of these individuals were nominated by Trump because they both want to succeed Powell and become the chairman.

But the reality is that there are 12 permanent members of the Federal Reserve, and apart from these two, the other members are saying not to cut interest rates. Many people originally expected the impact of tariffs on the U.S. economy and prices to manifest in May, but in reality, it did not. Because a lot of inventory was prepared in advance before May, which was very abundant, so they have been selling the pre-prepared stock. We can look at Walmart's Q1 earnings report; Walmart will raise prices across the board at the end of May. Therefore, the impact of tariffs on price levels may be seen in June. Moreover, something happened in June: oil prices, which were previously $50, rose to nearly $80. Friends living in the U.S. can ask how much oil prices have risen in the last half month.

So is inflation back? It is hard to say. Lin Chao predicts that the earliest news of interest rate cuts will come in September, as we need to wait for the release of the CPI data for the last two months to make a judgment. This is why it is said that there will not be any extreme market movements in the cryptocurrency space this quarter; it will only be a period of fluctuation. In fact, if inflation remains high, it is very likely that there will be no interest rate cuts this year. Everyone should also be mentally prepared for this. If there are indeed no interest rate cuts, it would mean that the cryptocurrency market will inevitably experience a crash. But even if there is a crash, it does not mean that the bull market in the cryptocurrency market has ended. If the U.S. wants to safely navigate through debt restructuring, it will definitely develop new markets and actively create financial reservoirs, and the cryptocurrency space is their new reservoir. Even if there is a decline, it is merely to excavate greater space for future increases.

The macroeconomic market is too broad, and words are limited. Recently, Lin Chao will take advantage of the "boring cycle" (fluctuation period) in the cryptocurrency space to spare time to educate everyone on as many macro-level concepts as possible. We will also discuss the Japanese economy and why cryptocurrencies are so popular in Japan and South Korea. Interested friends can also send private messages to Lin Chao for direct discussions.

We must always maintain sensitivity to information in order to make appropriate decisions at the right time; riding the wind is the only opportunity for ordinary people. The biggest prison in the world is the consciousness of people; if you cannot earn money beyond your cognition, then learn to leverage.

The global market is changing rapidly, the world is a whole, follow Lin Chao, and gain a top-tier global financial perspective

For real-time consultation, feel free to follow the public account: Lin Chao on Cryptocurrency.

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