Arthur Hayes New Article: The market will return altcoins with products, Bitcoin will exceed $1 million in 2028

Original title:Fatty Fatty Boom Boom

Original author: Arthur Hayes

Original translation: TechFlow

(This article only represents the author's personal views and should not be used as a basis for investment decisions, nor should it be interpreted as suggestions or guidance for investment transactions.)

Surprisingly, the economic imbalance between singer Lizzo, who advocates "fat aesthetics", and Pax Americana, has many similarities. Don't get me wrong, it doesn't matter whether you think "full body" is an aesthetic. However, the metabolic problems caused by obesity, although sometimes seemingly "beautiful", are always fatal. Similarly, although the US economy benefits some people, ultimately, extreme social disharmony may trigger a revolution.

The waistline and economic situation during the "American Peace" period were not always so unbalanced. In the mid-20th century, Americans were neither generally obese nor had their economy fallen into serious imbalances. But as time goes by, the problem gradually worsens.

The food system was hijacked by agricultural giants (Big Ag), who promoted their own processed “delicious” but nutritious lab food through fake nutritional guidelines. Americans become obese and develop chronic diseases after eating these nutrient-deficient foods, while Big Pharma has taken the opportunity to launch various drugs to treat symptoms of these metabolic diseases, such as diabetes, rather than the underlying cause. Unwilling to curb the influence of corporate influence that controls food supply, social discourse turns to the narrative of "fat aesthetics" or "fat is beauty", telling obese patients that this is not the fault of the corrupt system, but that they should be proud of their "beautiful figure". So, stars like Lizzo are pushed to the altar, and despite being a talented singer, the message she conveys is to promote a lifestyle that may lead to premature death. Lizzo represents the status quo of obesity, which is extremely profitable for a few corporate giants.

The US economy was also hijacked by a "money printing machine". Before the Federal Reserve was founded in 1913, financial panic would follow when credit expansion exceeded cash flow support. Some bad businesses and some excellent businesses will go bankrupt, the economy will be reset, credit will be cleared, and the system will be revived. However, since the birth of the Federal Reserve, every credit bubble has been dealt with with a lot of money printing. Since the Great Depression of the 1930s, the imbalance in the U.S. economy has never been truly corrected.

This is the fundamental reason for the imbalance between trade and financial capital during the "American Peace" period, not the level of tariff policies (Daniel Oliver wrote a wonderful article exploring why excess credit is the root of trade imbalance, and tariffs are just a false proposition). The status quo has led to problems such as inequality, despair and addiction to the ordinary people, while the "cosmic masters" who control stocks, bonds and real estate assets enjoy unprecedented wealth in the history of human civilization.

Not all hope is shattered, and change is still possible, but there are options for difficult or simple ways.

For decades, the pharmaceutical industry has been selling drugs that “miraculously” melt fat. Remember Fen-Phen? No one drug really works. Therefore, the only possible solution is complex, unpopular, expensive and less profitable ways: go to the gym, reduce the consumption of cheap processed foods, switch to fresh organically grown produce. However, even these methods are not enough to solve the problem, because once you enter the "obese state", the body adjusts its hunger and metabolism to ensure that it maintains obesity. According to some scientists, it may take up to seven years to change the body's metabolism to support slimmer body shape.

Then Denmark brought the "simple button". GLP-1 agonists, a drug originally used to treat diabetes, have been found to reduce people's desire for food and addictive substances such as alcohol and nicotine. Drugs like Ozempic, Wegovy, and Monjaro have significantly lost weight in a short period of time. Currently, these drugs have proven safe enough that some believe that many people who have been obese may take them for life. Thanks to modern medicine, these injections or pills provide a simple "off switch" for obesity if you can afford it.

Even Lizzo eventually chose this "miracle slimming pill" to avoid premature death from preventable metabolic diseases. Awesome! However, she may not be invited to stand up for Kamala Harris in 2028…

There are painful and painless solutions to address the U.S. trade imbalance. For American politicians, adopting policies that make neutral voters feel pain or discomfort will undoubtedly lead to their defeat in the election.

Previously, the Trump administration tried difficult and painful options, but soon found that the median voters could not stand the high-priced American goods that could take a decade to achieve, nor the empty shelves caused by the inability of American manufacturers to produce a large amount of goods that China once supplied.

This dissatisfaction is communicated to members of Congress and senators, especially in Republican districts, and the Trump team has therefore retreated and now must find other ways to achieve the same rebalancing. Action to lift the maximum tariffs is underway, and the recently announced bilateral tariffs to about 10% within 90 days is evidence.

A successful general can retreat from the wrong strategy and still win.

Another way to rebalance the U.S. trade that is more politically acceptable is to attack capital account surpluses through various forms of capital controls. These capital controls will tax foreigners who purchase and hold U.S. financial assets. If foreigners give up buying U.S. financial assets due to high taxes, they must also give up selling cheap goods to the United States. If foreigners still sell cheap goods and buy assets, tax revenue can be returned to the median voter by stimulus checks or lowering income taxes. In this way, Trump can claim that he has hit "evil foreigners" and provides lower taxes to the American public. This strategy won the midterm and presidential elections and achieved the same goal of reducing the influx of cheap foreign goods into the U.S. consumer market and relocating manufacturing capacity back home.

The end result of Trump's shift from difficult solutions to easy solutions is that foreign capital will gradually and then suddenly flee from U.S. stocks, bonds and real estate. The dollar will then depreciate relative to the currencies of the surplus countries. The problem with the U.S., and especially U.S. Treasury Secretary Bessent, is who will finance exponentially growing U.S. Treasury debt if foreigners change from net buyers to sellers. The problem facing governments and businesses in surplus countries is where they should “storage” those surpluses if they continue to run surpluses. The answer to the former is to print money, while the answer to the latter is to buy gold and Bitcoin.

The core of this article will focus on the mathematical identity of trade, how capital controls work—the “boil the frog in warm water” theory, how these taxes affect capital flows in surplus countries, how Bessent prints explicitly and implicitly to fund the U.S. Treasury market, and why Bitcoin will be the best performing asset during this global currency transition.

Trade Accounting Identity and Geopolitical Issues

Let's use this ironic example to illustrate the relationship between a trade account and a capital account.

It's 2025 and Trump's election reaffirms the right of little boys to play with action toys again. Mattel is re-launching the He-Man action toy with the AR-15 plastic rifle. Masculinity is back, baby...the spokesperson for the toy is Andrew Tate! Mattel needs to quickly produce one million units at the lowest price. Since the U.S. manufacturing base is almost non-existent, Mattel must buy these toys from its Chinese factory.

Mr. Zhou owns a manufacturing company in Guangdong Province that produces cheap plastic toys. He agreed to the terms of Mattel, one of which was paid in US dollars. Mattel transferred the money to Mr. Zhou, and the toys arrived in a month. Wow, that's so fast.

Mr. Zhou’s profit margin is 1%. China is very fierce in competition. Due to the large volume of orders he handled, the total revenue from orders from Mattel and other similar companies reached US$1 billion.

Mr. Zhou must decide what to do with these dollars. He does not want to bring it back to China by converting the dollar into RMB, because the yuan has no productive uses given the low interest rates on government and corporate bonds. In addition, banks pay almost no interest on deposits.

Mr. Zhou doesn’t like all these anti-China remarks because he felt unpopular when he was in the United States last time. His daughter is at UCLA, and she is being looked at strangely for driving the latest Phantom Convertible, while ordinary Americans take the Los Angeles subway, ahem, I mean Uber goes to class. So even if the U.S. Treasury yield is one of the highest government bond yields in the world, he would rather not buy those bonds if he could. Mr. Zhou has a good impression of Japan and has a much higher long-term government bond yield than before. He asked his banker to help him buy Japanese government bonds (JGB). Bankers told him that the Japanese government does not want foreigners to buy their debt in large quantities because it would push up the value of the yen, and they want to keep exports competitive. If Mr. Zhou sells the dollar to get the yen needed to buy JGB, the yen will appreciate.

The JGB market is the only market big enough to absorb its surplus, and Japan does not want foreigners to push up the value of their currency. Mr. Zhou accepted the reality and barely used his dollar export income to buy U.S. Treasury bonds.

What impact does this have on U.S. trade and capital accounts?

US Trade Account:

• Trade account deficit: $1 billion

• Boss Zhou’s bank account: $1 billion in cash

Buy:

$1 billion in fiscal bonds.

Because these surpluses did not flow back to China, Japan or elsewhere, but were recycled into US Treasury bonds:

US Capital Account:

• Capital Account Surplus: $1 billion

The moral of this part of the story is that if other countries are reluctant to let their currencies appreciate, the deficit in the trade account will be translated into the surplus of the capital account. This is the current situation: except the United States, no market is large enough or willing to absorb global trade imbalances. This is why even if the United States issues trillions of dollars in debt every year to raise government funds, the dollar remains strong. By the way, China asked Japan many years ago whether it could buy Japanese government bonds (JGB), but Japan's response was: "No, unless you ask us to buy Chinese government bonds (CGB)." China replied: "No, you can't buy CGB." Therefore, these two countries continued to dump their surplus capital into US financial assets.

Under the current global trade landscape, any discussion about the replacement of the RMB, the yen or the euro as a global reserve currency is nonsense unless China, Japan or the EU are willing to open its capital accounts and its financial markets are large enough to absorb the income of surplus countries.

Next, Trump announced that the United States must revive its manufacturing industry and reverse its trade account deficit. His current tool choice is tariffs. But let's analyze why tariffs are not feasible from a political standpoint.

Take Mattel as an example, they sell cheap toy dolls to little boys. However, most households are financially struggling, not even having $1,000 in emergency savings. If the price of a toy doll rises from $10 to $20, the little boy Jonny will not be able to play with it. Without tariffs, Mattel can sell dolls for $10 because it is cheap to produce in China. But now, Trump imposes 100% tariffs on Chinese goods. Boss Zhou was unable to bear the tariff cost, so he passed it on to Mattel. Mattel passes the cost to consumers because its profit margin is only 10%.

As a result, the doll's price soared to $20. This is too expensive for most families and they choose to give up on buying. The little boy Jonny didn't understand why his parents didn't buy him his beloved gunfight doll. His parents worked hard to start Uber and deliver food, but barely made a living. Now, because Trump makes toys expensive, his children are angry at home. Will parents vote Republican or Democratic in the next election?

Before the election, they may diagnose the child with attention deficit ADHD and then give him medication to calm him down. The Democratic Party will take the election program "making toys and other commodities affordable again" and advocate a return to the "free trade" policy, allowing China to continue to dump cheap goods into the US market. The Democratic Party will claim that all smart economists agree that "free trade" allows Americans to enjoy cheap goods and maintain their lifestyles; while Trump and his advisers are a bunch of ignorant idiots. If things go as they are currently on the trend, the Democrats could make a comeback in the 2026 midterm elections.

Can Boss Zhou evade tariffs by transferring production from China to countries with lower tariffs? sure.

Since the early 2000s, Boss Zhou has accumulated a lot of wealth by investing in factories in Mexico, Vietnam, Thailand and other places. He began producing dolls in these places and then shipped them to the United States. The effective tariffs dropped, and he could sell the doll for $12 instead of $20. Parents can accept spending $2 extra to avoid having their kids lose their temper and avoid having their kids rely on prescription medications too early.

Since Trump did not propose to impose uniform tariffs on all markets, but instead adopted a scattered bilateral agreement, smart manufacturers like Boss Zhou can always find a low tariff path to enter the United States. The Trump team is well aware of this, but for geopolitical reasons, such as whether a certain country has a U.S. military base, whether it sells key goods to the United States, and whether it sends soldiers to participate in the long-term war in the United States, they cannot completely ban the allies' economies, otherwise these countries may choose not to cooperate with the "American World Police."

Without unified tariffs, there will always be countries or regions that become "transshipment arbitrage points." For example, China's arbitrage mechanism for obtaining advanced semiconductors and AI chips through TSMC and NVIDIA can also allow Chinese goods or Chinese-owned manufacturers to evade high tariffs on goods directly exported from China to the United States.

Ultimately, tariffs cannot achieve the goal of significantly reducing the U.S. trade deficit. The American public won’t be willing to wait five to ten years until manufacturing returns to a level that is enough to refille cheap goods with shelves. If the trade deficit does not shrink significantly in the next 12 months, Trump's policies will only intensify commodity inflation and make the people in economic distress unable to see any substantial benefits.

Ultimately, the problem is not in the tariff itself, but in order for the tariff to be really effective, every country must face the same tax rate and cannot have any transactions or exemptions. However, this cannot be achieved in reality, especially when the surplus countries are not just "evil China", but also firm allies like Japan and Germany. It is ridiculous to expect Japan to continue to contain China and Russia at the naval level, station tens of thousands of US troops and carry more than 120 military bases, while also allowing its manufacturing industry to be crushed by tariffs.

Therefore, this 90-day suspension of tariff policies will eventually become a permanent shelving.

Tax me, baby

If there are many problems in attacking the trade account deficit due to domestic and geopolitical reasons, then how about turning to capital account surplus? Is there any way to prevent foreign investors from accumulating U.S. financial assets? The answer is yes. However, for wealthy people who believe in the glory of free markets, this approach may appear dirty and despicable—this is Capital Controls. Specifically, I am not referring to the United States banning or significantly restricting foreigners from holding financial assets (which is what most countries around the world do), but rather taxing foreigners’ asset holdings. Foreigners can still hold most of U.S. financial assets on any scale, but their assets will continue to be subject to a certain percentage of taxes.

These tax revenues will be returned to ordinary people in the United States by reducing income tax or other government subsidies to ensure their support. The result could be: foreigners continue to generate surpluses by selling goods to the United States, but their earnings are taxed at the same time; or they reduce their exports to the United States to avoid tax payments; or they turn to buying other stateless financial assets, such as gold or Bitcoin.

There are many ways to choose from how to tax foreign capital. But to simplify the explanation of the effect of taxation, we assume that all foreign capital is taxed at a rate of 2% per year. The focus here is on foreign portfolio assets, that is, stocks, bonds and real estate with strong liquidity, excluding non-liquid assets like factories owned by foreign automakers in Ohio.

Currently, the total value of foreign portfolio assets is approximately US$33 trillion. Assuming that the price is constant and no capital is outflowing due to taxation, let's take a look at the annual tax returns.

It is worth noting that the total income tax paid by the bottom 90% of the income group in the United States in 2022 is about US$600 billion. Therefore, Trump can completely eliminate the income tax of the vast majority of voters by imposing a 2% capital tax on foreign-held stocks, bonds and real estate. This is undoubtedly an attractive political strategy.

Next, let's study the comparison of the effects of capital tax vs. tariffs:

Collection capacity:

The U.S. Treasury has complete control over the banking system and financial markets. They may not know exactly the specific owner of each asset, but they can distinguish whether the holder of the asset is a U.S. entity or a foreign entity. Therefore, it is relatively simple to tax only stocks, bonds, and real estate held by non-U.S. entities for financial institutions or local governments.

In contrast, tariff collection is more complicated because it is difficult to accurately track the origin of each item or the addition of its value in the supply chain. This also makes tariff policies more likely to be exploited.

Uniform tax rate: One tax controls the world

The purpose of capital tax is to eliminate net capital account surplus, and this only requires a unified tax rate. If foreigners are unwilling to pay this tax, don't buy US financial assets. They can reinvest their export revenue in their own markets. Such taxation will not immediately prevent exporters from selling cheap goods to the United States, so the impact on the quantity of traded goods will not appear immediately.

While capital controls can bring income to reduce income taxes, will it help bring manufacturing back to the United States?

Suppose the exporter does not want to pay a 2% tax on holding U.S. financial assets every year. They believe that the net expected return after tax is low and instead choose investment opportunities in their own country. They sell their assets, exchange them for dollars, and then exchange them for cost coins. The end result is that the dollar weakens while the surplus currencies (such as the Japanese yen) appreciate. Over time, the US dollar will gradually weaken, while the surplus currencies will increase significantly. By then, even without tariffs, goods produced in Japan will become more expensive in US dollars - that's the key.

Made in the United States will become cheaper, while foreign goods will become expensive over time. This process may take decades, but American voters will benefit from it anyway. Either foreign capital stays and pays taxes, and these incomes are used to cancel income taxes for most voters; or foreign capital withdraws, U.S. manufacturing grows, providing more high-paying jobs, thereby improving voters' income levels. In any case, the goods on the shelves will not be empty immediately, nor will they cause inflation in commodity prices.

Stable capital control

I am a global macro "DJ" who likes to remix other people's ideas, plus my own language style and rhythm. Just as every house music has standard drum beats, snare drums, clapping and syncopation, my "drum beats" revolve around the rhythm of the "money printing machine". I hope to add interesting "bass line", "harmony" and "special effects" to the text, and finally present a wonderful "decomposition" and "explosion" like Solomun.

The reason I say this is to emphasize that the idea of ​​using capital controls instead of tariffs to narrow down imbalances in the U.S. trade and capital account is not new or my original work. In negotiations on the Bretton Woods system after World War II, economist Maynard Keynes advocated levied "use fees" on capital in surplus countries and recycled them to the capital markets of deficit countries to balance trade and capital flows. Recently, Stephen Miran (currently Chairman of the Economic Advisory Board) discussed in his paper, Guide to the Reconstruction of the Global Trade System, how to force capital flows to be rebalanced by imposing specific types of fees on foreign holdings and trading of U.S. financial assets. Another very influential macro analyst (required anonymous) has published several articles over the past year, believing that capital controls are necessary and that countries that want to be American allies must pay for it. Additionally, Michel Pettis speculated in a recent webinar that tariffs would not substantially reduce the U.S. trade deficits with the world and capital account surplus, and he concluded that capital controls are coming because the government realized that this is the only way to really change the flow of funds.

I mentioned these people to prove that today's financial think tanks are advocating capital controls rather than tariffs. The good thing about investors is that we can see in real time how tough tariff gangs led by Commerce Secretary Howard Lutnick implement plans to cut US imbalances. However, due to the collapse of financial markets in early April this year, tariff policies were rushing to implement, the internal struggle seems to have ended. Lobbyists of capital controls, such as Bessent, are now taking over. My description of the effectiveness of capital controls may be as optimistic as Sam Bankman-Fried (SBF)’s “painting pie” when showing investors the financial situation of FTX/Alameda. However, the implementation of capital controls in the Pax Americana financial markets may have serious consequences. I predict that the implementation of capital controls will lead to an accelerated rise in Bitcoin prices. This is the core of what I call the "boiled frog theory in warm water".

An unsuccessful crash

These measures will be implemented gradually due to the negative impact of capital controls on U.S. financial assets. Global financial markets will slowly accept US capital controls as normal, rather than some heresy. Just as a frog does not know that it is about to be cooked in the rising water, capital controls will quietly become the new normal.

Foreigners earn a large amount of dollars by selling goods to Americans, and they have no choice but to reinvest these dollars in U.S. stocks, bonds and real estate markets. Here are some charts showing the excellent performance of the U.S. financial markets as foreign capital influxes.

The chart below is the cornerstone of all my analysis. If you are a reserve currency issuer and have to open your capital account, the trade deficit will result in a capital account surplus.

For the next three charts, I use data from 2002 to early 2025, because China joined the World Trade Organization in 2002, and early January 2025 was a period of high optimism in the US market that "Trump wants to repair the world".

Since 2022, the MSCI U.S. Index (White) has outperformed the MSCI World Index (Golden) by 148%: a special performance of the U.S. stock market.

Total U.S. Treasury bonds (golden) rose 1000%, but 10-year U.S. Treasury yields fell slightly: a special performance in the U.S. bond market.

The working-age population aged 15-64 (golden) grew only 14%, but the Cash Shiller National House Price Index (white) rose 177%: a special performance of the U.S. real estate market. This is quite amazing, as data from the 2008 global financial crisis are also included.

If foreign capital is taxed and they marginally decide that investing in the United States is no longer feasible, then mathematically, stocks, bonds and real estate prices will inevitably fall. This is a problem, and there are several reasons. If stocks fall, capital gains tax revenues decrease, and these taxes are the government's marginal income drivers. If bond prices fall and yields rise, government interest expenses will increase as it must continue issuing new bonds to fund huge deficits and roll over existing $36 trillion debt. If house prices fall, middle-class and wealthy baby boomers who own most of the property will see their net worth breaking down when they need that wealth to fund years of retirement. These people will vote against the current Republican Party in the November 2026 midterm elections.

"Pax Americana" relies on foreign capital, and if capital controls are implemented and foreign capital leaves, it is bad news for the economy. Can politicians, the Federal Reserve and the Treasury take measures to replace foreign capital and maintain stability in financial markets?

Remember that four quarter drum beat, the Brrr button. Everyone knows the answer. The answer is the same as usual. If foreigners do not provide US dollars, the government will provide it through a money printing machine.

Here are the policies the Fed, Treasury Department and Republican lawmakers will adopt to replace foreign capital:

Fed:

• Stop quantitative tightening (QT) of mortgage-backed securities (MBS) and Treasury bonds.

• Restart quantitative easing (QE) for MBS and Treasury bonds.

• Exclude MBS and Treasury bonds from supplemental leverage ratio (SLR).

Ministry of Finance:

• Increase the number of Treasury bond repurchases every quarter.

• Continue to issue a large number of short-term Treasury bills (<1 year maturity) instead of long-term Treasury bonds (>10 year maturity).

Republican lawmakers:

• Ended custody of Fannie Mae and Freddie Mac, the two largest housing mortgage lenders in the United States.

There is no need to imagine the Treasury Department and Republican lawmakers following Trump’s orders, but why would the Fed act as Trump’s request? The answer to this question is that this is a wrong question. The Fed has acted behind the scenes as Trump and Bessent’s request. Take a look at this beautiful example of Luke Gromen tagged:

The Fed is shrinking its balance sheet. However, it has some discretion in how to achieve this, especially since the task of policy is to reduce net rather than evenly across all term categories. Yellen and now Bessent need to fund the government's huge debt. Foreign investors and the private U.S. enjoy buying Treasury bills because they are short-term bonds and pay interest, meaning they are high-yield cash alternatives and are more popular than low-yield bank deposits. But no one is willing to buy long-term government bonds, that is, 10 years or more. To help Yellen and now Becent raise funds, the Fed has given great support through quantitative easing (QE) on 10-year Treasury bonds. Powell cites government deficits as a problem, but continues to lower 10-year yields through money printing machines to maintain politically acceptable lows, which is very dishonest.

Given that Powell is already conducting a secretive quantitative easing of Treasury bonds, he will also accept requests from the BBC and powerful commercial banks such as JPMorgan Chase CEO Jamie Dimon to stop quantitative tightening (QT), resume quantitative easing (QE), and grant supplemental leverage (SLR) exemption. I don't care how stubborn he was in the press conference to Trump's demand for looser currency conditions. Powell's position has been fixed and he will not leave. Now, keep on moving.

These measures will provide printing of money through various channels to replace foreign capital lost due to capital controls and increase stock, bond and real estate prices in the following ways:

Bond prices will rise and yields will collapse. It will buy bonds due to the Fed's quantitative easing policy. Banks will buy bonds because they can be purchased with unlimited leverage and they will snatch them to buy before the Fed.

The stock market will rise as a whole due to the lower discount rate applied to future earnings; some industries will benefit more than others. Manufacturing companies will benefit the most, as credit costs fall and availability increases. This is a direct result of a decline in government bond yields and banks have more balance sheets to provide loans to the real economy.

House prices will rise because mortgage rates will fall. The Fed's quantitative easing purchase of mortgage-backed securities will lower mortgage interest rates. Credit availability will increase as Fannie and Freddie Mac are eager to re-enter the loan underwriting business, leveraging their implicit government guarantees.

Don't expect these policies to be implemented overnight. It's a process over the years, but it must happen; otherwise, the U.S. financial markets will collapse. Given that politicians can’t handle the financial dilemma of a week after the liberation day, they always press the printing button somehow.

Will they withdraw their investment?

Before we end my Bitcoin price forecast, we must ask a major question: Will foreign capital withdraw? If so, are there any signs that this assumption is becoming a reality?

My assumption, consistent with the views of many other analysts, is the rapid appreciation of currencies in some Asian exporters, such as the New Taiwan Dollar and South Korean won, suggesting a reversal in capital flows. This therefore provides a credible basis for the upcoming view of capital controls, and also indicates that some forward-looking market participants are withdrawing early. In addition, finance ministers responsible for monetary policy are allowing their own currencies to appreciate as this particular arbitrage transaction is gradually being lifted.

Private capital of Asian businesses, insurance companies and pension funds often moves with market trends. Since Asian exporters devalued their currencies after the Asian financial crisis of 1997-1998 and adopted a policy of manipulating the depreciation of their currencies against the US dollar, Asian private capital has been doing the following:

1. The capital earned overseas stays overseas.

2. Domestic capital is transferred overseas and mainly enters the U.S. financial markets to obtain higher returns.

Essentially, it's a huge arbitrage deal. Ultimately, these capitals must either be returned to local shareholders in the form of local Asian currencies or need to meet liabilities denominated in local Asian currencies. Therefore, Asian private capital is actually shorting the local currency. In some cases, they even borrow at home, as domestic interest rates are very low due to the large amount of local currency bank deposits created by the central bank to keep the local currency weak. Meanwhile, Asian private capital holds long positions on high-yield dollar assets such as stocks, bonds and real estate. They will not hedge these dollar longs because the state-supported policies are themselves manipulating the downward trend of the local currency price.

This arbitrage transaction will be lifted in two cases:

1. The rate of return gap between U.S. and local financial assets narrows.

2. Asian currencies began to appreciate relative to the US dollar.

Capital controls reduce the net return on U.S. financial assets. If the net return rate drops, or the market expects that this trend will continue due to rising foreign capital tax rates, then capital in Asia’s private sector will begin to lift its arbitrage transactions. They will sell stocks, bonds and real estate and then exchange the dollar for local Asian currencies. On the marginal effect, this will cause the prices of certain U.S. financial assets to fall, while Asian currencies appreciate relative to the US dollar.

In terms of US assets, the first and most critical battlefield will be the US Treasury market, especially the long-term Treasury market with a 10-year and above. This market is most vulnerable to foreign sell-offs, because few people are willing to hold these "junk debts". The corresponding currency market battlefield will be the currencies of some Asian exporters.

When the US dollar price fell against the Korean won (USDKRW), the Korean won appreciated relative to the US dollar.

Many sovereign and private foreign capital are also conducting similar arbitrage transactions. If the flow of private capital in Asia is reversing, then these funds must also remove their positions. Therefore, even before the scale and scope of U.S. capital controls are clear, foreign investors holding U.S. assets and local currency liabilities must begin selling stocks, bonds and real estate and repurchasing their local currency.

What ultimately forces the Federal Reserve, the Treasury Department and politicians to implement some or all of the currency printing measures will be a slow and irreversible rise in the 10-year Treasury yield. As capital reflux intensifies, yields will rise. With the system embedded in the large amount of leverage, the rate of return strike price in the financial market is between 4.5% and 5% of the 10-year Treasury bonds. As yields rise, volatility in the bond market will increase, which can be observed with the MOVE index. Remember that when the index exceeds 140, policy action is immediate and inevitable. Therefore, even if the rise in yields restricts the stock market rebound, Bitcoin will see the acceleration of currency printing through this weakness.

Bloomberg Asia Dollar Index (Golden) and U.S. 10-year Treasury yield (White). As the dollar index rises, local Asian currencies strengthen and we see a corresponding increase in 10-year yields.

lifeboat

With the gradual split of Sino-US relations, global financial markets will move towards Balkanization. A monetary policy that prioritizes national interests will require capital controls, which will be implemented everywhere, including the United States.无论你是谁，都不能保证你的资本能够投资于全球收益最高、风险最低的法定金融体系资产。过去，黄金是不同金融系统之间唯一的流动连接，但现在中本聪给了信徒们比特币！

只要有互联网，你就能将法币兑换成比特币。

即便中心化交易所被禁，银行被禁止处理与比特币相关的交易，你仍然可以将法币兑换成比特币。我对此有信心，因为在中国的运作方式就是如此。自2017年以来，中国有效地禁止了中心化交易所在中心限价现货订单簿上运营。然而，如果私人之间想在银行系统内互相发送法币以换取银行系统外的比特币，国家对此无能为力。中国大陆的场外比特币市场仍然非常活跃。即使是中国也没有禁止比特币的私人持有，因为它知道这样做是适得其反且不可能的。对于那些生活在比中国共产主义更无效的形式下的欧洲人，不要指望欧洲央行（ECB）在不尝试的情况下学到这一课。因此，现在就把你的钱拿出来吧！听听我在今年早些时候的加密金融会议上的演讲，了解资本管制为何即将在欧盟实施。

一个大问题是特朗普团队是否会试图击沉黄金和比特币这两艘全球资本的救生船。我认为不会，因为他和他的副手们认为，1971年后美国国债成为全球储备资产的安排并没有惠及将他们推上权力的那部分美国人。他们认为，美国的金融化导致了军事准备、制造能力和社会和谐的下降。为了解决这个问题，黄金和/或比特币将被提升为中立的全球储备资产。国家的不平衡将通过黄金平衡，而私人则通过比特币。

我们知道特朗普团队对黄金持正面态度，因为它在一开始就被豁免于关税。我们也知道特朗普团队对比特币持正面态度，因为各监管机构的变化。虽然我认为这些措施可能不是Pax Americana（美式和平）下比特币真正公平扩展所需的，但你不能否认各执法机构的撤退不是朝着正确方向迈出的重要一步。

考虑到我们知道外国投资组合资产总额为33万亿美元，接下来就是思考有多少资本将从美国撤出并流入比特币的问题。取决于你希望多快完成，这决定了有多少比例的资产将逃往比特币。

如果未来几年有10%的这些资产（3.3万亿美元）流入比特币呢？按当前市场价格计算，交易所持有的比特币约为3000亿美元。如果10倍的资本试图挤入市场，价格将远不止上涨10倍。这是因为最后的价格是在边际上设定的。当然，如果价格飙升至100万美元，长期持有者将会出现并出售他们的比特币换取法币，但随着这些投资组合资产迁移到比特币上，一场史诗般的空头挤压将随之而来。

比特币之所以是全球金融巴尔干地区资本流动的优越载体，是因为它是一种数字化的持有资产。存储和转移财富不需要中介。黄金虽然有着1万年的无国籍资本历史，但只能以纸质形式数字化流通。这意味着必须信任金融中介来仓储你的实物黄金，然后你交易一个数字收据。这些中介将受到旨在将资本隔离在国内以便征税以支付国家优先工业政策的金融法规的限制。因此，除非你是国家或准国家行为者，黄金作为实物持有资产在全球数字经济中不能快速移动。比特币是全球资本必须离开美国和其他地方的完美且唯一的救生船。

额外的牛市动力将来自美国对其庞大国债的实际违约。面值1000美元的债券到期时将获得1000美元，这意味着名义上你将收回本金。但未来的1000美元将购买更少的能源单位。美国自2008年全球金融危机后开始认真地对国债的实际价值违约，当时他们决定通过印钞解决问题。但在COVID之后，违约的速度加快了。这一趋势将再次加速，因为特朗普团队通过贬值国债相对于黄金和比特币等硬通货来重振美国经济。这是从“解放日”关税闹剧中得到的真正启示。随着企业在本土更好地重建，名义增长将激增；然而，高单位数字的名义GDP增长将不会与国债和银行存款的高单位数字收益率相匹配。这种通胀将像过去一样在未来的黄金和比特币价格中显现。

这个图表展示了美国长期国债ETF（TLT）以黄金计价（金色）和比特币计价（红色）的表现，自2009年起以100为基准。从2021年至今，国债相较黄金和比特币分别贬值了64%和84%。

外资回流和美国庞大国债存量的贬值将成为推动比特币在现在至2028年之间达到100万美元的两大催化剂。 我之所以提到2028年，是因为那是下一次美国总统大选的时间点，届时谁将获胜以及会实施何种政策尚不可知。或许，通过某种神圣的干预，美国公众会准备好接受因过去一个世纪的挥霍无度而带来的“货币宿醉”，并消除正在摧毁社会的腐朽信用。当然，我对此并不抱很大希望，但也不是完全没有可能。因此，现在正是抓住机会的时候，当“太阳王”（指当前的市场环境）对比特币展现出青睐时，不要错过。

Trading strategy

从宏观层面看，我作为Maelstrom的首席投资官（CIO）已经完成了我的任务。在1月底，我降低了风险，增加了法币持仓。随后，从3月底到4月初，我逐步重新进入市场。在“解放日”期间的一周金融市场崩盘中，我们将加密货币的敞口拉到最大。现在是时候决定哪些优质的“山寨币”（shitcoins）将在牛市的下一波上涨中跑赢比特币。

我相信，这一次市场将奖励那些有真实用户、用户为产品或服务支付真实货币，并且协议将部分利润返还给代币持有者的“山寨币”。有两个项目脱颖而出，Maelstrom在低点进行了买入，它们分别是 $PENDLE和$ETHFI 。Pendle将主导加密固定收益交易市场，而在我看来，这是加密资本市场中最大的未开发机会。Ether.fi则会成为加密领域的“美国运通”（American Express），即一个面向富有持币者的原型加密金融机构。我将在后续文章中进一步评论这些“山寨币”。

尽管我相信比特币将达到100万美元，但这并不意味着没有机会进行战术性的空头操作。资本管制和货币印刷即将到来，但从现在到那时的道路充满坎坷。特朗普团队并未完全押注资本管制，因此可以预期，那些希望特朗普带领帝国走向不同方向的人将重新发声。特朗普没有固定的意识形态；他会根据环境的限制而调整方向，曲折前行以实现目标。因此，趋势是你的朋友——直到它不再是为止。