In-depth analysis of the underlying reasons for the current fluctuations in the crypto market: Value rise anxiety after BTC reaches new highs

Recently, the crypto market has been experiencing severe fluctuations, with BTC prices fluctuating widely between $94000 and $101000. There are two main reasons for this situation.

On December 10th, Microsoft officially rejected the "Bitcoin Financial Proposal" put forward by a certain think tank at its annual shareholders' meeting. The proposal suggested that Microsoft diversify 1% of its total assets into BTC as a potential hedge against inflation. Although the board had previously clearly recommended rejecting the proposal, the market still held some hope for it.

Secondly, after the proposal was rejected, the BTC price briefly fell to $94,000 and then quickly rebounded. The extent of the price fluctuations triggered by this event indicates that the current market is in a state of anxiety. The focus of the anxiety is what the new source of growth will be after the BTC market cap breaks its historical high.

Recent signs indicate that some key figures in the crypto world are leveraging the wealth effect of a certain company to promote the financial strategy of allocating BTC on the balance sheets of more publicly traded companies, in order to combat inflation and achieve performance growth, thereby increasing the adoption of BTC.

However, as an alternative to gold, BTC still has a long way to go to become a global store of value, and it is not easy to succeed in the short term. Gold has been able to serve as a store of value due to its obvious luster and malleability, scarcity, and widespread global distribution. In contrast, BTC's value proposition is top-down, and its acquisition relies on electricity and computational efficiency, which limits its spread in underdeveloped countries.

Moreover, the retreat of globalization and the challenge to the dollar's hegemony will also affect the development of BTC. With the possible return of a former leader of a certain country, their promotion of isolationism will strike a blow to globalization, directly impacting the status of the dollar as the settlement currency for global trade. This trend of "de-dollarization" will hit the global demand for the dollar in the short term, thereby affecting the acquisition cost of BTC priced in dollars.

Therefore, focusing on anti-inflation as a short-term promotion may not be sufficient to attract "professional" clients to choose to allocate BTC instead of gold. Large listed companies may not aggressively choose to allocate BTC in the short term to cope with inflation.

In contrast, some publicly listed companies with weak growth may find it easier to gain recognition for their financial strategy of achieving overall revenue growth by allocating BTC. This strategy could allow BTC to take over from AI and become the core driver of economic growth in the new political and economic cycle.

Currently, the Buffett indicator for U.S. stocks has exceeded 200%, indicating that the U.S. stock market is in a state of extreme overvaluation. The main driving force that has helped the U.S. stock market avoid a correction over the past two years has been the AI sector, but as the revenue growth of related companies slows down, the U.S. stock market will face pressure.

In this case, it becomes very important to implant a controllable core that drives economic growth into the US stock market, and BTC may be a suitable choice. If small and medium-sized enterprises in the US begin to allocate BTC reserves on their balance sheets, even if their main businesses are affected by external factors, encouraging crypto-friendly policies to boost BTC prices can also stabilize the stock market to a certain extent.

This targeted stimulation is efficient and may bypass the restrictions of monetary policy. Therefore, in the new political and economic cycle, this strategy may be a good choice for certain political figures' teams and many small and medium-sized enterprises in the United States, and its development process is worth paying attention to.