Bitcoin: The Future Gold Alternative or a Short-term Financial Strategy?
Recently, I have been pondering a question that may explain the recent violent fluctuations in the crypto market: After BTC broke through its historical high, how can it continue to capture new incremental value? I believe the key is to observe whether Bitcoin can become a core driver of the new economic cycle in the United States, just like artificial intelligence, driving the development of the U.S. economy. This trend has already been initiated through MicroStrategy, but there are still many challenges.
The Volatility in the Crypto Market: The Wealth Effect of MicroStrategy and Bitcoin
Last week, the crypto market experienced violent fluctuations, with the price of Bitcoin oscillating between 94,000 and 101,000. Why did such volatility occur? The core reason can be traced back to December 10, when Microsoft officially rejected a proposal at its annual shareholder meeting. This proposal was put forward by a think tank in the United States, suggesting that Microsoft allocate 1% of its assets to Bitcoin to hedge against inflation.
This event triggered a strong market reaction, even causing a significant fluctuation in the price of Bitcoin. Because many people began to worry about what kind of growth Bitcoin could bring after breaking its historical high. Some market leaders began to try to replicate the success of MicroStrategy, promoting the strategy of adding Bitcoin to the company's balance sheet, believing that this could help companies fight inflation and achieve performance growth.
Can Bitcoin Become a Gold Alternative?
When discussing whether Bitcoin can replace gold, we must first understand that gold's ability to become a global store of value is not solely due to speculation, but rather its universality and cultural recognition. Gold has been regarded as a precious commodity throughout history, with the following characteristics:
Physical Properties: Gold has a bright luster and is easy to process, making it not only valuable, but also widely used as an ornament.
Scarcity: The limited production of gold has made it a precious monetary store of value.
Global Distribution: The mining of gold is not dependent on a specific culture or technology, so it can be accessed by almost every civilization, and its value can be understood.
However, it is not realistic for Bitcoin to replace the position of gold in the short term. The mining of Bitcoin requires a large amount of computing power and electricity, making its acquisition highly concentrated, especially in resource-rich regions. For countries with scarce resources, it is difficult to participate in the production and use of Bitcoin, which limits the widespread adoption of Bitcoin as a global store of value.
Furthermore, with the return of Trump to the U.S. political arena, the trend of globalization has been reversed, and the hegemonic position of the U.S. dollar has also been challenged. Since the value of Bitcoin is largely priced in U.S. dollars, if the international status of the U.S. dollar declines, the value of Bitcoin may also be affected.
Therefore, in the short term, Bitcoin's volatility is relatively high, and it cannot stably store value like gold. Moreover, in the face of inflation, gold is still a more secure choice. Bitcoin's high volatility makes it difficult to be the first choice for professional investors.
Another Possibility for Bitcoin: A Financial Strategy to Boost Corporate Market Capitalization
However, Bitcoin may have another path in the short term: becoming a tool for companies to increase their market value and revenue. We know that MicroStrategy has increased its Bitcoin reserves, converting the appreciation of Bitcoin into company performance growth, thereby driving an increase in market capitalization.
This financial strategy is indeed attractive to some companies that lack growth. With the return of the Trump administration, U.S. economic policy may change, and the stock market may face pressure, especially against the backdrop of slowing growth in the AI sector. For example, Nvidia's financial report shows that its revenue growth is beginning to slow, and it is expected to continue slowing in the coming months. For the U.S. stock market, if there are no new drivers of economic growth, there may be a correction.
In this environment, some companies may choose to include Bitcoin on their balance sheets, like MicroStrategy, as a strategy to combat economic uncertainty and inflation. If more and more U.S. companies follow suit, or even drive up Bitcoin prices through Trump's crypto-friendly policies, it may help maintain a certain stability in the stock market.
Trump-supported policies will help these companies gain the support of the capital market and promote the widespread adoption of Bitcoin. This strategy is more flexible and effective than other economic stimulus measures, especially in traditional industries and small and medium-sized enterprises.
Bitcoin as a New Driver of the Trump Economic Cycle
Whether Bitcoin can become a core driver of the new economic cycle in the United States is another issue worth noting. With Trump's return, the implementation of his economic policies may bring uncertainty, particularly in areas such as corporate taxes and fiscal deficits, which may cause some market turmoil. In this context, how to stabilize the economy by promoting the adoption of Bitcoin has become a strategy worth exploring.
In recent years, Trump's attitude towards cryptocurrencies has been relatively positive, which provides an opportunity for the potential rise of Bitcoin. In the future economic cycle, Trump may promote the allocation of Bitcoin on the balance sheets of domestic companies to stimulate economic growth. This strategy may be favored by some companies with sluggish growth, especially those with declining core businesses, as the allocation of Bitcoin can achieve a rapid increase in market capitalization. The successful case of MicroStrategy is a reflection of this financial strategy, as it has achieved rapid growth in the company's market value through the allocation of Bitcoin.
Furthermore, the "Buffett indicator" of the U.S. stock market has currently exceeded 200%, indicating an overvalued state of the market. In this case, some companies relying on traditional industries may seek new growth points, and Bitcoin, as a new asset allocation method, may become the choice of these companies.
