Predictable trade conflicts and unpredictable Web3 settlements

Source: Zuoye Waiboshan

I thought that the map opening was only for small islands, but I didn’t expect that the world-class hegemon would follow this old practice; I thought that the ETH L2 ecosystem was chaotic enough, but I didn’t expect that the world trade system has gradually broken down; I thought that Web3 settlement was just a dream, but I didn’t expect that stablecoins have become a new pillar.

On February 1, 2025, Trump began to "fulfill his promise" and began to increase tariffs on Mexico and Canada. In addition to Canadian energy products, goods imported from the two countries will increase by an additional 25%.

Although Trump’s style has always been to exert extreme pressure, the final tariffs may not necessarily come true 100%, but once the bow is drawn, there is no turning back. The core economic idea of ​​Trump 2.0 is to replace "domestic taxes" with tariffs, so that the United States can return to the good old days without IRS.

Of course, Americans are not stupid enough to believe Trump's rhetoric and really think that increasing tariffs and stabilizing prices can coexist. In the completely deindustrialized United States, all goods are imported products. It's just that from the American temple to the people, they have entered a quasi-wartime state. In order to win the final victory, temporary pain is necessary.

Crypto War Economy

After the start of the tariff war 2.0, the crypto market was the first to bear the brunt. Bitcoin fell to 97,000, and the entire market entered a downward cycle, just as fragile as the previous A-share market.

In theory, the crypto market is a global market. Even if you are not optimistic about the US tariff war against the world, there should be a large amount of funds entering the market for risk aversion, but the premise of all this is that the currency circle is indeed a global market.

Unfortunately, the emergence of DeepSeek has broken the stereotype that the U.S. stock market is the global market. If you have a good memory, you will remember that not long ago, when DeepSeek V3 released a technical report on December 26, 2024, the cryptocurrency industry was the first to accept and recognize its advanced nature, earlier than the general public.

AI Agent is still thriving at this time. The real crisis lies in the successive launches of $TRUMP and DeepSeek R1. From January 17 to January 20, in just three days, the world has experienced two waves of shock. The president will really issue currency, and Chinese AI will temporarily lead the United States.

Or to put it this way, this wave of AI Agent narratives in the cryptocurrency circle is based on two premises:

1. American AI is the only one in the world, and AI Agent is first of all Pax Americana AI Agent. OpenAI needs to maintain its lead in algorithms, and Nvidia chips are irreplaceable in hardware;

2. AI Agent has not generated real profits, nor has it attracted real users. The liquidity sucked away by $TRUMP will not flow back without thinking. It is still narrative economics, not a PMF product.

The world line converges and returns to the trade war.

In the face of the sharp decline of Nvidia and other Magnificent 7 giants in the US stock market, the AI ​​Agent track and the chaos of the Ethereum Foundation and Binance seem insignificant.

Nvidia's chips, the price of Bitcoin, if these are Plan A and B of the US revitalization plan, then they are currently being questioned. The only solution is to rebuild the confidence of the global capital market in the United States.

Tariffs and trade wars will only be the first move. The core is the rise of US stocks and interest rate cuts. The United States needs to cut interest rates to stabilize the economy, but at the same time, as a global financial country, the stock market cannot have any problems, and can only rise but not fall. Therefore, there is only one option, which is the rise of US stocks.

In normal economic theory, these two are not easy to have at the same time, but the magical $TRUMP can bypass the existing fiscal-monetary system, and tariffs and trade wars will create government financial resources in the short term. There is also Musk's layoffs. The remaining funds can only be gathered in the capital market, unless someone really goes to the United States to open a factory.

In this system, the short-term driving force is that tariffs need to work, so it can be inferred that even if Canada compromises with Trump, Trump's tariffs on the world will only intensify.

In the long run, the fiscal role of cryptocurrency will be inevitable, that is, either the US dollar-Federal Reserve system will get rid of its nominal independence and reach a closer political cooperation with Trump, or the Trump administration will continue to use unconventional means to "command" the US dollar.

But there is no doubt that for cryptocurrency itself, the current driving force is no longer blockchain technology or decentralized concepts. After all, Vitalik himself admits that he has ultimate control over the Ethereum Foundation. The real master of the currency circle is already a real political force. The largest CEX must stand in line, the issuer and operator of USDT must stand in line, and even every coin trader must make his own choice.

The wartime state has become a reality in 2025.

Two Worlds

Looking at the main theme of 2025, the fragmentation of world trade has become a reality. Regionalization has actually replaced the old globalization centered on the United States and based on the WTO mechanism. The only thing left is that the US dollar is still the global currency.

In fact, Trump has repeatedly warned the BRICS countries not to challenge the status of the US dollar, but everyone understands that if the United States does not participate in global trade, it is very strange to use the currency of a non-trading country, but everyone also understands that no country or organization’s currency can challenge the status of the US dollar.

It is rare in the world to be so entangled.

Blockchain technology has been tried. The mBridge project in which the Bank for International Settlements (BIS) participated is one example. It focuses on settlement between CBDCs. The People's Bank of China, the Central Bank of the United Arab Emirates and other central banks and enterprises in many countries and regions have tried it.

However, BIS cannot bridge the divided world. BIS has withdrawn from the mBridge project. The reason is that too many BRICS countries are involved. BIS may be accused by the West of helping Russia and other countries evade sanctions. BIS can only launch the Agorá project. The participants are South Korea, Japan, the European Union and other countries. It is clear at a glance that the East and the West are clearly divided.

Web3 projects also continue to advance. The concept of PayFi has entered a long-term construction stage. Huma Finance hopes to open up cross-border settlement for enterprises in the post-Ripple era. The means can only be stablecoins, but the power of a project is ultimately limited. B2B has become the most mainstream choice, and ordinary people are ultimately out of reach.

Web3 super individuals are at a loss. In the era of CEX explosion, holding Bitcoin, Ethereum, and even BNB can outperform, but in the PVP era, super individuals need to face the super-fast response of robots, the cannibalistic offensive of the currency issuing group, and the unscrupulous PUA of unscrupulous VCs. The old world is gone after all.

Last year, Web3 settlement based on stablecoins may be the biggest trend in the industry, but it is hard to say now. After the AI ​​Agent was shut down, the entire industry entered a boring and lengthy soap opera mode, and began to complain about trivial matters. VCs said that they suffered from 6 times the return, and CEX said that they suffered from the market value of 100 billion and the transaction volume of 100 trillion for the platform currency.

Conclusion

There is no real empathy in this world, and humans cannot empathize with their own kind, but before the epic correction of the US stock market, I hope we still have a chance.

From any angle, this DeepSeek surprise attack is just a preview of the next long and tense war. I hope we can be prepared before that.