Trump is back, he has eradicated all the malpractices, and he is killing everyone in the dog house.

I used to think that map opening was exclusive to small islands, but I didn’t expect that the world’s hegemons would also follow this old practice; I used to think that the ETH L2 ecosystem was chaotic enough, but I didn’t expect that the world trade system has gradually broken down; I used to think that Web3 settlement was just a dream, but I didn’t expect that stablecoins have become the new pillar.

On February 1, 2025, Trump began to "fulfill his promise" and began to increase tariffs on Mexico and Canada. Except for Canadian energy products, an additional 25% tariff was added to goods imported from the two countries.

Although Trump's style has always been to exert extreme pressure, and the tariffs will not necessarily become 100% true in the end, 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 the IRS.

Of course, Americans are not stupid enough to believe Trump's rhetoric and do not 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 government 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 Tariff War 2.0, the crypto market was the first to be hit. Bitcoin fell to 97,000 and the entire market entered a downward cycle, just as fragile as the A-share market in the past.

In theory, the crypto market is a global market. Even if one is not optimistic about the U.S. tariff war against the world, there should be a huge amount of funds entering the market for risk aversion. However, the premise of all this is that the cryptocurrency market 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.

 Image caption: Overall trend of AI Agent

 Image source: CoinGecko

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.

In other words, this wave of AI Agent narrative in the cryptocurrency world is based on two premises:

The United States is the world leader in AI. The first AI agent is Pax Americana AI Agent. OpenAI needs to maintain its lead in algorithms, and NVIDIA chips are irreplaceable in hardware.
AI Agent has not generated real profits, nor has it attracted real users. The liquidity sucked away by $TRUMP will not flow back mindlessly. 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, they are currently being questioned. The only solution is to restore the confidence of the global capital market in the United States.

Tariffs and trade wars will only be the first move. The core issue is the rise of U.S. 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 it can only rise and not fall. Therefore, there is only one option: the rise of U.S. stocks.

In normal economic theory, it is not easy to have both, 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. In addition, with 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 motivation is that tariffs need to work, so it can be inferred that even if Canada compromises with Trump, Trump's tariff stance on the world will only intensify.

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

But there is no doubt that for cryptocurrency itself, the current driving force is no longer blockchain technology or the concept of decentralization. After all, Vitalik himself admitted that he has ultimate control over the Ethereum Foundation. The real ruler of the currency circle is already real political power. The largest CEX has to take sides, the USDT issuer and operator have to take sides, and even every cryptocurrency trader has to make his own choice.

The wartime state has become a reality in 2025.

Two Worlds

Looking ahead to 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 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 would be 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. mBridge, in which the Bank for International Settlements (BIS) participated, is one example. It focuses on settlement between CBDCs. Central banks and enterprises in many countries and regions, such as the People's Bank of China and the Central Bank of the United Arab Emirates, have tried it.

However, BIS is unable to bridge the divided world. BIS has withdrawn from the mBridge plan for the simple reason that too many BRICS countries are involved in it. BIS may be accused by the West of helping Russia and other countries evade sanctions. BIS can only launch the Agorá plan, whose participants include 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 are also continuing to advance, and the PayFi concept has entered a long-term construction phase. Huma Finance hopes to enable cross-border settlement for enterprises in the post-Ripple era. The means, of course, can only be stablecoins, but the power of a project is ultimately limited. B2B has become the most mainstream choice, and ordinary people will ultimately have no chance of doing so.

Web3 super individuals are at a loss. In the era of CEX explosion, they can outperform by holding Bitcoin, Ethereum, or even BNB. However, in the PVP era, super individuals need to face the super-fast reactions of robots, the cannibalistic offensives of coin issuing groups, and the unscrupulous PUAs of unscrupulous VCs. The old world is gone after all.

Last year, Web3 settlement based on stablecoins may have been the biggest trend in the industry, but it is hard to describe now. After the AI Agent was shut down, the entire industry entered a boring and lengthy soap opera mode, and started a family complaint mode. VCs said that they suffered from a 6x return, and CEXs said that they suffered from a market value of 100 billion yuan and a trading volume of 100 trillion yuan for their platform coins.

Conclusion

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

From any perspective, this DeepSeek raid is just a preview of the next long and intense war. I hope we can be prepared before that.

Ripple receives preliminary license for electronic money institution from Luxembourg regulator.

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