The original intent behind Bitcoin's design can be found in its white paper, "Bitcoin: A Peer-to-Peer Electronic Cash System," published by its anonymous creator Satoshi Nakamoto in 2008. The core goal of Bitcoin is to create a decentralized currency system that does not rely on any central bank or government agency for management. It provides individuals with the possibility of participating in transactions freely within this currency system without the scrutiny or obstruction of third parties. "People finally have a way to escape the frenzy of global fiat currency devaluation."
The Empire's Doomsday Chariot
Since the 2008 financial crisis, discussions about whether dollar hegemony can be maintained in the long term have increased. Many believe that the end of dollar hegemony is merely a matter of time. In fact, the United States and its allies, as the primary beneficiaries of the current global financial system, have been striving to maintain this unequal system that benefits them. Looking back at the financial crisis of 2008, the severity of the situation was comparable to the Great Depression of the 1930s. In response to the crisis, central banks around the world took extreme measures, the most notable of which was pushing interest rates to extremely low levels, almost close to zero.
This approach can be seen as an injection of adrenaline into the economy. Central banks hoped to stimulate consumption and investment through low-interest rates, avoiding further collapse of the economic system. Theoretically, low interest rates would encourage companies to borrow for investment, and individuals would be more willing to spend because saving became less attractive. The intention behind this policy was good and indeed helped the economy at critical moments, but it also led to many side effects. The most direct consequence was the "flooding" of money globally—meaning a significant increase in the money supply. Central banks have been operating their printing presses almost around the clock, issuing large amounts of currency in an attempt to support the economy through artificially created liquidity. This has led to a carnival of capital, but the vast majority of the world's population has not benefited from it; their cost of living has risen as the price to pay for this monetary flooding.
One of the results of this "flooding" is the insane expansion of global debt. Governments, corporations, and individuals are borrowing more and more. According to the latest data released by the U.S. Treasury in August 2024, the total U.S. national debt has surpassed $35 trillion. This number is staggering, especially when compared to the scale of the U.S. economy. The ratio of U.S. debt to GDP has exceeded 100%. This means that the money the U.S. owes is greater than the wealth it creates in a year. In other words, the U.S. is burdened with an extremely heavy debt load.
What is even more worrying is that the trend of imperial debt expansion seems to have no possibility of braking. Whether the Republican or Democratic party comes to power, no fundamental changes to this issue can be made. Everyone talks about how to cut spending and reduce debt, but when they are actually in power, reality often makes these promises seem distant. It’s like a car that has already entered autopilot mode; no matter who is at the helm, it will continue along the established route.
Over the past decade, U.S. fiscal and monetary policy has largely relied on increasing debt to sustain the economy. This model may work in the short term, but in the long run, it poses significant risks. Because when debt inflates to a certain extent, creditors may begin to question the ability of the U.S. to repay its debts. Once this confidence is shaken, the dollar's position as the global reserve currency may also be impacted. Although the dollar currently dominates international trade and financial markets, this position is not unshakeable.
In fact, more and more countries and regions are exploring how to reduce their dependence on the dollar. For example, China and Russia have accelerated their de-dollarization process in recent years, attempting to conduct bilateral trade settlements using their own currencies or other alternative currencies. Additionally, the International Monetary Fund (IMF) is also promoting Special Drawing Rights (SDR) as part of the global reserve currency to hedge against the dollar's dominance.
Why Bitcoin?
To reduce debts in the economic system that do not yield actual returns, capital must continue to operate within the current economic system. Simply put, inflation can help by weakening the actual value of these debts. For example, if you owe a large sum of money, but over time, the purchasing power of the currency declines, the actual burden of those debts becomes lighter, making them seem less heavy. To achieve this, the empire needs to have very strong control over capital, ensuring that money flows under their control.
However, Bitcoin is different. First, its supply is limited, with a total of only 21 million coins. These bitcoins will be gradually released through "mining," with all bitcoins expected to be mined by 2140. Because the number of bitcoins is fixed and cannot be arbitrarily increased like fiat currency, many consider it a form of digital "gold," believing it to be an asset that can resist inflation. In other words, while the purchasing power of fiat currency may decline over time, Bitcoin will not depreciate simply due to an increase in its quantity.
Furthermore, Bitcoin's decentralized nature makes it very special. It does not rely on any central institution or government, meaning no government can easily prevent someone from initiating or receiving Bitcoin transactions. This has garnered widespread attention and support for Bitcoin globally.
Today, the total market capitalization of the cryptocurrency market has exceeded $2 trillion, with Bitcoin's market cap exceeding $1 trillion. For the empire, such a decentralized, uncontrollable asset is obviously unacceptable. After all, the rulers of the empire want capital to operate within their system, not to flow freely in a system they cannot control. Thus, they must find ways to pull this capital back into the existing system. One effective way to do this is through ETFs (Exchange-Traded Funds) to "financialize" Bitcoin, incorporating Bitcoin into the existing financial system using traditional financial instruments.
In fact, as early as 2013, the Winklevoss twins submitted the first Bitcoin ETF application, attempting to bring Bitcoin into the mainstream financial market. However, the U.S. Securities and Exchange Commission (SEC) has rejected dozens of similar applications over the years. It wasn't until June 2023 that BlackRock officially submitted its Bitcoin ETF application and successfully obtained approval in early 2024. This inevitably brings to mind certain conspiracy theories.
As Arthur Hayes stated, a spot Bitcoin ETF is essentially a trading product. People use fiat currency to purchase it, with the aim of earning more fiat currency. Therefore, although its underlying asset is Bitcoin, it has not truly escaped the traditional financial system. In other words, while Bitcoin itself is decentralized, through the ETF mechanism, it has been pulled back into the framework of traditional finance, which is precisely what the empire hopes to see.
Will Bitcoin Become the Mascot of the Dollar?
Since the approval of the spot Bitcoin ETF, the total market capitalization has reached $72 billion, and the price of Bitcoin has also set a new historical high. So will Bitcoin in the future become a "people's currency" completely separated from states and central banks, or will it ultimately become a mascot of the dollar, an accessory tool within the dollar system?
For Bitcoin, although its original intention was to serve as a decentralized currency independent of government and central bank control, the position of the dollar in the real financial ecosystem may profoundly affect Bitcoin's future development. Especially given that the dollar remains the primary unit of account in most global cryptocurrency transactions, many exchanges use dollars or dollar-pegged stablecoins (such as USDT and USDC) as trading mediums. This makes it difficult for Bitcoin to fully detach from the dollar system in many cases. Since stablecoins are pegged to the dollar, they help the cryptocurrency market to a certain extent become "dollarized." The price and trading of Bitcoin are in fact influenced by these stablecoins, meaning Bitcoin's value remains closely tied to the dollar in many cases. While Bitcoin itself attempts to be an independent form of currency, this symbiotic relationship with stablecoins indicates that Bitcoin has, in reality, become an "accessory tool" of the dollar within the existing financial system. With the introduction of Bitcoin futures, ETFs, and other financial derivatives, the pricing and liquidity of Bitcoin increasingly depend on traditional financial markets, making its market performance more interconnected with the dollar system. These developments suggest that Bitcoin is gradually integrating into the global financial system, of which the dollar is undoubtedly the core.
Currently, most cryptocurrency investors do not possess a deep understanding of Bitcoin's vision or its underlying principles. They do not care about the technological foundations behind Bitcoin, such as blockchain, proof of work (PoW) mechanisms, or decentralized networks. For many investors, Bitcoin is not a means of payment or a tool to replace fiat currency but is viewed as a high-risk, high-reward investment asset. Their primary goal is to exchange fiat currency to purchase Bitcoin or other cryptocurrencies and sell them when the price rises to make a profit. Ultimately, these investors’ profit goals still manifest as withdrawals or reinvestments in fiat currency form. Therefore, in the current investment ecosystem, Bitcoin is more dependent on the fiat currency system, while its characteristics of decentralization and inflation resistance, though praised by some technology enthusiasts and a few users, do not constitute the main appeal to most investors. On the contrary, fiat currency remains their trusted medium for storing value and realizing profits.
Summary
Bitcoin, from its inception rooted in idealism, aimed to construct a currency system independent of state and central bank control. However, in the process of being absorbed and financialized by the mainstream financial market, its decentralized essence is constantly challenged. Through financial tools like ETFs, Bitcoin is being integrated into the existing dollar-dominated economic system, becoming a participant in this system rather than a disruptor. Ultimately, Bitcoin's future may not lie in completely breaking away from traditional finance but in finding a new balance in global capital flows, playing an important role within the existing system while continuing to maintain its uniqueness as an anti-inflation, decentralized asset.
