I once thought that territorial expansion through maps was exclusive to small islands, but I never expected a world-class superpower to follow the same old playbook. I once believed the ETH L2 ecosystem was chaotic enough, but I didn’t foresee the global trade system gradually falling apart. I once dismissed Web3 settlements as mere fantasy, but now stablecoins have become a new pillar.

Trump’s return brings promises of reform, sweeping away old maladies, and unleashing chaos across the board.

On February 1, 2025, Trump began "fulfilling his promises" by imposing additional tariffs on Mexico and Canada. Except for Canadian energy products, a 25% extra tariff was added to goods imported from these two countries.

Although Trump’s style has always been about maximum pressure, and the final tariffs may not necessarily materialize at 100%, there’s no turning back once the arrow is released. The core economic idea of Trump 2.0 is to replace "domestic taxes" with tariffs, aiming to return the U.S. to a golden era without the IRS.

Of course, Americans aren’t naive enough to believe Trump’s rhetoric that increasing tariffs and maintaining stable prices can coexist. In a fully deindustrialized U.S., almost every product is imported. However, from the government to the general public, the nation has entered a quasi-wartime state. To secure ultimate victory, temporary suffering is deemed necessary.

Crypto Wartime Economy
As the tariff war 2.0 kicked off, the crypto market was the first to bear the brunt. Bitcoin plummeted to $97,000, and the entire market entered a downward cycle, as fragile as ever.

In theory, the crypto market is a global market. Even if one is skeptical about the U.S. waging a tariff war against the world, there should still be a flood of capital seeking refuge in the market. But this assumes that the crypto space is indeed a global market.

Unfortunately, the emergence of DeepSeek has shattered the stereotype that the U.S. stock market is the global market. If memories serve well, it was the crypto industry that first embraced and acknowledged the advancements of DeepSeek V3 when its technical report was released on December 26, 2024, even before the general public.

Foreseeable Trade Conflicts, Unpredictable Web3 Settlements
Image Caption: AI Agent Overall Trend
Image Source: CoinGecko

At this point, AI Agents were still thriving. The real crisis emerged with the back-to-back launches of $TRUMP and DeepSeek R1. Between January 17 and January 20, the world witnessed two seismic shocks in just three days: a president issuing his own coin, and Chinese AI temporarily surpassing the U.S.

Or to put it another way, the narrative of AI Agents in the crypto space is built on two premises:

1. U.S. AI dominance is unparalleled. AI Agents are first and foremost Pax Americana AI Agents, requiring OpenAI to maintain its lead in algorithms and Nvidia’s chips to remain irreplaceable in hardware.

2. AI Agents have not yet generated real profits or attracted real users. The liquidity absorbed by $TRUMP won’t mindlessly flow back. It’s still narrative economics, not a product-market fit (PMF).

The worldline converges, and the focus returns to the trade war.

In the face of the sharp decline of Nvidia and other members of the U.S. stock market’s "Magnificent Seven," both the AI Agent sector and the chaos within the Ethereum Foundation and Binance seem insignificant.

Nvidia’s chips and Bitcoin’s price—if these are Plan A and B of America’s revitalization plan—are now both under scrutiny. The only solution is to rebuild global capital markets’ confidence in the U.S.

Tariffs and trade wars are just the first move. The core issues remain the rise of U.S. stocks and interest rate cuts. Domestically, the U.S. needs to cut rates to stabilize the economy, but as a global financial power, its stock market cannot afford any missteps—it can only rise, not fall. Thus, the only option is for U.S. stocks to keep climbing.

In normal economic theory, these two goals are difficult to achieve simultaneously. However, the miraculous $TRUMP can bypass the existing fiscal-monetary system. Tariffs and trade wars will create short-term government revenue, and with Musk’s layoffs, the remaining funds will inevitably flow into capital markets—unless someone actually opens factories in the U.S.

In this system, the short-term driver is the effectiveness of tariffs. Thus, it can be inferred that even if Canada compromises with Trump, his tariff war against the world will only intensify.

In the long run, the fiscal role of cryptocurrencies will become inevitable. Either the dollar-Fed system will shed its nominal independence and form a closer political alliance with Trump, or the Trump administration will continue to use unconventional means to "direct" the dollar.

However, there’s no doubt that for cryptocurrencies themselves, the driving force is no longer blockchain technology or decentralization. After all, even Vitalik admits to having ultimate control over the Ethereum Foundation. The true rulers of the crypto space are now real political forces. Major CEXs must take sides, USDT issuers and operators must take sides, and even every crypto trader must make their own choice.

A wartime state has quietly become a reality in 2025.

Two Worlds
Looking at the overarching theme of 2025, the fragmentation of global trade has become a reality. Regionalization has effectively replaced the old globalization centered on the U.S. and the WTO mechanism. The only remnant is that the dollar remains the global currency.

In fact, Trump has repeatedly warned BRICS nations not to challenge the dollar’s status. But everyone understands that if the U.S. withdraws from global trade, using the currency of a non-trading nation would be strange. Yet, everyone also knows that no country or organization’s currency can truly challenge the dollar’s dominance.

Such a dilemma is rare in history.

Blockchain technology has made some attempts. The mBridge project, involving the Bank for International Settlements (BIS), is one example, focusing on settlements between CBDCs. Central banks from China, the UAE, and other nations, as well as enterprises, have participated.

However, even BIS cannot bridge a divided world. BIS has withdrawn from the mBridge project, fearing accusations from the West of aiding Russia and others in evading sanctions. Instead, BIS has launched the Agorá project, with participants including South Korea, Japan, and the EU—clearly delineating the East-West divide.

Web3 projects continue to evolve. The PayFi concept has entered a long-term development phase, and Huma Finance aims to facilitate cross-border corporate settlements in the post-Ripple era, naturally relying on stablecoins. But the power of a single project is limited. B2B has become the mainstream choice, leaving ordinary individuals out of the equation.

Web3 super-individuals are at a loss. In the era of CEX explosions, holding onto Bitcoin, Ethereum, or even BNB could yield returns. But in the PVP era, super-individuals must contend with the lightning-fast reactions of bots, the predatory tactics of coin-issuing groups, and the manipulative schemes of unscrupulous VCs. The old world has truly faded away.

Last year, Web3 settlements based on stablecoins might have been the industry’s biggest trend. But now, it’s hard to say. With AI Agents losing steam, the entire industry has entered a tedious soap opera mode, filled with complaints. VCs lament their 6x returns, while CEXs bemoan achieving platform coin market caps of $100 billion and trading volumes of $100 trillion.

Conclusion
There’s no true empathy in this world; humans cannot fully empathize with their own kind. But before the epic correction in U.S. stocks, we hope there’s still a chance for us.

From any perspective, this DeepSeek surprise attack is just a prelude to the next long, grueling battle. Let’s hope we’re all prepared before it begins.

I once thought that territorial expansion through maps was exclusive to small islands, but I never expected a world-class superpower to follow the same old playbook. I once believed the ETH L2 ecosystem was chaotic enough, but I didn’t foresee the global trade system gradually falling apart. I once dismissed Web3 settlements as mere fantasy, but now stablecoins have become a new pillar.

Trump’s return brings promises of reform, sweeping away old maladies, and unleashing chaos across the board.

On February 1, 2025, Trump began "fulfilling his promises" by imposing additional tariffs on Mexico and Canada. Except for Canadian energy products, a 25% extra tariff was added to goods imported from these two countries.

Although Trump’s style has always been about maximum pressure, and the final tariffs may not necessarily materialize at 100%, there’s no turning back once the arrow is released. The core economic idea of Trump 2.0 is to replace "domestic taxes" with tariffs, aiming to return the U.S. to a golden era without the IRS.

Of course, Americans aren’t naive enough to believe Trump’s rhetoric that increasing tariffs and maintaining stable prices can coexist. In a fully deindustrialized U.S., almost every product is imported. However, from the government to the general public, the nation has entered a quasi-wartime state. To secure ultimate victory, temporary suffering is deemed necessary.

Crypto Wartime Economy
As the tariff war 2.0 kicked off, the crypto market was the first to bear the brunt. Bitcoin plummeted to $97,000, and the entire market entered a downward cycle, as fragile as ever.

In theory, the crypto market is a global market. Even if one is skeptical about the U.S. waging a tariff war against the world, there should still be a flood of capital seeking refuge in the market. But this assumes that the crypto space is indeed a global market.

Unfortunately, the emergence of DeepSeek has shattered the stereotype that the U.S. stock market is the global market. If memories serve well, it was the crypto industry that first embraced and acknowledged the advancements of DeepSeek V3 when its technical report was released on December 26, 2024, even before the general public.

Foreseeable Trade Conflicts, Unpredictable Web3 Settlements
Image Caption: AI Agent Overall Trend
Image Source: CoinGecko

At this point, AI Agents were still thriving. The real crisis emerged with the back-to-back launches of $TRUMP and DeepSeek R1. Between January 17 and January 20, the world witnessed two seismic shocks in just three days: a president issuing his own coin, and Chinese AI temporarily surpassing the U.S.

Or to put it another way, the narrative of AI Agents in the crypto space is built on two premises:

1. U.S. AI dominance is unparalleled. AI Agents are first and foremost Pax Americana AI Agents, requiring OpenAI to maintain its lead in algorithms and Nvidia’s chips to remain irreplaceable in hardware.

2. AI Agents have not yet generated real profits or attracted real users. The liquidity absorbed by $TRUMP won’t mindlessly flow back. It’s still narrative economics, not a product-market fit (PMF).

The worldline converges, and the focus returns to the trade war.

In the face of the sharp decline of Nvidia and other members of the U.S. stock market’s "Magnificent Seven," both the AI Agent sector and the chaos within the Ethereum Foundation and Binance seem insignificant.

Nvidia’s chips and Bitcoin’s price—if these are Plan A and B of America’s revitalization plan—are now both under scrutiny. The only solution is to rebuild global capital markets’ confidence in the U.S.

Tariffs and trade wars are just the first move. The core issues remain the rise of U.S. stocks and interest rate cuts. Domestically, the U.S. needs to cut rates to stabilize the economy, but as a global financial power, its stock market cannot afford any missteps—it can only rise, not fall. Thus, the only option is for U.S. stocks to keep climbing.

In normal economic theory, these two goals are difficult to achieve simultaneously. However, the miraculous $TRUMP can bypass the existing fiscal-monetary system. Tariffs and trade wars will create short-term government revenue, and with Musk’s layoffs, the remaining funds will inevitably flow into capital markets—unless someone actually opens factories in the U.S.

In this system, the short-term driver is the effectiveness of tariffs. Thus, it can be inferred that even if Canada compromises with Trump, his tariff war against the world will only intensify.

In the long run, the fiscal role of cryptocurrencies will become inevitable. Either the dollar-Fed system will shed its nominal independence and form a closer political alliance with Trump, or the Trump administration will continue to use unconventional means to "direct" the dollar.

However, there’s no doubt that for cryptocurrencies themselves, the driving force is no longer blockchain technology or decentralization. After all, even Vitalik admits to having ultimate control over the Ethereum Foundation. The true rulers of the crypto space are now real political forces. Major CEXs must take sides, USDT issuers and operators must take sides, and even every crypto trader must make their own choice.

A wartime state has quietly become a reality in 2025.

Two Worlds
Looking at the overarching theme of 2025, the fragmentation of global trade has become a reality. Regionalization has effectively replaced the old globalization centered on the U.S. and the WTO mechanism. The only remnant is that the dollar remains the global currency.

In fact, Trump has repeatedly warned BRICS nations not to challenge the dollar’s status. But everyone understands that if the U.S. withdraws from global trade, using the currency of a non-trading nation would be strange. Yet, everyone also knows that no country or organization’s currency can truly challenge the dollar’s dominance.

Such a dilemma is rare in history.

Blockchain technology has made some attempts. The mBridge project, involving the Bank for International Settlements (BIS), is one example, focusing on settlements between CBDCs. Central banks from China, the UAE, and other nations, as well as enterprises, have participated.

However, even BIS cannot bridge a divided world. BIS has withdrawn from the mBridge project, fearing accusations from the West of aiding Russia and others in evading sanctions. Instead, BIS has launched the Agorá project, with participants including South Korea, Japan, and the EU—clearly delineating the East-West divide.

Web3 projects continue to evolve. The PayFi concept has entered a long-term development phase, and Huma Finance aims to facilitate cross-border corporate settlements in the post-Ripple era, naturally relying on stablecoins. But the power of a single project is limited. B2B has become the mainstream choice, leaving ordinary individuals out of the equation.

Web3 super-individuals are at a loss. In the era of CEX explosions, holding onto Bitcoin, Ethereum, or even BNB could yield returns. But in the PVP era, super-individuals must contend with the lightning-fast reactions of bots, the predatory tactics of coin-issuing groups, and the manipulative schemes of unscrupulous VCs. The old world has truly faded away.

Last year, Web3 settlements based on stablecoins might have been the industry’s biggest trend. But now, it’s hard to say. With AI Agents losing steam, the entire industry has entered a tedious soap opera mode, filled with complaints. VCs lament their 6x returns, while CEXs bemoan achieving platform coin market caps of $100 billion and trading volumes of $100 trillion.

Conclusion
There’s no true empathy in this world; humans cannot fully empathize with their own kind. But before the epic correction in U.S. stocks, we hope there’s still a chance for us.

From any perspective, this DeepSeek surprise attack is just a prelude to the next long, grueling battle. Let’s hope we’re all prepared before it begins.