Author: @BlazingKevin_, the Researcher at Movemaker

The Starting Point of Bitcoin's Structural Slow Bull Market Has Formed

I believe we are at the starting point of a long cycle of Bitcoin's slow bull market, potentially spanning even a decade. Phenomenally, the key turning point that has driven this trend is the approval of Bitcoin ETFs at the end of 2023. From that moment on, the market attributes of Bitcoin began to undergo a qualitative change, gradually transforming from a completely risky asset to a safe-haven asset. Currently, Bitcoin is in the early stages of becoming a safe-haven asset, while the U.S. is entering a rate-cutting cycle, thus providing Bitcoin with a favorable growth space. The role of Bitcoin in asset allocation is shifting from "speculative object" to "asset allocation tool," stimulating longer-term demand increments.

This evolution of asset attributes coincides with a turning point where monetary policy is about to shift from tight to loose. The Federal Reserve's rate-cutting cycle is not an abstract macro backdrop but a substantive signal of capital pricing that affects Bitcoin.

Under this mechanism, Bitcoin will exhibit a new operational characteristic: whenever there are signs of market correction after excessive enthusiasm, a wave of "liquidity" will enter the market just as prices are about to enter a bear market, interrupting the downward trend. We often say that "liquidity is abundant in the market but unwilling to bet," which is not entirely accurate. Other altcoin assets lack mid-term allocation logic due to evaporating valuation bubbles and unproven technology; Bitcoin, at this moment, becomes the "only certain asset to bet on." Therefore, as long as the expectation of easing remains and ETFs continue to absorb funds, it will be extremely difficult for Bitcoin to form a traditional bear market throughout the entire rate-cutting cycle, at most experiencing periodic corrections or localized bubble clearances due to sudden macro events (such as tariff shocks or geopolitical risks).

This means that Bitcoin will traverse the entire rate-cutting cycle as a "quasi-safe-haven asset," and its price anchoring logic will change accordingly—from being "driven by risk appetite" to gradually transitioning to "supported by macro certainty." Once this rate-cutting cycle ends, with the passage of time, the maturation of ETFs, and the increase in institutional allocation weight, Bitcoin will also complete its preliminary transformation from a risky asset to a safe-haven asset. Subsequently, when the next rate-hiking cycle begins, Bitcoin is likely to be genuinely trusted by the market as a "safe haven under interest rate hikes" for the first time. This will not only enhance its allocation position in traditional markets but may also allow it to gain some capital siphoning effect in competition with traditional safe-haven assets like gold and bonds, thus initiating a structural slow bull market cycle spanning over a decade.

Looking ahead to Bitcoin's development years or even a decade from now is too far-fetched; it is better to first consider the potential triggers that could lead to a significant decline in Bitcoin before the U.S. truly shifts to consistent easing. From the first half of this year, tariffs have undoubtedly been the most disruptive event to market sentiment. However, if we view tariffs as a benign adjustment tool for Bitcoin, we might gain a different perspective on their potential future impact. Secondly, the passage of the GENIUS Act marks the acceptance of the inevitable decline of the dollar's status and an active embrace of the development of Crypto finance, amplifying the dollar's multiplier effect on-chain.

Viewing Tariffs as a Benign Adjustment Tool for Bitcoin, Rather than a Black Swan Trigger

In the tariff process over the past few months, it is evident that Trump's primary policy direction is focused on manufacturing return and improving fiscal conditions, while simultaneously targeting major competitor countries. In pursuit of improving government finances, Trump is willing to sacrifice price stability or economic growth. Consequently, the fiscal situation of the U.S. government has deteriorated rapidly during the pandemic, with the 10-year Treasury yield soaring over the past few years, causing the government's interest expenses to more than double within three years. The revenue generated from tariffs accounts for less than 2% of the federal tax structure; even if tariffs are raised, the revenue generated is trivial compared to the enormous interest expenses. So why does Trump continue to focus on tariffs?

The purpose of tariffs is to determine the attitude of allies and exchange for security protection.

According to the systematic explanation of the role of tariffs by Milan, Chairman of the White House Council of Economic Advisers, in his article "A User's Guide to Restructuring the Global Trade System," it is clear that tariffs are an "abnormal tool for market intervention," used in crises or confrontations. The strategic logic of U.S. tariff policy is increasingly approaching the route of "fiscal weaponization," meaning that by imposing tariffs, the U.S. not only "self-finances" but also seeks to "rent-seek" externally on a global scale. Milan points out that, in the context of a new Cold War, the U.S. no longer pursues global free trade but attempts to restructure the global trading system into a "friend-shoring trade network" centered around the U.S., forcing key industrial chains to shift to allied countries or back to the U.S. and maintaining the exclusivity and loyalty of this network through tariffs, subsidies, and restrictions on technology transfer. Within this framework, high tariffs do not mean that the U.S. is withdrawing from globalization; on the contrary, they are a hegemonic tool aimed at regaining control over the direction and rules of globalization. Trump's proposal to impose high tariffs on all Chinese imports is not about complete decoupling but about forcing global manufacturers to "take sides," shifting production capacity from China to Vietnam, Mexico, India, and even back to the U.S. Once the global manufacturing system is forced to reorganize around the U.S., the U.S. can continuously extract fiscal benefits from foreign production capacity through "geopolitical tariff rents" in the medium to long term. Just as the dollar settlement system allows the U.S. to tax the global financial system, the tariff system is also becoming a new fiscal weapon to bind and exploit the manufacturing capabilities of peripheral countries.

The Side Effects of Tariffs Make Trump Cautious

Tariffs are a double-edged sword. While they limit imports to promote the return of manufacturing, increase government tax revenue, and restrict competitor countries, they also come with potential side effects that could erupt at any time. The first is the issue of imported inflation. High tariffs may temporarily raise the prices of imported goods, stimulating inflationary pressures, which poses a challenge to the independence of the Federal Reserve's monetary policy. Secondly, there may be fierce retaliation from competitor countries, and allied nations may protest or even retaliate against the U.S.'s unilateral tariff policies.

When tariffs threaten the capital markets and the interest costs of the U.S. government, Trump becomes very anxious and immediately releases favorable news about tariffs to salvage market sentiment. Therefore, the destructive power of Trump's tariff policy is limited. However, whenever sudden tariff news emerges, the stock market and Bitcoin prices tend to correct. Thus, viewing tariffs as a benign adjustment tool for Bitcoin is an appropriate perspective; the possibility of tariffs alone creating a black swan event is very low under the premise of declining recession expectations, as Trump will not allow the negative impact of events to increase interest costs.

The Inevitable Decline of the Dollar's Status Leads to Greater Missions for Dollar Stablecoins

For Trump, to achieve the goal of manufacturing return, it is acceptable to sacrifice the dollar's status in international currency reserves. This is because part of the reason the U.S. faces hollowing out of its manufacturing sector comes from the strength of the dollar. When the dollar remains strong, the world's demand for the dollar continues to rise, leading to persistent financial surpluses, which ultimately contributes to ongoing trade deficits, causing U.S. manufacturing to flee. Therefore, to ensure the return of manufacturing, Trump frequently utilizes tariffs as a weapon, but this process accelerates the decline of the dollar's status.

It can be said that against the backdrop of rapidly evolving global financial dynamics, the relative weakening of traditional dollar control has become an undeniable fact. This change is not the result of a single event or policy misstep but rather the outcome of multiple structural factors accumulating and evolving over time. Although on the surface, the dollar's dominant position in international finance and trade remains solid, a deeper examination from the perspectives of underlying financial infrastructure, capital expansion paths, and the effectiveness of monetary policy tools reveals that its global influence is facing systemic challenges.

The first thing to acknowledge is that the trend toward a multipolar global economy is reshaping the relative necessity of the dollar. In the past globalization paradigm, the U.S., as a center for technology, institutions, and capital, naturally held the discourse power, thereby promoting the dollar to become the default anchor currency for global trade and financial activities. However, with the rapid development of other economies, especially the growth of financial self-organizing systems in Asia and the Middle East, this dollar-centric single settlement mechanism is gradually facing competitive alternatives. The global liquidity advantage and settlement monopoly of the traditional dollar are beginning to erode. The decline of dollar control does not equate to a collapse of its status, but its "uniqueness" and "necessity" are weakening.

The second important dimension comes from the trend of credit overextension exhibited by the U.S. in recent fiscal and monetary operations. Although past credit expansions and dollar overissuance are not unprecedented, their side effects have been significantly amplified in the context of higher synchronization in global markets during the digital age. Especially as the traditional financial order has yet to fully adapt to the new growth models dominated by the digital economy and AI, the inertia of U.S. financial governance tools is glaring.

The dollar is no longer the only asset vehicle capable of providing global clearing and value storage; its role is gradually being diluted by a diverse array of contractual assets. The rapid evolution of the crypto system is also forcing sovereign currency systems to make strategic compromises. This oscillation between passive responses and proactive adjustments further exposes the limitations of the traditional dollar governance system. The passage of the GENIUS Act can be seen, to some extent, as a strategic response and institutional concession by the U.S. federal system to this new era's financial logic.

In summary, the relative decline of traditional dollar control is not a dramatic collapse but rather a gradual dissolution that is institutional and structural. This dissolution stems from the multipolarity of global financial power, the lagging financial governance model of the U.S., and the crypto system's ability to reconstruct new financial tools, settlement paths, and monetary consensus. During this transitional period, the credit logic and governance mechanisms that traditional dollars rely on need to be deeply restructured, and the GENIUS Act is a prelude to this restructuring attempt. The signals it releases are not merely about tightening or expanding regulation but represent a fundamental shift in monetary governance thinking paradigms.

The GENIUS Act Represents a Strategic Compromise of "Retreating to Advance"

The GENIUS Act reflects not a conventional regulatory action but rather a strategic "retreat to advance" proactive compromise. The essence of this compromise lies in the U.S.'s clear recognition of the paradigm shift in monetary governance triggered by crypto and its attempt to achieve a "leveraging" of future financial infrastructure through institutional design. The widespread distribution of dollar assets within the crypto system means that the U.S. can no longer block its development through mere regulatory measures; instead, it needs to ensure that dollar assets do not become marginalized in the next phase of on-chain currency competition through institutional "inclusive regulation."

The strategic significance of the GENIUS Act lies precisely in its shift away from "suppression" as the primary goal, instead constructing a predictable compliance framework that re-incorporates the development of dollar stablecoins into the federal vision. If signals accepting the logic of crypto finance are not actively released, the U.S. may be forced to accept a non-dollar-dominated on-chain financial system. Once the dollar loses its status as an anchor asset in the on-chain world, its global clearing capacity and ability to export financial tools will also diminish. Therefore, this is not out of open goodwill but out of the need to defend monetary sovereignty.

The GENIUS Act cannot simply be classified as an acceptance or tolerance of crypto; it is more like a "tactical withdrawal" of sovereign currency under the new paradigm, aimed at re-integrating resources and re-anchoring the on-chain monetary power structure.

Crypto brings not only a new market or new asset class but also a fundamental challenge to the logic of financial control and the way value is empowered. In this process, the U.S. has not chosen to engage in direct confrontation or coercive regulation; instead, it has made trade-offs through the GENIUS Act—sacrificing direct control over the marginal parts of crypto assets in exchange for legitimizing dollar stablecoin assets; relinquishing some authority over the construction of on-chain order in exchange for the continuation of anchoring rights over core assets.

The Role of Shadow Money is Amplified Through Crypto Tools

The introduction of the GENIUS Act superficially adjusts the order of stablecoin issuance, but its deeper significance lies in the fact that the dollar's monetary structure is exploring a new expansion mechanism, leveraging on-chain systems to extend the existing shadow money logic. The practice of the Restaking model in the DeFi ecosystem provides direct insights into this structural change. Restaking is not merely about reusing assets; it is a way to maximize the efficiency of the underlying collateral through protocol-level logic, achieving credit derivation and reuse of on-chain assets without altering the original credit source. Similar ideas are being borrowed from the fiat currency world to construct a second-layer amplification mechanism for "on-chain dollars."

The shadow banking mechanism in the traditional financial system completes the monetary multiplier effect through off-balance-sheet credit expansion and non-traditional intermediaries. The on-chain stablecoin system, however, possesses stronger modularity and automation features, making the formation path of the monetary multiplier not only shorter but also more transparent. If the collateral for stablecoins is U.S. Treasuries, it essentially uses national credit as the primary anchoring source, which is then amplified through on-chain protocol structures in multiple rounds. Each round of amplification can be designed as partially collateralized, cyclically pledged, or cross-supported by multiple assets, combined with sufficient on-chain liquidity and scenario demand, to form a complete new system of dollar credit expansion driven by on-chain logic.

This structure not only continues the layered characteristics of traditional shadow money but also introduces more operational on-chain clearing and tracking mechanisms. Especially as multi-chain deployment and cross-chain clearing and settlement frameworks gradually mature, the liquidity paths of on-chain stablecoins will no longer be limited to centralized exchanges or payment platforms but may delve deeper into more protocol layer stacks. In such a structure, each instance of re-staking or asset packaging could become a new credit layer node. The GENIUS Act does not explicitly prohibit such operations, implying that regulation itself acknowledges the sustainability of the on-chain shadow money structure, only screening and reviewing the first-layer issuance.

More importantly, the monetary multiplier effect in the on-chain environment possesses inherent combinability. Once on-chain stablecoins have a broad protocol circulation base, their staking capacity will no longer be limited by the asset-liability structure of traditional finance but will be realized through smart contracts, enabling more granular asset circulation paths. This also means that the credit boundaries of on-chain dollars will be jointly determined by market behavior and protocol design, rather than solely depending on regulatory approval. This change represents a fundamental shock to the fiat currency system, not in terms of whether the scale of a particular stablecoin is controllable, but in whether dollar credit can still be managed in a closed-loop manner regarding its ultimate destination.

The underlying logic of the GENIUS Act has likely accepted the fact that this credit boundary is irreversibly expanding. While clarifying the on-balance-sheet regulatory framework, the U.S. has not set absolute restrictions on offshore issuance and repackaging paths; instead, by granting more flexibility to compliant institutions, it establishes a multi-layered monetary structure that operates in parallel on and off the balance sheet, coordinating on-chain and off-chain. In this way, U.S. regulatory agencies can maintain the credit foundation of the dollar in the on-chain system without intervening in specific operational paths, while controlling systemic risks through first-layer access mechanisms.

This also explains why the act emphasizes that offshore issuers are not allowed to enter the U.S. market but does not deny their significance. In fact, offshore issuance, on-chain repackaging, and protocol circular amplification paths constitute the foundational prototype of a new generation of dollar expansion models, contributing to the dollar's influence no less than the traditional offshore dollar system. From this perspective, the Restaking mechanism in DeFi is not only a tool for enhancing liquidity efficiency within crypto but has also become a reference blueprint for credit leverage design in the real financial structure.

The Continuous Market Expectations During the Rate-Cutting Cycle Prevent "Bear Markets" from Being Triggered by Post-Hoc Indicators.

After analyzing the impact of the aforementioned macro events and future trends, I will now return to some data indicators of Bitcoin, attempting to find more evidence from the data that demonstrates Bitcoin's potential resilience. First, I conclude from the data: The continuous market expectations during the rate-cutting cycle prevent post-hoc indicators from triggering a "bear market."

In observing Bitcoin's price movements, various indicators can be divided into two main categories based on their mechanisms and timeliness: a priori indicators and a posteriori indicators. Furthermore, we can view market sentiment as an intermediary variable connecting these two types of indicators, acting as a catalyst that triggers supply-demand transitions and accelerates trend reversals.

A priori indicators typically exhibit slower change rhythms and higher trend prediction capabilities. These indicators do not imply that prices will immediately reverse but rather provide early warnings of potential structural opportunities, making them very suitable for "left-side positioning"—that is, entering positions at stage lows where prices have not yet clearly bottomed but have structural support for a rebound.

In contrast, a posteriori indicators rely on the price paths and trading behaviors that the market has already traversed to confirm whether a trend is genuinely established. The core value of these indicators lies in trend validation; they are not used for prediction but serve as references for "trend-following operations" once the market has established a certain trend.

From the past four-year cycles to the current new market trajectory, many a priori and a posteriori indicators have lost their judgment significance, essentially because the main holders of Bitcoin have shifted from whales to institutions. Therefore, indicators such as miner shutdown prices, P/E ratios, NUPL, etc., which were previously used to judge bottoms and tops, have begun to fail.

In the trajectory of Bitcoin's new buying cycle, we need to remove the concept of bull-bear alternation from our minds and instead use the peaks and troughs of market sentiment as the basis for judging Bitcoin's phase states.

Market sentiment is reflected by Bitcoin's buyers; it is the micro-dynamics that lie between structural factors and price behavior, directly determining whether investors are willing to bet and collectively push the price trend. Supply and demand can be extreme; if sentiment is not activated, prices may still remain stagnant; conversely, if sentiment heats up rapidly, even with limited structural support, there may be sharp rebounds or sudden drops. Thus, market sentiment becomes an indispensable bridge variable connecting a priori and a posteriori indicators, structural logic, and trading behavior. The reversal or extremes of sentiment can be analyzed by observing the relationship between long-term holders (LTH) and short-term holders (STH).

The Profit and Loss Ratio of Long-Term Holders and Short-Term Holders

The conversion of LTH and STH profit and loss states often signals important market turning points. By observing the changes in the profit and loss ratio of long-term holders (LTH-RPC), we can capture signals of market bottoms. When this indicator shows that long-term holders are generally experiencing losses, it often means that the market is approaching a phase low.

The principle of the indicator is:

1. When the profit ratio of long-term holders significantly declines and losses appear, it means that the realizable profit space has been greatly compressed.
2. The persistence of loss states will suppress the willingness to sell; as the sellable chips decrease, market selling pressure will gradually weaken.
3. When selling momentum exhausts to a certain extent, the market will naturally form a price bottom.

Historical data supports this:

• At the bottoms of the bear markets in 2018 and 2022, the proportion of loss-making chips among long-term holders reached the range of 28%-30%.
• In the extreme market conditions of March 2020, this indicator also climbed to around 29%.
• During bull market cycles, when this ratio reaches 4%-7%, it usually corresponds to the low point area of adjustment.

The market characteristics of Bitcoin at 75,000 show:

• The proportion of losses among long-term holders has risen from nearly zero to 2.8%. When it approaches the level of July 2024, Bitcoin prices receive support.

In bull market cycles, the rising proportion of losses among long-term holders from zero indicates that the bottom is near, serving as a priori indicator. When losses exceed 10%, it is termed a posteriori indicator confirming a bear market. Subsequently, when losses reach around 30%, it again serves as a priori indicator for the bear market bottom.

When the vast majority of long-term holders are in profit, each price rebound will trigger profit-taking, creating sustained downward pressure. Whether at bear market bottoms or bull market corrections, when long-term holders generally shift to loss states, it often signifies that the market is about to bottom. This is because, at this point, selling momentum has been fully released, and the unsustainable selling pressure will prompt prices to stabilize and rebound.

Under the negative sentiment impact of the first tariff shock and recession black swan, Bitcoin began to decline without the proportion of losses among long-term holders reaching previous bull market correction levels, indicating that in the current cycle, the extent of Bitcoin's corrections under extreme market shocks is limited.

STH-RPC is a priori indicator of market sentiment signals, serving as a right-side entry signal. When it turns from negative to positive, it proves that current demand far exceeds supply; when it turns from positive to negative, it signals local highs.

The principle of the indicator:

• When new short-term participants in the market gradually shift from loss states to profit, it usually means that overall confidence is recovering. When price declines lead short-term participants to incur losses, it indicates that sentiment may accelerate into pessimism. Such changes often accompany trend reversals in the market and are a key turning point signal for market sentiment.

Indicator trigger critical points:

• Once the average cost of short-term holders exceeds their holding cost, it indicates that this batch of funds is achieving a profit-loss reversal. Their profit-taking sentiment will bring stronger buying momentum, pushing prices to continually break through previous trading ranges until the upward momentum is neutralized by selling pressure from long-term investors. Therefore, when the "short-term holding cost line" crosses above the "cost line," it often signifies that the market is warming up, and the signal for trend reversal has appeared on the right side of the chart.

In Bitcoin's performance during the first half of this year, when STH-RPC turned negative, market sentiment accelerated into pessimism, leading to the LTH-RPC loss rate rising to below 4%, marking the bottom of market sentiment. The bear market signal of LTH-RPC losses exceeding 10% may not be triggered in the mid-short cycle of the GENIUS Act's passage, limited tariff impact, declining recession expectations, and approaching consistent easing.

The long-cycle slow bull structure of Bitcoin is not linear and will not rise every day; rather, it is composed of several policy switches, geopolitical conflicts, technological changes, and market sentiment that form a wave-like path. However, as long as the "evolution path of Bitcoin's asset attributes" remains clear, it has the potential to become the most certain participant in this wave of global capital reassessment.
About Movemaker: Movemaker is the first official community organization authorized by the Aptos Foundation and jointly initiated by Ankaa and BlockBooster, focusing on promoting the construction and development of the Aptos ecosystem in the Chinese-speaking region. As the official representative of Aptos in the Chinese-speaking area, Movemaker is committed to building a diverse, open, and prosperous Aptos ecosystem by connecting developers, users, capital, and numerous ecological partners.

Disclaimer: This article/blog is for reference only, representing the author's personal views and does not represent the position of Movemaker. This article does not intend to provide: (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets, including stablecoins and NFTs, carries high risks, significant price volatility, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. If you have specific questions, please consult your legal, tax, or investment advisor. The information provided in this article (including market data and statistics, if any) is for general reference only. Reasonable care has been taken in compiling this data and charts, but no responsibility is accepted for any factual errors or omissions expressed therein.