Author | WuBlockchain
The content of this article does not constitute any investment or financial advice. Readers must strictly comply with the laws and regulations of their location.
This episode of the WuBlockchain Crypto Podcast invited Didier Zheng, a frontier technology investor, as a guest. The discussion revolved around the recent Bitcoin decline, the financial strategy changes of MicroStrategy (Strategy, formerly MicroStrategy), the AI-driven rise of US stocks, the integration of crypto exchanges with US stock markets, and the macro outlook.
Didier believes the core reason for Bitcoin's recent drop is not simply macro factors or ETF redemptions, but rather the market starting to reprice the expectation that MicroStrategy might continuously sell small amounts of Bitcoin to pay preferred stock dividends under the "Bitcoins Per Share Neutrality" principle. Meanwhile, AI is reshaping the labor structure, with Tokens being viewed as new factors of production, driving the sustained rise of the AI industry chain in US stocks. The crypto industry may gradually shift from native altcoin speculation towards real-world asset tokenization, on-chain machine economies, and a more mature, industrialized stage.
The guest's views do not represent WuBlockchain's stance and do not constitute any investment advice. Please strictly adhere to local laws and regulations. Audio transcription and translation were completed by GPT and may contain errors. Please listen to the full podcast:
XiaoYuZhou:
https://www.xiaoyuzhoufm.com/episode/6a337dbb43a22a695585c365
MicroStrategy's Bitcoin Sale Experiment: Expectation of Continuous Selling Pressure vs. Market Absorption
Maodi: Bitcoin has fallen sharply recently, with many explanations in the market. Some say it's MicroStrategy selling Bitcoin, some say it's ETF redemptions, others attribute it to macro changes or leverage liquidation. Which factor do you think is the most critical?
Didier: I think the core is still MicroStrategy, but what's truly suppressing the market is not that one sale itself, but the market beginning to expect it will continuously sell Bitcoin.
MicroStrategy stated during its May earnings call that it aims to maintain Bitcoins Per Share neutrality. With the increasing issuance of preferred stock and debt instruments like STRC, STRZ, STRD, STRF, Bitcoin is no longer just an asset for common shareholders but must first cover the rights of creditors and preferred shareholders. This makes the cost of maintaining BPS neutrality much higher.
Previously, the market believed it mainly paid preferred stock dividends by selling shares, putting little pressure on Bitcoin. But now, raising funds by issuing new shares has become more difficult, shifting the pressure towards Bitcoin. As long as MMV remains below the neutrality threshold, it's more likely to cover cash flow by selling small amounts of Bitcoin continuously. Especially if the frequency of interest payments increases further, the market naturally expects not just an occasional sale but potentially regular small sales.
So the key to this round of decline is not "how much was sold," but "whether it will keep selling in the future." Under this logic, ETF selling appears more like a result than a cause. Because once the market judges MicroStrategy will continue selling, related funds will withdraw early.
Maodi: You mentioned earlier that Michael Saylor seems to be conducting a financial experiment. What is the purpose of this experiment?
Didier: Essentially, he is testing the market's capacity to absorb continuous, small Bitcoin sales.
From a financial perspective, when the MMV premium isn't high, small Bitcoin sales cause less damage to Bitcoins Per Share than selling shares, making it the first-order optimal solution. The problem is, after the large-scale issuance of STRC in March, interest and dividend payments on preferred stock and perpetual instruments have significantly increased, making cash flow management a problem that must be addressed. So the key is no longer whether to manage cash flow, but how to manage it.
If the market can absorb the impact of this continuous, small-scale Bitcoin selling, this system can continue. But if this approach instead depresses the stock price, lowers the MMV, worsens depegging, and further strengthens the "continuous selling" expectation, then it may be forced to make a soft pivot, such as relying more on selling shares again, or using a mix of share and Bitcoin sales. This would sacrifice some Bitcoins Per Share but could reduce the impact on Bitcoin and stock prices, representing a second-order optimal solution.
So essentially, this is now a game between Michael Saylor and the market. He's watching to see at what price strong enough buying support emerges, while the market is also waiting for a lower, more certain price before stepping in.
Maodi: Could this evolve into MicroStrategy and Bitcoin entering a "death spiral" together?
Didier: I don't think this issue alone would lead to that. To truly reach that point, it usually requires additional macro headwinds or larger systemic shocks.
As long as a soft pivot occurs later, moving away from rigid Bitcoin selling, buying support will likely return. The question isn't whether there is support, but at what price it appears. It might be at $62k, or lower. The market is now waiting for that level.
So my judgment remains cautiously optimistic: This round of decline is more due to structural pressure from changes in MicroStrategy's own financial structure, rather than simply triggered by macro liquidity tightening. In the absence of new major negative catalysts, the situation can likely still be reversed, and it's not easy to directly evolve into a true "death spiral."
Token as the Labor Force of the New Era
Maodi: Although the crypto industry is relatively sluggish now, AI is very hot, especially stocks related to optical modules, semiconductors, and data centers. What do you think is the core driver behind this?
Didier: The core is actually very simple: tokens are essentially becoming the labor force of the new era.
In the past, the core factor of production for businesses was people, whether manual or intellectual labor was done by humans. But now, many execution tasks previously undertaken by people are being replaced by AI and tokens. In the future, what will truly be scarce may only be the few people who can complete the closed loop: those who can propose goals, design solutions, drive execution, and ultimately solve problems. Such people, plus a large number of tokens, constitute the new labor system.
This will directly change enterprise organizational structures. In the past, companies had many layers because information had to be passed down through people. But in the AI era, many middle-management, assistant, IT, and execution roles will be compressed. What is truly valuable is no longer mere execution ability, but influence, decision-making power, and imagination.
So essentially, in the past, companies paid money to employees; in the future, they will pay more money to tokens, to models and computing power. Model companies then reinvest that money upstream to purchase chips, energy, optical modules, and data centers. Upstream production capacity expansion is limited, and supply cannot keep up with demand, so these areas become the most persistently profitable links in the AI industry chain. This is the core reason for the continuous rise of related US stocks.
The service industry will be the first to be impacted because knowledge-based services like accounting, law, consulting, and data analysis are the easiest for AI to replace. In the future, corporate internal operations will become increasingly automated, and inter-corporate machine economies may form on-chain. By then, many transactions, collaborations, and even payments will be completed by machines.
Maodi: Are you suggesting this round of gains is not just short-term speculation but has mid-to-long-term sustainability, and we might still be in the very early stages?
Didier: Yes, I think the era of the machine economy has just begun.
Many people also misunderstand "one-person companies." It's not one person working alone, but one person running operations with a dozen or dozens of intelligent agents. These agents combined might equal the efficiency of hundreds of people in the past. So the premise of a one-person company is actually having a large number of agents providing labor.
This is also why I've always emphasized that tokens are the new labor force. In the past, companies spent money hiring people; now, they are increasingly shifting their budgets towards tokens. As long as tokens can continuously amplify revenue, corporate profit margins will significantly improve. This is the core logic behind the market's bullishness on the AI industry chain.
So the expectation reflected in the US stock market now is essentially this: more and more companies will become AI-native companies, replacing labor with tokens, increasing automation levels, thereby significantly raising profit margins. This is the most fundamental and reasonable driving force behind this round of gains.
Exchanges Shift to US Stocks, Users Don't Need to Rewrite Trading Logic
Maodi: With US stocks continuously rising, many crypto exchanges have also opened access to US stock trading. What's your take on this? Is it because the crypto industry itself lacks hotspots, forcing exchanges to actively create demand, or is there a deeper reason? Also, could this further lead to capital outflow from the crypto industry?
Didier: I've actually said this before: offshore CEXs ultimately have only two paths.
The first is to become prediction markets, but this path is very difficult. The top player landscape is basically set, and most existing CEXs cannot truly transform into the next generation "everything exchange."
The second is to turn into distribution channels for real-world assets. Currently, the most important real assets are US stocks, US bonds, and gold is also a significant direction.
The more fundamental reason is that over these many years, there have actually been very few truly valuable crypto-native assets. Bitcoin is one, a few DeFi infrastructure projects and public chains count, but beyond that, most native assets lack sustained intrinsic value and cash flow support. In that case, the trading infrastructure built around these assets will eventually have to seek new, valuable targets.
So CEXs shifting to US stocks is essentially a natural progression. I don't really think this is a squeeze on crypto assets; it's more like the industry returning to reality: there simply aren't many truly valuable assets, and exchanges are just shifting towards things that can better support liquidity.
But in the long run, this might not be a bad thing. The core value of blockchain was never just issuing native assets, but providing decentralized options and more efficient, lower-cost settlement and trading methods. Bringing real-world assets on-chain is itself a meaningful direction.
Moreover, from a longer-term perspective, blockchain technology is actually more like technology designed for machines. In the next five to ten years, the more likely scenario is: humans interact with agents, and agents complete payments, trades, and collaborations with other agents on-chain. In that case, the on-chain infrastructure being built today can be directly used by machines.
So in the long run, I think this is actually positive for Bitcoin. Because whether more people or more machines, they will eventually be exposed to on-chain assets.
Maodi: For ordinary users who previously mainly traded altcoins, Bitcoin, or public chain assets in the crypto market, switching to US stocks involves a different logic. Whether it's earnings cycles, valuation systems, or regulatory rules, there are big differences. If you had to give one most important piece of advice to these users or traders who have long been in the crypto world, what would it be?
Didier: Actually, I don't think they need to deliberately change much.
Because US stocks and on-chain assets are fundamentally similar. US stocks include both value stocks, growth stocks, and many assets with meme attributes. One core reason for the recent weakness in the on-chain meme trend is that the most influential meme assets have actually shifted to US stocks.
The stories these assets tell are essentially still about "changing the world." In the past, this narrative belonged to blockchain. Now, a stronger version exists in US stocks, like quantum computing, nuclear fusion, SMR. These things are also often hard to explain solely by earnings reports, cash flows, or DCF models; they inherently carry strong meme attributes.
So, people who used to chase altcoins and meme coins can chase these long-term concepts in US stocks; the logic is actually the same, and they might not necessarily feel out of place. Another group, who originally looked at cash flow, fundamentals, and value support, can also find corresponding value and growth stocks in US markets.
So my point is, various trading styles within the crypto space actually have their counterparts in US stocks. Most people don't need to forcibly change their trading modes to find familiar asset types.
If there's one piece of advice, it's not to force yourself to change your method just to switch markets. Those who have survived until now usually have their own proven survival methods. Sticking to the parts that work for you is more important.
The 1011 Event Severely Damaged Crypto Liquidity, Altcoin Momentum Difficult to Recover
Maodi: Listening to your analysis just now, a quite dramatic picture came to my mind. It feels like the altcoin speculation of the past period has completely ended, because almost all those speculative targets can now be found in US stocks, with even stronger real-world significance. Is it fair to understand it that way?
Didier: That's a fair understanding.
The core reason the altcoin momentum is basically over is that crypto liquidity has been severely damaged. The 1011 event hit the industry's vitality very hard. The surface report was $19 billion in liquidations, but the actual number was likely far greater. Rumors of $40-$50 billion seem closer to the truth.
And note, this loss wasn't just market cap; it was real cash. The total market cap of the crypto industry isn't that large to begin with, with a significant portion locked up or inflated. The real amount of freely circulating supply is actually much less than it appears. In that context, losing hundreds of billions of dollars in cash within a day is a heavy blow to the industry's sentiment and liquidity.
So I believe the 1011 event was the last straw that broke the altcoin momentum.
As for why "meme assets" in US stocks can continue to be traded, the reason is simple: because the US stock market is currently the world's most liquid market. When your own liquidity dries up, you naturally shift towards markets with stronger liquidity.
From the US perspective, its support for Bitcoin and blockchain also has its own strategic considerations. The US version of the logic is to turn blockchain, on-chain markets, and CEXs into channels for US assets to attract global capital and hot money. So promoting the on-chain integration of the US financial system is essentially expanding the global fundraising and distribution capabilities of US assets.
Of course, this is just the US government's understanding and application. Whether the blockchain and crypto world will ultimately be completely shaped by this national will is another matter. The more realistic situation might be that the on-chain world and sovereign nations will exist in a complex, long-term relationship of both cooperation, utilization, and mutual博弈 for a long time to come.
But at least so far, this thinking from the US is indeed becoming reality step by step.
More Cautious on H2 Macro, But Long-Term Bullish on AI & Web3
Maodi: What is your macro judgment for the next six months, through the end of this year? What policies might the newly appointed Fed Chair Warsh adopt next, and how would that affect the overall market?
Didier: I think market uncertainty is rising.
On one hand, the market has already risen a lot. On the other hand, there might be several giant company IPOs later, like SpaceX, OpenAI, and Anthropic. The real pressure isn't just fundraising draining liquidity, but that once these trillion-dollar companies are quickly included in indices, with limited liquidity, institutions may be forced to sell other index components for rebalancing, creating market pressure. So I'd be more cautious after entering June.
Another key variable is the midterm elections. If the Democrats ultimately win both chambers, that could be bearish for both Web3 and AI, as they emphasize labor rights, regulation, and oversight more than letting frontier technologies continue rapid expansion.
But looking at fundamentals, I think the market may be underestimating AI's real push on the economy. AI has already penetrated many sectors, but existing statistical methods may not fully reflect it, so in the long term, its boost to productivity is still very strong.
The real problem isn't just growth, but distribution. If the distribution mechanism isn't adjusted well, a highly polarized situation could emerge in the future: a few people capable of harnessing AI reap most of the benefits, while a large middle class is squeezed or even unemployed. In that case, although productivity increases, overall societal consumption capacity might decline. This is also why I lean towards long-term deflation rather than long-term inflation.
So in the coming years, the distribution mechanism will be crucial. Things like an "AI tax" will likely be implemented within three to five years because, without new tax sources, many future social arrangements will lack a funding foundation.
If we look only at the second half of this year to next year, I don't want to make an absolute conclusion. Short-term adjustment pressure is indeed increasing, especially around the potential SpaceX IPO, but I see this more as an adjustment, not a complete peak. As long as big tech capital expenditures can continue, the overall uptrend isn't over.
From a longer-term perspective, I remain bullish on AI and on the integration of AI and blockchain. The internal operations of enterprises will become increasingly automated, and inter-enterprise machine economies may form on-chain. This broad direction hasn't changed.
So I still believe blockchain and Web3 have bright prospects, but the playbook will become more mature. The phase of mindlessly rushing in and easily profiting might be over; the future looks more like an era of industrialization and institutionalization.
