Why is it that at this moment, buying U.S. Treasuries offers better cost-effectiveness than buying Bitcoin? What specific operations should be undertaken?

First, let’s discuss two concepts.

First, U.S. Treasuries are the cornerstone of modern finance; the entire stock market, housing market, commodities, and everything you can think of in the financial market is fundamentally based on U.S. Treasuries.

Second, the price of U.S. Treasuries is inversely proportional to yields, meaning that if everyone buys U.S. Treasuries, bond rates will decline; if everyone sells, rates will rise.

U.S. Treasuries represent America’s ability, as a nation, to continuously borrow new and repay old debts, or rather, its credit. Once the world begins to question America’s ability to repay debts, or even to pay interest, the entire stock market, housing market, and the purchasing power of the dollar will begin to collapse. A default on U.S. Treasuries would be a nuclear-level event, not just for America, but the entire world would enter a depression more terrifying than in 1929.

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So last Wednesday, the understanding king suddenly compromised, actually because U.S. Treasury yields suddenly rose (someone was wildly selling U.S. Treasuries), and then the next day, the understanding king hurriedly retracted policy to stabilize confidence in the bond market.

This point is actually counterintuitive; why?

Because generally speaking, when the U.S. stock market falls, the money seeking safety should flow into the bond market and the U.S. dollar, since U.S. Treasuries are stable and won’t default. It’s unprecedented for U.S. Treasuries to be wildly sold off while the stock market is dropping, or even for stocks, bonds, and currencies to all crash at once during previous financial crises in the U.S.

So who is selling U.S. Treasuries?

Some say the entire process is retaliation from across the Pacific, which actually doesn’t hold water because, first of all, they don’t hold that much U.S. Treasuries. If we go by the rumored selling speed, they would be sold out in 10 days. Secondly, U.S. Treasuries are the assets of creditors; rational people wouldn’t sell off all their possessions just to express a stance. More importantly, the currency exchange rate hasn’t changed significantly, indicating that it’s not the other side selling, at least not as the main seller.

Another possibility is that U.S. hedge funds are deleveraging through basis trading (which I mentioned before, regarding the Black guy discussing the Fed’s market rescue), and there's also a rumor that a certain Japanese hedge fund leveraged heavily on U.S. Treasuries and faced a meltdown, along with European capital selling off, etc. Of course, some countries’ capital manifests through hedge funds, so we can't clearly say which specific country is selling.

But overall, various capitals from different countries are selling off for various reasons, resulting in the current situation.

This is also the most profound and cautionary vote of distrust the world has cast on the understanding king's tariffs and foreign policy.

That’s why the understanding king backed down in seconds, directly pausing the reciprocal tariffs; a businessman understands the bond market.

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Alright, now let’s talk about investment opportunities.

After this battle, we have seen the understanding king's trump card; you might think he has pocket aces, but in reality, he’s holding a king high. He’s still bluffing not because he’s bold enough, but because he truly believes he has the nuts.

So what’s the result? The result is today's news: exemptions for electronic products, semiconductors, etc.

In fact, U.S. Treasury bonds are his trump card and red line; 4.5% should be the bottom line. As we approach this bottom line, we need to release favorable news. We know that at this yield, buying U.S. Treasuries is relatively safe; this is the real Trump Put.

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I believe that now is a good opportunity to go long on U.S. Treasury prices, as rates decline and prices rise, having an inverse relationship. I mentioned before that Bessent repeatedly stated he wanted to lower the 10-year yield, but his boss keeps hindering him. Overall, I believe the general trend over the next 15 months is a decline in the 10-year yield.

More importantly, if he faces a potential U.S. economic downturn, weak consumption, lowered corporate earnings guidance, or even recession (what I'm saying are just possibilities), then the speed and extent of interest rate declines will be greater. If a recession does not occur and the U.S. economy remains strong, under basic conditions, Bessent will also find ways to lower interest rates.

So regardless of how you look at it, if you extend the timeline, this bond crisis (can it be called a crisis? It may not compare to 1994) has given us a very good opportunity to bottom-fish in bonds, which is why I forwarded Howard Marks' article earlier; he has already bottom-fished 10 billion U.S. Treasuries.

At the beginning, I said that the cost-effectiveness of buying U.S. Treasuries might be higher than Bitcoin because U.S. Treasuries have more certainty over the next 1-2 years and enough room for growth (thanks to the mad king). Regardless of whether the economy experiences a soft landing or recession, or the speed and extent of the Fed's interest rate cuts, there is logic to going long on U.S. Treasuries. More importantly, the facts have proven we have the Trump Put.

Bitcoin relies more heavily on a narrower economic outlook, and it's at the end of a cycle. I’m not saying Bitcoin can’t make money, but its cost-effectiveness is relatively lower (lower Sharpe ratio), meaning the additional returns for the risks taken are relatively less. What I’m saying is qualitative analysis, not quantitative.

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To put it simply, here’s a specific operation: based on your own situation, I’ll give an example. You can choose to build a position in TLT/IEF over the next 2-3 weeks, or in extreme cases, for instance, buy TMF if yields hit 5.0%, or you can design a U.S. Treasury investment portfolio.

Of course, as always, we must control our positions and not go all in; preventing tail risk is the most important principle in my own investment strategy. There’s nothing truly impossible in this world.