Source:Wu Blockchain
Frontier technology investor Didier Zheng appeared on a podcast, discussing recent Bitcoin price declines, changes in MicroStrategy’s financial strategy, AI-driven rallies in U.S. stocks, cryptocurrency exchanges integrating with U.S. equities, and the broader macroeconomic outlook.
Didier believes that the core reason for Bitcoin's recent decline is not merely macroeconomic factors or ETF redemptions, but rather the market beginning to reprice the expectation that MicroStrategy may continue small-scale Bitcoin sales to pay preferred dividends under its "per-share Bitcoin neutrality" principle. Meanwhile, AI is reshaping labor structures, with tokens viewed as a new production factor, driving continued gains in the U.S. stock market’s AI supply chain. The crypto industry may gradually shift from speculative炒作 of native altcoins toward real assets on-chain, on-chain machine economies, and a more mature industrialization phase.
MicroStrategy's coin-selling experiment: Ongoing selling pressure versus market absorption
CatBro: Bitcoin has dropped sharply recently, and there are many explanations in the market. Some say it’s due to MicroStrategy selling coins, others point to ETF redemptions, while some attribute it to macroeconomic shifts or leveraged liquidations. Which factor do you think is the most critical?
Didier: I think the core is still MicroStrategy, but what truly suppressed the market wasn't the single sale itself, but the market's growing expectation that it would continue selling.
MicroStrategy stated at its May earnings call that it aims to maintain a bitcoin-per-share neutral position. As preferred shares and debt instruments such as STRC, STRZ, STRD, and STRF continue to increase, bitcoin is no longer solely an asset of common shareholders but must first cover the claims of creditors and preferred shareholders. As a result, the cost of maintaining BPS neutrality has risen.
Previously, the market believed it primarily paid preferred dividends by selling stocks, placing little pressure on Bitcoin; now, with higher barriers to raising capital through new share issuance, pressure is shifting to Bitcoin. As long as MMV remains below the neutral threshold, it is more likely to cover cash flow through small, continuous Bitcoin sales. Especially if dividend payment frequency increases further, the market will naturally expect not occasional sales, but periodic, incremental sales.
So the key to this downturn isn't "how much was sold," but "whether selling will continue in the future." Under this logic, ETF sales are more of a consequence than a cause—because once the market believes MicroStrategy will keep selling, funds will withdraw in advance.
Cat Brother: So earlier you said Michael Saylor was conducting a financial experiment—what was the purpose of that experiment?
Didier: Essentially, he is testing the market's capacity to absorb continuous small-scale selling of coins.
From a financial perspective, when the MMV premium is not high, selling a small amount of crypto causes less damage to the crypto-per-share ratio than selling stocks, making it a first-order optimal solution. The issue, however, is that since the large-scale issuance of STRC in March, interest and dividend payments on preferred shares and perpetual instruments have increased significantly, making cash flow management an unavoidable concern. The key question is no longer whether to manage cash flow, but how to do it.
If the market can absorb the sustained, small-scale selling pressure, the system can continue to function; but if this practice instead depresses the stock price, lowers the MMV, exacerbates the脱锚, and further reinforces the expectation of continued selling, it may be forced into a secondary adjustment—such as reverting to greater reliance on stock sales, or a hybrid approach combining stock and coin sales. While this would reduce the coin content per share, it would alleviate pressure on both coin and stock prices, representing a second-order optimal solution.
So essentially, it’s a game between Michael Saylor and the market. He’s waiting to see at what level the market will show strong enough buying pressure, while the market is waiting for a lower, more certain price before acting.
Cat Brother: Could this turn into a death spiral involving MicroStrategy and Bitcoin?
Didier: I don't think this event alone would be enough. To reach that point, it usually requires additional macroeconomic headwinds or a larger systemic shock.
As long as there’s a soft turn and no more rigid selling, bottom-fishing capital is likely to return. The issue isn’t whether there’s demand—it’s at what price that demand will appear. It could be $62,000 or lower; the market is currently waiting for this level.
So my assessment remains cautiously optimistic: this downturn is more due to MicroStrategy’s own financial structural changes than simply being driven by macro liquidity tightening. Without any new major negative catalysts, the situation is likely to recover and is unlikely to directly spiral into a true “death spiral.”
Tokens are regarded as the labor force of the new era
Cat Brother: Although the crypto industry is currently in a downturn, AI is very hot, especially in the U.S. stock market, where optical modules, semiconductors, and data centers have surged significantly. What do you think is the core driver behind this?
Didier: The core idea is actually quite simple—tokens are essentially becoming the labor force of the new era.
In the past, the core production factor for enterprises was people—whether physical or intellectual labor, everything was accomplished by humans. But now, many execution tasks once performed by people are being replaced by AI and tokens. In the future, what may become truly scarce are only a few individuals capable of completing end-to-end cycles: those who can set goals, design solutions, drive execution, and ultimately solve problems. Such individuals, combined with vast numbers of tokens, form the new labor system.
This will directly transform corporate organizational structures. In the past, companies had many layers because information had to be passed down manually; but in the AI era, many middle-management, assistant, IT, and executive roles will be streamlined. What truly matters is no longer mere execution, but influence, decision-making, and imagination.
So essentially, in the past, companies paid money to employees; in the future, they will pay more to tokens, models, and computing power. Model companies will then reinvest this money upstream to purchase chips, energy, optical modules, and data centers. Since upstream capacity expansion is limited and supply cannot keep up with demand, this segment will be the most consistently benefited part of the AI industry chain—this is also the core reason why related U.S. stocks continue to rise.
Service industries will be the first to be impacted, as knowledge-based services such as accounting, legal, consulting, and data analysis are among the easiest to be replaced by AI. In the future, internal business operations will become increasingly automated, and machine-driven economies may emerge between companies. At that point, many transactions, collaborations, and even payments will be carried out by machines.
Cat Brother: So you're saying this rally isn't just short-term speculation, but has medium- to long-term sustainability, and we might still be in the very early stages?
Didier: Yes, I think the machine economy is just beginning.
Many people also misunderstand the concept of a "one-person company." It doesn't mean one person working alone, but rather one person managing a team of dozens or even hundreds of agents, whose combined efficiency may equal that of hundreds of people in the past. Therefore, the premise of a one-person company is actually a large number of agents providing labor behind the scenes.
This is why I’ve consistently emphasized that tokens are the new labor. In the past, companies spent money hiring people; now, an increasing portion of their budgets is shifting toward tokens. As long as tokens continue to amplify revenue, corporate profit margins will rise significantly—this is the core logic behind the market’s bullish outlook on the AI industry chain.
So the expectation currently reflected in the U.S. stock market is that an increasing number of companies will become AI-native, replacing labor with tokens and enhancing automation to significantly boost profit margins. This is the most fundamental and rational driver behind this rally.
The exchange shifts to U.S. stocks, and users do not need to rewrite their trading logic.
Cat弟: As the U.S. stock market continues to rise, many cryptocurrency exchanges have launched U.S. stock trading channels. What’s your take on this? Is it because the crypto industry itself lacks hot topics, forcing exchanges to proactively create demand, or are there deeper reasons? Also, could this lead to further capital outflow from the crypto industry?
Didier: I’ve actually said before that offshore CEXs ultimately have only two paths.
First, it’s about building a prediction market, but this path is extremely difficult. The leading landscape has largely already taken shape, and most existing CEXs find it hard to truly transform into the next-generation “exchange for everything.”
Second, shift toward distribution channels for real-world assets, and the most important real-world assets today are U.S. stocks, U.S. bonds, and gold is also a key direction.
More fundamentally, over the years, truly valuable crypto-native assets have been few. Bitcoin is one, and a small number of DeFi infrastructure projects and blockchains qualify, but beyond that, most native assets lack sustained intrinsic value or cash flow support. Given this, the trading infrastructure built around these assets will inevitably seek out new, valuable targets.
So it’s quite natural for CEXs to shift toward U.S. stocks. I don’t see this as a squeeze on crypto assets, but rather the industry returning to reality: there simply aren’t that many truly valuable assets, and exchanges are just moving toward what can better support liquidity.
But in the long term, this is not necessarily a bad thing. The core value of blockchain has never been just about issuing native assets, but rather about providing decentralized alternatives and more efficient, lower-cost settlement and transaction methods. Bringing real-world assets onto the blockchain is itself a meaningful direction.
Moreover, in the long term, blockchain is essentially a technology designed for machines. Over the next five to ten years, the more likely scenario is that humans will interact with agents, while agents conduct payments, transactions, and collaboration on-chain. In this way, the on-chain infrastructure being built today can be directly utilized by machines.
So in the long term, I actually think this is bullish for Bitcoin, because whether it’s more people or more machines, they will eventually interact with on-chain assets.
Cat Brother: For ordinary users who previously primarily traded altcoins, Bitcoin, or blockchain assets in the crypto market, switching to U.S. stocks involves a fundamentally different logic—whether it’s earnings cycles, valuation frameworks, or regulatory rules, the differences are significant. If you were to give these long-time crypto users or traders one most important piece of advice, what would it be?
Didier: Actually, I don’t think they need to change much deliberately.
Because U.S. stocks and on-chain assets are fundamentally similar. U.S. stocks include both value stocks and growth stocks, as well as many assets with meme characteristics. One core reason this round of on-chain meme momentum has weakened is that the most influential meme assets have already shifted to U.S. stocks.
The story these assets tell is fundamentally still about “changing the world.” In the past, this narrative belonged to blockchain; now, a stronger version has emerged in U.S. equities, such as quantum computing, nuclear fusion, and SMRs. These things are often difficult to explain solely through financial statements, cash flows, or DCF models, and they similarly carry strong meme-like qualities.
So, those who previously chased altcoins and meme coins will find the same logic applies when pursuing these forward-looking concepts in the U.S. stock market—they won’t necessarily feel out of place. Meanwhile, those who originally focused on cash flow, fundamentals, and value support can similarly identify corresponding value and growth stocks in the U.S. market.
So what I mean is, the various styles in the crypto market all have corresponding equivalents in the U.S. stock market. Most people don’t need to force a change in their trading approach—they can find asset types they’re already familiar with.
If I were to give one suggestion, it’s not to force yourself to change your approach just to switch markets. Those who have survived this long usually have their own proven methods of survival—sticking to what works is even more important.
The 1011 event severely impacted crypto liquidity, making it difficult for altcoin markets to recover.
Cat弟: Based on your analysis just now, the image that comes to mind is quite dramatic. It feels like the recent wave of altcoin speculation has completely run its course, because nearly all of those previously hyped assets can now be found in the U.S. stock market—and even carry stronger real-world relevance. Is it fair to understand it that way?
Didier: You can understand it that way.
The reason the altcoin market has largely come to an end is that liquidity in the crypto space has been severely destroyed. The October 11 event dealt a heavy blow to the industry’s overall health. While reports mention $19 billion in liquidations, the actual figure is likely far higher. Rumors suggest $40 to $50 billion, and I believe that’s closer to the truth.
Also note that the loss here is not just paper market value, but actual cash. The total market capitalization of the crypto industry is already relatively small, and much of it consists of locked-up or inflated assets—meaning the truly liquid supply is far smaller than it appears. In this context, the sudden disappearance of tens of billions of dollars in cash within a single day is a severe blow to the industry’s morale and liquidity.
So I believe the 1011 event was the final straw that broke the altcoin market.
As for why meme assets on U.S. stocks are still being traded, the reason is simple: U.S. stocks are currently the most liquid market in the world. When your own liquidity dries up, you naturally shift toward markets with stronger liquidity.
From the U.S. perspective, it supports Bitcoin and blockchain, while also pursuing its own strategic interests. The American logic is to turn blockchain and on-chain markets, along with CEXs, into channels for U.S. assets to attract global capital and hot money. Therefore, promoting the on-chain integration of the U.S. financial system is essentially about expanding the global financing and distribution capacity of U.S. assets.
Of course, this is merely the U.S. government's understanding and usage. Whether blockchain and the crypto world will ultimately be entirely shaped by such state will is another matter. A more realistic scenario is that, in the future, the on-chain world and sovereign states will likely maintain a complex relationship characterized by ongoing cooperation, exploitation, and mutual博弈.
But at least so far, this line of thinking in the United States is indeed becoming a reality.
More cautious on macro conditions for the second half of the year, but still bullish on AI and Web3 in the long term.
Cat Brother: What is your macro outlook for the next six months through the end of this year? What policies might the newly appointed Fed Chair Walsh implement, and how could they impact the broader market?
Didier: I think market uncertainty is increasing going forward.
On one hand, the market has already risen significantly; on the other hand, several giant companies such as SpaceX, OpenAI, and Anthropic may still go public. The real pressure isn't just from fundraising draining liquidity, but from the potential for these trillion-dollar companies to be rapidly added to indices, forcing institutions to sell other weighted stocks to rebalance in a market with limited liquidity—creating downward pressure. Therefore, after entering June, I will be more cautious.
Another key variable is the midterm elections. If the Democratic Party ultimately gains control of both chambers, it could be bearish for Web3 and AI, as they place greater emphasis on labor rights, regulation, and oversight rather than allowing cutting-edge technologies to continue expanding at high speed.
From a fundamental perspective, I believe the market may be underestimating AI’s true economic impact. AI has already permeated many sectors, but current statistical methods may not fully capture this, so over the long term, its boost to productivity remains very strong.
The real issue isn't just growth, but distribution. If the distribution mechanism isn't properly adjusted, a highly polarized future could emerge: a small number of people who can harness AI will capture most of the gains, while the middle class faces severe pressure or even unemployment. In such a scenario, although productivity increases, overall societal consumption capacity would decline—which is why I favor long-term deflation over long-term inflation.
So in the coming years, allocation mechanisms will be crucial. Things like an AI tax, I believe, are highly likely to be implemented within three to five years, as without new sources of revenue, many social arrangements will lack a financial foundation.
Looking only from the second half of this year into next, I don’t want to draw any definitive conclusions. Short-term adjustment pressure is indeed increasing, especially around the time of SpaceX’s IPO, but I see this more as a correction rather than a full peak. As long as major companies continue their capital expenditures, the overall market rally isn’t over yet.
Looking further ahead, I remain bullish on AI and on the integration of AI with blockchain. In the future, internal business operations will become increasingly automated, and businesses may also form machine economies on chains—this overarching direction has not changed.
So I still believe that blockchain and Web3 have great potential, but the ways of participating will become more mature. The era of mindless rushing in and easy profits may already be over; the future will resemble an industrialized and institutionalized era.