Donald Trump's election as the new president of the United States became the biggest political and economic topic of November. Not surprisingly, the impact of Trump's rise to power has been enormous, with his "Trump 2.0" economic policy line, which is different from other parties, and strong support for cryptocurrency, reversing the market's previous trading logic. Stock market liquidity is starting to flow to more zones, and the encryption market carnival is also closely related to Trump, all of which seem to indicate that a new trading logic system is being born.

With the end of the US election, Trump has been re-elected as the 47th President of the United States. With this, the election results are in, and the US will return to a right-wing development path, alleviating global traders' concerns about election risks.

As the traditional conservatives, the Republican Party advocates for tax cuts, revitalization of the manufacturing and traditional energy industries, reduction of government regulatory power, and deportation of illegal immigrants. 'Trump 2.0' further implements the policy concept of 'MAGA Party'.

From a policy perspective, Trump's policy approach is very similar to Reagan's at the time, which is a combination of 'loose fiscal policy + deregulation + trade protectionism'. Reagan used this approach to lead the United States out of the economic environment of stagflation after the oil crisis, promote economic recovery, ultimately achieve the 'Reaganomics', and continue to influence subsequent US economic policies. Whether Trump can replicate President Reagan's 'success' path, pump the US economy back from the brink of stagnation, and become the most focused point during his tenure remains to be seen.

The similarity between Trump's policy and Reagan's policy could be the main trading logic for the subsequent 'Trump trade', and investors can continue to follow.

Back to November inflation data and Fed policy. On November 26, local time, the Federal Reserve released the minutes of the Federal Open Market Committee (FOMC) meeting on November 6-7. The minutes showed a 25-point rate cut in November, in line with expectations. At the same time, the Fed stressed that "participants expect a gradual shift to a more neutral policy stance over time if the data is in line with expectations, inflation continues to fall to 2% on a sustained basis, and the economy remains close to maximum employment." This "more neutral policy stance" means that the Fed no longer deliberately pursues interest rate hikes or cuts, but makes daily adjustments according to market economic conditions, which undoubtedly implies that the Fed has optimistic expectations that the US economy will come out of recession and recover in the future.

In November, the US stock market ran smoothly with small steps breaking through historical highs. In the field of AI, although NVIDIA's (NVDA) third-quarter financial report exceeded expectations, it fell 5% after hours on the day of the report's announcement because it did not exceed expectations too much. Currently, the market's attitude towards AI seems to be "as long as it doesn't explode too much, it's considered meeting expectations."

Since Trump was elected, BTC has been like a wild horse, galloping towards $100,000. The market's fear of missing out was severe, and it wasn't until the last week of November that it eased slightly. Against the backdrop of Trump's call for 'BTC strategic reserves,' Pennsylvania took the lead in passing the 'BTC Rights Act,' and it seems that the market is ushering in the 'Trump era' of Crypto Assets, which are becoming the subject of legislative protection in the traditional world and are truly entering everyone's life.

If Trump's election brought BTC to new highs, then Musk completely ignited the MEME track. With Musk joining the 'Trump 2.0' government team, there was a violent surge in three Musk concept coins at one point. The longer-term narrative behind this episode is that Musk, as a leader in technological innovation, his potential political influence may accelerate the progress of encryption technology, such as promoting the integration of AI and blockchain.

Therefore, Crypto Assets deserve to replace AI as the new favorite of the stock market in November, and people naturally seek opportunities related to Crypto Assets in the secondary US stock market. The biggest winner in the BTC frenzy in November is MicroStrategy (MSTR), whose stock price in November has risen by more than 140%.

Source: StockCharts.com

MicroStrategy was originally a niche software company established in the 1990s. After surviving the technology bubble in 2000 and entering a period of business stability, the company had almost no room for further growth. It wasn't until the company's CEO, Michael Saylor, became a BTC believer around 2020, incorporating BTC as a core strategic asset on the company's balance sheet and successfully constructing a 'trap' for the company's growth logic: BTC accounts for a significant proportion of the company's assets, and its value fluctuation directly impacts the company's value. As the BTC price pumps, MicroStrategy's stock price rises significantly due to the increase in assets, with daily trading volume surpassing that of NVIDIA. By leveraging capital operations, the company can issue additional shares to raise funds to continue buying coins. In November, MicroStrategy issued additional shares to raise $4.6 billion and reinvested all of it in BTC, driving the BTC price pump. This forms a cycle of buying BTC - stock price pump - debt or issuing more shares to buy more BTC, closely linking shareholder interests with the appreciation of BTC. The unexpected surge in MicroStrategy's stock price is essentially viewed by some investors as an indirect way to hold BTC and are willing to pay a premium for it.

BTC has achieved MicroStrategy, and MicroStrategy has also achieved BTC, its crazy issuance of debt and sale of stocks to buy coins, as well as its high-profile market style, has helped push BTC from 70,000 to 90,000, just as the BTC ETF helped push BTC from 40,000 to 70,000 before. Therefore, MicroStrategy is also considered the biggest promoter of this round of BTC from 70,000 to 90,000.

Some investors believe that MicroStrategy has a unique insight to discover a clever way to exploit the loopholes in the Fiat Currency system, fully utilizing the inefficiency of traditional Capital Markets, thereby gaining leverage advantages against Fiat Currency, and combining it perfectly with the predictability of BTC, thereby giving itself significant pump potential. In short, it is to use cheap and constantly inflating capital to acquire scarce and appreciable assets. Of course, the premise of this logic is that BTC will inevitably succeed in the long run. As of the latest data, MicroStrategy currently holds 279,420 BTC.

MicroStrategy's 'digital gold standard' strategy and capital operation model provide us with a new experimental paradigm. If the market continues to trend upwards, this model may become an industry pioneer, guiding other companies to adopt similar strategies, accelerating the integration of BTC into corporate balance sheets, and propelling BTC to be recognized as the top predator of assets.

The market's rise has long caused retail investors to dump BTC in pursuit of so-called memes' high returns. Currently, BTC is already the main battlefield for whales. Some people believe that the biggest risk to BTC comes from the dumping of whales. As one of the largest whales, MicroStrategy's biggest dumping risk comes from the forced liquidation of bonds due to the decline in BTC prices, which leads to a self-reinforcing decline in BTC prices.

However, this argument ignores the bond structure of MicroStrategy issuance. The bonds issued by MicroStrategy are convertible bonds, which belong to over-the-counter leverage. Even if MicroStrategy cannot repay the debt on the repayment date three years later, the bondholder can only convert the debt into stocks and dump them on the stock market, which cannot shake the price of BTC. Therefore, instead of worrying about MicroStrategy being forced to liquidate and sell coins to repay the debt, it is better to worry about those who buy MicroStrategy stocks in the US stock market.

Investor Victor Dergunov has explicitly pointed out that although MicroStrategy has shown forward-looking vision, its stock is significantly in an Overbought state, which can be seen as a typical bubble in the entire encryption field. Although BTC has not yet reached its peak, reality has already sounded the alarm, reminding us of what will happen when the market heats up too quickly. The market's valuation of MicroStrategy will reach a more clear Consensus, which should be significantly lower than the current level.

Of course, a more exciting future could be that we may see BTC taking a place on the balance sheets of thousands of companies, and MicroStrategy will go down in history as a pioneer of finance.

In November, against the backdrop of Trump's election as President of the United States, the economy has shown multidimensional changes. The FOMC meeting cut interest rates by 25 basis points, and it is highly likely to continue to ease in December, injecting liquidity expectations into the economy. Trump's economic team has been formed and its policy proposals are expected to replicate the high-growth path of the previous period. The US stock market continues to rise and reach new highs, while the crypto market celebrates under the favorable conditions of Trump, with BTC approaching $100,000. MicroStrategy has emerged as a rising star due to its BTC holdings and the launch of new capital operations experiments. Looking ahead, it is necessary to follow the implementation strength and pace of Trump's policies, as well as the impact of interest rate cuts on the economic structure. If Trump's commitment to the encryption industry is partially realized, $100,000 may not be the end point of the BTC price, but only a milestone in its pumping process. The road is tortuous, but the future is bright.