The New Globalization of the Digital World: The Rise and Future of Encryption Assets

In the past year, the trend of "de-globalization" in the physical world has intensified, but in the digital realm, a new model of globalization is quietly emerging.

2024 is a major election year globally, with more than half of the world's countries and regions set to hold elections. At the same time, the Russia-Ukraine conflict has persisted for three years, and the situation in the Middle East remains turbulent. Against this backdrop, traditional globalization models face severe challenges. However, the wave of digitalization shows a distinctly different development trend.

According to statistics, a total of 119 countries and 4 British territories have legalized encryption assets worldwide. Since El Salvador became the first country to recognize Bitcoin as legal tender in 2021, several developing countries have followed suit. At the beginning of 2024, the United States approved 11 Bitcoin spot ETFs, marking Bitcoin's official entry into the mainstream financial market. This series of events has accelerated the globalization process of encryption assets.

Reflections of Developed Countries on Globalization

Once, globalization was seen by developed countries as a tool to shape the global economic order. However, today these countries have become the main voices questioning globalization. Although globalization has improved production efficiency and promoted industrial upgrading in developed countries, it has also brought about profound structural contradictions.

The most significant issue is the unequal distribution of wealth. Taking the United States as an example, its Gini coefficient rose from 34.7% in 1980 to 41.3% in 2019, an increase of 19% in income inequality. Although there was a decline in 2020, it subsequently climbed back to high levels, highlighting the severity of the income distribution problem.

In addition, the dominant position of developed countries in global production has declined. The global GDP share of BRICS countries surged from 7.7% in 2000 to 37.4% in 2023, while the shares of the United States and the European Union have noticeably decreased. In the manufacturing sector, the share of developed countries dropped from over 70% in 2000 to about 45% in 2023, while East Asia and the Pacific region increased from 31.9% in 2007 to 46.5% in 2021.

At the same time, the issue of public debt in developed countries is becoming increasingly serious. The U.S. government debt as a percentage of GDP rose from 58% in 2000 to 98% in 2023, while Japan has maintained levels above 200% for a long time. The highlighting of these structural economic problems has forced developed countries to reassess the globalization system and its sustainability.

Digitalization: The "New Continent" of Globalization

As traditional globalization faces challenges, the cryptocurrency market represented by Bitcoin is gradually becoming the "new continent" of the financial world. Unlike traditional globalization, this "new continent" breaks through geographical boundaries and the limitations of a single power center, establishing a brand new trust system through global consensus mechanisms and technological means.

Against the backdrop of geopolitical tensions and economic pressures, the encryption market has gradually become a new "pressure relief valve". In 2024, Bitcoin ranked first among major asset returns with an annual yield of 128%. As of November 2024, Bitcoin's market capitalization has surpassed that of silver, making it the eighth largest asset globally. This not only reflects the new position of encryption assets within the traditional financial system but also showcases their potential for hedging and appreciation in a complex economic environment.

The borderless nature of encryption assets has driven the formation of a new type of globalization market. In the context of geopolitical conflicts and restricted capital flows, cryptocurrencies demonstrate a unique "depoliticized" economic function. For example, after Russia faced SWIFT sanctions, some economic activities shifted to encryption assets, showcasing their flexibility in responding to international conflicts. The case of the Ukrainian government raising a significant amount of donations through encryption assets also proves their rapid response and cross-border capital flow capabilities in times of crisis.

Looking deeper, encryption assets are driving a new economic model that does not rely on power centers. This system, based on technological trust, significantly reduces the risk of "single points of failure" through algorithms and the joint participation of global nodes. The 24/7 uninterrupted trading of encryption assets and their borderless nature break through the limitations of traditional financial systems, providing new possibilities for global collaboration.

As the "globalization" of the physical world faces challenges, the encryption market seems to provide a new direction for reconstructing the global order. This new technological-based model of globalization may become an important driving force for the development of the world economy in the future.