The financial markets experienced a notable surge in November, characterized by a sharp rise in the prices of Bitcoin and many other cryptocurrencies, which were primarily driven by the endorsement of significant backers.

Rumors swirled regarding the potential for the U.Sgovernment or the Treasury Department to consider accumulating BitcoinAdditionally, it was suggested that China's classification of Bitcoin as an illegal currency resulted in missing out on a lucrative wealth opportunity.

Nevertheless, a crucial question loomed in the air: Do cryptocurrencies possess genuine value, or are they merely a meticulously orchestrated Ponzi scheme by the American fintech sector?

As the bubble in the U.S

stock market began to burst, speculation arose regarding whether a similar collapse awaited the cryptocurrency market.

Amidst this backdrop, on the evening of December 18, Federal Reserve Chairman Jerome Powell delivered a powerful statement.

He unequivocally stated that Bitcoin cannot substitute for the dollar, and the Federal Reserve would neither hold Bitcoin nor consider it for inclusion in government reserves.

This brief yet profound statement unveiled the indifference of established financial elites towards cryptocurrency.

Despite the total market capitalization of cryptocurrencies slotting into the top ten global assets, this burgeoning phenomenon has not captured the genuine attention of traditional powerhouses.

Although U.S

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financial firms and asset management giants have launched their own cryptocurrency products in recent years, their portfolio allocations are strikingly minimal, often falling below five percent.

This indicates a cautious approach from most financial institutions toward cryptocurrency, reluctant to miss the technological trend while also wary of its volatile price repercussions on product valuations.

In fact, even as Bitcoin's price soared to unprecedented heights approaching $100,000, a considerable number of investors remained skeptical.

Many see Bitcoin as a virtual currency that could rival gold; however, the stability of gold prices far surpasses that of Bitcoin.

The impact of gold on the net worth fluctuations of investment entities is minimal, whereas Bitcoin exerts a polarizing influence due to its substantial price volatility, raising numerous controversies.

Furthermore, there exists a stark dichotomy in value between virtual currencies and fiat currencies.

Cryptocurrencies lack a backing of intrinsic value, leaving the identities of holders and price manipulators shrouded in mystery.

This has triggered market concerns: might there be an impending wave of Bitcoin sell-offs orchestrated by undisclosed actors in the future?

The recent upsurge in Bitcoin prices is attributed, in part, to speculation and, concurrently, to market anticipations of the Federal Reserve igniting a new round of quantitative easing.

This has led to a significant decline in trust for the dollar, consequently enhancing the credibility of this famously scarce virtual currency.

However, in comparison to gold, the world's predominant asset, Bitcoin pales in significance.

Central banks globally are accumulating gold, while Bitcoin remains obscure in contrast.

As the U.S

stock market crumbles, worries mount over whether Bitcoin's bubble will burst concurrently.

The proposal to use Bitcoin to repay U.Snational debt has also sparked widespread concern in China regarding the safety of U.Sdebt.

Especially with the increasing risk of a default on U.Sdebt, is there a risk of asset devaluation or shrinkage concerning the $800 billion in U.Sdebt that China holds?

However, it is essential to recognize that China currently possesses around $3 trillion in foreign exchange reserves, a substantial portion of which consists of U.S

and Chinese government bonds.

These U.Sbonds not only serve as a means of communication and negotiation between China and the U.Sbut are also crucial assets for China within global financial markets.

As long as China continues to hold a reasonable amount of U.Sbonds and adeptly utilizes this leverage, there is no need for excessive concern regarding the risk of U.Sdebt default.

Furthermore, for China and the renminbi, it is paramount to reduce dependence on the dollar for foreign trade exports.

According to reports from Russian news agencies, the renminbi's popularity in SWIFT international payments has once again surpassed that of the yen.

This shift indicates that the renminbi's standing in international payments is gradually ascending.

With the Federal Reserve's interest rate cuts, the appreciation of the renminbi, and the rising value of renminbi-denominated bonds and assets, the usage of the renminbi in SWIFT is expected to continue its upward trajectory.

While the dollar remains the dominant global currency, its usage in transactional and settlement contexts for goods trade is gradually declining.

The Federal Reserve is employing various strategies to uphold the dollar's standing in financial markets, yet the speculative attributes of the dollar pose a challenge to its prominence in actual transactions and settlements.

As the use of the renminbi steadily rises, China's voice in the international financial arena is growing ever louder.

In this context, the risk of U.S

debt default is no longer a pressing issue for China.

On the contrary, China should maintain its diversified foreign exchange reserve strategy and bolster economic cooperation with other nations, marching confidently into the future.

In conclusion, although cryptocurrencies have stirred excitement in the market, the associated risks and issues must not be overlooked.

For investors, it is crucial to rationally assess the value and risks of cryptocurrencies.

Simultaneously, China should continue enhancing its management and utilization of foreign exchange reserves to tackle potential risks and challenges ahead.