The Greatest Financial Opportunity: Transfer of Capitals from the Old System to the New — Analysis by Stanislav Tikhonov

The Greatest Financial Opportunity: The Transfer of Capitals from the Old System to the New One
Stanislav Tikhonov
The economic situation is worsening
Last autumn, I wrote a lengthy article about the current financial system and possible courses of action for the US administration. Today, I want to update the data on how the situation has changed and which development paths are most likely. This autumn, elections to the US Congress and Senate will take place, which the Republicans will lose badly, which means that Trump has less and less time for active action.
The main sore points: debt, deficit, and expensive interest
Let us start with the main problem of the current financial system – the cost of servicing US debt, the budget deficit, and the trade balance.
According to the Congressional Budget Office (CBO) and the US Treasury, the federal budget deficit for fiscal year 2025 amounted to 1.775–1.809trillion[1][2].Budgetrevenuesin2025reached1.775–1.809trillion[1][2].Budgetrevenuesin2025reached5.235 trillion, while expenditures exceeded $7 trillion [1]. In other words, every dollar the government receives is accompanied by roughly 34 cents of borrowed money. And this is without considering the tariffs that the Supreme Court struck down – some of the revenue will have to be returned.
For some reason, we are constantly given the budget deficit as a percentage of GDP (only 6–7.8%). But allow me to offer a different perspective. Imagine a person with his annual salary and his annual expenses. GDP is the turnover of all the residents in his building. Let our person be the “building manager”, but the residents’ turnover does not belong to him, and it is not right to spread his expenses over everyone. So we have a person who earned 5.2 million conventional rubles but spent 7 million. And every year his expenses relative to income grow, and in recent years with acceleration. There is no possible way to repay the debts: the amount is already greater than all his assets and even the assets of all the residents of the building.
Debt: $39 trillion and rapid growth
The gross US government debt in April 2026 crossed the 39trillionmark–justfivemonthsafter39trillionmark–justfivemonthsafter38 trillion and seven months after 37 trillion[3].Intermsofgrowthrate,debtincreasesbymorethan37trillion[3].Intermsofgrowthrate,debtincreasesbymorethan3 trillion annually.
But the most frightening thing is not even the size of the debt itself, but the cost of servicing it. In fiscal year 2025, interest expenses for the first time in US history exceeded 1 trillion[1][5].Tounderstandthescale:thatismorethanthePentagon’sbudget.The CBO project sthatin 2026 intereste xpenses will reach 1 trillion[1][5].Tounderstandthescale:thatismorethanthePentagon’sbudget.TheCBOprojectsthatin2026interestexpenseswillreach1.0 trillion, and by 2036 nearly 2.1trillionperyear[5].EverydaytheTreasurypays2.1trillionperyear[5].EverydaytheTreasurypays2.8 billion in interest alone [5].
Because of the currently high rates, the Fed is forced to shift more and more longterm borrowing into shortterm bills of up to one year. This means that every year the US government has to reborrow an everlarger amount – in 2025 that was more than $9 trillion. Powell has been lowering the rate very slowly lately, and in the current situation he has stopped doing it altogether.
Fed rate and inflation: what next?
As of April 2026, the Fed’s target rate is in the range 3.5–3.75% [6]. The market expects virtually no rate cut in 2026 – moreover, the probability of a rate increase is estimated at about 45% [6]. The International Monetary Fund, in its annual Article IV report on the US economy, directly stated that the Fed has “almost no room to cut rates this year” [6].
The culprit is inflation. Inflation for February 2026 was 2.4% yearonyear, still above the 2% target, and the data have been stable for several months [7]. But the worst is yet to come: the war in the Middle East and rising oil prices have not yet been fully reflected in the statistics. The Fed will have to keep an eye on these data, which could mean either a pause or even another rate hike. In any case, easy living is not on the horizon.
The mathematics that nobody understands
The situation is very serious. They need to borrow; the economy has a whole host of problems, from unemployment to loan delinquencies. Moreover, they have exhausted their stash in the REPO accounts at banks for financing through shortterm paper. So they came up with a new trick – to cover it by printing stablecoins backed by shortterm US bills. But those amounts are minuscule by financial system standards: the total market capitalization of all stablecoins ranges from 185billionto185billionto315 billion depending on the calculation method, and the financial system needs trillions, and fast [8].
I strongly advise you to read and understand the swimmingpool filling problem, then you will more clearly understand the dire situation the global financial system is in.
Problem statement: There is an empty pool being filled with water. Every minute the amount of water in the pool doubles. At what minute will the pool be halffull, if it is known that it fills completely in one hour?
Here any sensible person would immediately think of the 30th minute or so. But this problem is about progression. In fact, the pool will be halffull only at the 59th minute. At the 30th minute there will be a small puddle in the corner. Around the 56th minute the water will barely reach your sneakers, at the 58th – kneedeep, at the 59th – waistdeep, and at the 60th the pool is full. It is this progressive system that is not understood by most of the population, who are used to the linear dynamics of events, but the mathematics of this process is exponential. And this simple idea is very difficult for people to understand and grasp. Most investors and financiers do not realise that time is running out, not noticing the approaching danger. They are used to living the old way, because most of the time it was “a small puddle in the corner of the pool”. But now it has begun to grow rapidly, and we are approximately at the 57th minute.
Which path has America chosen?
The situation is not very good and continues to worsen. The only reasonable solution to the problem is to wipe out the current debt. A few years ago, I suggested three options for the US, as the holder of the reserve currency in the current financial system:
1.Do nothing – the option of the Democrats and globalists in Europe. The US did not take this path. It would lead the US to decline, likely civil war, and its financial system to death from hyperinflation, but globalisation might have been stretched for another 5–7 years.
2.Fight and be the first to exit the old financial system at the most inconvenient moment for everyone else, having first squeezed all the juice out of their current privileged position. Trump, with his tariffs, is doing exactly that.
3.A massive cyberattack on financial centres, destroying the main depositories and data servers. Debts will be wiped out, and the old system will most quickly begin transitioning to a new digital one on the blockchain.
A couple of years ago I was almost certain of the second scenario, but now I am beginning to doubt. The globalists are stubbornly resisting, and control over the Fed is still in their hands. Trump has lost precious time. The confrontation in the US has reached a level where even the Supreme Court, where Trump has a majority, did not side with him on the tariff issue. Therefore, the probability of the third scenario has increased. It would be extremely difficult to come to an agreement with all the US elites and consolidate enough power to intentionally introduce a new financial system. And the third option – a cyberattack – is essentially an uncontrolled but effective dismantling of the system.
A new digital financial system is coming
We already see that the Trump administration is very actively promoting cryptocurrencies and their regulation. On July 18, 2025, President Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) – the first federal law on digital assets in US history, which creates a legal framework for regulating payment stablecoins [12]. This effectively lays the groundwork for a parallel dollarissuance system alongside the Fed.
Next comes the CLARITY Act (Digital Asset Market Clarity Act of 2025), which, together with the SEC v. Ripple court case, will become the basis for cryptocurrency regulation in the future. In July 2025, the House of Representatives passed the CLARITY Act with bipartisan support – 294 votes in favour to 134 against [13]. The law has not yet been finally passed by the Senate, but it is expected to be passed this autumn and to come into force by the end of the year.
All this opens up boundless horizons for building a new digital financial system on the blockchain. The world’s largest financial institutions are already conducting tests. DeFi is becoming the new banking and brokerage system.
Four stages of the structural crisis
Let me remind you that I divide the current structural crisis of the financial system into four stages. We are now at the end of the second stage:
1.Illusion of growth – ended in December 2021 with the breakdown of the familiar old system of fundamental market analysis. Methods of valuing companies that had been relevant for the last 80 years ceased to work.
2.Deflationary crisis – began in December 2021, when they started raising rates and reducing liquidity. The system turned out to be stronger than I expected, but now we are approaching the climax. In my view, a major deflationary shock should happen in the coming months. The war in the Middle East and the impending oil crisis act as a catalyst.
3.Inflationary crisis – the deflationary contraction will have to be flooded with money. The Fed is afraid to lower the rate again, and rightly so, because a new round of inflation could spiral out of control. It is this crisis that will force the US to act and be the first to break up its own old system in order to gain an advantage in the new one.
4.New digital financial system – a stage of finetuning and establishing the new system on the blockchain. It will be volatile for markets; the standard of living in many Western countries will decline significantly.
Signs of an imminent transition
I currently focus on 2027–2028 as a possible time for the culmination of the inflationary phase, but my timing is usually off (I am two years too early). It is better to look at specific signs:
The rise of dollar inflation first above 5%, and then above 10%, while a rate hike will not be effective. According to Fed data for March 2026, inflation (PCE) is forecast at 2.7% in 2026, returning to 2% only by 2027, but the risks are tilted to the upside [6].
Interest payments exceed 1.5trillionperyear,whichwouldbemorethan201.5trillionperyear,whichwouldbemorethan201.0 trillion, and by 2036 nearly $2.1 trillion [5].
The share of the dollar in world trade will begin to fall below critical levels. According to SWIFT, in December 2025 the dollar’s share of global payments rose to 50.5% – the highest since the change in calculation methodology in 2023 [9]. At the same time, the euro’s share fell to 21–22%, and the renminbi’s share is about 3.17% [10]. However, in central banks’ foreign exchange reserves (IMF COFER data), the dollar’s share fell to 56.3% – a 30year low [11].
The emergence in BRICS of a real alternative financial system for internal settlements.
A new financial system on the blockchain will be prepared and tested – watch the development and adoption of cryptocurrencies. The use of DeFi will become convenient for the average user on a smartphone. Most of the necessary real economy will be digitised and converted into RWA and tokens.
Analysis of the current market situation
Enough of the distant future. I doubt you believe in it very much right now, but changes in our lives are happening rapidly, so it is worth keeping your ear to the ground. In the meantime, let us assess the current situation in the markets and why now may be the last chance to get into crypto cheaply (none of what is said constitutes individual investment advice).
The technical picture is interesting. The market has formed a formation typical for the end of a fifth wave – a rising diagonal. The market grew slowly with fading volatility, large players were dumping the remnants of their positions, while small players bought in the hope of continued growth. Around November 2025, we broke down from this formation.
Recently, market stress has increased, but there has been no major volatility. Instead of the market falling, funds and investors bought hedges against a fall – they hedged their positions mainly with options. The structure of the options market suggests that if the S&P 500 falls and consolidates below 6,000 points, we will face a gamma squeeze – a situation where contracts quickly become unprofitable and most will have to dump real assets, which will cause a sharp acceleration of the collapse.
Problems in the economy are mounting: delinquencies on credit cards, auto loans, and mortgages are rising. Real estate sales have stalled; the number of homes for sale is almost as high as before the 2008 crisis. Cyclical sectors – real estate, construction, and industrial production – have been declining since the beginning of 2025.
And everything that is happening does not resemble the soft landing that Fed members so wanted. Therefore, central banks around the world simply cannot avoid intervening during financial crises – they will intervene again. And this game can only end in hyperinflation of the reserve currency.
What is happening in crypto
In the crypto market, a major correction is already well underway. As of early April 2026, the total market capitalisation of the crypto market is between 2.35and2.35and2.57 trillion, significantly below historical highs [14][15]. Bitcoin is trading around 66,000–68,000afterafivemonthdownwardstreak[16].Ethereumisaround66,000–68,000afterafivemonthdownwardstreak[16].Ethereumisaround2,050–2,100, with the prospect of testing lower levels [17].
As soon as the CLARITY Act is finally passed by the Senate and signed, a redcarpet will be laid out for crypto on Wall Street [13]. Ethereum and its ecosystem will feel especially good. If Bitcoin has grown the most in crypto over the last couple of years, the next year could be the year of Ethereum and fundamental projects on its network. They will truly build a second parallel financial system that can duplicate the current one if necessary. If we compare the current situation with 2021, the difference is like between kindergarten and high school. We haven’t yet reached university, but the system is already very mature.
In the following articles, we will analyse it in more detail, and you will see with your own eyes how diverse the world of cryptocurrencies has become. How quickly technology is developing here and how large the capital already circulating here is.
Conclusion
I think the general concept is clear to you: nothing good awaits us in the near future. The world of, say, 2017 will seem to you like an ideal dream from the past. But nothing can be brought back, no matter how much many would like it. The problem is systemic and economic – recall the swimmingpool filling problem.
But every crisis also brings opportunity. The transition to a new type of financial system – a decentralised blockchain – is a chance for those who find themselves in the right assets at the right time. At the moment of the old system’s collapse, the greatest redistribution of capital in history will take place.
And remember: altseason lasts only 2–3 months, when everything rises sharply in maximum euphoria right before the end. Therefore, while there are no clear signals, it is worth sticking to the main conservative cryptocurrencies and not jumping into alts with large sums prematurely.
Good luck with your investments and a cool head in hot times!

Sources
1.CBO reports 1.8trillionfederaldeficitasdebtcostshitrecord1.8trillionfederaldeficitasdebtcostshitrecord1 trillion // Fox Business / Yahoo Finance, October 2025.
URL: https://finance.yahoo.com/news/cbo-reports-1-8-trillion-110017099.html
2.Monthly Fiscal Update: November 2025 // U.S. Joint Economic Committee, December 2025.
URL: https://www.jec.senate.gov/public/index.cfm/republicans/newsroom?id=AAAA1B6A-4FBF-45FE-B724-FCD41B980625
3.Opinion: With federal debt, is the U.S. going the way of Rome? // The Detroit News, April 2, 2026.
URL: https://www.detroitnews.com/story/opinion/2026/04/02/opinion-with-federal-debt-is-the-u-s-going-the-way-of-rome/89421528007/
4.(not used)
5.Interest Costs on the National Debt Are Reaching All-Time Highs // Peter G. Peterson Foundation, March 20, 2026.
URL: https://www.pgpf.org/article/any-way-you-look-at-it-interest-costs-on-the-national-debt-will-soon-be-at-an-all-time-high/
6.IMF Forecasts Only One U.S. Rate Cut This Year // The Asia Business Daily, April 3, 2026.
URL: https://www.asiae.co.kr/en/article/2026040314130967257
7.CPI Keeps Steady at +2.4% YoY // Yahoo Finance, March 11, 2026.
URL: https://au.finance.yahoo.com/news/cpi-keeps-steady-2-4-141500224.html
8.BitGo’s Mint Platform May Transform Institutional Stablecoin Vulnerabilities into Advantages // Bitget News, April 3, 2026.
URL: https://www.bgportable.com/news/detail/12560605332381
9.Dollar’s share in global payments hits 50.5% in Dec, highest since 2023 // AASTOCKS, January 22, 2026.
URL: https://www.aastocks.com/en/stocks/news/aafn-con/NOW.1396853/industry
10.Use of Chinese yuan reaches 3.17% in global payments in September // Global Times, October 23, 2025.
URL: https://www.globaltimes.cn/page/202510/1346329.shtml
11.IMF Data Brief: Currency Composition of Official Foreign Exchange Reserves, Q2 2025 // IMF, October 2, 2025.
URL: https://data.imf.org/en/news/october%201%202025%20cofer
12.S.1582 – GENIUS Act (119th Congress) // U.S. Congress, enacted July 18, 2025.
URL: https://www.congress.gov/bill/119th-congress/senate-bill/1582
13.Crypto Regulation: SEC Priorities & Market Structure Bills // Alston & Bird, December 5, 2025.
URL: https://www.alston.com/en/insights/publications/2025/12/crypto-regulation-sec-priorities-market-structure
14.2026年加密货币总市值现状 // Gate.com, April 3, 2026.
URL: https://www.gate.com/zh/post/status/20016004
15.Cryptocurrency Prices Today // BingX, April 2, 2026.
URL: https://bingx.com/en/price/page/1911
16.Bitcoin tops $68,399 briefly, trims gains // Moneycontrol.com, April 1, 2026.
URL: https://www.moneycontrol.com/news/business/personal-finance/bitcoin-tops-68-399-briefly-trims-gains-as-investors-remain-cautious-amid-geopolitical-developments-13876274.html
17.Ethereum Dips Below $2,100 as Exchange Outflows Signal Rally Preparation // Edgen.Tech, April 3, 2026.
URL: https://www.edgen.tech/zh/news/post/ethereum-dips-below-2100-as-exchange-outflows-signal-rally-prep

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Author of the article: Stanislav Tikhonov
Subscribe to his channel: https://t.me/stanislav_tikhonov_finance (Telegram)

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