Recent episodes
Too Big To Fail: America's Retirement Fund, Strategy's Big Sale, and the Bitcoin Exit
- Eric Balchunas' "too big to fail" thesis: U.S. equities have become America's de facto savings account (55% ownership); fiat's loss of store-of-value function has forced savers into financial assets, raising the likelihood of future government intervention to support stock prices during downturns. - MicroStrategy's 3,588 BTC sale: Viewed as a strategic move to strengthen its S&P 500 inclusion case rather than a shift in long-term Bitcoin conviction; the sale funded dividends for digital credit securities and demonstrated monetization capability during market stress. - U.S. Strategic Bitcoin Reserve delays: Treasury and Commerce departments are disputing control; the DOJ's Office of Legal Counsel is reviewing legal authority. Structural announcement promised by late April remains 10 weeks overdue; no Bitcoin accumulation has occurred yet. - CLARITY Act stalled: Trump's $1.4 billion crypto earnings and associated insider-dealing concerns have politically weighted down the legislation; passage before midterm elections is unlikely, with Democratic House control making future passage more difficult. - ETF outflows versus whale accumulation: June recorded record outflows (~$4 billion over a 10-day stretch); concurrently, Bitcoin whales purchased ~$17 billion worth in two weeks, suggesting experienced holders are buying during weakness while institutional ETF investors are selling. - Bitcoin miners allocating compute to AI: Companies like Terawolf are striking deals (e.g., with Anthropic) to provide AI compute; assessed as net-positive for mining network security and infrastructure resilience, as AI can pay higher energy premiums, leaving sub-5¢/kWh sources available for Bitcoin.
OpenUSD, Bitcoin Cycles, and America’s Monetary Future
- World Cup as metaphor for global monetary competition; Bitcoin, fiat, and emerging stablecoins (OUSD, USDC, USDT) are competing for monetary dominance over decades. - OpenUSD (OUSD) announced with 140+ company backing, positioned as "open" and "neutral" infrastructure; hosts argue it remains centralized, censorable, and functionally similar to a CBDC despite private-market framing. - Bitcoin bear-market bottom signals: four of ~12 classic indicators (Mayor multiple, fear & greed index, hash ribbons, SOPR 30-day) have triggered; four-year cycle timing has held uncannily well, with October 2024 peak matching historical precedent within one week. - Crypto venture capital collapsing while AI attracts investment; OG Bitcoin holders and failed crypto founders liquidating Bitcoin holdings to keep companies afloat, creating downward pressure without alternative season rally. - Federal debt and M2 money supply continue upward trajectory post-pandemic; Fed ownership of treasuries fell from 25% to ~15% but expected to spike again in future crisis. - Bitcoin framed as embodiment of founding-era American ideals: individual liberty, property rights, sound money, and resistance to centralized monetary control.
AI, Surveillance, and Bitcoin’s Next Test
- Bitcoin price has fallen below $60,000, touching the $58K level that acted as a magnet during past cycles, and broke through the bottom of the power law chart for the first time ever; sentiment is weak and infighting among Bitcoiners is increasing. - The four-year cycle pattern is holding, raising questions about whether cycles work symmetrically (if downside follows a pattern, upside should too); fundamentals appear unchanged compared to 2022's clear bear-market catalysts. - Long-term holder supply is at record highs, indicating conviction buyers are accumulating while weaker ETF-driven holders sell; this concentration of coins in strong hands is historically bullish despite price weakness. - AI is pulling investor capital and attention away from Bitcoin; the narrative has shifted to AI stocks and chip makers as the "fastest horse," creating short-term headwinds for crypto broadly and Bitcoin specifically. - Strategy's preferred shares (Stretch, others) are trading significantly below par (~75 and lower); cascading selling by leveraged holders and possible hedge fund hunting have stressed the company, though its Bitcoin holdings remain substantial (~870,000 BTC). - Government surveillance infrastructure is expanding globally: UK requires face scans for social media, Utah law targets VPNs, CBDCs are moving from discussion to implementation in the EU, while the U.S. passed a CBDC ban but is embracing private stablecoins that enable surveillance.
The Fed Held, BITA Launched, STRC is Stressed
- World Cup 2024 is providing a welcome counternarrative to negative stereotypes about America, with international visitors surprised by the country's infrastructure, culture, and friendliness; Canada achieved its first-ever World Cup win. - Bitcoin sentiment has deteriorated significantly, with price around $62K and widespread expectation of a four-year-cycle-driven bottom in Q3–Q4 2026 at the high 40s to low 50s. - The 2022 bear market felt more explainable due to Fed tightening, inflation, QT, M2 contraction, and crypto collapses; the current drawdown lacks equivalent macro justification, fueling debate over whether the four-year cycle is real or reflexive. - Whale and miner selling, AI stock flows diverting capital, and reflexive belief in the four-year cycle are cited as the primary drivers of the sell-off. - Kevin Warsh's first Fed meeting held rates unchanged; half of Fed officials expect at least one rate hike by year-end; PCE inflation is not expected to return to 2% target until 2028. - BlackRock launched a new income ETF targeting 15–25% yield while capturing at least 70% of Bitcoin's upside; Strategy's preferred stock (Stretch) fell to $80–$88 after trading near par, triggered by liquidation cascades from levered positions, though the company itself remains solvent.
Is This Bitcoin Bottom Different? Cycles, MicroStrategy, and Real Bitcoin
- Bitcoin price near $63K after declining from October's $74K peak; debate over whether classic cycle bottom signals (only 4 of 13 triggered) will materialize, with evidence that this cycle behaves differently from prior ones due to institutional integration and ETF adoption. - Supply-in-profit metrics now match prior cycle bottoms (47%), suggesting potential support, though historical bottom frameworks may no longer predict price action as they once did. - MicroStrategy's ~4% Bitcoin holdings and institutional accumulation not a threat to Bitcoin; permissionless network design means large entity ownership cannot "kill" the asset. - OG coin distribution, miner selling (pivoting to high-performance computing), and AI hype cited as tangible factors in 50% drawdown; 2022's decline felt more explicable due to clear macro headwinds (inflation spike, rate hikes, platform collapses). - CPI at 4.2% year-over-year, 63 consecutive months above 2% target; Kevin Warsh unlikely to raise rates despite inflation, more likely to hold steady then cut once geopolitical pressures ease. - Swan launches RealBitcoin Exchange (RBX), a first-to-market in-kind exchange converting Bitcoin ETF positions into actual self-custody Bitcoin while managing tax consequences.
Is the Bottom In? Bitcoin's Record ETF Streak and the AI Money Magnet
- Bitcoin is in a 13-day ETF outflow streak (longest since spot ETF launch) and briefly dipped to $59k before recovering to low $60k range. - Multiple on-chain signals suggest a potential cycle bottom: coins held at a loss now exceed coins in profit, price has touched the 200-week moving average at $61.3k, and long-term holder supply sits near an all-time high at 16.3 million coins. - Each bear market downturn is becoming milder; roughly 50% of addresses remain in profit at this cycle's low versus 35% in 2015, indicating improving market structure. - AI IPO supercycle (OpenAI, Anthropic, SpaceX) is the largest competing claim on risk capital Bitcoin has faced to date, pulling capital away from crypto assets. - JPMorgan, Bank of America, and Citi announced a private tokenized deposit network via The Clearing House—a closed bank ledger unrelated to Bitcoin or permissionless blockchains. - Better and Coinbase launched the first Fannie Mae-backed Bitcoin mortgage, allowing borrowers to pledge Bitcoin as collateral without selling and avoiding capital gains taxes.
SpaceX, Strategy, Strive, US Treasury: 4 Big Bitcoin Balance Sheets
- SpaceX Bitcoin Holdings: SpaceX filed its S-1 IPO disclosure revealing 18,712 Bitcoin at a $35,000 cost basis, making it the seventh largest public Bitcoin holder, just ahead of Coinbase. The company acquired these holdings in 2021–2022 and has held them since. - MicroStrategy Surpasses BlackRock: MicroStrategy purchased another $25 million in Bitcoin and now holds more Bitcoin than BlackRock's iBit ETF (the largest Bitcoin ETF). However, roughly 70% of iBit holdings belong to retail investors, whereas MicroStrategy's holdings belong to Michael Saylor directly. - Strive Bitcoin Daily Dividends: Strive launched a Bitcoin product offering 13% daily dividend yields while maintaining a $100 share price, marking the first daily-dividend Bitcoin product in US financial history. This is similar to 1971's money market fund innovation but applied to Bitcoin within a preferred stock wrapper. - Strategic Bitcoin Reserve Legislation: A bill with 17 co-sponsors was introduced to codify Trump's executive order and authorize the US Treasury to acquire up to 200,000 Bitcoin per year for five years, targeting 1 million total Bitcoin (roughly 5% of global supply). This is authorization only, not a directive, and passage within 12 months is uncertain. - Iran Uses Bitcoin for Maritime Insurance: Iran launched a digital insurance product for shipping cargo, settled in Bitcoin on the blockchain. This exemplifies how nation-states outside the Western financial system use Bitcoin to circumvent dollar-based sanctions and maintain sovereignty. - Market Context: Bitcoin's implied volatility has dropped to a seven-month low despite macro risks, as investor attention focuses heavily on AI. Long-term holder supply is approaching record highs, breaking a multi-year downtrend. The Fed signaled higher rates for longer; markets now price minimal chance of rate cuts in 2025.
Bitcoin is Winning the Debasement Trade. Quietly.
- JP Morgan report: Bitcoin is replacing gold in the "debasement trade," with Bitcoin ETF inflows positive over recent months while gold ETFs have struggled, particularly during geopolitical tensions like the Iran conflict. - US Strategic Bitcoin Reserve speculation: Officials including Patrick Witt (executive director of the President's Council of Advisors for Digital Assets) have hinted at significant announcements coming "in coming weeks" regarding a strategic Bitcoin reserve, with hints pointing toward summer 2025 or July 4th. - MicroStrategy's flexibility on Bitcoin sales: Michael Saylor reversed his "never sell" stance, stating the company will sell some Bitcoin opportunistically to cover Stretch product dividends (11.5% annually) and counter short sellers, while continuing net accumulation. - AI infrastructure and market concentration: Tech stocks (particularly Mag 7 plus AI-related companies) now represent ~40% of S&P 500 gains since April, comparable to historical bubbles in railroads and the dot-com era. Demand for AI is genuinely strong with 900M+ ChatGPT users, but energy bottlenecks could constrain growth. - Bitcoin technical signals: Five consecutive weekly higher lows suggest a potential bear market bottom; if Bitcoin holds above 74,000–75,000 this week, it would mark a historic pattern shift where Bitcoin didn't decline 80%+ from peak. - Bitcoiner personality profile: Bitcoiners are 10x overrepresented in the INTP/INTJ Myers-Briggs categories (50% vs. 5% general population) and score high on intuition and thinking; newer adopters show increasing diversity in personality types, suggesting broader adoption.