Category: Crypto

Bitcoin is closing out one of its most remarkable months in history, surging over $30,000 in November and marking a renewed bullish sentiment in the market. As we look ahead to December and beyond, investors are eager to understand whether Bitcoin’s momentum can sustain itself into 2025. With macroeconomic conditions, historical trends, and on-chain data aligning in Bitcoin’s favor, let’s analyze what’s happening and what it could mean for the future.

November’s Record-Breaking Performance

November 2024 wasn’t just any month for Bitcoin; it was historic. Bitcoin’s price rose from around $67,000 to nearly $100,000, an approximate 50% peak-to-trough increase, making it the best-performing month ever in terms of dollar increase. This rally rewarded long-term holders who endured months of consolidation after Bitcoin’s all-time high of $74,000 earlier in the year.

Figure 1: Bitcoin has rallied over $30,000 in November.

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Historically, Q4 is Bitcoin’s strongest quarter, and November has often been a standout month. December, which has also performed well in past bull cycles, presents a promising outlook. But as with any rally, some short-term cooling might be expected.

Figure 2: Q4 has historically been Bitcoin’s best-performing period.

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The Role of the Dollar and Global Liquidity

Interestingly, Bitcoin’s rise occurred against the backdrop of a strengthening U.S. Dollar Strength Index (DXY), a scenario that typically sees Bitcoin underperforming. Historically, Bitcoin and the DXY have maintained an inverse relationship: when the dollar strengthens, Bitcoin weakens, and vice versa.

Figure 3: Bitcoin rallied even as the strength of USD increased.

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Similarly, the Global M2 money supply, another key metric, has shown a slight contraction recently. Bitcoin has historically correlated positively with global liquidity; thus, its current performance defies expectations. If liquidity conditions improve in the coming months, this could act as a powerful tailwind for Bitcoin’s price.

Figure 4: Global M2 YoY chart showing liquidity contraction.

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Parallels to Past Bull Cycles

Bitcoin’s current trajectory is strikingly similar to past bull markets, particularly the 2016–2017 cycle. That cycle began with gradual price increases before breaking key resistance levels and entering an exponential growth phase.

In 2017, Bitcoin’s price broke out from a key technical level of around $1,000, leading to a parabolic rally that peaked at $20,000, a 20x increase. Similarly, the 2020-2021 cycle saw Bitcoin rise from $20,000 to nearly $70,000 after breaking above the crucial YoY Performance threshold.

Figure 5: Current BTC performance showing parallels to price prior to breaking previous major resistance levels.

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If Bitcoin can break out decisively from this historic level and above the key $100,000 resistance, we may witness a repeat of these explosive price movements as BTC enters its exponential phase of bullish price action.

Institutional Adoption and Accumulation

A key factor underpinning Bitcoin’s strength is the continued accumulation by institutions. Bitcoin ETFs are adding billions of dollars worth of BTC to their holdings, and corporations like MicroStrategy have doubled down on their Bitcoin strategy, now holding close to 400,000 BTC. Even with BTC rallying to new all-time highs, ‘smart money’ is scrambling to accumulate as much as possible to ensure they’re not left behind.

Figure 6: Institutions are not waiting for a retracement to accumulate BTC.

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This institutional demand indicates growing confidence in Bitcoin as a long-term store of value, even in volatile market conditions. Such accumulation also tightens the available supply, creating upward pressure on prices as demand increases.

Conclusion

While December has historically been a strong month for Bitcoin, short-term volatility could temper gains as the market digests November’s sharp rally. Although given the aggressive accumulation we’re witnessing from institutional participants anything is possible.

Longer-term, however, the outlook remains exceptionally bullish. The obvious level to watch is $100,000 as the next major milestone, which, if breached, could pave the way for a much larger rally in 2025. Bitcoin is entering one of its most exciting phases yet, with the stars seemingly aligning across macroeconomic, technical, and on-chain metrics.

For a more in-depth look into this topic, check out a recent YouTube video here: The BIGGEST Bitcoin Month EVER – So What Happens Next?

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Introduction

Scholars dispute whether it was Mahatma Gandhi who first said, “First they ignore you, then they laugh at you, then they fight you, then you win.” What cannot be disputed is that advocates of bitcoin have adopted the aphorism as their own.

Bitcoiners commonly prophesize that at some point, bitcoin will replace the US dollar as the world’s predominant store of value.[1] Less frequently discussed is the essential question of exactly how such a transition might take place and what risks may lie along the path, especially if the issuers of fiat currency choose to fight back against challenges to their monetary monopolies.

Will the US government and other Western governments willingly adapt to an emerging bitcoin standard, or will they take restrictive measures to prevent the replacement of fiat currencies? If bitcoin does indeed surpass the dollar as the world’s most widely used medium of exchange, will a transition from the dollar to bitcoin be peaceful and benign, like the evolution from Blockbuster Video to Netflix? Or will it be violent and destructive, as with Weimar Germany and the Great Depression? Or somewhere in between?

These questions are not merely of theoretical interest. If bitcoin is to emerge from the potentially turbulent times ahead, the bitcoin community will need to contemplate exactly how to make it resilient to these future scenarios and how best to bring about the most peaceful and least disruptive transition toward an economy based once again upon sound money.

In particular, we must take into account the vulnerabilities of those whose incomes and wealth are below the rich-nation median—those who, at current and future bitcoin prices, may fail to save enough to protect themselves from the economic challenges to come. “Have fun staying poor,” some Bitcoiners retort to their skeptics on social media. But in a real economic crisis, the poor will not be having fun. The failure of fiat-based fiscal policy will inflict the most harm on those who most depend on government spending for their economic security. In democratic societies, populists across the political spectrum will have powerful incentives to harvest the resentment of the non-bitcoin-owning majority against bitcoin-owning elites.

It is, of course, difficult to predict exactly how the US government will respond to a hypothetical fiscal and monetary collapse decades into the future. But it is possible to broadly group the potential scenarios in ways that are relatively negative, neutral, or positive for society as a whole. In this essay, I describe three such scenarios: A restrictive scenario, in which the US attempts to aggressively curtail economic liberties in an effort to suppress competition between the dollar and bitcoin; a palsied scenario, in which partisan, ideological, and special-interest conflicts paralyze the government and limit its ability to either improve America’s fiscal situation or prevent bitcoin’s rise; and a munificent scenario, in which the US assimilates bitcoin into its monetary system and returns to sound fiscal policy. I base these scenarios on the highly probable emergence of a fiscal and monetary crisis in the United States by 2044.

While these scenarios may also play out in other Western nations, I focus on the US here because the US dollar is today the world’s reserve currency, and the US government’s response to bitcoin is therefore of particular importance.

The Coming Fiscal and Monetary Crisis

We know enough about the fiscal trajectory of the United States to conclude that a major crisis is not merely possible but probable by 2044 if the federal government fails to change course. In 2024, for the first time in modern history, interest on the federal debt exceeded spending on national defense. The Congressional Budget Office (CBO)—the national legislature’s official, nonpartisan fiscal scorekeeper—predicts that by 2044, federal debt held by the public will be approximately $84 trillion, or 139 percent of gross domestic product. This represents an increase from $28 trillion, or 99 percent of GDP, in 2024.[2]

The CBO estimate makes several optimistic assumptions about the country’s fiscal situation in 2044. In its most recent projections, at the time of this publication, CBO assumes that the US economy will grow at a robust 3.6 percent per year in perpetuity, that the US government will still be able to borrow at a favorable 3.6 percent in 2044, and that Congress will not pass any laws to worsen the fiscal picture (as it did, for example, during the COVID-19 pandemic).[3]

The CBO understands that its projections are optimistic. In May 2024, it published an analysis of how several alternative economic scenarios would affect the debt-to-GDP ratio. One, in which interest rates increase annually by a rate of 5 basis points (0.05 percent) higher than the CBO’s baseline, would result in 2044 debt of $93 trillion, or 156 percent of GDP. Another scenario, in which federal tax revenue and spending rates as a share of GDP continue at historical levels (for example, as a result of the continuation of purportedly temporary tax breaks and spending programs), yields a 2044 debt of $118 trillion, or 203 percent of GDP.[4]

But combining multiple factors makes clear how truly dire the future has become. If we take the CBO’s higher interest rate scenario, in which interest rate growth is 5 basis points higher each year, and then layer onto that a gradual reduction in the GDP growth rate, such that nominal GDP growth in 2044 is 2.8 percent instead of 3.6 percent, the 2044 debt reaches $156 trillion, or 288 percent of GDP. By 2054, the debt would reach $441 trillion, or 635 percent of GDP (see figure 1).

Credit: Avik Roy, https://public.flourish.studio/visualisation/18398503/.

In this scenario of higher interest rate payments and lower economic growth, in 2044 the US government would pay $6.9 trillion in interest payments, representing nearly half of all federal tax revenue. But just as we cannot assume that economic growth will remain high over the next two decades, we cannot assume that the demand for US government debt will remain steady. At a certain point, the US will run out of other people’s money. Credit Suisse estimates that in 2022 there was $454 trillion of household wealth in the world, defined as the value of financial assets and real estate assets, net of debt.[5] Not all of that wealth is available to lend to the United States. Indeed, the share of US Treasury securities held by foreign and international investors has steadily declined since the 2008 financial crisis.[6] At the same time that demand for Treasuries is proportionally declining, the supply of Treasuries is steadily increasing (see figure 2).[7]

Credit: Avik Roy, https://public.flourish.studio/visualisation/7641395/.

In an unregulated bond market, this decline in demand paired with an increase in supply should lead to lower bond prices, signifying higher interest rates. The Federal Reserve, however, has intervened in the Treasury market to ensure that interest rates remain lower than they otherwise would. The Fed does this by printing new US dollars out of thin air and using them to buy the Treasury bonds that the broader market declines to purchase.[8] In effect, the Fed has decided that monetary inflation (that is, rapidly increasing the quantity of US dollars in circulation) is a more acceptable outcome than allowing interest rates to rise as the nation’s creditworthiness decreases.

This situation is not sustainable. Economist Paul Winfree, using a methodology developed by researchers at the International Monetary Fund,[9] estimates that “the federal government will begin running out of fiscal space, or its capacity to take on additional debt to deal with adverse events, within the next 15 years”—that is, by 2039. He further notes that “interest rates and potential [GDP] growth are the most important factors” that would affect his projections.[10]

For the purposes of our exercise, let us assume that the US will experience a fiscal and monetary failure by 2044—that is, a major economic crisis featuring a combination of rising interest rates (brought about by the lack of market interest in buying Treasuries) and high consumer price inflation (brought about by rapid monetary inflation). Over this twenty-year period, let us also imagine that bitcoin gradually increases in value, such that the liquidity of bitcoin, measured by its total market capitalization, is competitive with that of US Treasuries. Competitive liquidity is important because it means that large institutions, such as governments and multinational banks, can buy bitcoin at scale without excessively disrupting its price. Based on the behavior of conventional financial markets, I estimate that bitcoin will reach a state of competitive liquidity with Treasuries when its market capitalization equals roughly one-fifth of federal debt held by the public. Based on my $156 trillion estimate of federal debt in 2044, this amounts to approximately $31 trillion of bitcoin market cap, representing a price of $1.5 million per bitcoin—roughly twenty times the peak price of bitcoin reached in the first half of 2024.

This is far from an unrealistic scenario. Bitcoin appreciated by a comparable multiple from August 2017 to April 2021, a period of less than four years.[11] Bitcoin has appreciated by similar multiples on many other occasions previously.[12] And if anything, my projections of the growth of US federal debt are conservative. Let us, then, further imagine that by 2044, bitcoin is a well-understood, mainstream asset. A young man who turned eighteen in 2008 will celebrate his fifty-fourth birthday in 2044. By 2044, more than half of the US population will have coexisted with bitcoin for their entire adult lives. A robust ecosystem of financial products, including lending and borrowing, will by then likely have been well established atop the bitcoin base layer. Finally, let us speculate that in this scenario, inflation has reached 50 percent per annum. (This is somewhere between the over-100 percent inflation rates of Argentina and Turkey in 2023 and the nearly 15 percent inflation experienced by the US in 1980.)

In 2044, under these conditions, the US government will be in crisis. The rapid depreciation in the value of the dollar will have led to a sudden drop in demand for Treasury bonds, and there will not be an obvious way out. If Congress engages in extreme fiscal austerity—for example, by cutting spending on welfare and entitlement programs—its members will likely be thrown out of office. If the Federal Reserve raises interest rates enough to retain investor demand—say, above 30 percent—financial markets will crash, along with the credit-fueled economy, much as they did in 1929. But if the Fed allows inflation to rise even further, it will only accelerate the exit from Treasuries and the US dollar.

Under these circumstances, how might the US government respond? And how might it treat bitcoin? In what follows, I consider three scenarios. First, I contemplate a restrictive scenario, in which the US attempts to use coercive measures to prevent the use of bitcoin as a competitor to the dollar. Second, I discuss a palsied scenario, in which political divisions and economic weakness paralyze the US government, preventing it from taking meaningful steps for or against bitcoin. Finally, I consider a munificent scenario, in which the US eventually ties the value of the dollar to bitcoin, restoring the nation’s fiscal and monetary soundness. (See figure 3.)

Figure 3. Three US fiscal scenarios

1. The Restrictive Scenario

Throughout history, the most common response of government to a weakening currency has been to force its citizens to use and hold that currency instead of sounder alternatives, a phenomenon called financial repression. Governments also commonly deploy other economic restrictions, such as price controls, capital controls, and confiscatory taxation to maintain unsound fiscal and monetary policies.[13] It is possible—even probable—that the United States will respond similarly to the crisis to come.

Price Controls

In AD 301, the Roman Emperor Diocletian issued his Edictum de Pretiis Rerum Venalium—the Edict Concerning the Sale Price of Goods—which sought to address inflation caused by the long-running debasement of the Roman currency, the denarius, over a five-hundred-year period. Diocletian’s edict imposed price caps on over 1,200 goods and services.[14] These included wages, food, clothing, and shipping rates. Diocletian blamed rising prices not on the Roman Empire’s extravagant spending but on “unprincipled and licentious persons [who] think greed has a certain sort of obligation . . . in ripping up the fortunes of all.”[15]

Actions of this sort echo throughout history until the modern day. In 1971, US President Richard Nixon responded to the imminent collapse of US gold reserves by unilaterally destroying the dollar’s peg to one-thirty-fifth of an ounce of gold and by ordering a ninety-day freeze on “all prices and wages throughout the United States.”[16] Nixon, like Diocletian and so many other rulers in between, did not blame his government’s fiscal or monetary policies for his country’s predicament but rather the “international money speculators” who “have been waging an all-out war on the American dollar.”[17]

Even mainstream economists have convincingly shown that price controls on goods and services do not work.[18] This is because producers cease production if they are forced to sell their goods and services at a loss, which leads to shortages. But price controls remain a constant temptation for politicians since many consumers believe that price controls will protect them from inflation (at least in the short term). Since 2008, the Federal Reserve has imposed an increasingly aggressive set of controls on what economic historian James Grant calls “the most important price in capital markets”—that is, the price of money as reflected by interest rates.[19] As explained above, the Federal Reserve can effectively control interest rates on Treasury securities by acting as the dominant buyer and seller of those securities on the open market. (When bond prices rise because of more buying than selling, the interest rates implied by their prices decline, and vice versa.) The interest rates used by financial institutions and consumers, in turn, are heavily influenced by the interest rates on Treasury bonds, bills, and notes. Prior to the 2008 financial crisis, the Fed used this power narrowly, on a subset of short-term Treasury securities. But afterward, under Chairman Ben Bernanke, the Fed became far more aggressive in using its power to control interest rates throughout the economy.[20]

Capital Controls

Price controls are only one tool used by governments to control monetary crises. Another is capital controls, which hamper the exchange of a local currency for another currency or reserve asset.

In 1933, during the Great Depression, President Franklin Delano Roosevelt (popularly known as FDR) deployed a First World War–era statute to prohibit Americans from fleeing the dollar for gold. His Executive Order 6102 prohibited Americans from holding gold coin, gold bullion, and gold certificates and required people to surrender their gold to the US government in exchange for $20.67 per troy ounce.[21] Nine months later, Congress devalued the dollar by changing the price of a troy ounce to $35.00, effectively forcing Americans to accept an immediate 41 percent devaluation of their savings while preventing them from escaping that devaluation by using a superior store of value.[22]

Capital controls are far from a historical relic. Argentina has historically prohibited its citizens from exchanging more than $200 worth of Argentine pesos for dollars per month, ostensibly to slow the decline of the value of the peso.[23] China imposes strict capital controls on its citizens—essentially requiring government approval for any exchange of foreign currency—to prevent capital from leaving China for other jurisdictions.[24]

Increasingly, mainstream economists see these modern examples of capital controls as a success. The International Monetary Fund, born out of the 1944 Bretton Woods Agreement, had long expressed opposition to capital controls, largely at the behest of the United States, which benefits from global use of the US dollar. But in 2022, the International Monetary Fund revised its “institutional view” of capital controls, declaring them an appropriate tool for “managing . . . risks in a way that preserves macroeconomic and financial stability.”[25]

In my restrictive 2044 scenario, the US uses capital controls to prevent Americans from fleeing the dollar for bitcoin. The federal government could achieve this in several ways:

Announcing a purportedly temporary, but ultimately permanent, suspension of the exchange of dollars for bitcoin and forcing the conversion of all bitcoin assets held in cryptocurrency exchanges into dollars at a fixed exchange rate. (Based on my predicted market price at which bitcoin’s liquidity is competitive with Treasuries, that would be approximately $1.5 million per bitcoin, but there is no guarantee that a forced conversion would occur at market rates.)Barring businesses under US jurisdiction from holding bitcoin on their balance sheets and from accepting bitcoin as payment.Liquidating bitcoin exchange-traded funds (ETFs) by forcing them to convert their holdings to US dollars at a fixed exchange rate.Requiring bitcoin custodians to sell their bitcoin to the US government at a fixed exchange rate.Requiring those who self-custody their bitcoin to sell it to the government at a fixed exchange rate.Introducing a central bank digital currency to fully surveil all US dollar transactions and ensure that none are used to purchase bitcoin.

The US government would be unlikely to execute all of these strategies successfully. In particular, the US will be unable to force all those who self-custody bitcoin to surrender their private keys. But many law-abiding citizens would likely comply with such a directive. This would be a pyrrhic victory for the government, however: The imposition of capital controls would lead to a further decline in confidence in the US dollar, and the cost to the US government of purchasing all the bitcoin custodied by American citizens and residents could exceed $10 trillion, further weakening the US fiscal situation. Nonetheless, the government in the restrictive scenario will have concluded that these are the least bad options.

Confiscatory Taxation

The US government could also use tax policy to restrict the utility of bitcoin and thereby curtail its adoption.

In a world where one bitcoin equals $1.5 million, many of the wealthiest people in the United States will be early bitcoin adopters. Technology entrepreneur Balaji Srinivasan has estimated that at a price of $1 million per bitcoin, the number of bitcoin billionaires will begin to exceed the number of fiat billionaires.[26] This does not imply, however, that the distribution of wealth among bitcoin owners would be more equal than the distribution of wealth among owners of fiat currency today.

Fewer than 2 percent of all bitcoin addresses contain more than one bitcoin, and fewer than 0.3 percent contain more than ten bitcoin. Addresses within that top 0.3 percent own more than 82 percent of all the bitcoin in existence.[27] (See figure 4.) Given that many individuals control multiple wallets, and even allowing for the fact that some of the largest bitcoin addresses belong to cryptocurrency exchanges, these figures likely underestimate the amount of bitcoin wealth concentration. They compare unfavorably to US fiat wealth distribution; in 2019, the top 1 percent held merely 34 percent of all fiat-denominated wealth in the United States.[28]

If bitcoin ownership remains similarly distributed in 2044, those left behind by this monetary revolution—including disenfranchised elites from the previous era—will not go down quietly. Many will decry bitcoin wealth inequality as driven by anti-American speculators and seek to enact policies that restrict the economic power of bitcoin owners.

Credit: Avik Roy, https://public.flourish.studio/visualisation/18651414/.

In 2021, rumors circulated that Treasury Secretary Janet Yellen had proposed to President Joe Biden the institution of an 80 percent tax on cryptocurrency capital gains, a steep increase from the current top long-term capital gains tax rate of 23.8 percent.[29] In 2022, President Biden, building on a proposal by Massachusetts Senator Elizabeth Warren, suggested taxing unrealized capital gains—that is, on-paper increases in the value of assets that the holder has not yet sold.[30] This would be an unprecedented move since it would require people to pay taxes on earnings they have not yet realized.

It has long been argued that taxing unrealized capital gains would violate the US Constitution because unrealized gains do not meet the legal definition of income, and Article I of the Constitution requires that non-income taxes must be levied in proportion to states’ respective populations.[31] A recent case before the Supreme Court, Moore v. United States, gave the court the opportunity to make clear its position on the question; it declined to do so.[32] As a result, it remains eminently possible that a future Congress, supported by a future Supreme Court, will assent to the taxing of unrealized capital gains, and cryptocurrency gains specifically.

Moreover, a presidential administration that does not like the constitutional interpretations of an existing Supreme Court could simply pack the court to ensure more favorable rulings. The FDR administration threatened to do precisely that during the 1930s. The conservative Supreme Court of that era had routinely ruled that FDR’s economically interventionist policies violated the Constitution. In 1937, Roosevelt responded by threatening to appoint six new justices to the Supreme Court in addition to the existing nine. While he was ultimately forced to withdraw his court-packing proposal, the Supreme Court was sufficiently intimidated and began approving New Deal legislation at a rapid pace thereafter.[33]

A unique feature of US tax policy is that US citizens who live abroad are still required to pay US income and capital gains taxes, along with the taxes they pay in the country of their residence. (In all other advanced economies, expatriates only pay taxes once, based on where they live. For example, a French national living and working in Belgium pays Belgian tax rates, not French tax rates, whereas an American in Belgium pays both Belgian and US taxes.) This creates a perverse incentive for Americans living abroad to renounce their US citizenship. Every year, a few thousand Americans do so. However, they must first seek approval from a US embassy on foreign soil and pay taxes on all unrealized capital gains. In a restrictive scenario, in which the US Treasury is starved for revenue, it is easy to imagine the government suspending the ability of Americans to renounce their citizenship, ensuring that expatriates’ income remains taxable regardless of where they live.

Right-Wing Financial Restrictions

While many of the restrictive policies described above have been proposed by politicians affiliated with the Democratic Party, Republican Party officials and representatives in 2044 may be just as willing to amplify populist resentment of the bitcoin elite. The United States is already home to a vocal movement of both American and European intellectuals building a new ideology broadly known as national conservatism, in which the suppression of individual rights is acceptable in the name of the national interest.[34] For example, some national conservatives advocate monetary and tax policies that protect the US dollar against bitcoin, even at the expense of individual property rights.[35]

The USA PATRIOT Act was passed by overwhelming bipartisan congressional majorities weeks after the terrorist attacks of September 11, 2001. It was signed into law by Republican President George W. Bush and included numerous provisions designed to combat the financing of international terrorism and criminal activity, especially by strengthening anti-money-laundering and know-your-customer rules, as well as reporting requirements for foreign bank account holders.[36]

The PATRIOT Act may have helped reduce the risk of terrorism against the US, but it has achieved this at a significant cost to economic freedom, especially for American expatriates and others who use non-US bank accounts for personal or business reasons. Just as FDR used a law from the First World War to confiscate Americans’ gold holdings, in 2044 a restrictive government of either party will find many of the PATRIOT Act’s tools useful to clamp down on bitcoin ownership and usage.

The End of America’s Exorbitant Privilege

Bitcoin is remarkably resilient in its design; its decentralized network will likely continue to function well despite restrictive measures adopted by governments against its use. Today, for instance, a considerable amount of bitcoin trading volume and mining activity occurs in China, despite that country’s prohibition of it, because of the use of virtual private networks (VPNs) and other tools that disguise a user’s geographic location.[37]

If we assume that half of the world’s bitcoin is owned by Americans and further assume that 80 percent of American bitcoin is held by early adopters and other large holders, it is likely that most of that 80 percent is already protected against confiscation through self-custody and offshore contingency planning. Capital controls and restrictions could collapse institutional bitcoin trading volume in the US, but most of this volume would likely move to decentralized exchanges or to jurisdictions outside of the US with less restrictive policies.

A fiscal failure of the US in 2044 will be necessarily accompanied by a reduction in US military power because such power is predicated on enormous levels of deficit-financed defense spending. Hence, the US government will not be as capable in 2044 as it is today of imposing its economic will on other countries. Smaller nations, such as Singapore and El Salvador, could choose to welcome the bitcoin-based capital that the US turns away.[38] The mass departure of bitcoin-based wealth from the US would, of course, make America poorer and further reduce the ability of the US government to fund its spending obligations.

Furthermore, US restriction of bitcoin’s utility will not be enough to convince foreign investors that US Treasuries are worth holding. The main way the US government could make investing in US bonds more attractive would be for the Federal Reserve to dramatically raise interest rates because higher interest rates equate to higher yields on Treasury securities. But this would in turn raise the cost of financing the federal debt, accelerating the US fiscal crisis.

Eventually, foreign investors may require the US to denominate its bonds in bitcoin, or in a foreign currency backed by bitcoin, as a precondition for further investment. This momentous change would end what former French Finance Minister and President Valéry Giscard d’Estaing famously called America’s privilège exorbitant: Its long-standing ability to borrow in its own currency, which has enabled the US to decrease the value of its debts by decreasing the value of the dollar.[39]

If and when US bonds are denominated in bitcoin, the United States will be forced to borrow money the way other countries do: In a currency not of its own making. Under a bitcoin standard, future devaluations of the US dollar would increase, rather than decrease, the value of America’s obligations to its creditors. America’s creditors—holders of US government bonds—would then be in a position to demand various austerity measures, such as requiring that the US close its budget deficits through a combination of large tax increases and spending cuts to Medicare, Social Security, national defense, and other federal programs.

A substantial decline in America’s ability to fund its military would have profound geopolitical implications. A century ago, when the United States eclipsed the United Kingdom as the world’s leading power, the transition was relatively benign. We have no assurances that a future transition will work the same way. Historically, multipolar environments with competing great powers are frequently recipes for world wars.[40]

2. The Palsied Scenario

In medicine, a palsy is a form of paralysis accompanied by involuntary tremors. This term accurately describes my second scenario, in which the macroeconomic tremors accompanying bitcoin’s rise are paired in the US with partisan polarization, bureaucratic conflict, and diminishing American power. In the palsied scenario, the US is unable to act aggressively against bitcoin, but neither is it able to get its fiscal house in order.

Today, partisan polarization in the US is at a modern high.[41] Republicans and Democrats are increasingly sorted by cultural factors: Republicans are disproportionately rural, high school–educated, and white; Democrats are more urban, college-educated, and nonwhite. Independents, who now make up a plurality of the electorate, are forced to choose among the candidates selected for general elections by Republican and Democratic base voters in partisan primaries.[42]

While we can hope that these trends reverse over time, there are reasons to believe they will not. Among other factors, the accelerating development of software capabilities that manipulate behavior at scale, including artificial intelligence—for all of their promise—brings substantial risks in the political sphere. The potential for deepfakes and other forms of mass deception could reduce trust in political parties, elections, and government institutions while further fragmenting the US political environment into smaller subcultural communities. The cumulative effect of this fragmentation may be the inability to achieve consensus on most issues, let alone controversial ones such as reducing federal entitlement spending.

In the palsied scenario, the US government is unable in 2044 to enact most of the restrictive measures described in the previous section. For example, paralysis could prevent Congress and the Federal Reserve from developing a central bank digital currency because of adamant opposition from activists but especially from depository banking institutions, who correctly view such a currency as a mortal threat to their business models. (A retail central bank digital currency obviates the need for individuals and businesses to deposit their money at banks because they could instead hold accounts directly at the Federal Reserve.)[43]

Similarly, in the palsied scenario, Congress would be unable in 2044 to enact confiscatory taxes against bitcoin holders and the wealthy more broadly. Congress would fail to enact these policies for the same reasons it has failed to date: Concerns about such taxes’ constitutionality; opposition from powerful economic interests; and recognition that direct attacks on bitcoin-based capital will drive that capital offshore to the detriment of the United States.

The palsied scenario is no libertarian utopia, however. In such a scenario, the federal government would retain the ability to regulate centralized exchanges, ETFs, and other financial services that facilitate the conversion of US dollars to bitcoin. If a majority of US-held bitcoin becomes owned through ETFs, the federal regulatory agencies would maintain the ability to limit the conversion of bitcoin ETF securities into actual bitcoin, heavily restricting the movement of capital out of US-controlled products.

Most importantly, however, partisan paralysis means that Congress will be unable to solve America’s fiscal crisis. Congress will lack the votes for entitlement reform or other spending cuts. And by 2044, federal spending will continue to increase at such a rapid clip that no amount of tax revenue will be able to keep pace.

Under the palsied scenario, Americans who hold bitcoin will be better able to protect their savings from government intrusion than under the restrictive scenario. They will not have to flee the country to own bitcoin, for example. This suggests that a significant proportion of the bitcoin community—both individuals and entrepreneurs—will remain in the United States and likely emerge as an economically powerful constituency. But the institutional environment in which they live and work will be frozen in dysfunction. Anti-bitcoin policy makers and pro-bitcoin political donors may end up in a stalemate.

As in the restrictive scenario, in the palsied scenario the failure of the dollar-denominated Treasury bond market could force the United States to eventually get its fiscal house in order. In both cases, creditors may very well demand that the Treasury Department issue debt securities that are collateralized by hard assets. By 2044, bitcoin will have over three decades of validation as a preeminent store of value, and the American bitcoin community will be well positioned to help the US adapt to its new circumstances.

3. The Munificent Scenario

The munificent scenario is both the least intuitive and the most optimistic scenario for America in 2044. In the munificent scenario, US policy makers respond to the fiscal and monetary crisis of 2044 by actively moving to remain ahead of events, instead of being compelled to react to forces ostensibly outside of their control.

The munificent scenario involves the US doing in 2044 something similar to what El Salvador did in 2019 or Argentina did in 2023 when those countries elected Nayib Bukele and Javier Milei to their presidencies, respectively. Though Bukele and Milei are different leaders with somewhat differing philosophies, they have both explicitly expressed support for bitcoin, with Bukele establishing bitcoin as legal tender in El Salvador[44] and Milei pledging to replace the Argentine peso with the dollar[45] while legalizing bitcoin.[46] Milei has also used his presidential authority to significantly reduce Argentine public expenditures in inflation-adjusted terms, thereby achieving a primary budget surplus.[47]

Imagine that in November 2044, the US elects a dynamic, pro-bitcoin president who pledges to adopt bitcoin as legal tender alongside the dollar (à la Bukele) and works with Treasury bondholders to reduce the US debt burden (à la Milei). One could imagine a grand fiscal bargain in which Treasury bondholders accept a one-time, partial default in exchange for Medicare and Social Security reform and an agreement to back the US dollar with bitcoin going forward, at a peg of sixty-seven satoshis to the dollar (that is, $1.5 million per bitcoin). Bondholders will likely be glad to accept a partial default in exchange for significant reforms that put the US on a sustainable fiscal and monetary footing for the future.

Such reforms need not punish the elderly and other vulnerable populations. A growing body of research suggests that fiscal solvency need not be at odds with social welfare. For example, the Foundation for Research on Equal Opportunity published a health care reform plan that was introduced by Arkansas Rep. Bruce Westerman and Indiana Sen. Mike Braun in 2020 as the Fair Care Act. The plan would reduce the deficit by over $10 trillion in a thirty-year period and make the health care system fiscally solvent while achieving universal coverage.[48] The bill achieves this in two primary ways: First, it means-tests health care subsidies so that taxpayers are only funding the cost of care for the poor and the middle class, not the wealthy. Second, it reduces the cost of subsidizing health care by incentivizing competition and innovation. In these ways, the proposal increases the economic security of lower-income Americans while also increasing the fiscal sustainability of the federal government.

Similarly, the US could reform Social Security by transitioning the Social Security trust fund from Treasury bonds to bitcoin (or bitcoin-denominated Treasury bonds).[49] Such an idea is less practical in the era of high volatility that has characterized bitcoin’s early history, but by 2044 the bitcoin-dollar exchange rate is likely to be more stable. The post-ETF maturation of bitcoin trading, as large financial institutions introduce traditional hedging practices to the asset, has significantly reduced bitcoin’s dollar-denominated price volatility. Soon, bitcoin’s price volatility may resemble that of a stable asset such as gold. By collateralizing Social Security with bitcoin, the US could ensure that Social Security lives up to its name, providing actual economic security to American retirees in their golden years.

The munificent scenario has additional benefits. The US government, by directly aligning itself with bitcoin’s monetary principles, could help make the twenty-first century another American one. It is highly unlikely that America’s primary geopolitical rival, China, will legalize a currency such as bitcoin that it cannot control. America’s culture of entrepreneurship, married with sound money, could lead to an unprecedented era of economic growth and prosperity for the United States. But this would require US leaders to place the nation’s long-term interests ahead of short-term political temptations.

The Satoshi Papers is now available for pre-order in the Bitcoin Magazine Store.

[1] A widely held view among academic economists is that for something to be considered money, it must serve as a store of value, a medium of exchange, and a unit of account. These features of money are not binary, but rather reside on a continuum; some forms of money are better stores of value, and others might be more widely used in trade and commerce. Bitcoin’s emergence as the premier store of value is the most significant development because this is what fiat currencies do most poorly. See Friedrich Hayek, Denationalisation of Money, 2nd ed. (London: Profile Books, 1977), 56–57.

[2] Congressional Budget Office, “The Long-Term Budget Outlook: 2024 to 2054,” March 20, 2024, https://www.cbo.gov/publication/59711.

[3] Congressional Budget Office, “Long-Term Economic Projections,” March 2024, https://www.cbo.gov/system/files/2024-03/57054-2024-03-LTBO-econ.xlsx.

[4] Congressional Budget Office, “The Long-Term Budget Outlook Under Alternative Scenarios for the Economy and the Budget,” May 21, 2024, https://www.cbo.gov/publication/60169.

[5] Credit Suisse AG, “Credit Suisse Global Wealth Report 2023,” accessed June 16, 2024, https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html.

[6] Avik Roy, “Bitcoin and the U.S. Fiscal Reckoning,” National Affairs, Fall 2021. https://nationalaffairs.com/publications/detail/bitcoin-and-the-us-fiscal-reckoning.

[7] Federal Reserve Bank of St. Louis, “Federal Debt Held by Federal Reserve Banks,” accessed June 16, 2024, https://fred.stlouisfed.org/graph/?g=jwFo.

[8] Lowell R. Ricketts, “Quantitative Easing Explained,” Federal Reserve Bank of St. Louis, accessed June 16, 2024, https://files.stlouisfed.org/files/htdocs/pageone-economics/uploads/newsletter/2011/201104.pdf.

[9] Atish R. Ghosh et al., “Fiscal Fatigue, Fiscal Space and Debt Sustainability in Advanced Economies,” Economic Journal 123, no. 566 (February 2013): F4–F30, https://onlinelibrary.wiley.com/doi/full/10.1111/ecoj.12010.

[10] Paul Winfree, “The Looming Debt Spiral: Analyzing the Erosion of U.S. Fiscal Space,” March 5, 2024, https://epicforamerica.org/wp-content/uploads/2024/03/Fiscal-Space-March-2024.pdf.

[11] Coinmarketcap.com, “Bitcoin Price Today,” accessed June 16, 2024, https://coinmarketcap.com/currencies/bitcoin/.

[12] Coinmarketcap.com, “Bitcoin Price Today.”

[13] Ray Dalio, Principles for Navigating Big Debt Crises (Westport, CT: Bridgewater, 2018).

[14] When the denarius was introduced circa 211 BC, it contained around 4.5 grams of silver. In AD 64, the Roman Emperor Nero reduced the amount of silver to 3.5 grams. By the time of Diocletian’s reign, there was almost no silver left in the denarius, and the currency was abolished. For further reading on hyperinflation in ancient Rome, see H. J. Haskell, The New Deal in Old Rome: How Government in the Ancient World Tried to Deal With Modern Problems (New York: Alfred A. Knopf, 1947).

[15] Antony Kropff, “An English Translation of the Edict on Maximum Prices, Also Known as the Price Edict of Diocletian,” April 27, 2016, https://kark.uib.no/antikk/dias/priceedict.pdf.

[16] Richard M. Nixon, “Address to the Nation Outlining a New Economic Policy,” August 15, 1971, https://www.presidency.ucsb.edu/documents/address-the-nation-outlining-new-economic-policy-the-challenge-peace.

[17] Richard M. Nixon, “Address to the Nation.”

[18] Vernon Smith and Arlington Williams, “On Nonbinding Price Controls in a Competitive Market,” American Economic Review 71: 467–74.

[19] Swen Lorenz, “3 Lessons I Learned From Jim Grant, the Wall Street Cult Hero,” accessed July 5, 2024, https://www.undervalued-shares.com/weekly-dispatches/3-lessons-i-learned-from-jim-grant-the-wall-street-cult-hero/.

[20] Avik Roy, “Bitcoin and the U.S. Fiscal Reckoning,” National Affairs, Fall 2021.

[21] US Congress, “The Gold Standard Act of 1900,” accessed June 16, 2024, https://www2.econ.iastate.edu/classes/econ355/choi/1900mar14.html.

[22] Gary Richardson, Alejandro Komai, and Michael Gou, “Gold Reserve Act of 1934,” accessed June 16, 2024, https://www.federalreservehistory.org/essays/gold-reserve-act.

[23] Fitch Ratings, “Overview of Argentine Capital Controls (History and Recent Impact on Corporates),” April 6, 2021, https://www.fitchratings.com/research/corporate-finance/overview-of-argentine-capital-controls-history-recent-impact-on-corporates-06-04-2021.

[24] Robert Kahn, “The Case for Chinese Capital Controls,” Council on Foreign Relations, February 2016, https://www.cfr.org/sites/default/files/pdf/2016/02/February%202016%20GEM.pdf.

[25] International Monetary Fund, “Executive Board Concludes the Review of the Institutional View on the Liberalization and Management of Capital Flows,” press release, March 30, 2022. https://www.imf.org/en/News/Articles/2022/03/30/pr2297-executive-board-concludes-the-review-of-the-institutional-view-on-capital-flows.

[26] Balaji Srinivasan, “The Billionaire Flippening,” February 5, 2021, https://balajis.com/p/the-billionaire-flippening.

[27] “Bitcoin Rich List,” accessed July 7, 2024, https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html.

[28] Congressional Budget Office, “Trends in the Distribution of Family Wealth, 1989 to 2019,” September 27, 2022, https://www.cbo.gov/publication/57598.

[29] William White, “80% Crypto Capital Gains Tax? 15 Things We Know About the Rumors,” Yahoo! Finance, April 23, 2021, https://finance.yahoo.com/news/80-crypto-capital-gains-tax-153027836.html#.

[30] Garrett Watson and Erica York, “Proposed Minimum Tax on Billionaire Capital Gains Takes Tax Code in Wrong Direction,” Tax Foundation, March 30, 2022, https://taxfoundation.org/blog/biden-billionaire-tax-unrealized-capital-gains/.

[31] Steven Calabresi, “Taxes on Wealth and on Unrealized Capital Gains Are Unconstitutional,” Reason, October 11, 2023, https://reason.com/volokh/2023/10/11/taxes-on-wealth-and-on-unrealized-capital-gains-are-unconstitutional/.

[32] Wall Street Journal Editorial Board, “A Supreme Court Mistake on Wealth Taxes,” The Wall Street Journal, June 20, 2024, https://www.wsj.com/articles/moore-v-u-s-supreme-court-mandatory-repatriation-tax-brett-kavanaugh-amy-coney-barrett-23d99510.

[33] Charles Lipson, “Packing the Court, Then and Now,” Discourse, April 21, 2021, https://www.discoursemagazine.com/p/packing-the-court-then-and-now.

[34] Avik Roy, “Freedom Conservatism Is Different, and That Matters,” National Review, July 18, 2023, https://www.nationalreview.com/2023/07/freedom-conservatism-is-different-and-that-matters/.

[35] Peter Ryan, “Is Bitcoin ‘America First’?” The American Conservative, February 13, 2024, https://www.theamericanconservative.com/is-bitcoin-america-first/.

[36] USA PATRIOT Act of 2001, Congress.gov, accessed June 16, 2024, https://www.congress.gov/107/plaws/publ56/PLAW-107publ56.htm.

[37] Ryan Browne, “Bitcoin Production Roars Back in China Despite Beijing’s Ban on Crypto Mining,” CNBC.com, May 18, 2022, https://www.cnbc.com/2022/05/18/china-is-second-biggest-bitcoin-mining-hub-as-miners-go-underground.html.

[38] Some bitcoin-based wealth may be denominated in fiat currencies, such as equity stakes in digital-asset exchanges such as Coinbase and bitcoin-mining companies such as Marathon Digital Holdings.

[39] Barry Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System (Oxford: Oxford University Press, 2011).

[40] Donald Kagan, On the Origins of War: And the Preservation of Peace (New York: Anchor, 1996).

[41] Ezra Klein, Why We’re Polarized (New York: Simon & Schuster, 2020).

[42] Nick Troiano, The Primary Solution: Rescuing Our Democracy from the Fringes (New York: Simon & Schuster, 2024).

[43] Avik Roy, “There’s No Such Thing as an ‘American-Style’ Central Bank Digital Currency,” Forbes, April 12, 2023, https://www.forbes.com/sites/theapothecary/2023/04/12/theres-no-such-thing-as-an-american-style-central-bank-digital-currency/.

[44] Avik Roy, “El Salvador Enacts Bitcoin Law, Ushering In New Era Of Global Monetary Inclusion,” Forbes, June 9, 2021, https://www.forbes.com/sites/theapothecary/2021/06/09/el-salvador-enacts-bitcoin-law-ushering-in-new-era-of-global-monetary-inclusion/.

[45] Ryan Dubé and Santiago Pérez, “Argentina’s New President Wants to Adopt the U.S. Dollar as the National Currency,” The Wall Street Journal, November 20, 2023, https://www.wsj.com/world/americas/argentinas-new-president-wants-to-adopt-the-u-s-dollar-as-national-currency-86da3444.

[46] On Twitter/X, Milei’s foreign minister and economic adviser Diana Mondino (@DianaMondino, December 21, 2023) declared, “We ratify and confirm that in Argentina contracts can be agreed in Bitcoin.”

[47] “The spending cuts that allowed Milei to turn around Argentina’s economy,” Buenos Aires Times, April 23, 2024, https://www.batimes.com.ar/news/economy/the-expenses-cut-by-milei-to-achieve-a-fiscal-surplus.phtml.

[48] Avik Roy, “The Fair Care Act of 2020: Market-Based Universal Coverage,” Foundation for Research on Equal Opportunity, October 12, 2020, https://freopp.org/the-fair-care-act-of-2020-market-based-universal-coverage-cc4caa4125ae.

[49] Under 2024 forecasts, the Social Security Trust Fund will be fully depleted by 2033. I assume, for the purposes of my scenario analysis, that Congress finds a short-term solution before then that postpones Social Security’s reckoning past 2044.

Bitcoin consistently captures headlines, and over the years, November 28 has emerged as a pivotal date in its history. On this day in 2013 and 2017, Bitcoin surged to new ATHs, sparking global interest and investor enthusiasm. As we approach November 28, 2024, the question arises: Can Bitcoin replicate its past performance and soar beyond $100,000?

A Look Back: November 28, 2013, and 2017

November 28, 2013: Bitcoin celebrated its first ATH by surpassing $1,000. This milestone was the result of a rapid ascent fueled by growing awareness, increased adoption, and excitement surrounding the disruptive potential of Bitcoin. At the time, Bitcoin was still a niche asset, but crossing the $1,000 barrier established it as a serious contender in the financial landscape, akin to a digital gold rush.

November 28, 2017: Four years later, Bitcoin shattered the $10,000 mark, a significant psychological and market-defining milestone. The 2017 rally was driven by broader adoption, the Initial Coin Offering (ICO) boom, and rising interest from retail investors. By December, Bitcoin’s price peaked near $20,000, concluding an extraordinary year that left a lasting imprint on the market.

These dates have become legendary in Bitcoin lore, symbolizing moments when Bitcoin exceeded expectations and overcame skeptics.

Why November 28? Understanding the Historical Context

The prominence of November 28 in Bitcoin’s history is no mere coincidence. This date is intrinsically linked to Bitcoin’s four-year halving cycle, an event where the block reward miners receive is reduced by half. The first halving occurred on November 28, 2012, initiating a pattern that correlates with Bitcoin’s price cycles. Halvings decrease the rate at which new Bitcoins enter circulation, enhancing scarcity and often sparking bullish price movements in subsequent years. The 2012 halving set the stage for the 2013 ATH, while the 2016 halving paved the way for the 2017 bull run.

With the most recent halving having taken place in April 2024, similar market dynamics are expected to unfold, leading to speculation that November 28, 2024, could witness another ATH.

What Makes 2024 Special?

Several factors contribute to the optimism surrounding a potential ATH on November 28, 2024:

Post-Halving Momentum

Historically, Bitcoin experiences significant price growth in the 12–18 months following a halving. With the April 2024 halving now behind us, the anticipated supply shock has already begun to influence the market. Early indicators suggest a steady increase in demand, setting the stage for a potential record-breaking rally as we approach the end of the year.

Increased Institutional Adoption

Since 2017, the investment landscape has evolved with major institutional players like BlackRock and Fidelity entering the Bitcoin market. The introduction of spot Bitcoin ETFs has injected billions of dollars in new liquidity, potentially propelling prices to unprecedented levels. In 2024, continued institutional interest and the launch of additional financial products further drove Bitcoin’s adoption and price.

Geopolitical and Economic Factors

In an era marked by inflation, currency devaluation, and banking instability, Bitcoin’s appeal as a store of value has intensified. Enhanced global adoption could further amplify its upward trajectory, positioning Bitcoin as a hedge against economic uncertainties. Recent geopolitical tensions and economic policies worldwide may also contribute to increased investor interest in Bitcoin as a safe-haven asset.

Presidential Support

Adding to this momentum is the election of Donald Trump as the first pro-Bitcoin U.S. President. President Trump’s administration has been notably supportive of Bitcoin, implementing policies that favor adoption and integration. His pro-Bitcoin stance has further legitimized Bitcoin in the eyes of many investors and institutions, fostering an environment conducive to Bitcoin’s growth.

Corporate Treasury Adoption

Another pivotal development in 2024 is the increasing trend of corporations adopting Bitcoin as part of their treasury reserves. Leading companies across various industries are diversifying their assets by allocating a portion of their treasury to Bitcoin. This shift not only enhances corporate financial strategies but also drives demand for Bitcoin, contributing to its upward price trajectory. Corporate adoption serves as a strong endorsement of Bitcoin’s viability as a long-term investment and store of value.

Market Sentiment

Bitcoin thrives on narratives and investor sentiment. The aspiration to reach $100,000 aligns with the prevailing optimism and excitement as November 28, 2024, approaches. Social media discussions, technical analysis, and psychological milestones all contribute to building momentum. The community’s belief in Bitcoin’s potential plays a crucial role in driving its price forward.

Challenges to Consider

Despite the promising factors, reaching $100,000 by November 28, 2024, is not assured. Potential hurdles include:

Macroeconomic Uncertainties: Global economic instability could impact investor confidence and market dynamics.Regulatory Challenges: Increasing regulatory scrutiny and potential restrictions could hinder Bitcoin’s growth.Market Volatility: Bitcoin remains inherently volatile, and unforeseen market shifts could disrupt upward momentum.Past Performance Limitations: Historical trends do not guarantee future results, and the market remains unpredictable.

Will History Repeat Itself?

Bitcoin’s historical performance on November 28 highlights its cyclical nature, offering a tantalizing glimpse into potential future trends. However, whether the 2024 pattern will continue remains uncertain. Achieving a $100,000 ATH would not only demonstrate Bitcoin’s resilience but also reinforce its status as a global financial asset.

As November 28, 2024, approaches, one thing is clear: Bitcoin’s journey is ongoing. Whether it reaches $100K or surpasses it, this date could once again become a landmark moment in the annals of the world’s first digital currency.

What do you think? Will Bitcoin hit a new ATH on November 28, 2024?

Too much of the discussions around Bitcoin in the last year have been focused on how to use it. Or how it should be used. The entire Ordinals/Inscriptions mania over the last year has created a mob of Bitcoiners essentially shrieking like children about how other users decide to make use of their own bitcoin.

This is completely detached and disconnected from the entire philosophy of Bitcoin’s design in the first place: to be an open access permissionless system. To be something you can’t be stopped from using. So much of the “technical discussions” over the last year beyond the developer community have focused heavily on technical mechanisms that can be used to stop other Bitcoin users from using Bitcoin.

It is mind boggling to me that so many people in this space have made such changes, which are ultimately impossible to make without also crippling the uses of Bitcoin they arbitrarily put on the “approved” list, such a massive focus of theirs. It’s insane. Bitcoiners are actively trying to figure out how to censor other Bitcoiners because they do not like the way they use Bitcoin.

There are two primary rationalizations for this. 1) That inscriptions are hurting people’s ability to bootstrap a new full node. This is false, the bottleneck of initial node syncing is not bandwidth (where inscriptions have made small increases in the data needed), it is verification of the data. Inscriptions don’t need to be verified. The more inscriptions there are, the cheaper verification costs are, because nodes just download it and verify nothing involving the inscription data when validating those transactions. 2) That it is increasing fees. Increasing fees are inevitable, and a result of a finite blocksize cap.

Here is what Satoshi said in 2010 to someone complaining about fees:

“It’s only when you’re sending a really huge transaction that the transaction fee ever comes into play, and even then it only works out to something like 0.002% of the amount. It’s not money sucked out of the system, it just goes to other nodes. If you’re sad about paying the fee, you could always turn the tables and run a node yourself and maybe someday rake in a 0.44 fee yourself.”

These arguments are just broken, and completely missing the point. If you can stop someone from using Bitcoin, then Bitcoin has failed in its core value proposition. There is nothing that can regulate the use of a Bitcoin that actually functions how it is supposed to except economic pressure from fees. If anything but that can stop you from using the system, it doesn’t work. It is not censorship resistant. It has failed.

People upset about the externalities of use cases that affect their own should do something productive, like focus on how to adapt their own uses of Bitcoin in a way that they still function properly in the face of people using it for other purposes.

Instead, many Bitcoiners are simply crying to mommy and daddy to make the bad men stop using Bitcoin. The fact that this is still to any degree an argument present in the conversation is just sad at this point. It’s also one of the contributing factors to improvements to Bitcoin that could adapt their use cases to function properly in the face of others stalling.

It’s time to grow up and stop crying about what other people are doing with their own property, and focus instead on how to do what you want with your own. 

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Just hours after the U.S. election results were announced, I received messages from friends filled with striking assumptions. Some congratulated me, mockingly saying, “Congrats, your side won for Bitcoin.” Others expressed disapproval with remarks like, “It’s pathetic!” and “I’m shocked that Americans just voted for Hitler.” One friend said, “You were lucky to find safety in the U.S. as a refugee under Biden’s administration. Refugees and asylum seekers will now face a harder time here, but, hey, it’s still good for your Bitcoin.” Many of these friends work in high-level corporate jobs or are university students.

As a Green Card holder, I was not eligible to vote, but I recognize their huge disappointment in seeing their preferred candidate lose. Their frustrations were directed at me because they know I support Bitcoin and work in the space. I understand that making me a scapegoat says less about me and more about their limited understanding of what Bitcoin’s value represents.

I’m aware that in this highly polarized political landscape, ideological stereotyping becomes evident—not only during election season but also in spaces where innovative thinking should be encouraged. A prime example of this ideological bias occurred during the Ohio State University commencement, where Chris Pan’s speech on Bitcoin was largely booed by students attending their graduation ceremony. I admire the courage it took to stand firm in front of over 60,000 people and continue his speech. My guess is that most of these graduating students have never experienced hyperinflation or grown up under authoritarian regimes, which likely triggered an “auto-reject”’ response to concepts beyond their personal experience.

I’ve encountered similar resistance in my own unfinished academic journey; during my time at Georgetown, I had several unproductive conversations with professors and students who viewed Bitcoin as a far-right tool. Once a professor told me, “Win, just because cryptocurrency (he didn’t use the term Bitcoin) helped you and your people in your home country doesn’t make it a great tool—most people end up getting scammed in America and many parts of the world. I urge you to learn more about it.” The power dynamics in academic settings often discourage open-minded discourse, which is why I eventually refrained from discussing Bitcoin with my professors.

I’ve learned to understand that freedom of expression is a core American value. Yet, I’ve observed that certain demographics or communities label anyone they disagree with as ‘racist.’ In more extreme cases, this reaction can escalate to using influence to have people fired, expelled from school, or subjected to coordinated cyberbullying. I’m not claiming that racism doesn’t exist in American society or elsewhere; I strongly believe both overt and subtle forms of racism still persist and are well alive today.

Although bias and inequality remain widespread, Bitcoin operates on entirely different principles. Bitcoin is borderless, leaderless, and accepting of any nationality or skin color all while without requiring any form of ID to participate. People in war-torn countries convert their savings into Bitcoin to cross borders safely, human rights defenders receive donations in Bitcoin, and women living under the Taliban get paid through the Bitcoin network.

Bitcoin is not racist because it is a tool of empowerment for anyone who is willing to participate. Bitcoin is not Xenophobic because it gives those forced to flee their homes the power to carry their hard-earned economic energy across borders and participate in another economy when every other option is closed. For activists, often branded as ‘criminals’ by authoritarian regimes, it supports them through frozen bank accounts and blocked resources. For women, enduring life under misogynistic rule, Bitcoin offers a rare chance for financial independence.

Going back to the U.S. election context, Bitcoin not only levels the playing field for people in the world’s most forgotten places and darkest corners, but it also opens new avenues for U.S. presidential candidates to engage with this growing community. President-elect Donald Trump has made bold promises regarding Bitcoin, signaling a favorable policy. In contrast, Democratic candidate Vice President Kamala Harris’s campaign reportedly declined to support the Bitcoin community. Grant McCarty, co-founder of the Bitcoin Policy Institute, stated, “Can confirm that the Harris campaign was offered MILLIONS of dollars from companies, PACs, and individuals who were looking for her to simply take meetings with key crypto stakeholders and put together a defined crypto policy plan. The campaign never took the industry seriously.” I believe this is something most people may be unaware of, and confirmation bias often leads to the assumption that all Bitcoin supporters back every policy of the other side, including potential drastic changes to America’s humanitarian commitments such as refugee resettlement and asylum programs, anti-trafficking and protection of vulnerable populations, and foreign aid and disaster relief.

Most people around the world lack a stable economic infrastructure or access to long-term mortgages; they live and earn with currencies more volatile than crypto gambling and, in some cases, holding their own fiat currency is as dangerous as casino chips, or worse.

The Fiat experiment has failed the global majority. I believe that Bitcoin and Bitcoin advocates deserve to be evaluated on their merits and work on global impact, rather than through the binary lens of political bias, misappropriated terms, or factually flawed yet socially accepted diminutive categorizing, which allows them to opt out of learning and evaluating assumptions.

This is a guest post by Win Ko Ko Aung. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Follow Frank on X.

It’s that time again — time to sit around the Thanksgiving table and catch up with loved ones while you have Bitcoin on the mind thanks to its recent price action.

Some see this time as an opportunity to convince said loved ones that they should get on the Bitcoin rocket ship because it’s headed towards the moon.

My humble advice: Don’t be that person.

As you’ve probably learned if you’ve been in the Bitcoin space for some time now, bitcoin’s volatility can be quite unsettling, and, therefore, it isn’t for everyone. In other words, convincing sweet Auntie Jane to ape into bitcoin probably isn’t going to end well.

While you may have personally benefitted from holding bitcoin for some period of time, it doesn’t mean others will have the same experience. Without some understanding of bitcoin’s cycles, most will panic sell when bitcoin’s price inevitably drops again.

With that said, if Uncle Bob asks you about Bitcoin because he’s heard that its price has gone up recently and he knows that you’re familiar with it, you can still point him in the right direction as far as onboarding resources (a far better strategy than becoming his personal Bitcoin advisor).

Below are some examples of such resources:

Simple Bitcoin — This Bitcoin education app presents you with information on Bitcoin via digestible learning modules, and it rewards you with sats when you get a passing grade on the post-module quizzes. Uncle Bob will be grateful that you made learning Bitcoin so easy for him.Yzer — Yzer, another Bitcoin education app, goes much deeper into the technology and economic philosophy that underpins Bitcoin. Its curriculum is more extensive than Simple Bitcoin’s, but it also rewards you with sats for completing quizzes with passing scores the same way Simple Bitcoin does. Nerdy Cousin Linda will be pumped to learn who Friedrich Hayek and Ludwig Von Mises were thanks to this app.THNDR Games — With THNDR, you can earn bitcoin just for playing games. Whether it’s Solitaire, Snake or Tetro Tiles (a play on Sodoku), THNDR can help Auntie Katrina stack sats for doing little more than playing video games on her phone. Plus, THNDR teaches her how to use a Lightning wallet.Gemini Credit Card — If you have a family member that’s into credit card rewards, tell them that with the Gemini rewards card they can earn bitcoin for everyday purchases, including 4% back on EV charging and gas at the pump, 3% back on dining out and 2% back on groceries. The kicker here is that there’s no membership free. This is great for cheap Uncle Bruce who showed up to Thanksgiving dinner empty-handed yet again this year.Fold — Fold offers you a checking account through which you can make your monthly payments and earn bitcoin rewards in the process. Imagine doing nothing more than paying your electric bill and earning some bitcoin in the process. Fold’s annual membership fee is $100, or users can pay $10 per month to use the service. Sign up now and get three months free. Great for Black-Friday-deal-searching Aunt Crystal.

So, best of luck tomorrow, and remember to think twice before launching into philosophical diatribe on how Bitcoin is going to change the world or offering some ill-suited bitcoin-related financial advice based on little more than tidbits of information you’ve picked up while scrolling X.

Your family and loved ones likely don’t care about your magic internet money. If they do ask about it, they probably only care about using bitcoin to speculate so to get more U.S. dollars.

If your intentions are to get them to understand Bitcoin better and to slowly accumulate some without having to spend their hard-earned money on it, suggest the resources above and trust that some will find their way down the rabbit hole on their own.

Happy Thanksgiving!

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

I have to call BS on this claim that Michael Saylor is now Bitcoin’s overlord and can single-handedly decide its fate. That’s just ridiculous.

During some drama about whether MicroStrategy’s valuation makes sense, Vinny Lingham declared Saylor is the second most powerful person in Bitcoin after Satoshi Nakamoto. He argued Saylor can dictate terms by threatening to dump MicroStrategy’s giant bitcoin stash if he doesn’t get his way.

While questioning MicroStrategy is fair game, the notion Saylor controls Bitcoin’s destiny is intellectually dishonest drama-baiting. Vinny knows better.

Bitcoin is decentralized, permissionless, and based on consensus. No single entity, not even the largest holder, can dictate terms.

If influence correlated to Bitcoin holdings, the asset would have failed long ago. Governments could easily acquire 10% of supply with their printing presses and control Bitcoin — but that’s not how it works.

Saylor can’t force protocol changes on Bitcoin. Even if he demands certain features, node operators hold the real power by enforcing consensus rules. If Saylor forks Bitcoin to make unilateral changes, the main chain persists while his fork dies, assuming that would be a shittier version.

We’ve already seen this play out when early influencers like Roger Ver disagreed with the community. Bitcoin kept on trucking while Ver’s alternative chain became irrelevant.

Bitcoin’s entire value stems from no one party controlling it. If whales could centralise decision-making by buying large portions, the whole experiment would fail. Thankfully, that’s impossible by design.

So, while Saylor provides a valuable perspective, his influence has limits. He cannot compel developers or miners or nodes to follow his preferred roadmap. His Bitcoin stack buys him a voice at the table, not absolute authority.

No matter how many satoshis Saylor accumulates, he cannot unilaterally impose changes on a decentralized, leaderless network. Bitcoin derives resilience precisely from preventing such dominance.

So enough with this bogus narrative that Michael Saylor is now Bitcoin’s dictator. He’s an influential figure, sure — but he doesn’t control Bitcoin’s fate any more than you or I do. That power remains dispersed.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Bitcoin has consistently outperformed all major asset classes over the past decade, solidifying its role as the benchmark for digital asset investors. For those committed to Bitcoin’s long-term vision, the ultimate financial goal often shifts from acquiring more dollars to maximizing their Bitcoin holdings.

Bitcoin is the Hurdle Rate

Bitcoin is to digital assets what treasury bonds are to the legacy financial system—a foundational benchmark. While no investment is without risk, Bitcoin held in self-custody eliminates counterparty risk, dilution risk, and other systemic risks common in traditional finance.

With BTC outperforming every other asset class in 9 of the past 12 years (by orders of magnitude), it’s no surprise that it has usurped treasury bonds as the “risk free rate” in the minds of many investors – especially those knowledgeable about monetary history and thus the appeal of Bitcoin’s verifiable scarcity.

Another way to phrase this would be that the financial objective of digital asset investors is to acquire more BTC rather than acquire more dollars. All investments or spending are viewed through the lens of BTC being the opportunity cost.

MicroStrategy has demonstrated what this looks like in the corporate world with their new KPI: BTC Yield. To quote from their September 20th, 8-K form: “The Company uses BTC Yield as a KPI to help assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders.” MicroStrategy has taken full advantage of the tools available to them as a multi-billion dollar public company: access to low interest rate debt and the ability to issue new shares. This KPI shows that they are acquiring more BTC per outstanding share despite the fact that they are engaging in the traditionally dilutive activity of new share issuance.

Mission accomplished: they are acquiring more bitcoin.

But MicroStrategy has an advantage that the average fund manager or retail investor does not: they are a publicly traded company with the ability to tap into capital markets at little to no relative cost. Individual holders are unable to issue shares into the public market in order to raise capital and acquire BTC. Nor can we issue convertible notes and borrow dollars at a near zero % interest rate.

So that begs the question: how can we accumulate more bitcoin? How can we have a positive ‘BTC Yield’?

Bitcoin Mining

Bitcoin miners acquire BTC by contributing computational power to the Bitcoin network, and receiving a greater amount of BTC than what it costs in electricity to operate their machine(s). Now this is easier said than done. The Bitcoin protocol enforces a predetermined supply schedule using “difficulty adjustments” – meaning that more computational power dedicated towards Bitcoin mining results in the finite block rewards getting split up into smaller pieces.

The most effective Bitcoin miners are those that maximize their computational power while minimizing their operational costs. This is accomplished by acquiring the latest, most-efficient Bitcoin mining hardware, and operating with the lowest possible electricity rate.

Under current market conditions (as of 11/21/2024), 1 bitcoin has a price of ~$98,000. However, an Antminer S21 Pro mining with an electricity rate of $0.078/kWh is able to produce 1 BTC for ~$40,000 in electricity. This is an operating margin of nearly 145%. A business is typically considered to have “healthy profit margins” if they are in the 5-10% range – mining beats this easily. This is in spite of the fact that as of the April 2024 Bitcoin halving, they earn half as much BTC per unit of compute.

Price Growth Outpacing Difficulty Growth

The price of a financial asset – specifically bitcoin – is set at the margin. This means that the asset’s price is determined by the most recent transactions between buyers and sellers. In other words, the price reflects what the last buyer is willing to pay and what the last seller is willing to accept.

This, in part, is what enables BTC’s notoriously volatile price action. A lack of sellers at price X means buyers must bid the price higher than X in order to find the next marginal seller. Inversely, a lack of buyers at price X means a seller must lower their ask to find the next marginal buyer. BTC can quickly move up or down based on a lack of sellers or buyers in a specific range.

Consequently, the velocity at which the Bitcoin price can move is much higher than that of network mining difficulty. Substantial growth in network mining difficulty is not achieved by marginal bid/ask spreads, it is achieved by the culmination of ASIC manufacturing, energy production, and mining infrastructure development. There is not shortcutting the time and human capital necessary to increase the total computational power on the Bitcoin network.

This dynamic is what creates opportunities for Bitcoin miners to accumulate vast amounts of bitcoin.

The chart here illustrates the explosive growth of Bitcoin mining profitability that takes place during bull markets. “Hashprice” measures the amount of revenue that Bitcoin miners earn per unit of compute on a daily basis. On a year-over-year basis, hashprice has increased by more than 300% at the height of each bitcoin mining cycle. This means that miners have had their profit margins more than triple in a 12-month span.

Over the long-run this metric trends down as more entities begin mining bitcoin, miners upgrade to more powerful & efficient machines, and the block subsidy is cut in half every four years. However, during bull markets, the combination of the forces that are a positive catalyst for mining difficulty (and thus net-negative for mining profitability) pale in comparison to the rapid growth in the price of bitcoin.

Price Volatility in Bitcoin Mining Hardware

In addition to wider profit margins during bull markets, Bitcoin miners have the simultaneous benefit of the fact that ASIC prices tend to move in tandem with the Bitcoin price. During the 2020 – 2024 cycle, the Antminer S19 (most efficient ASIC at the time) began trading at ~$24/T. By November 2021 – when the BTC price was peaking – they began trading for north of $120/T.

Bitcoin mining hardware retaining resale value is becoming increasingly the case with each new generation of hardware. In the early days of Bitcoin mining, technological advancements were swift and forceful – to the point that new ASICs would make older models obsolete overnight. However, the marginal gains of new ASICs have diminished to the point that older models are able to remain competitive for multiple years after release.

Since the S19 was launched in 2020 and retains a non-zero market price today, it is reasonable to expect that the S21 line of machines will be able to retain value for even longer. This gives miners a significant leg-up when it comes to accumulating bitcoin, because the upfront cost of purchasing machines is no longer “sunk”. Their machines have a price, one that is correlated to bitcoin, and there is a resource available to get liquidity.

Blockware Marketplace

Blockware developed this platform to enable any investor – institutional or retail – the opportunity to gain direct exposure to Bitcoin mining. Users of the marketplace are able to purchase Bitcoin mining rigs that are hosted at one of Blockware’s tier 1 data centers and have access to industrial power prices. These machines are online already, eliminating lengthy lead times that have historically caused some miners to miss out on those key months in the cycle in which price is outpacing network difficulty.

Moreover, this platform is built by Bitcoiners, for Bitcoiners. Which means that machines are purchased using Bitcoin as the medium of exchange, and mining rewards are never held by Blockware – they are sent directly to the users own wallet.

Lastly, this provides miners with the aforementioned opportunity, but not obligation, to sell their machines at any time and price. This enables miners to capitalize on volatility in ASIC prices, recoup the cost of their machines, and accumulate more BTC faster than they would with a traditional “pure play” approach.

This innovation removes the obstacles that have historically made hosted mining difficult, enabling miners to concentrate on the mission: accumulating more Bitcoin.

For institutional investors looking for bulk pricing on mining hardware, contact the Blockware team directly.

Company Name: Cake Wallet

Founders: Vik Sharma

Date Founded: October 2017

Location of Headquarters: Saint Kitts and Nevis (and staff is remote)

Number of Employees: 14

Website: https://cakewallet.com/

Public or Private? Private

When Vik Sharma isn’t serving as the CEO of Liberty Steel, he’s focused on making bitcoin and other cryptocurrencies easier and more private to use via Cake Wallet.

Sharma believes that a product must be user-friendly if it is to be adopted widely, which is why usability is at the center of the Cake Wallet mission.

“The very broad mission of Cake Wallet is to bring cryptocurrency to the masses, to enable people to easily send, receive, hold, swap, on-ramp, and off-ramp crypto like you would with Venmo or PayPal,” Sharma told Bitcoin Magazine.

The other primary dimension of the Cake Wallet mission is privacy.

Sharma is a staunch believer in the idea of transactional privacy, something he came to value after experiencing just how public bitcoin is by default.

Prioritizing Privacy

Sharma first started acquiring and mining Bitcoin in November 2013. (The ASIC miners he purchased from eBay and ran in the basement of his office building back then were minting him a cool 0.2 bitcoin per day at the time.)

By the mid-2010s, Sharma wanted to do more with his bitcoin than just HODL it. He wanted to use it, and, at that time, it was mostly only illicit online marketplaces that accepted bitcoin.

“Back then, it was hard to find anyone that took bitcoin,” began Sharma. “You had Silk Road, and then AlphaBay and other darknet markets, and I thought, ‘Let me check this out.’”

After attempting to make a purchase on one of those darknet sites, Sharma was promptly notified that he’d crossed a legal line.

“I sent Bitcoin directly from my Coinbase account to the darknet address,” said Sharma.

“And, I kid you not, within seconds, I got an email from Coinbase saying ‘Your account has been suspended or deleted or canceled because you’ve violated some terms of service and you need to move your assets ASAP. I was like, ‘What the heck? How did they find out? There must be millions of addresses out there. Are they tracking millions of addresses?’” he added.

“That woke me up to the transparent nature of Bitcoin.”

Not only did Sharma’s experience using bitcoin in a darknet marketplace enlighten him as to just how public a ledger Bitcoin actually is, but it also introduced him to Monero (XMR).

“There was this other special coin on AlphaBay called Monero, and I thought ‘Why not Litecoin or Ethereum or whatever was big at that time — why only Bitcoin and Monero?’” said Sharma.

It was in pursuing an answer to this question that Sharma went deep down the Monero rabbit hole. His research led him to embracing the concept of transacting privately with cryptocurrency.

And so he created Cake Wallet — a Monero-only wallet at its inception.

Cake Wallet And Silent Payments

Cake Wallet launched in January 2018. Approximately one year later, Sharma added Bitcoin functionality to the wallet, as well.

However, for over five years, Cake Wallet users had little ability to transact privately with bitcoin using Cake Wallet. The wallet didn’t have a Lightning implementation (Lightning offers more privacy than the Bitcoin base chain), nor many other privacy-enhancing features (aside from letting users add or select the node they want to use within the wallet).

If a user wanted to make a private payment, they were better suited using XMR.

But transacting with Bitcoin via Cake Wallet became somewhat more private (though still not as private as using Monero) in September 2024, when Cake wallet became the first bitcoin wallet to implement Silent Payments.

Silent Payments enable users to receive bitcoin payments without revealing their public Bitcoin address. They’re like a P.O. Boxes for public Bitcoin addresses — static addresses that allow users to receive bitcoin without having to reveal their actual Bitcoin address — and they’re great for anyone doing fundraising or accepting payments via a public Bitcoin address.

“When I read about Silent Payments, I liked it right away,” said Sharma. “I wish the Bitcoin community was more enthusiastic about it, because I think it’s a great feature, especially if you’re posting an address publicly, whether for donations or payments.”

Because one of Cake Wallet’s most notable features, Bird Pay, hinges on users posting their address publicly, Silent Payments is a game changer.

Unveiled approximately one year ago, Bird Pay enables Cake Wallet users to send bitcoin (or other crypto assets) to a contact using nothing other than an X handle.

The receiver simply has to add their bitcoin address, which can be a Silent Payments address, to either their bio or a pinned tweet, and Cake Wallet can fetch the information from there.

“CakeWallet will use the Twitter API, pull the address and send the payment to you,” explained Sharma, also noting that this same feature can be used via Nostr or Mastodon.

“There’s a place where you should put your Silent Payments address,” he added.

Cause For Concern

While the Bitcoin and Monero communities have embraced the privacy that Cake Wallet offers, Sharma is concerned that the U.S. federal government could turn out to not be so keen on it.

In an era in which the government is cracking down on privacy-enhancing Bitcoin and crypto services, including Bitcoin Fog, Tornado Cash and Samourai Wallet, it seems difficult for anyone who’s creating such privacy-preserving crypto technology to not think twice about what’s at stake.

“It does worry me — and not because we’re doing anything wrong,” said Sharma. “But something could be twisted or construed to make it seem as if we are doing something wrong.”

As a precautionary measure, Sharma has moved the headquarters of Cake Wallet overseas, from Florida to Nevis and Saint Kitts, something that Roger Ver advised him to do.

He also discusses all updates to Cake Wallet with the company’s general counsel to make sure that Cake Wallet isn’t breaking any laws. While his lawyers have assured him he isn’t, he’s aware that skewed interpretations of laws and legal guidelines could potentially cause problems for Cake Wallet.

“If you dig deep enough into the way the laws are written, they might say, ‘No, you’re a money transmitter business, even though we’re not,’” explained Sharma.

“We’re not touching users’ funds. We don’t have access to them. Even though we built the app, once that app is on the user’s phone, it’s being generated on their phone, not on our servers,” he added.

“But they might come back and say, ‘But it connects to your node initially.’ Who knows? I’m just using that as an example — even though we give the option right up front for users to not connect to our node.”

Staying On Mission

Despite a concerning legal backdrop, Sharma and the Cake Wallet team plan to stay the course and to remain mission-driven, focused on making Bitcoin both easy and private to use.

“We have stuck to our ethos,” said Sharma.

“The team will call each other out like, ‘No, we shouldn’t put this feature in because it violates this privacy or that privacy or could in the future. We have those debates internally all the time,” he added.

And because Sharma has never taken VC money for Cake Wallet, the only people that he and his team have to answer to, aside from themselves, is their users.

“Since we’re not beholden to a VC, investment firm or an angel investor who’s looking for a return, nobody’s on top of us. We’re able to do what our users want, what our community wants.”

Follow Mark on X.

Ah, Bitcoin—a digital enigma that dances between brilliance and bafflement, much like a British summer deciding whether to rain or shine. As we teeter on the brink of the $100,000 milestone, it’s impossible not to cast our minds back to the late John McAfee: antivirus mogul, libertarian firebrand, and a man whose eccentricity made the Mad Hatter look like an accountant.

In the distant, carefree days of 2017—when masks were for surgeons and Zoom was just an onomatopoeia—McAfee made a proclamation that would make even Nostradamus raise an eyebrow. He boldly wagered that Bitcoin would soar to $500,000 within three years. And if not? Well, let’s just say he offered to partake in a culinary act so unspeakable, it would make a cannibal blush. National television executives must have been on standby, salivating at the potential ratings bonanza.

By 2019, instead of backpedaling like any sensible person who’d had one too many at the pub, McAfee doubled down. He upped his prediction to a cool $1 million per Bitcoin, asserting that the $100,000 mark would merely be the opening act—the financial equivalent of a warm-up comedian before the headliner brings the house down.

Let’s not forget McAfee’s infamous bullish proclamation: that once Bitcoin hits the $100,000 mark, it would be like unlocking the floodgates of a financial Hoover Dam. At that pivotal price point, he believed, Bitcoin wouldn’t just stroll to $1 million—it would sprint. At the time, there were no Bitcoin ETFs gracing the portfolios of traditional investors, no nations like El Salvador adopting Bitcoin as legal tender, no corporate titans like MicroStrategy hoarding it like digital dragons atop golden hordes, and certainly no whispers of U.S. Bitcoin strategic reserves. John didn’t have a crystal ball—though I wouldn’t have been surprised if he’d claimed to—but he keenly understood the game theory behind Bitcoin’s design. He grasped that the underlying security, the allure, and the network effect of its mathematical genius were not just revolutionary; they were inevitable. For McAfee, it was never a matter of “if” but “when” the world would catch on.

Critics scoffed, economists guffawed, and the rest of us watched with the same morbid fascination we reserve for reality TV and train wrecks. Was McAfee a visionary or just a man who’d spent a bit too much time sampling his own supply of eccentricity?

Now, as Bitcoin flirts coquettishly with the $100,000 threshold, perhaps it’s time to reconsider. Maybe old John wasn’t entirely off his rocker—perhaps just teetering on the edge with a cocktail in hand. His timing was about as precise as a broken sundial, but the essence of his prediction might yet hold water.

You see, McAfee understood something fundamental about Bitcoin: its potential to disrupt, to redefine, to turn the financial world on its head like a particularly aggressive yoga instructor. He saw the floodgates that could open, unleashing a torrent of innovation and, yes, wealth.

Of course, trusting McAfee’s predictions was always a bit like trusting a fox to guard the henhouse—or perhaps more aptly, trusting a software tycoon with a penchant for tropical escapades to give sound financial advice. But even a broken clock is right twice a day, and perhaps a maverick is right once in a blue moon.

As we stand on this precipice, wallet in one hand and skepticism in the other, let’s tip our hats to John McAfee. Not because he was necessarily correct, but because he had the audacity to dream big, to stake his reputation (and other unmentionables) on a future that seemed ludicrous to many.

In a world that often feels like it’s been scripted by a committee of pessimists, McAfee was a wild card—a joker in the deck who reminded us that fortune favors the bold, or at least makes for an entertaining story.

So here’s to you, John. Your timing was off, your methods were unorthodox, and your promises were—thankfully—unfulfilled in certain respects. But as Bitcoin edges toward that $100,000 milestone, perhaps your spirit of defiant optimism wasn’t so misplaced after all.

In the end, maybe it’s not about the destination or even the journey, but the colorful characters we meet along the way who make the whole saga worth following. And if nothing else, McAfee ensured that the tale of Bitcoin was never short of intrigue, humor, and a dash of the absurd.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.