Bitcoin Letter Archives

Bitcoin's Blacksheep Has A Plan

Everyone's celebrating the Bitcoin miners who signed long-term HPC leasing deals last year. TeraWulf (WULF) up 226%. Hut 8 (HUT) up 171%.

Meanwhile MARA (MARA) fell 53%. The narrative writes itself: MARA missed the boat. I've heard that story before. Usually, right before the boat comes back to pick someone up.

The story of 2025 in Bitcoin mining was simple enough.

Companies like TeraWulf, Hut 8, Core Scientific (CORZ), and Cipher Digital (CIFR) looked at their warehouses full of computing infrastructure and made a pragmatic decision: the AI boom needed GPU capacity right now, and they had it.

So they leased it out - long-term contracts, predictable revenue, instant re-rating from the market. Fluidstack and CoreWeave (CRWV) got the compute they needed without waiting five years to build it themselves.

Everybody shook hands and went home happy. Everybody except MARA.

What the celebratory narrative skips over is that MARA's situation was never quite the same as its peers to begin with. While most miners sell the majority of Bitcoin they produce, MARA made a deliberate choice to accumulate.

They didn't just hold what they mined. Instead, they leveraged up and bought more, including a $100 million Bitcoin purchase in July 2024.

Today, they carry the second-largest Bitcoin treasury of any public company on earth. That's not a mining company that forgot to pivot. That's a company that made a different bet entirely, one far closer to Strategy Inc. (MSTR) than to TeraWulf.

A leasing deal would have trimmed the bleeding in 2025, but it wouldn't have fixed the fundamental exposure. Bitcoin (BTC) fell nearly 30% from its highs, and MARA was always going to feel that more than anyone else.

So what MARA actually announced on their February earnings call deserves more careful reading than the market's knee-jerk 15% after-hours pop suggests.

First, they closed the acquisition of Exaion, a deal originally proposed in August 2025, which gives them HPC infrastructure with genuine international reach.

Second, and more significantly, they announced a partnership with Starwood Digital Ventures to develop, finance, and operate next-generation digital infrastructure targeting enterprise, hyperscale, and AI customers.

MARA brings the data center sites and cheap energy access. Starwood brings capital, operational expertise, and tenant relationships.

The structure is a joint venture where MARA can invest up to 50%, with an initial target of 1 gigawatt of capacity scaling to 2.5 gigawatts over time.

This is where the distinction from their peers actually matters.

TeraWulf and Hut 8 are locked in known revenues for known gigawatts over known time periods. Safe, sensible, and now fully priced in.

MARA is not doing that. They're positioning themselves as a cloud infrastructure provider, competing not with fellow miners but with CoreWeave and Nebius (NBIS), companies currently trading at revenue multiples that would make a Bitcoin miner blush. The execution risk is real. CoreWeave and Nebius are growing at a pace that is genuinely difficult to match, and they have head starts that don't shrink easily. But the upside math is completely different from a leasing arrangement, and management knows it.

The piece of this that doesn't get enough attention is MARA's energy strategy. Their CEO, Frederick Thiel, has been consistent on this point: control of low-cost energy is the real competitive moat in HPC, not the hardware. CoreWeave is building data centers wherever capacity exists right now, which is smart for near-term growth but tends to produce ugly cost structures over time. MARA is approaching it the other way — anchor the energy costs first, build around that foundation. Anyone who's spent time in the energy business recognizes this logic immediately. The companies that controlled cheap power in the fracking era didn't just survive the commodity cycles — they defined the economics for everyone else.

Quarterly revenues came in at $202 million, down 5.6% year over year, with GAAP losses of $4.52 per share driven almost entirely by marking their Bitcoin holdings to market. Neither number is the point. The point is whether MARA can execute a transition from leveraged Bitcoin accumulator to credible HPC infrastructure provider while Bitcoin works through what looks like another 6 to 12 months of pressure. That's the actual risk, and it's a serious one. The balance sheet remains heavily exposed. The Starwood partnership is promising but unproven. Competing with CoreWeave at scale is not something you pencil in as a given.

Own it for what it is: a high-octane option on two simultaneous recoveries — Bitcoin finding its floor and MARA's HPC ambitions gaining traction. Size accordingly. The potential return if both legs work is several hundred percent. The downside if neither does is most of your investment.

The boat, as it happens, is still at the dock. The question is whether you want a ticket.

Whale, Whale, Whale.....What Do We Have Here?

Bitcoin Letter

I remember watching Tokyo whales quietly accumulate positions in beaten-down industrials in late 1992 while every gaijin investor was sprinting for the exits.

The Nikkei had already cratered 60%, and the newspapers were full of obituaries for the Japanese miracle.

Three years later, those patient accumulators had doubled their money. The lesson wasn't specific to Japan. It never is.

Which brings me to Ethereum (ETH).

ETH has recently posted its sixth consecutive weekly loss, the longest uninterrupted downtrend since the brutal 10-week drawdown from March to June 2022.

The Crypto Fear & Greed Index has been pinned in Extreme Fear territory for most of the month. Vitalik sold. Miners sold.

Trump rattled global markets with a 15% global tariff increase that sent Bitcoin (BTC) below $65,000 and had the Federal Reserve's rate-cut timeline quietly sliding toward irrelevance. On the surface, it looks like a crime scene.

Beneath the surface is where it gets interesting.

On Binance, the average ETH whale sell order size has dropped from 2,250 ETH in early January to 1,350 ETH in recent weeks. That's not a subtle shift.

Large holders are withdrawing from the sell side - not because they've gone neutral, but because they're busy doing something else.

The realized price curve of ETH-accumulating whale addresses has bent downward for the first time, which in plain English means these holders aren't selling into weakness.

They're buying more, pulling their average cost basis lower. Balances have surged, and realized cap has increased in precisely the price zones where retail sentiment is most catastrophic.

That's accumulation, not capitulation.

The macro backdrop provided excellent cover for the panic. Trump's pivot to Trade Act Section 122 after the Supreme Court struck down his earlier tariff authorities caught markets flat-footed on February 23rd and 24th.

The resulting inflation fears did what they always do - they hammered high-beta assets first and asked questions later. Cryptocurrency, leveraged to global liquidity conditions, took the hit squarely.

Regulatory hope evaporated on roughly the same timeline.

The Clarity Act, which had been trading at an 82% probability of passage on prediction markets just weeks earlier, collapsed to around half that within three days as Senate negotiations stalled over stablecoin reward provisions.

Institutional desks don't wait around for legislative clarity that isn't coming. They de-risk, and they did.

The project-specific catalysts added fuel. Vitalik Buterin sold 1,869 ETH for approximately $3.67 million over two days in late February, part of a pre-announced plan from January to allocate 16,384 ETH toward Ethereum ecosystem initiatives.

The sales were transparent and strategic. The market's 5% reaction to them was neither.

Meanwhile, Bitcoin miner Bitdeer (BTDR) liquidated its entire self-mined BTC treasury (roughly 1,133 coins for $62 million) to fund a pivot toward AI cloud infrastructure.

Cango (CANG) followed the same playbook in early February, selling 4,451 BTC for $305 million.

The mining industry's exodus from Bitcoin treasuries into data center land is a structural shift worth watching.

Then there's the Jane Street story, which exploded across crypto circles this month and deserves more than a dismissive wave.

Since late 2024, Bitcoin has experienced sharp sell-offs clustering around 10 am Eastern, a pattern the community dubbed the "10 am dump."

A viral long-form post on X argued that Jane Street, operating as an Authorized Participant for BlackRock's (BLK) IBIT and other spot ETFs, was programmatically selling Bitcoin at market open to drive spot prices lower, then accumulating ETF shares at a discount - a structural arbitrage made possible by their privileged access to the ETF creation and redemption mechanism.

The post pointed to Jane Street's Q4 2025 13F filings showing $790 million in IBIT holdings, suggesting those long positions were hedged or net short through undisclosed derivatives.

The theory holds that without this daily suppression, Bitcoin would already be trading above $150,000. That's an extraordinary claim, and extraordinary claims require more than a 13F filing and a pattern of morning selloffs.

But the timing is genuinely strange: following a federal lawsuit in February from Terraform Labs' bankruptcy administrator accusing Jane Street of insider trading tied to the 2022 Terra collapse, the 10 am dump pattern stopped.

Bitcoin staged a sharp V-shaped rebound. Correlation isn't causation, but it's enough to keep a lawyer busy and a trader alert.

The practical question for ETH holders is what the whale accumulation data is signaling about the timeline. Bottoming processes are rarely clean.

The 2022 analog that everyone is reaching for ended with a cycle low before stabilization - it didn't bounce straight from the sixth weekly loss. Patience remains the operative word, and the on-chain data suggests the smart money has plenty of it.

The Tokyo whales of 1992 weren't smarter than everyone else. They were just less impressed by the headlines.

Federal Seal Of Approval: The Most Expensive Door In Finance Is Now Open

Bitcoin Letter

The crypto industry spent a decade building a better mousetrap and then couldn't figure out why the institutional cats wouldn't come inside.

The answer was never the technology.

Roughly $35 trillion in US institutional assets - pension funds, endowments, insurance companies - has been sitting on the sidelines for one reason and one reason only: no federally chartered custodian to send the compliance paperwork to.

Crypto.com just became one.

The US Office of the Comptroller of the Currency granted Crypto.com conditional approval for a national trust bank charter, making it one of the first major crypto exchanges to operate as a federally regulated institution. It joins Circle and Paxos, which received similar approvals in recent months.

The OCC, in characteristic bureaucratic fashion, declined to confirm the news publicly. No matter. The direction is unmistakable.

For years, crypto firms have operated in the regulatory equivalent of a patchwork quilt—a state license here, a money transmitter registration there, held together mostly by lawyers and hope.

Every major endowment, sovereign wealth fund, and insurance company sitting on the sidelines has compliance officers with one job: keep assets away from anything that doesn't have a federal charter behind it. Federal charter in hand, the compliance officers finally have somewhere to send the paperwork.

What has kept institutional money out was never skepticism about the technology or even the price. It was simpler and more human than that.

For a pension fund manager, the career-ending event isn't crypto going down 40% - markets go down 40%, it happens. The career-ending event is losing assets to a hack or an unregulated custodian with no federal oversight behind it.

A national trust bank charter doesn't make Crypto.com your corner Wells Fargo. It can't take deposits, write mortgages, or issue credit cards but it does hold assets in custody the way Bank of New York Mellon and State Street do for the traditional financial world, with federal supervision behind every transaction.

That solves the "I could get fired for this" problem, which is an entirely different psychological barrier than price risk, and unlocks an entirely different category of capital.

The political tailwinds aren't subtle either.

Crypto.com donated $1 million to Trump's inauguration committee and made eight-figure contributions to MAGA Inc., with another $5 million filing recorded in January alone. CEO Kris Marszalek was among the first crypto executives through the Mar-a-Lago door after the 2024 election.

The exchange has partnered with Trump Media & Technology Group on ETFs, prediction markets, and a digital-asset treasury company.

You don't have to love the politics to read the scoreboard. Washington is open for business on crypto, and Crypto.com has quietly positioned itself closer to the front of that line than almost anyone.

The domino logic is straightforward. As exchanges acquire federal charters, institutional custody infrastructure becomes standardized, standardized infrastructure attracts institutional capital, and institutional capital reduces the volatility that kept the next wave of investors away.

I've watched this cycle play out in every asset class that eventually grew up—junk bonds in the 1980s, emerging market equities in the 1990s.

The legitimization phase always looks identical: a handful of early movers get the right licenses, the big money follows the licenses, and the early movers end up with durable competitive advantages over everyone who waits.

Now consider what that big money actually means in practice. That $35 trillion doesn't need to move in bulk to reshape this market.

A 1% allocation is equal to $350 billion in new demand entering a market with a total capitalization of roughly $3 trillion.

And because most Bitcoin (BTC) supply sits in long-term wallets and rarely trades, $350 billion chasing a thin float doesn't just move the needle. It bends it.

When gold ETFs gave institutional investors a compliant vehicle in 2004, gold sat at $400 an ounce. Seven years later, it touched $1,900.

The metal hadn't changed. The mine output hadn't changed. What changed was access - a regulated structure that let the big money through a door it could legally walk through.

The charter is that door.

For investors already holding crypto, watch which exchanges move fastest toward federal charter status - that's the moat being built in real time.

The cats are finally coming inside. Someone left the door open.

Treasury For The Bitcoin Age

Bitcoin Letter

Strategy's (MSTR) carrying $8.2 billion in debt, most of it convertible, with $2.25 billion in cash reserves and over 714,000 Bitcoin (BTC) on the balance sheet.

The CEO says Bitcoin would need to drop to $8,000 and sit there for five years before they'd have a real problem.

The bears say this is a leveraged disaster waiting to implode. The bulls say it's genius financial engineering. I say the numbers tell a more interesting story than either camp wants to admit.

The company started life as a business intelligence software firm. That business still exists, quietly generating revenue in the background, but nobody's pricing MSTR on software fundamentals anymore.

Michael Saylor transformed the company into a publicly traded Bitcoin treasury, and the stock now trades purely on Bitcoin exposure.

When Bitcoin rises, MSTR typically outperforms. When Bitcoin falls, MSTR drops harder. That's the whole trade - leveraged upside and amplified downside.

Three metrics cut through the noise better than any price chart.

Forced liquidations show you when leveraged positions are getting washed out beyond fundamental value.

Long-term holder behavior reveals whether Bitcoin believers are actually holding or quietly heading for exits.

Bitcoin ETF flows tell you when institutional money managers think the worst is over.

I track all three because they separate actual risk from perceived panic.

Forced liquidations matter because MSTR's leverage amplifies Bitcoin moves in both directions. When Bitcoin drops sharply, margin calls force leveraged traders to sell, creating declines beyond fundamentals.

November 2025 and mid-January through early February 2026 saw forced liquidations soar, bringing steep dives exceeding normal corrections. MSTR's share price reflects these exaggerated moves.

Long-term holder data provides the second metric. As of February 10, holders with Bitcoin for over ten years control 17.2% of the supply. Combined holders from 1 to 10 years account for another 30.8%.

Nearly half the Bitcoin supply is held by people who've demonstrated multi-year conviction. These holders don't contribute to volatility - newer entrants trading Bitcoin as one asset class among many create the price swings.

Bitcoin ETF flows round out the picture. From January 16 through early February, outflows far surpassed inflows. Since February 6, inflows have consistently exceeded outflows. If that continues, it signals fund managers believe the worst may be over.

The debt structure deserves a closer look. Most of the $8.2 billion is convertible notes with no collateral requirements and no forced liquidation risk.

The company holds $2.25 billion in cash, providing roughly 2.5 years of dividend coverage for preferred shares.

CEO Phong Le said Bitcoin would need to stay at $8,000 through 2032 before debt coverage becomes a problem. Saylor said if issues arise, they'd refinance.

Whether that's possible in a distressed scenario is unknowable, but it's at least 6 years away under pessimistic assumptions.

The preferred stock structure adds complexity. MSTR issued multiple classes paying 8% to 11.25% dividends.

As the company pays these, the $2.25 billion cash reserve depletes. When that happens, they'll likely issue more common shares, creating predictable dilution that investors can model.

Between 2023 and early 2024, you could write "AI" in a presentation and ride the thematic wave.

Bitcoin-exposed stocks traded with roughly 80% correlation - buy any name, and you get the same trade. That correlation dropped to approximately 20%.

The market stopped treating Bitcoin plays as a basket and started differentiating between companies that can actually monetize exposure versus companies just burning cash.

MSTR's getting repriced as investors figure out whether leveraged Bitcoin accumulation with convertible debt makes sense.

I'm bullish on both Bitcoin and MSTR.

The leveraged structure means MSTR outperforms Bitcoin on the upside. The debt structure is more defensible than bears claim, and the runway extends further than most investors realize.

MSTR trades as a binary bet.

You either believe Bitcoin appreciates over time despite volatility, or you think the growth trajectory is unsustainable, and this is capital looking for a place to die.

There's no middle ground.

The emotional intensity around both Bitcoin and MSTR tells me most investors are making decisions based on where they bought rather than what the balance sheet shows.

The framework for navigating this is pretty straightforward.

Track forced liquidations to identify when price moves exceed fundamentals. Watch long-term holder behavior to gauge conviction among true believers.

Monitor ETF flows for signs that institutional money thinks we've seen the worst. Free cash flow, leverage structure, and whether the company's actually accumulating Bitcoin per share (not just in absolute terms) round out the analysis.

Companies selling stock during panic create some of the best buying opportunities of the decade, provided the balance sheet can survive to benefit.

MSTR's balance sheet suggests more runway than the disaster scenarios imply. Whether Bitcoin hits $8,000 and sits there for five years remains to be seen.

But if you're waiting for that scenario to invest, you've already made your bet.

Another Slip-Up

Bitcoin Letter

It’s here - rules, and a mountain of them.

They didn’t stop until they got their cut.

Blame the industry for attracting the ire of the all-mighty rule makers.

This means that growth in this sector won’t be as gangbusters moving forward, if ever.

It’s a net negative for the original vision of crypto because the industry relies on that extra supercharger growth to attract incremental investors, and all in one poof, it's gone, like the wind.

What exactly happened?

The Financial Stability Oversight Council (FSOC), the U.S. regulatory panel comprising top financial regulators, successfully pushed Congress to enact legislation addressing risks digital assets pose to the financial system, including strict oversight of crypto spot markets and stablecoins.

Anything that Congress touches turns to higher costs and more red tape.

The FSOC's current enforcement regime follows a slate of directives that were released throughout the mid-2020s. The administration’s mandate effectively forced U.S. government agencies to double down on digital asset sector enforcement and close holes in regulation.

Legislative clarity has largely replaced the ambiguity of the past, with bills now codified to address stablecoins and digital commodities regulation.

Federal financial regulators now possess explicit rulemaking authority over the spot market for cryptocurrencies that are not securities, addressing conflicts of interest and abusive trading practices.

It’s not a joke that regulation has raced to the front and center of the crypto narrative as the defining constraint on the industry.

It has been relentless.

Just as we thought the worst had passed, the industry was forced to reckon with the consequences of the trust-toppling scandals that induced this heavy-handed regulation.

The poster child for this era remains reality TV star and influencer Kim Kardashian.

She is the Hollywood socialite who pushed Ethereum Max, a digital coin that aptly borrowed its name from the second biggest crypto, Ethereum.

What were the results?

Ethereum Max is effectively dead, prompting investors to sue Kardashian, who initially failed to disclaim that her marketing was being paid for by the company that owned the token.

Kardashian’s legal battles became a landmark case for influencer liability, even as her lawyers argued there was insufficient evidence that her endorsements led to the plaintiffs buying EMAX.

She paid a settlement of $1.26 million.

EMAX's value was based on the greater fool theory because it had no utility whatsoever.

As investors and promoters like Kardashian talked up such coins, more people invested, and the price went up, allowing the investors at the beginning to cash out.

Kardashian was paid $250,000 by Ethereum Max for her marketing efforts.

Altcoins like EMAX lack the stability of established assets like Bitcoin and Ether.

And EMAX never returned to meteoric highs, meaning the greater fool theory in this coin only reached so high for the previous investors to cash out.

EMAX remains a cautionary tale because investing in such assets is akin to pouring money down a black hole, with the asset depreciating rapidly.

While the exact number of people who invested based on celebrity endorsements is history, data from that period found that Kardashian's advertisement reached about one in five US adults and roughly 30% of crypto owners.

This was a public relations disaster that permanently damaged the crypto industry.

It’s bad enough that the industry impoverished many of its participants during the purge, but it also involved the lowest level of brain activity on the human planet.

One might conclude that the Kardashian fiasco marked the bottom of the industry's reputation, because how much lower and pitiful could crypto get?

The one silver lining in the market's survival is that the big holders haven’t sold out, which bodes well for crypto now that capital markets have stabilized.

That appears to be the last leg crypto is standing on, which could be either scary or a sanctuary, depending on how you look at it.

Lastly, steer away from anything other than Bitcoin if you are going to invest.

An Industry on the Ropes

Bitcoin Letter

Crypto and Terraform Labs co-founder Do Kwon is no longer on the run.

Yes, that’s right – he’s a convict.

The Interpol red list that once alerted 195 countries to his status as a wanted fugitive has been retired, replaced by a federal prison number. We now know that his desperate transfer of 33,131 Bitcoins right after being added to that list was the final act of a man who knew the walls were closing in.

Kwon was the golden boy for stablecoins for quite some time as the native South Korean’s brash attitude led him to billions in wealth.

His “fake it ‘til you make it” attitude got him into deep water, and the quickly escalating investigations have now concluded with a definitive thud.

Why?

His brainchild, Terra’s UST stablecoin, lost its parity to the dollar in May 2022 in a $70 billion collapse, and today is nothing more than a digital tombstone.

Kwon and Terraform Labs fled South Korea for Singapore ahead of Terra’s meltdown, and then he fled Singapore, sparking a global manhunt that ended in Montenegro.

South Korean authorities finally got their answers regarding the violations of capital markets law that resulted in a slew of local suicides by investors who lost everything.

Investigators also confirmed what many suspected: his company misled investors in labeling UST as a stablecoin.

The courts have ruled that his stablecoin achieved the definition of a Ponzi scheme.

It feels like a lifetime ago when Terraform Labs successfully rallied an audience of fans that called themselves the “Lunatics,” praising Kwon as the project’s outspoken hero, as the price of its LUNA token rallied.

Kwon’s unique case set off US regulators with the intent of regulating stablecoins more rigidly, a goal that was realized with the passage of the GENIUS Act last year.

The South Korean sullied the stablecoin industry, and while the manhunt is over, the reputational stain remains.

U.S. lawmakers successfully passed the bill that introduced a ban on UST-like algorithmic stablecoins, safeguarding other decentralized dollar alternatives like MakerDAO’s DAI by forcing them to adhere to strict backing requirements.

Cryptocurrencies have been littered with non-stop streaming of negative headlines over the last few years.

Bitcoin reaching $65,000 back then wasn’t in fact a celebration, but the calm before the storm, before a myriad of structural problems were revealed as the price of Bitcoin collapsed.

Kwon's incarceration has stopped his attempt at fixing LUNA, and the price levels remain a fraction of what they were before the collapse.

The conclusion of this international police case has heaped more fuel on the fire for incremental investors, signaling them to stay away from speculative cryptocurrencies, and rightly so.

Kwon is now serving a 15-year sentence, though legal experts believe he may still face additional time in his native homeland of South Korea.

Financial fraud and running a Ponzi scheme are serious matters in South Korea, which is infamous as a place where Korean oligarchs regularly flout the law, but Kwon was not spared.

Delaying the inevitable stirred up even more unrest for crypto, but at least one of its big-time CEOs can no longer evade the law.

The longer he hid internationally, the longer the damage to the reputation of crypto lasted.

The problem I have is that even with justice served, the lack of cash flow dispensing from these assets keeps them in a gray area of whether they are sustainable or not.

Even more worrisome, the strict regulations born from Kwon’s actions have wiped out the wild-west infrastructure that once fueled the industry's growth.

It caused manhunts for crypto CEOs and the bankruptcy of the masses.

These events remain highly bearish for the cryptocurrency industry's legacy, and I advise readers to continue heading for higher water.

Where Does the Utility Come From

Bitcoin Letter

Crypto insider Mike Novogratz has long maintained an upbeat tone, even as crypto remains one of the most frustrating asset classes of the last few years.

His words are mostly silver linings and an optimistic view of the future.

His argument for structural appreciation in Bitcoin centers on the premise that the next phase must differ from historical cryptocurrency rallies in terms of story and utility.

Compared to previous cycles, the thesis is that any future Bitcoin rally will be more focused on utility and less on the story.

An asset can only go so far based on the fear of missing out hype.

The structural issue remains the lack of buyers, and it is no surprise.

Every liquidity event serves as a great exit point for holders to dump more coins.

In my analysis over the years, I chronicle how structural shifts make it less attractive for incremental investors to bite at crypto.

The data backs me up as new buyers have largely exited this speculative industry and sought assets that pay an annuity-like premium.

According to Novogratz, the 2017 era was mostly about the story of people not trusting the government and wanting more privacy and decentralization.

The blockchain narrative has stagnated, and few institutions have integrated the technology into daily tasks.

I do not see where the utility comes from.

The era when speculative investors bought digital real estate in the metaverse in hopes of accruing rental digital revenue defies belief.

I do not see the utility there either.

It is all good to use buzz words like scalable and user-friendly, yet I see no actual development.

I do not believe crypto is the inherent successor to fiat either, and I do believe that, at best, it acts as a nice compliment, and that is if miracle after miracle happens from here on out.

With governments regulating the sector heavily, its value proposition diminishes greatly.

Novogratz needs to stop pushing the inevitable theme like a real estate agent advising buyers to buy the most expensive mansion at the top of the market.

Hilariously enough, one of the knocks on crypto was the elevated volatility, which has dampened significantly.

Why?

The lack of volatility stems from the lack of new buyers and sellers. There are still owners who have not sold and are holding until infinity, so the price does not get pushed down further, but investors are so turned off by the charlatans and dangers in the industry that they would rather put their money in something more real.

Crypto executives need to stop pushing the Bitcoin to $1 million theme, as every headwind imaginable crushes the price of crypto.

Even worse, the industry is still metabolizing billions of dollars in regulatory actions, and I believe it is more responsible to talk about the persistent existential crisis that Bitcoin faces.

If Bitcoin fails, then crypto is finished, so it will be interesting to see what the last big holders do with their coin.

Do they sell out the rest and crash the market? Or wait for a bull run that may never come?

The likely outcome is that the price of Bitcoin remains rangebound for the foreseeable future.

Another Win for Bitcoin

Bitcoin Letter

Bitcoin has periodically been pulled into geopolitical spotlights, and few moments generated as much reaction as comments made by Pavel Zavalny, chairman of the Russian State Duma Committee on Energy, suggesting that Russia was open to accepting Bitcoin (BTC) for oil and gas payments.

At the time, the statement landed like a bombshell for the “digital gold” narrative. Bitcoin had spent much of its early life as a financial outcast, shunned by governments and institutions alike. Now, suddenly, it was being mentioned in the same sentence as global energy trade and the world’s largest commodity exporter.

The symbolism was powerful. Russia, increasingly isolated in traditional financial channels, was exploring alternative settlement mechanisms. Bitcoin appeared, at least rhetorically, as one of several tools being discussed to navigate a fractured geopolitical landscape.

This mattered most in the context of the U.S. dollar and the euro, which had long dominated energy settlement with Russia. European buyers historically paid for Russian oil and gas almost exclusively in those currencies. That framework began to fracture once Western governments imposed sweeping financial sanctions on Moscow.

The freezing of Russian foreign reserves under U.S. President Joe Biden accelerated a reassessment among non-aligned and rival states about reliance on Western reserve currencies. Russia’s response was not limited to crypto. It demanded ruble payments from certain counterparties, expanded trade invoicing in non-Western currencies, and explored bilateral settlement arrangements with partners outside the U.S.-EU axis.

With hindsight, however, the idea that Bitcoin would become a primary settlement currency for Russian oil has not materialized. Energy trade at scale continues to rely on state-backed currencies, clearing arrangements, and intermediaries capable of handling massive volumes, compliance obligations, and price hedging. Bitcoin’s role has remained peripheral rather than structural.

That distinction matters when evaluating claims that this moment marked a permanent turning point for the dollar. While dollar dominance has undeniably been questioned and diversified against, it has not been displaced. China and Russia have expanded non-dollar trade, but global energy markets continue to clear overwhelmingly in traditional currencies.

Political fragmentation within Europe added further complexity. Leaders such as Viktor Orbán resisted full energy disengagement, arguing domestic economic stability took precedence. This underlined that sanctions, while impactful, were neither airtight nor universally enforced.

Crypto did play a role at the margins. Digital assets were used for cross-border transfers, capital mobility, and limited trade settlement where counterparties were willing to assume volatility and regulatory risk. But this fell short of the sweeping sanction bypass sometimes implied. Existing EU and U.S. sanctions frameworks explicitly extend to crypto, and large-scale energy buyers remain subject to compliance, custody, and reporting constraints.

The idea that simply holding Bitcoin balances indefinitely could nullify sanctions also proved impractical. State-level trade requires convertibility, accounting clarity, and fiscal predictability. Bitcoin’s volatility and regulatory exposure limit its usefulness as a sovereign settlement base, even for countries seeking alternatives to Western finance.

Russia’s broader economic resilience during the early sanction period owed more to elevated commodity prices, capital controls, redirected exports, and fiscal intervention than to cryptocurrency adoption. The ruble’s recovery reflected administrative measures and trade flows rather than market-driven confidence.

That said, the episode was not meaningless for Bitcoin. It reinforced a core narrative: Bitcoin exists outside the control of any single state and is considered, at least conceptually, when traditional systems become politically constrained. For crypto advocates, that alone represented validation of its censorship-resistant design.

Still, the core thesis that Russia’s energy trade would migrate meaningfully to Bitcoin, triggering a new global monetary order, has not held up. Bitcoin’s role has remained symbolic and tactical, not foundational. Energy markets continue to operate on scale, liquidity, and stability that decentralized assets have yet to provide.

The legacy of this moment is therefore more modest but still instructive. It demonstrated how geopolitical stress tests existing financial infrastructure and pushes states to explore alternatives. Bitcoin emerged as part of that conversation, not as a replacement for it.

Another Sovereign Country Considers Bitcoin

Bitcoin Letter

Another sovereign country once appeared ready to consider Bitcoin, and for a moment, it looked like the experiment launched in Central America might quickly spread north. By 2026, however, the reality is more restrained. Bitcoin adoption has entered a slower, more selective phase across Latin America, shaped less by ideological enthusiasm and more by political limits, regulatory pressure, and hard economic trade-offs.

The early narrative was built on frustration with local currencies. Across parts of the region, long histories of inflation and devaluation created fertile ground for alternative monetary ideas. But broad claims of collapse have not held evenly. Mexico’s peso, for example, did not spiral into oblivion. After years of volatility, it proved comparatively resilient through the mid-2020s, supported by strong remittance inflows, nearshoring investment, and orthodox central bank policy. For most households, holding pesos in a bank did not become the nightmare scenario once implied.

That context matters when revisiting political calls to adopt Bitcoin as legal tender. Indira Kempis, a senator from Nuevo León, did publicly advocate for Bitcoin adoption and framed it as a tool for financial inclusion. She emphasized Bitcoin’s potential to serve the unbanked and said she was consulting with people knowledgeable about the asset. Those statements were real, but the effort never translated into national policy. Mexico did not move toward making Bitcoin legal tender, and no broad legislative coalition formed around the idea.

The argument that Bitcoin could bank the unbanked continues to resonate rhetorically. Millions of Mexicans remain outside the formal financial system, and digital wallets can lower barriers to entry. But by 2026, policymakers largely treat crypto as a complementary payment rail rather than a replacement for sovereign currency. Bitcoin is tolerated, regulated, and sometimes encouraged for innovation, but not elevated to the status of national money.

The experience of El Salvador has also tempered regional enthusiasm. President Nayib Bukele made history by adopting Bitcoin as legal tender, but the long-term outcome was more nuanced than early boosters expected. By 2024, El Salvador amended its Bitcoin law as part of negotiations with international lenders, removing mandatory acceptance and scaling back the legal tender framework. Bitcoin remained on the balance sheet and in official rhetoric, but its role shifted from revolutionary currency to an optional instrument.

That recalibration mattered across the region. Rather than triggering a domino effect, El Salvador’s path became a cautionary reference point. Legislators elsewhere continued to study crypto, but few were willing to stake monetary sovereignty on it.

Where Bitcoin has made steadier inroads is in payments and remittances. Crypto rails proved useful for cross-border transfers, particularly in corridors with high fees and slow settlement. Coinbase Global expanded services in Mexico by enabling recipients to cash out crypto into pesos at tens of thousands of retail locations. This targeted the remittance market directly, offering speed and cost advantages without requiring users to abandon fiat entirely.

That approach was more durable than legal-tender experiments. It allowed crypto to compete with incumbents like Western Union on efficiency rather than ideology. Over time, crypto remittances became another option in a crowded payments landscape rather than a wholesale disruption of national currencies.

Prominent business figures also continued to promote Bitcoin. Ricardo Salinas Pliego, founder and chairman of Grupo Salinas, remained one of Bitcoin’s most vocal advocates in Mexico, urging long-term holding and criticizing fiat debasement. His support kept Bitcoin in the public conversation, but it did not translate into official monetary reform.

By 2026, the tone around Bitcoin in Latin America is more pragmatic. Grand predictions of immediate legal tender adoption have faded. Volatility remains, and while Bitcoin has matured relative to its early years, governments are reluctant to tie fiscal stability to an asset they do not control. The idea that entire regions would balance their budgets through Bitcoin has not materialized.

Instead, Bitcoin occupies a narrower but more realistic role: a speculative asset, a hedge for some individuals, and a payment and remittance tool where it offers clear advantages. Sovereign adoption, where it exists at all, is partial and reversible. The era of sweeping declarations has given way to incremental integration, and that slower path now defines Bitcoin’s relationship with Latin American states.

The Strong Breadth of Crypto

Bitcoin Letter

Periods of weakness in Bitcoin price action often reflect positioning and profit-taking rather than a breakdown in the asset’s underlying structure.

Bitcoin remains a volatile asset by design, and retracements have historically occurred even during sustained growth phases. Sharp pullbacks, while uncomfortable, have repeatedly functioned as resets rather than trend reversals.

From a structural perspective, Bitcoin’s price behavior continues to reflect cyclical volatility rather than instability.

Corrections are a feature, not a flaw.

Bitcoin does not move in a straight line, and expectations that it should do so tend to form near local extremes rather than durable inflection points.

What has been more notable during periods of Bitcoin consolidation is the behavior of the broader digital asset market.

Even when Bitcoin has struggled to make near-term progress, capital rotation into alternative crypto assets has often remained active, signaling broader participation rather than capital flight.

Assets such as Ethereum, Solana, and Cardano have each experienced phases of outsized growth across multiple market cycles, alongside many smaller projects that have captured speculative and developmental interest.

This breadth reflects a market that has expanded beyond a single-asset thesis.

Bitcoin has begun to exhibit characteristics of a more mature asset, even while remaining volatile by traditional standards.

At the same time, much of the altcoin market remains earlier in its development curve, where experimentation, speculation, and rapid growth are more common.

As a result, capital that once flowed almost exclusively into Bitcoin increasingly disperses across a wider set of digital assets, particularly those perceived to offer higher upside at earlier stages.

A few years ago, broad-based participation across dozens of crypto assets would have seemed implausible.

The expansion of liquidity beyond Bitcoin reflects both increased risk tolerance and a growing belief that multiple blockchain networks can coexist with differentiated use cases.

That dispersion does not weaken Bitcoin’s role, but it does change how capital cycles through the ecosystem.

Macro conditions also continue to influence crypto markets.

Strength in the US dollar and shifts in global liquidity have periodically pressured risk assets, including digital currencies. While Bitcoin is often framed as an alternative monetary asset, it still competes for capital within the same global financial system.

During periods of dollar strength or tightening financial conditions, it is common for investors to reduce exposure, lock in gains, or rebalance toward perceived safety.

Currency volatility in emerging and developed markets alike has reinforced this dynamic, reminding investors that crypto does not exist in isolation from global macro forces.

Another recurring source of market anxiety has been the distribution of long-dormant bitcoin holdings from early industry failures.

The long-running resolution of the Mt. Gox bankruptcy has periodically resurfaced as a sentiment overhang, driven by concerns that large distributions could temporarily pressure prices.

Historically, however, such events have tended to influence short-term behavior rather than long-term market structure.

Even when additional supply enters the market, it does not alter Bitcoin’s fixed issuance schedule or long-term scarcity.

If selling pressure emerges, it typically delays recovery rather than defining a new secular trend.

Despite these intermittent headwinds, the broader direction of crypto adoption has remained constructive.

Bitcoin continues to attract institutional interest, corporate balance-sheet allocation, and sovereign-level experimentation, while alternative networks push forward with development, scaling, and application design.

That combination has reinforced the idea that crypto markets are no longer driven by a single narrative or participant class.

Breadth across assets, use cases, and geographies has become one of the defining characteristics of the ecosystem.

Volatility remains, cycles persist, and corrections are unavoidable.

But the widening participation across digital assets suggests that crypto has moved beyond its earliest phase, even if it remains far from mature.

That breadth continues to be one of the strongest signals underpinning the asset class.