Many in the crypto space have echoed a familiar sentiment over recent months: “The four-year crypto market cycle is dead.” Experts from the Bull Theory assert that while the four-year cycle may have come to an end, the Bitcoin bull run itself is merely delayed and could stretch until 2027.
Why The Four-Year Cycle May Be Ending
In a recent post on social media platform X, formerly known as Twitter, the Bull Theory analysts noted that the concept of Bitcoin adhering to a neat four-year cycle is weakening.
They highlighted that significant price movements over the last decade weren’t solely driven by Halving events; rather, they were influenced by shifts in global liquidity.
The analysts pointed to the current landscape of stablecoin liquidity, which remains high despite recent downturns, indicating that larger investors are still engaged in the market, poised to invest when appropriate macroeconomic conditions arise.
In the US, Treasury policies are emerging as pivotal catalysts. The recent buybacks are notable, but the analysts emphasize that the larger narrative lies in the Treasury General Account (TGA) balance, which is currently around $940 billion—almost $90 billion above its normal range.
This surplus cash is likely to flow back into the financial system, enhancing financing conditions and adding liquidity that typically gravitates toward risk assets.
Globally, the trends appear even more promising. China has been injecting liquidity for several months, while Japan recently announced a stimulus package worth approximately $135 billion, alongside efforts to simplify cryptocurrency regulations.
Canada is also moving toward easing its monetary policy, and the US Federal Reserve (Fed) has officially halted its quantitative tightening (QT) measures—a historical precursor to some form of liquidity expansion.
Political And Monetary Factors Align To Create Bullish Condition
The analysts explained that when major economies adopt expansive monetary policies simultaneously, risk assets like Bitcoin tend to respond more rapidly than traditional stocks or broader markets.
Additionally, potential policy tools, such as the Supplementary Leverage Ratio (SLR) exemption—implemented in 2020 to allow banks more flexibility in expanding their balance sheets—could return, resulting in increased credit creation and overall market liquidity.
There is also a political dimension to consider. President Trump has discussed potential tax reforms, including abolishing income tax and distributing $2,000 tariff dividends.
Furthermore, the likelihood of a new Federal Reserve chair who supports liquidity assistance and is constructive toward cryptocurrency could bolster conditions for economic growth.
Extended Bitcoin Uptrend
Historically, whenever the Institute for Supply Management’s Purchasing Managers’ Index (ISM PMI) surpasses 55, it has been followed by periods of altcoin season. The probability of this occurring in 2026 appears high, according to the Bull Theory.
The convergence of rising stablecoin liquidity, the Treasury’s injection of cash back into markets, global quantitative easing, the cessation of QT in the US, potential bank-lending relief, pro-market policy shifts in 2026, and major players entering the crypto sector suggests a very different scenario than the old four-year halving model.
The analysts concluded that if liquidity expands concurrently across the US, Japan, China, Canada, and other significant economies, Bitcoin is unlikely to move counter to that trend.
Therefore, rather than experiencing a sharp rally followed by a prolonged bear market, the current environment indicates a more extended and broader uptrend that could span through 2026 and into 2027.
Featured image from DALL-E, chart from TradingView.com
The anticipated crypto market structure bill, or namely the CLARITY Act, designed to provide essential regulatory clarity for digital assets in the United States, is approaching critical dates in the Senate. However, it faces significant complexities related to stablecoin yield, conflicts of interest, and decentralized finance (DeFi).
Senate Divided On Crypto Market Structure Bill
Legal expert and Chief Legal Officer of Variant Jake Chervinsky, reports that the Senate is divided into two committees: Banking, which is handling the securities law aspect, and Agriculture, responsible for the commodities law portion.
Both committees have published drafts of their work this fall, with the next step being markup, a process where hearings will be held to vote on amendments before sending the bill to the Senate floor for a full vote.
However, both committees are cautious and are unlikely to proceed with markup until they resolve ongoing disputes. Among these, three significant issues stand out.
The first major concern involves stablecoin yield. In the GENIUS Act, banks lobbied for a prohibition on interest payments, meaning stablecoin issuers cannot offer holders any form of interest or yield.
While the current prohibition prevents direct yield payments to holders, it does not address non-yield rewards or yield provided by third parties. Banks consider this gap a “loophole” and are advocating for broader restrictions to be included in the market structure bill.
Conflicts Of Interest And DeFi Regulations Stall Progress
The second issue revolves around conflicts of interest. Some Democratic senators have indicated they would not support the market structure legislation unless it includes provisions that restrict the President’s family from conducting business in the crypto space.
The third and perhaps most crucial issue pertains to DeFi. It is important to note that market structure legislation primarily addresses centralized platforms that exercise custody over user funds and transactions.
Chervinsky believes the bill should primarily focus on protecting DeFi, but traditional finance (TradFi) stakeholders have been pushing Congress to categorize virtually all entities in the crypto sector—developers, validators, and others—as intermediaries.
The expert emphasized that the success of any market structure bill hinges on ensuring robust protections for developers since the viability of the crypto industry relies on their contributions.
Given the intricate nature of these issues and the swiftly approaching holiday break, Chervinsky noted that it is possible that discussions about market structure could extend into January.
Senate Markup Set For December 17-18
Market analyst MartyParty provided another update on December 4, indicating that the bipartisan Digital Asset Market Structure Bill is gaining significant momentum in Congress, with a markup session in the Senate Banking Committee tentatively scheduled for December 17-18, just before the holiday recess
If successfully passed, he states that the bill could establish clearer pathways for tokenized real-world assets (RWAs) and mitigate “debanking” risks, paving the way for compliant exchanges and potentially stimulating market volumes following the Commodity Futures Trading Commission (CFTC) approvals for spot crypto trading.
This “regulatory convergence” is seen as a catalyst that could drive liquidity and energize the next bull market, reinforcing President Trump’s vision for the US to emerge as the “crypto capital of the world.”
Featured image from DALL-E, chart from TradingView.com
Despite the Bitcoin price recovery above the crucial $90,000 threshold—a level that has historically served as a supportive floor for the cryptocurrency—the market is exhibiting signs that a further correction may be imminent.
Bitcoin Price Recovery At Risk?
Market expert Rekt Fencer recently shared insights on social media platform X, formerly known as Twitter, suggesting that the Bitcoin price might be forming what he calls a “massive bull trap.”
This term refers to a deceptive bullish signal in which the price briefly surpasses a resistance level, in this case, the $90,000 mark, only to reverse into a decline. Such movements can entrap investors who bought in during the peak, leading to significant losses.
Fencer pointed out a troubling pattern reminiscent of early 2022 when Bitcoin reclaimed its 50-week moving average (MA)—currently positioned above $102,300—before experiencing a severe decline of roughly 60%, plummeting below $20,000 by June of that year.
He indicated that the recent price recovery following major drops to $84,000 should not be interpreted as a signal of near-term success, especially since the Bitcoin price is currently trading under the 50-week MA.
If historical trends repeat, this could mean that Bitcoin might see a significant drop, potentially reaching around $36,200, which could potentially represent the low point of the bearish cycle for the cryptocurrency. On the other hand, there are analysts who retain a bullish outlook.
BTC Bottom In Sight?
Market researcher and analyst Miles Deutscher expressed a confident sentiment, stating he believes there is a 91.5% likelihood that the Bitcoin price has hit its bottom, based on his analysis of key developments.
He noted that recent weeks have been dominated by negative news stories, including concerns surrounding Tether (USDT) and the implications of China’s actions on crypto, which he asserts often mark local price bottoms.
Moreover, Deutscher pointed out a shift in market flows from predominantly bearish to bullish. He explained that the trading environment has recently seen a resurgence in buying momentum, with large investors, or “OG whales,” ceasing their selling. This change has been reflected in the order books, indicating a possible stabilization in market sentiment.
Additionally, the liquidity landscape appears to be shifting, with market conditions tightening in recent months. The potential appointment of a new Federal Reserve chair known for dovish policies, coupled with the official end of quantitative tightening (QT), could further influence market dynamics in favor of buyers.
Deutscher concluded by emphasizing that given the extreme levels of fear, uncertainty, and doubt (FUD) in the market, combined with improvements in trading flows, he believes that the odds favor the notion that the Bitcoin price has indeed reached its bottom.
Featured image from DALL-E, chart from TradingView.com
Meta Platforms Inc. shares climbed after reports that the company is weighing deep reductions to the budget behind its metaverse projects. Investors pushed the stock higher as traders reacted to the possibility that one of the company’s most costly bets could be scaled back.
Metaverse Budget Faces A Major Trim
Based on reports from Bloomberg and Reuters, Meta is considering cuts of up to 30% to the unit that builds its virtual reality and metaverse products, a move tied to planning for the company’s 2026 budget. The change would mainly affect Reality Labs, the division that makes Quest headsets and Horizon virtual spaces.
Reality Labs Has Been Losing Billions
Reality Labs has posted heavy losses since 2020. Reports put the total at more than $60 billion and, by some counts, closer to $70 billion in cumulative losses over recent years. Those sums have kept pressure on management to rethink where the company puts its money.
Investors Reward A Smaller Bet
The market response was swift. Meta’s share price jumped roughly 4%, and some outlets calculated that the move added about $69 billion to the company’s market value as traders reacted positively to a pullback from costly metaverse spending. That reaction signals investors prefer money steered toward projects with clearer near-term returns.
Layoffs Could Follow Early Next Year
Reports have warned that the cuts could bring staff reductions inside Reality Labs, with layoffs possibly starting as early as January 2026. Company leaders reportedly discussed budget scenarios during recent planning meetings. Any job cuts would mark a sharp change after years of heavy investment in virtual reality and related software.
A Bigger Push Toward AI And Wearables
At the same time, Meta has been moving money into artificial intelligence and related hardware. The company finalized a multibillion-dollar deal this year to take a large stake in Scale AI — a pact reported at roughly $14 billion for a near-half ownership — and then hired talent from that startup to help run a new AI effort. That tradeoff shows where Meta’s priorities now lie.
What This Means For Users And Competitors
For people who own or use Meta’s VR gear, this does not mean every project will end. But several initiatives could see slower progress and smaller teams. For rivals and suppliers in the AR/VR space, the cut may reshape who wins short-term device and platform business.
Analysts say the move narrows one major uncertainty for Meta while opening another: how well the company can compete in AI after so many dollars flowed into virtual worlds.
Featured image from Unsplash, chart from TradingView
Maximum Physical Privacy and Security as a Crypto Whale: OpSec Strategies Against Physical Threats & Scams
In recent years, physical attacks on cryptocurrency holders have surged dramatically. According to data tracked by Bitcoin security expert Jameson Lopp, reported physical attacks on Bitcoin and crypto holders increased by 169% in just six months in 2025, with dozens of violent incidents including kidnappings, home invasions, and armed robberies.
Lopp maintains a comprehensive list of over 200 known physical attacks since 2014, ranging from $5 wrench attacks (where attackers use physical coercion to force transfers) to organized kidnappings involving torture.
As a crypto whale — someone holding significant digital assets — you are a high-value target. Criminals know crypto transfers are irreversible, making you more attractive than traditional wealthy individuals. Beyond digital hacks, threats now include real-world violence and sophisticated scams like pig butchering that can lead to doxxing, luring, or physical meetings.
This article focuses on physical OpSec (operational security) to maximize privacy and safety in everyday life, drawing from best practices recommended by experts like Lopp and security firms.
Adopt a Low-Profile Lifestyle: The Foundation of Physical Privacy
The best defense is not being targeted in the first place.
Never discuss your crypto holdings publicly, at parties, or even with close friends unless absolutely necessary. Loose lips lead to targeting.
Avoid all visible signals of wealth or crypto involvement: No Bitcoin bumper stickers, conference lanyards, luxury watches/cars that stand out, or social media posts showing opulent lifestyles.
Dress modestly, drive common vehicles, and live in unassuming neighborhoods. Blend in completely.
Remove online traces: Scrub old posts, use pseudonyms, avoid linking real identity to wallets or addresses.
Fortify Your Home and Personal Environment
Your residence is the most likely attack vector.
Install layered physical barriers: Reinforced doors with deadbolts, shatter-resistant window film, motion-activated floodlights, visible security cameras, and alarm systems monitored 24/7.
Create natural deterrents: Thorny bushes under windows, fenced property with locked gates, no easy climbing points.
Build a safe room (panic room) with a solid-core door, independent communication (satellite phone or hardline), supplies, and a weapon if legal/trained.
Store seed phrases and hardware wallets in bolted safes or bank safety deposit boxes — never all in one place.
Consider professional security assessments or guarded communities if your holdings justify it.
Design Your Wallet Setup to Defensively Against the $5 Wrench Attack
The classic $5 wrench attack — where an attacker threatens violence until you hand over keys — cannot be fully prevented, but it can be made impractical.
Use multisignature (multisig) wallets requiring multiple keys from geographically separated locations (e.g., different cities or countries). Even under duress, you physically cannot comply quickly, forcing attackers to keep you hostage longer and increasing their risk.
Distribute keys/backups across trusted family, institutions, or secure vaults in multiple jurisdictions.
Avoid “duress PINs” or decoy wallets — attackers may test them or continue violence if they suspect more funds.
Consider collaborative custody services (e.g., Casa, AnchorWatch) that add institutional keys and emergency lockdowns.
Daily Movement and Travel OpSec
Vary routines: Routes to work, gym times, etc. Predictability enables ambushes.
Maintain situational awareness: Head on swivel, avoid phone distraction in public, note tailing vehicles/people.
Travel low-key: Use rideshares or rentals instead of personal luxury vehicles; fly commercial in economy if possible; never post travel plans in real-time.
For high-risk areas (e.g., certain countries with known crypto kidnappings), hire executive protection or avoid altogether.
Carry minimal identifying info; use burner phones for sensitive communications.
OpSec often comes into play in public settings. For example, if members of your team are discussing work-related matters at a nearby lunch spot, during a conference, or over a beer, odds are that someone could overhear. As they say, loose lips can sink ships, so make sure you don’t discuss any sensitive company information while out in public.
A lot of OpSec missteps can be avoided by being more aware of your surroundings and the context in which you are speaking: what you’re saying, where you are, who you’re speaking to, and who might overhear. It’s a good idea to go over the “no-no’s” for your specific company during onboarding and to remind employees of them periodically.
Counter Social Engineering, Phone Scams, and Pig Butchering Schemes
Many physical attacks begin with doxxing via scams.
Phone scams / SIM swapping: Use authentication app 2FA (not SMS), put PINs/passwords on mobile accounts, screen unknown calls ruthlessly, never give out verification codes.
To lock down your SIM, contact your mobile phone carrier. That is a standard that has been tested by telecommunications operators in the US, the UK, Poland, and China — also check out this tweet and this article. You just need to insist on it or visit the head office, and I’m sure that the support manager on the phone mayn’t know about it! Ask them to NEVER make changes to your phone number/SIM unless you physically show up to a specific store with at minimum two forms of identification. This (should) prevent hackers from calling up AT&T or T-Mobile or Vodafone, claiming to be you, and asking them to port your phone number to a new phone.
Get countermeasures in place. The last step of operational security is to create and implement a plan to eliminate threats and mitigate risks. This could include updating your hardware, creating new policies regarding sensitive data, or training employees on sound security practices and company policies. Countermeasures should be straightforward and simple.
Pig Butchering Schemes
These long-con scams build fake romantic or friendship relationships online, then push “lucrative” crypto investments on fake platforms.
Red flags: Unsolicited contact on dating/social apps, rapid affection, steering conversation to crypto, pushing specific (fake) platforms.
Rule: Never invest with or send crypto to anyone you met online. Period. If someone disappears when you refuse to invest, it confirms the scam.
General rule: Any unsolicited investment “opportunity,” recovery scam, or urgency play is fraud.
Additional Physical OpSec Tips for Crypto Whales (Updated for Late 2025 Threats)
We’re talking home invasions with intruders posing as delivery drivers (San Francisco $11M robbery on Nov 22), street kidnappings (Bangkok, Bali, Ukraine), carjackings forcing on-the-spot transfers (Oxford), and straight-up torture/murder when victims can’t or won’t pay (Dubai double murder, multiple Russian cases). The pattern is clear: organized crews are now routinely use delivery disguises, follow targets from public places, grab people off the street, or hit homes with overwhelming force and torture.
The threat model has upgraded from opportunistic thugs to professional kidnapping rings.
Delivery & Package Paranoia
2025’s #1 new vector is criminals posing as FedEx/Uber Eats/Amazon drivers.
Never accept unsolicited deliveries. Route all hardware wallets, seed backup plates, anything valuable to PO Boxes, private mailboxes (e.g., UPS Store), or secure coworking spaces, or lawyer/accountant offices.
Install a package locker or secure drop box outside your perimeter that doesn’t require you to open the door.
Use doorbell cams + intercom. If a delivery person shows up you didn’t order, do not open the door — ever. Tell them to leave it outside the gate or return later.
Bonus: Have mail forwarded through re-mailing services (e.g., Traveling Mailbox or Earth Class Mail) so your real address never appears on anything.
Thief posing as a delivery man steals $11mn in crypto from a man in San Francisco, after tying him up and pulling a gun.
Data Broker Scrubbing + Digital Footprint Eradication
Most victims who got hit hard were doxxed through basic OSINT.
Pay for professional deletion services (DeleteMe, Kanary, OneRep, or 360 Privacy) — do it quarterly. The average whale appears on 70–120 data broker sites with home address, phone, relatives, property records.
Remove your home from Google Street View (request blur) and Zillow, Redfin, etc.
If you’re really paranoid (you should be), buy your next house through an anonymous land trust or Wyoming/LLC structure so your name isn’t on public property records.
Duress Planning That Actually Works
Decoy wallets are good, but pros now expect them and will keep torturing. Real solution:
Have a very believable “main” hot wallet with $50k–$250k (enough to satisfy most crews).
Real stack in geo-distributed multisig that literally cannot be moved without keys in 2–3 different countries and a 7–30 day timelock on large amounts.
Practice your duress story: “That’s everything, I promise — the rest is in a multisig with my ex-wife in Canada and my lawyer in Switzerland. It takes weeks to move.”
Safe room with ballistic blanket/door, satellite phone or VOIP line independent of home power, and a weapon if you’re trained.
Family & Staff OpSec (The Weakest Link 90% of the Time)
Most tortured victims in 2025 were attacked together with spouses/kids/parents because the attackers knew the whole family would be home.
Your spouse and adult children must be fully understand OpSec — no bragging, no crypto stickers, no “my husband is loaded in Bitcoin” comments at school events.
Domestic staff (cleaners, nannies, gardeners) are the #1 leak vector. Vet them like you’re hiring a CIA asset — background checks, NDAs, never let them go if they ever ask about crypto.
Give family pre-agreed code words for phone calls (AI voice cloning + fake kidnapping calls are now common).
Conference & Travel Hardening (You’re Being Watched)
Bitcoin 2025 in Vegas and every major conference now has professional spotters.
Book flights/hotels under alias or corporate name.
Never post that you’re going until you’re already home.
Use cash or privacy.com virtual cards for everything on-site.
Travel with a “burner” phone and laptop that have zero access to real keys.
If you’re a known whale, hire close protection for the duration — it’s $2–4k/day and worth every penny.
The Nuclear Options (For 9-Figure+ Holders)
Relocate to a truly safe jurisdiction (UAE, Singapore, Switzerland, or certain gated compounds in Puerto Rico/Cayman).
Full-time executive protection team + armored vehicle with driver.
Collaborative custody with institutions that have armed response protocols (e.g., AnchorWatch + private security integration).
During and After an Incident
Life > Bitcoin. If attacked, comply as needed but use multisig delays to your advantage (“I need my partner in another country”).
Have emergency lockdown features enabled on wallets/apps.
Report incidents to authorities and communities (e.g., contribute to Lopp’s list) to help others.
Have inheritance/dead-man-switch planning so funds aren’t lost if the worst happens.
Final Thoughts
Bottom line for end of 2025: The game has permanently changed. The crews doing these hits are no longer random junkies — they’re transnational gangs who research targets for months, use fake delivery uniforms bought on Telegram, and are willing to waterboard you while your kids watch if they think you have more. Silence, geographic distribution of keys, and making yourself an annoyingly hard target are now non-negotiable if you want to keep both your bitcoin and your fingernails.
Maximum physical privacy as a crypto whale requires treating yourself like a high-net-worth individual in witness protection — constant vigilance, multiple defense layers, and acceptance that perfect security doesn’t exist, only making attacks too costly or difficult. The combination of strict OpSec, physical fortifications, geographically distributed multisig, and scam paranoia has kept many whales safe despite rising threats.
Implement these gradually, starting with the basics: shut up about your stack, secure your home, and your home, and distribute your keys. Your wealth is freedom — don’t let poor OpSec turn it into a liability. Stay safe!
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A combined obituary for TradFi’s (mis)understanding of bitcoin’s underlying value.
This article was written in response to a statement made by European Central Bank President Christine Lagarde in an October 7, 2025, interview, where she claimed that bitcoin has “no intrinsic” or “underlying value.”
When Christine Lagarde says Bitcoin has no “intrinsic” or “underlying value,” she’s (likely) referring to the fact that it — unlike an equity — doesn’t produce a cash flow. The classic critique that follows is that it’s “purely speculative”, meaning it’s only worth what someone else is willing to buy it for in the future.
She further dismisses Bitcoin as a form of “digital gold” and seems to suggest that physical gold is somehow different — presumably because she assigns it value for its use cases beyond its function as money (if I had to guess).
To say that Bitcoin doesn’t have a cash flow is factually correct — but as nonsensical as saying “language” or “mathematics” have no cash flow.
One could, of course, counter Lagarde’s statement by appealing to the subjective value proposition — arguing that there’s no such thing as intrinsic value, since all value is subjective, and that anything can only ever be worth what someone else is willing to pay for it in the future.
But instead of taking that route, I’ll go the roundabout (and more entertaining) way of showing why she’s not only wrong, but also inconsistent by her own logic.
Let’s start with gold and the idea that something supposedly has “intrinsic value” because it has a use case beyond its function as money — to get that out of the way.
Gold
We’ll start with a forum excerpt from Satoshi themselves:
The entire point of money is to be one step removed from bartering — to serve as a neutral medium that communicates the underlying economic reality between supply and demand in an economy, allowing participants to make maximally informed decisions.
For this reason, throughout history, the evolution of money has consistently trended toward what cannot be easily recreated at will. The reason is simple: it’s within everyone’s self-interest, and the economy as a whole (as we will see), that the money being used and accepted cannot be diluted.
If gold were assumed for a moment to be absolutely scarce and used solely as money, the price of an apple becomes a pure function of supply and demand. The price, expressed in gold, could only change if the real supply or demand for apples changed. In this setup, all market participants are maximally informed and economic reality is upheld.
Apple price = f(Apple supply, Apple demand)
If, however, gold all of a sudden gained demand for some other purpose, such as being used for jewellery, the dynamics change. The price of an apple now becomes a function not only of the supply and demand for apples, but also the jewellery demand, as it’s causing a change in the denominator (money) itself. The result is a less-than-ideal form of money, where economic reality is distorted and market participants are presented with compromised information.
Apple price = f(Apple supply, Apple demand, Jewellery demand)
Note that this is materially different from a setup where, as in the real economy, billions of participants want billions of different things while still using the same money.
Money is merely the measuring stick, which means that the demand for bananas isn’t going to affect the price of apples just because both prices are expressed in the same unit of account. What is going to distort prices is if people start demanding the good being used as money for something other than its monetary function.
The irony here, of course, is that gold’s supposed “usefulness” — beyond money — its role in jewellery or industry — which supposedly makes it an exception to the rule of having underlying value, actually makes it less perfect as money. By having a non-monetary use, gold introduces an additional demand parameter into what’s meant to be a neutral measuring stick.
The ideal money, as Satoshi pointed out, would be a kind of “grey metal” — something with no other purpose than being perfect money itself. That “grey metal” is, of course, Bitcoin.
Let’s now move on to cash flows — the main topic of discussion whenever TradFi talks about “underlying” or “intrinsic” value.
After all, many of the same people who point out that Bitcoin doesn’t have any aren’t as internally conflicted as Lagarde, and extend the same judgment to gold (that it doesn’t have intrinsic value)— which, at the very least, is a more consistent position.
Cash flows
Last year, Meta (Facebook), Google, and Amazon reported combined cash flows of roughly $160 billion. If someone asked Lagarde whether these equities had an underlying value, she would of course say yes. Each company sits on billion-dollar assets and billion-dollar expected future cash flows that can be discounted to generate an equity valuation.
Bitcoin, on the other hand, has no comparable cash flows to speak of — no disagreement there.
But before we go further, let’s ask: Where do those cash flows actually come from? In other words, what is the driver of those cash flows fromMeta, Google, and Amazon?
We’ve all used Facebook. It offers a global platform for people to connect, message, and share. Its revenue comes from selling ads on top of user attention. Why do people use Facebook? Because everyone else does. Because it offers the best experience. It’s a social network, meaning every new user adds value to everyone else.
What about Google? Same logic. It’s the world’s leading search engine — the front door of the internet. It also monetises through targeted advertising. Why do you use Google instead of Yahoo or Bing? Because everyone else does. The more data it gathers, the better it gets for everyone. Another network effect (often leading to winner-take-all outcomes).
Amazon? Same principle, different domain. It’s the default marketplace of the world, connecting buyers and sellers on a global scale. Amazon profits from subscriptions and logistics fees. Consumers use it because every supplier is there; suppliers use it because every consumer is there. Every new participant makes the network more useful. It started with books — now it sells everything.
Now, imagine each of these companies woke up one morning after a collective bump to the head, decided profit was overrated, and poured their fortunes into an endowment run entirely by an AI workforce — keeping the networks running exactly as before, just without the monetisation.
Shareholder value would immediately drop to zero.
But what about the network? Would people still use Facebook, Google and Amazon? Of course!
Because the underlying value to the users was never the company itself — it was the network it monetised (which they had no other way of accessing without going through that monetisation). The fact that the network now costs nothing or very little to use wouldn’t make it less valuable for them, now would it?
The equity value and the network value are two different things.
The Bitcoin Company
Now, imagine another startup with a single vision: “We’re going to build the best money in the world.”
Its service is to launch a global network for value transfer and storage, promising a monetary asset with a fixed supply of 21 million units forever — no dilution, no exceptions (pinky promise). The monetisation model: small transaction fees, 10x lower than competitors.
We call it “The Bitcoin Company”.
Imagine it miraculously gained some early traction. Why would people continue or grow interested in using it? Well, because more and more people does. And as they do, both the equity value of those owning the company (as they collect fees) and the network value to the users would grow.
There you’d have your cash flows.
Ironically, this is the same “business model” that underpins the central banking system, only they defaulted on their original promise. By positioning themselves as issuers atop the fiat monetary network, central banks and megabanks monetise it through two layers.
At the base lies the fiat monetary network, consisting of state-backed money. Central banks monetise this layer by issuing the very units the network runs on and indirectly financing government deficits. Above them, megabanks monetise the same network through credit creation, earning profits from interest on loans, and now increasingly from stablecoins (which is like credit on top of credit.).
Lagarde insists stablecoins are “different” because she views them as network expanders that amplify the monetary network she controls. Just as Facebook’s advertising revenue grows with its user base, the spread of stablecoins enlarges the euro monetary network, giving central banks greater room for monetary expansion.
From her perspective, this expansion of units as the network grows functions like “cash flow” in the business model of central banking — and, in her eyes, that’s what constitutes its underlying value.
The fiat monetary network stack. Stablecoins has the potential to expand the fiat monetary network.
Now imagine the same twist: the Bitcoin Company dissolves. No CEO. No board. No office, anymore. The equity value and the cash flows immediately go to zero, but the Bitcoin Network remains —operations henceforth run without rulers (according to some “decentralised consensus protocol” dreamt up one night by some mysterious entity called Satoshi).
Ask yourself: would that make the network more or less valuable?
To be clear — we’ve just removed all counterparty risk. No late-night CEO tweets. No offices to raid. No conflict of interest. No Coldplay scandals.
The network just became (1) even cheaper to use, and (2) even the tiniest worry about that pinky promise was just erased (which, to be fair, you probably should have been pretty worried about).
So yes, from the user’s perspective, the network just became more valuable.
Equity value vs Network value
Christine Lagarde simply hasn’t done the intellectual groundwork needed to understand what she’s critiquing. Like so many others before her, she’s mistaking equity value (which generates cash flows) for the network value — without recognising the path dependency between them: there would be no cash flows without the network in the first place (!)
The wrong question: What is the equity value of the company monetising the network? The right question: What is the network’s value to the users?
In other words:
What is the value of being able to speak with anyone in the world, for free, instantly, across borders and cultures? (Facebook)
What is the value of instantly accessing the world’s knowledge? (Google)
What is the value of finding, comparing, and receiving any product from anywhere on Earth, delivered in a day? (Amazon)
What is the value of moving your money — across borders and across time? Perhaps even more refined, what is the value of undistorted price signals in an economy? (Bitcoin)
The Bitcoin network isn’t valuable despite not being a company — it’s more valuable because it isn’t.
Unlike Meta, Google, or Amazon — whose networks power applications and commerce —the Bitcoin network provides the monetary foundation beneath them all. Its total addressable market is every transaction on Earth.
Now, you could try to build a straw man argument by claiming that the Bitcoin network isn’t truly a monetary network, since it isn’t “widely accepted” by your standards. The problem with that line of reasoning is (1) it implies that nothing new could ever emerge under the sun unless the entire world agreed on it in advance (pretty unreasonable), and (2) it would, by your own logic, require you to dismiss over 90% of the world’s sovereign currencies as money — including the Canadian dollar, the Swedish krona, and the Swiss franc — since Bitcoin’s market capitalisation already surpasses them many times over and would likely be accepted as payment by far more people globally.
The Bitcoin Network ranks 8 out of 108 fiat currencies. Source.
Returning to the initial claim, to say that Bitcoin doesn’t have a cash flow is factually correct — but as nonsensical as saying “language” or “mathematics” have no cash flow. True enough, not in themselves — but they’re indispensable tools for creating everything that does.
In fact, if the money you’re using did offer cash flows (an interest rate yield), that would be a sign you were dealing with defective money.
Let me explain why in the simplest terms:
Suppose the total money supply is $100,000, and ten depositors each place $10,000 into a bank. The bank offers them 4% interest and lends out the full amount to borrowers at 5%. After a year, the borrowers owe $105,000 in total (principal plus interest).
Do you see the problem?
The borrowers owe more money than exists in the entire system. Where does the extra $5000 come from?
No amount of productivity or hard work can solve this mathematical impossibility. The only thing that can is the creation of new money to fill the gap. For the system to keep running, the money supply would have to grow at par with, or faster than, the interest rate being offered to depositors. It’s the only way the math can work out. That means the supposed “cash flow” being offered in the form of an interest rate is being paid for by diluting the very money it’s denominated in, which is the very definition of a Ponzi scheme (!)
The result is a lesser form of money — one that must constantly lose value for the math to work out.
It would now appear we’re at a paradoxical intersection: on one hand, Lagarde and others dismiss Bitcoin’s underlying value on the grounds that it has no cash flow; on the other, we can now see that if it did have a cash flow, it would by definition be flawed money.
It therefore seems that the very trait that makes Bitcoin perfect money — its inability to conjure fake cash flows out of thin air — is precisely what’s being used to dismiss it by those defending a system that only functions by doing exactly that. So how do we work this out?
Here lies the crucial insight that Lagarde, and many others, fail to grasp: something can possess underlying or intrinsic value in a roundabout way.
The roundabout way
Take car insurance (or any other insurance policy, for that matter). Judged in isolation, it has a negative expected value — you pay premiums every month, and it’s structurally priced so that you’ll never get rich buying infinite insurance policies (if that were possible, everyone would).
But when you combine the policy with the car you own and depend on — the picture changes. You’ve now removed the risk of potential ruin. Evaluated together, you now have a situation where the insurance policy explodes in value (generating a positive cash flow) precisely when you need it most — when the car breaks down. Viewed as a whole, you end up with a positive geometric return (that is, underlying value through the omission of ruin) when the accident eventually occurs, which, odds are, it eventually will.
Cash flow/usefulness of an insurance policy.
To illustrate this more practically, consider a scenario where a person depends on their car to get to work. Without insurance, a breakdown might mean they can’t afford the repair, resulting in the loss of both the car and their income. With insurance, however, the repair is covered, allowing them to maintain their income stream. In this way, the insurance policy has value far beyond its direct payoff, as it preserves the ability to keep generating cash flow.
Y axis = Cash flow from income.
This, as we shall now understand, is the entire logic behind money in the first place — and we could just as easily swap the insurance policy for a stack of cash (which is really just a more universal, unspecific form of insurance). You save money not because it generates a cash flow, but because it gives you future optionality and explodes in usefulness when you need it most, allowing you to quickly recover and adapt when the unexpected occurs.
This is not speculative behavior. The reason you hold money is not because you’re engaging in what critics accuse you of — the “greater fool” prediction business, but precisely because you want to avoid it! You hold money not because you’re making a prediction of the future, but because you know you can’t, and therefore want to be ready for whatever it brings. After all, why would you pay for car insurance if you knew you would never need it?
The “greater fool” argument collapses under closer scrutiny because it assumes every individual faces the same circumstances, preferences, and time horizons. It treats the economy as a zero-sum game in which one person’s prudence must come at another’s expense. But reality is the opposite: what’s rational for each participant depends on their unique position in time and space.
Someone sitting on a vast reserve of cash might rationally choose to exchange part of it for a new car with a better A/C that improve their comfort and quality of life. Someone else, with less savings or living in a colder climate, might rationally do the precise opposite — defer a new car purchase and strengthen their savings buffer. Both are acting rationally within their own context. The latter isn’t a “greater fool” for buying the money the former is selling for a car. They’re both winners! Otherwise they wouldn’t agree to the trade in the first place!
Markets exist precisely because we don’t share the same circumstances or needs. The value of money, then, isn’t born from finding a “greater fool”, but from coordinating billions of rational actors, each seeking to balance their own lives in their own way.
We can extend this observation to all the networks and protocols mentioned earlier. Whether it’s a monetary network, a social network, mathematics, or language — each derives its value in a roundabout way that continues to fly over the heads of people like Lagarde, whose job ironically is supposed to be an expert on these things.
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Kraken and Deutsche Börse has announced a strategic partnership that will integrate crypto with traditional market infrastructure.
Kraken And Deutsche Börse Have Partnered Up
As announced in a press release, US-based digital asset exchange Kraken has teamed up with Deutsche Börse Group to bridge crypto and traditional finance and deliver institutional investors access across asset classes.
Headquartered in Frankfurt, Deutsche Börse Group is one of the biggest financial market infrastructure providers in the world. It operates the Frankfurt Stock Exchange, which ranks the 12th largest in market cap globally.
In the first phase of the partnership, Kraken will integrate directly with 360T, a subsidiary of the German multinational corporation that provides foreign-exchange trading services. This integration will provide Kraken clients access to the latter’s foreign-exchange liquidity.
The partnership will go the other way, as well. Via Crypto Finance, another Deutsche Börse subsidiary, and Kraken, Deutsche Börse Group clients will be able to trade cryptocurrencies and derivatives.
The two firms also plan to leverage Kraken Embed, the crypto trading infrastructure solution created by Kraken, to provide institutions in Deutsche Börse Group’s network with digital asset access.
The press release noted:
Together, the companies will develop advanced white-label solutions enabling banks, fintechs, and other financial institutions to offer secure, compliant crypto trading and custody services to clients across Europe and the U.S.
Another thing Kraken and Deutsche Börse Group are collaborating on is integration of xStocks in the ecosystem of 360X, Deutsche Börse’s tokenized trading venue. xStocks is a stock tokenization standard that has been gaining adoption. Kraken announced the acquisition of Backed, the company behind xStocks, just this Tuesday.
Arjun Sethi, Kraken Co-CEO, said:
By linking traditional and digital markets across a wide range of asset classes, we’re building a holistic foundation for the next generation of financial innovation: defined by efficiency, openness, and client access.
The companies are also looking to make derivatives listed on Deutsche Börse Group’s Eurex, the largest futures and options marketplace in Europe, available on Kraken, if regulators provide the nod.
Stephan Leithner, Deutsche Börse CEO, noted:
This collaboration with Kraken is a great strategic fit for Deutsche Börse Group. It underscores our ongoing commitment to shaping the future of financial markets by combining the trust and resilience of our regulated infrastructure with the innovation of the digital asset ecosystem.
Back in October, the German organization also announced another crypto partnership, this one with USDC issuer Circle. The collaboration aimed to integrate the latter’s USD and EUR stablecoins in the former’s infrastructure to boost stablecoin adoption in Europe.
Bitcoin Price
At the time of writing, Bitcoin is trading around $92,500, up 1% over the last week.
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A new player has emerged in the world of cryptocurrency banking, with a team of former executives from the collapsed Signature Bank at the helm. The establishment of N3XT comes nearly three years after Signature Bank’s downfall in March 2023, which significantly impacted the crypto industry.
Former Signature Bank Leaders Establish N3XT
According to a report by Reuters, the newly founded blockchain-based bank aims to facilitate instant US dollar payments around the clock, led by Scott Shay, who served as the founder and chairman of the Signature Bank. Jeffrey Wallis, the former director of digital assets at Signature, will take on the role of CEO at N3XT.
Per the report, N3XT will operate under a special-purpose bank charter in Wyoming and has decided to avoid typical lending activities, which were at the heart of the collapsed Signature Bank.
“Every dollar of deposits will be backed by cash or short-term U.S. Treasuries,” Wallis explained, noting that the bank will publish its reserve holdings daily.
This sets N3XT apart from its predecessor, Signature Bank, especially given that its reserves will be held with custodial partners, though Wallis did not disclose their names.
Importantly, N3XT will not be insured by the Federal Deposit Insurance Corporation (FDIC) since Wyoming special-purpose banks are not required to obtain such insurance.
The collapse of Signature Bank, along with the failures of Silvergate Bank and Silicon Valley Bank, pointed to a troubling trend among banks with significant uninsured deposits and ties to the cryptocurrency sector. Rising interest rates and a loss of depositor confidence culminated in bank runs that led to their downfall.
Solutions For Crypto Clients
Addressing concerns about the safety of client assets, Wallis reassured potential customers in the crypto industry, stating, “We do not lend against our balance sheet, so clients always have confidence that their capital is available to them and is never at risk.”
He emphasized that the newly established bank is designed to offer a new and “unique banking structure,” ensuring that clients’ liquidity is readily accessible according to their economic needs.
Wallis further distinguished N3XT’s approach to risk management from that of Signature Bank, which was criticized for “poor management” and a focus on “rapid, unrestrained growth” with little attention to risk.
“We are not making any lending decisions with the balance sheet,” Wallis reiterated. “We are keeping our clients’ assets in full liquid form.” N3XT will reportedly focus on catering to crypto clients, many of whom Wallis mentioned are already in the onboarding process.
As of this writing, Bitcoin (BTC), the market’s leading crypto, is trading at $92,834. It has consolidated above the key $90,000 support level for the past few days, sparking new hopes for a potential recovery above $100,000 by the end of the year.
Featured image from DALL-E, chart from TradingView.com
The cofounder and CEO of Circle says “money as an app platform” is the next step in a digital-based global economic system that’s right around the corner.
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