A lot of the confidence I had, vanished, once I stopped listening to podcasts with Bitcoin authority figures and started to research on my own.
The reason I made the move is that I am pretty sure Bitcoin is going to become Gold.
Based on my research, the masses embracing Bitcoin as a medium of exchange over stablecoins/CBDCs is a very remote probability.
This doesn't mean that Bitcoin is not going to go up in fiat terms of course. I still think there are massive fiat gains to be made in Bitcoin.
I'll be a buyer on draw-downs of 45-55% from ATH, and seller during "clarity" (e.g. policy, liquidity, etc.) spikes.
For me, Bitcoin went from being Hope to being a hedge against "The Great Taking" type scenario and a niche, permissionless MoE.
If you are unfamiliar with the book "The Great Taking":
- The book describes what Webb calls "The Great Taking" - a systematic, global seizure of all collateralized assets through legal, technological, and financial mechanisms. In other words, you don't own the stuff in your brokerage account.
- This is enabled by the laws in every country in the World (they were changed recently to allow for this global seizure type scenario).
Of course, if this happens, then Bitcoin and Gold get revalued much higher overnight.
Based on my research, the Controllers changed the laws for an edge case, this is not the base case type scenario.
If I have a reason to believe that the odds of Bitcoin as a mass MoE increase over time, I will scale back into it.
For now, Bitcoin is a dissident MoE, a Store of Value, and a "Great Taking" scenario type hedge, and I don't see this changing for the better any time soon.
More context on the post-ETF era:
My take on how the 4-year Bitcoin cycle changes in a post-ETF era.
TLDR: The 3 years up, 4th year crash, halving-based cycle is breaking. We are in a post-ETF regime where price discovery is dominated by CME + ETFs, not offshore perps. Cycles persist, but they're longer, flatter on the way up, sharper but shallower on the way down, and more synchronized with macro liquidity and options positioning than with the halving.
What changes in the post-ETF era:
1) Where the price is set
- Pre-ETF: offshore perps + retail leverage -> parabolic blow-off tops, then -80% busts.
- Post-ETF: CME futures + ETF creations/redemptions + dealer gamma do the heavy lifting. That caps "face-melting" tops and engineers weekend flushes (ETFs closed, dealers hedge via futures).
* Authorized participants hedge creations/redemptions with CME futures intraday; dealers use options.
* The Net effect: tops get "pinned" near large open-interest strikes, flushes happen on weekends when ETFs are closed and futures/perps can run stops.
So "tops get pinned" because rallies often stall beneath the biggest call walls because systematic hedging injects sell pressure right at the breakout level.
ETF plumbing shuts down on weekends, so the Monday effect is that when the stock market reopens, ETF flows and AP (Authorized participants) arbitrage come back online, often snapping price back toward fair value after the weekend move.
* As ETF AUM grows, dealer gamma around key strikes/quarters caps blow-off tops (they sell into rips, buy dips).
When Bitcoin sprints into a strike with large positive dealer gamma, the street's systematic selling into strength adds supply right where momentum needs air, pinning price under/around that level. Same in reverse on dips.
* Basis trades (long ETF/spot, short futures) arbitrage dislocations -> fewer parabolas, more mean reversion.
When futures trade richer than spot/ETF, funds buy spot (or create/buy ETF shares) and short the corresponding futures to lock in the basis; at expiry the two converge and they harvest the spread.
ETFs amplify it: Authorized participants can create/redeem ETF shares against spot, so the long ETF/short futures leg is scalable and precise, making dislocation-arbitrage the standard and not an occasional trade.
Net effect: Systematic two-sided hedging compresses basis and injects mean-reverting liquidity, so you get fewer parabolic blow-offs and tighter ranges around fair value.
2) Who holds and how (Post-ETF era)
- More advisors/RIAs/401k money -> systematic DCA, less forced selling, but more correlation to real yields/tech.
Flows are calendar-driven and benchmark-aware, not reflexive ape/fear.
That raises the decision interval (weekly/monthly) and dampens realized volatility (the actual price fluctuations over a specific period).
- Real yields, DXY going down is bullish and the inverse is also true.
- On-exchange leverage migrates to options overlays and basis trades. Liquidations still happen, but they look like controlled air pockets rather than full implosions.
3) Policy containment
- The likely arc (OP_RETURN illegal content scandal -> regulatory clarity -> licensed infrastructure) encourages ETF/custody flows and raises friction on self-custody. That dampens upside reflexivity (fewer "buy + withdraw" feedback loops).
* "Upside reflexivity" = a positive-feedback loop where price up -> behavior that tightens supply further -> price up more.
* In prior cycles, "buy -> self-custody" tightened exchange float and amplified upside reflexivity.
* ETF units don't withdraw, they immobilize coins in custodians. Reflexivity weakens -> smaller upside overshoots.
Because ETF buyers purchase shares (and the underlying coins are parked at a custodian while dealers/arbs sell rips and buy dips), the classic "buy -> withdraw -> thin book -> vertical squeeze" loop is muted - upsides overshoot less and mean-revert more.
Example:
In a self-custody bull market, $1B of demand might chew through an already-thin exchange ask, jump price +3–5%, trigger momentum, and the coins immediately get withdrawn, further thinning the book.
In an ETF bull market, $1B hits ETF shares; APs short futures / buy spot gradually to create units, parking Bitcoin at the custodian (Coinbase Trust - yes very trustworthy, if it's named "Trust"). Dealers’ long-gamma hedging sells into the rip. The net result: smaller upside overshoot and faster reversion toward fair value.
4) Halving ≠ clock (in the Post-ETF era)
- Halving remains a narrative catalyst but not the scheduler.
- Macro liquidity (real rates, USD (DXY), credit spreads) and ETF flows matter more.
What the new cycle probably looks like (Managed cyclicality):
- 18-30 months of "orderly up", punctuated by policy/liquidity scares (-30% to -55%), followed by "clarity" squeezes.
- Peaks are capped by options walls/ETF plumbing, crashes are bought by systematic flows.
- Realized volatility declines, weekend wicks persist, Monday gaps normalize.
- Draw-downs: Typical big draw-down -35% to -55% (not -80%).
- Returns concentrate mostly in buying despair and fading "clarity".
- If custody share stagnates while ETFs climb, expect contained tops.
Implications of this scenario:
- Add only on despair (-25 to -40% swift drops), not during "clarity" spikes.
- Expect lower CAGR from Bitcoin than prior cycles.
- Do not blindly extrapolate 2013/2017/2021 analogs because the market micro-structure is different now.
So yes, cycles continue - but they're not the old halving-clock cycles.
Expect a longer, ETF-managed uptrend, capped blow-offs, and engineered flushes keyed to macro and dealer positioning.
Let's look at Pre-ETF vs Post-ETF leverage.
You probably remember that in previous cycles, when retail plebs overextended with leverage, we got insane price action to the upside, which was then followed by cascade liquidations to the downside.
1) Pre-ETF (offshore perps):
- 20-100x retail leverage, reflexive funding squeezes, cascading liquidations drive face-melting blow-off tops and then -70 to -85% busts.
2) Post-ETF (institutional structure):
- Leverage migrates to basis (cash-and-carry), dealer options books, marginable-ETF units, and delta-one baskets (derivatives that provide exposure to an asset with a one-to-one price movement).
- It's bigger notional, lower directional beta-less explosive upside, faster but shallower draw-downs (-30 to -55%) as hedges kick in.
* Bigger notional because the market now runs on ETF AUM + options/futures carry rather than mostly spot on retail exchanges. That's deeper balance-sheet capital (APs, dealers, basis funds) constantly trading billions in notional via creations/redemptions, hedges, and arbs.
* "Lower directional beta - less explosive upside" because a larger share of flows is hedged or volatility-sold (covered calls, collars, long-ETF/short-futures basis). Dealers frequently sit long gamma near popular strikes; they sell rips and buy dips, and APs stage creations over time.
* "Faster but shallower draw-downs (-30 to -55%) as hedges kick in":
1) Shock hits (macro/headline/weekend): thin liquidity + leverage = quick air-pocket.
2) Hedges fire: basis desks buy back short futures as basis collapses; dealers' long-gamma hedging adds bids on the way down; collars monetize; rebalancers and AP/NAV arbs step in when discounts open.
3) These counter-flows cushion the fall before it snowballs into old-cycle −70% to −85% bear markets. Result: drops start quicker but bottom earlier because mechanical buyers show up by design.
In older "buy -> withdraw" regimes, upside reflexivity was huge and downside liquidity thin; in the ETF regime, two-sided hedging and AP arbitrage replace that with mean-reverting flows - they won't stop a crash from starting, but they truncate it.
With ETFs, most capital is hedged and arbitraged, so rallies are capped and selloffs snap faster but bottom sooner - think bigger money, smaller parabolas, quicker yet shallower (-30% to -55%) draw-downs as hedges and arbs do their job.
Implication: Upside skew is sold, downside tails are managed (until policy shocks).
So, is this a controlled volatility decline? Yes it is.
- Immobilized float (custody) + option gamma walls + CME hedging = capped rallies and orderly ranges.
- Policy "clarity" funnels users to ETFs/treasury companies, raising the market share of the limited volatility range machine.
- You still get shocks (headlines, weekend stop-hunts), but the structure pulls price back into the pen.
What I foresee:
- MoE (Medium of Exchange) stagnation: Payment rails lose mind-share, stable-coins absorb transactions, Bitcoin cements as a supervised SoV (Store of Value) wrapper.
- On-chain signals degrade: Lower UTXO velocity; exchange reserves matter less; ETF flow + CME Open interest matter more.
- Culture shift: Self-custody cohort shrinks relative to paper holders; regulatory nudges make sovereign usage legally/operationally expensive.
- "Buy puke / sell clarity" is going to become systematic.
- Don't lever as the structure weaponizes leverage against late longs.
In summary:
As ETFs accumulate coins, realized volatility declines by design: slower hands, hedged creations/redemptions, and dealer gamma cap the highs and cushion the lows.
The market shifts from halving-clock reflexivity to macro + plumbing.
The old casino is dead, welcome to the Wallstreet-fuckery era of gold v2.0.
More context on how permissionless technology ≠ permissionless adoption:
The concept that permissionless technology ≠ permissionless adoption is very misunderstood in Bitcoin.
This concept is called "The Perimeter Capture Rule".
It means that you have to watch the perimeter:
- cloud AUPs (Acceptable Use Policies),
- app stores,
- payments (exchanges, banks),
- policy.
Control at the perimeter beats control at the center (permissionless, global).
If a technology looks uncontrollable, ask: "Can a perimeter actor rate-limit (policy, app stores), de-list (exchanges, banks), de-prioritize (policy, app stores, exchanges, banks)?" If yes, price the center like a tenant.
Many Bitcoiners often say: "We have the best tech, it's permissionless" and I have to agree, the tech is brilliant.
However, is the tech good enough to compensate for the deficiency in the psychology of the user base?
And when you cut the ideology, the answer here is no.
Technology can't solve human preference for safety + ease (scale is assumed, I'm not talking about niche Bitcoin communities, I'm talking about a parallel to CBDCs/stablecoins global payments network).
nevent1q…xlha
More context on how governments and large institutions are domesticating Bitcoin:
How governments and large institutions are domesticating Bitcoin:
- allow price exposure in surveilled wrappers,
- throttle sovereign self-custody at scale,
- and pin price discovery to venues they can supervise.
Let's look at the definitive signal list of State, corporate, and market-structure tells that add up to containment (not prohibition, not capitulation).
There will be signs (and there are).
A) Law, Regulation, and Supervision
1) KYC/AML hardening (Travel Rule everywhere). Mandates to identify senders/recipients across VASPs (Virtual Asset Service Provider); private transfers face added friction or are discouraged.
To simplify this if you don't know what the Travel Rule is, here is how it plays out:
Exchange -> exchange (VASP -> VASP):
Example: Kraken -> Coinbase. Coinbase is the receiving company. Kraken must transmit originator/beneficiary details (name, account/wallet identifiers, etc.), typically in the IVMS-101 format.
Exchange -> self-hosted wallet:
There's no receiving company (no VASP on the other side), so no counter-party to send data to. In the EU, the sending VASP must still collect info, and for transfers over €1,000 it must verify ownership of that self-hosted address (e.g., message signing).
Self-hosted wallet -> exchange:
The exchange you deposit to is the receiving company. It must obtain required info before/when crediting the funds and may ask you to prove you control the sending address.
2) "Mixer" criminalization/designation. Sanctions and special-measure rules against mixing/tumbling tools and related infrastructure; chilling effect on privacy tooling.
3) Licensing regimes that raise fixed costs. BitLicense-style authorizations; EU MiCA CASP licensing; UK/FCA registration - each converts compliance into a barrier to entry and increases gatekeeper leverage.
4) Broker-style tax reporting. Expansion of standardized gain/loss reporting (e.g., 1099-type forms), pushing exposure into surveilled intermediaries and making day-to-day spend onerous.
5) No de-minimis relief for payments. Everyday Bitcoin spending remains a taxable disposal (no small-purchase exemption), suppressing medium-of-exchange usage.
6) High prudential capital charges for banks. Unbacked Bitcoin exposures given punitive risk weights under bank rules, discouraging balance-sheet adoption and reserve use.
7) Sanctions reach extended to addresses/tools. OFAC-style designations of specific wallets/services; exchanges obliged to screen and freeze - normalizes address-level policing.
8) Advertising/marketing restrictions. Tightened rules on retail promotion; approvals required; compliant phrasing only - slows "organic" adoption.
9) Court acceptance of chain-surveillance evidence. Judicial normalization of on-chain heuristics (taint analysis) increases enforcement confidence and deters privacy use.
B) Market-Structure & Pricing Control
10) Spot ETFs approved; self-custody not scaled. Mass exposure routed into custodial funds with APs/market-makers under surveillance; retail "ownership" = brokerage claims, not keys.
11) Cash-settled futures hegemony (regulated venues). Institutional hedging and basis trades centered on supervised derivatives (e.g., CME), letting paper supply influence marginal price.
12) Custody concentration. A small set of brand-name custodians and a narrow AP set - choke points where policy can act without touching every holder.
13) Index-committee discretion against Bitcoin proxies. Flagship equity indices can exclude corporates that function as Bitcoin trackers (protect index optics; avoid importing crypto beta).
- S&P declined MSTR entry, even though the company meets the requirements. NASDAQ/QQQ inclusion is rules-based which allowed MSTR in (for now). My best guess is that the rules change and MSTR gets kicked out eventually, but this is just speculation.
14) Prime brokerage / funding dependence. Leverage and borrow routed through supervised lenders; stress events are resolved in ways that prioritize systemic stability over "code is law".
15) Stablecoin preference for transactional rails. Policymakers elevate fiat-pegged coins (with issuer KYC/redeem controls) as the "digital cash" path, crowding out Bitcoin as a payments rail.
C) Platform, Standards, and Default Settings
16) App-store / OS policy throttles. Wallet and node apps constrained by ToS (background processes, payment rails, external links), keeping users inside monitored ecosystems.
17) Exchange surveillance integrations. Mandatory chain-analysis (TRM/Chainalysis/Elliptic) as a license condition; withdrawal heuristics trigger holds or questionnaires.
18) Bank/payment "de-risking". Episodic account closures, rolling KBA (knowledge-based auth) challenges, and heightened SAR (Suspicious Activity Report) filing - keeps fiat on/off-ramps scarce and cautious.
19) Standards -> law copy-paste. FATF guidance and regional templates propagate globally; once a control is codified in one bloc, others replicate the same wording.
20) Compliance by SDK/API. Travel-rule messaging, address-screening, and risk scoring embedded in vendor SDKs - containment becomes the default implementation.
21) Identity-bound wallets. Movement toward government-approved digital ID tying KYC attributes to wallets - programmable compliance at the wallet-permission layer.
D) Tax, Accounting, and Corporate Policy Signals
22) Fair-value accounting = optical profits; policy still resists. New accounting lets Bitcoin marks hit earnings, but committees/boards still avoid Bitcoin balance-sheet strategies (volatility + optics + procurement risk).
23) Treasury/board guidelines against macro-speculation. Corporate policies codify "no non-operating macro bets", pushing Bitcoin exposure -if any - into ETF shares, not keys.
24) Insurance & audit gating. D&O/cyber insurance, auditors, and lenders attach covenants or exclusions when Bitcoin exposure is outside well-worn wrappers.
E) CBDC/Identity Build-Out (the strategic substitute)
25) CBDC pilots tied to digital ID and programmable controls. The preferred digitization path is controllable money with ledger-level policy hooks.
26) Merchant QR/soft-POS rails hardened around KYC'd accounts. New payment rails ship with identity and risk controls by default - Bitcoin remains "other".
27) Crisis playbooks tested. Emergency alerting, "essential commerce" allow-lists, and granular merchant categories - primitives for programmable payments at scale.
F) Soft Power: Narrative & Optics
28) Environmental and consumer-risk frames. Sustained messaging that miners "waste energy" or that self-custody is "unsafe for consumers" - used to justify new controls.
29) "Innovation, responsibly" rhetoric. Politically safe posture: bless ETFs/enterprise chain-analytics while sidelining the monetary-sovereignty use case.
30) Hero projects elsewhere. Official enthusiasm channeled to AI, quantum, chips - areas with easier control knobs - signaling where capital and regulatory patience will go.
G) "Absence" Signals (what you never see)
31) No legal carve-outs for small Bitcoin payments. A lasting omission that tells you payments isn't the intended role.
32) No HQLA-style treatment for Bitcoin. Banks are not allowed to count Bitcoin toward high-quality liquid assets.
33) No sovereign reserve disclosures (outside of stolen Bitcoin). If a major central bank/sovereign wealth fund wanted Bitcoin reserve signaling, you’d see it; you don't.
34) No mass-market self-custody education from public institutions. Education focuses on fraud avoidance and ETF literacy, not key management.
H) Second-Order “Pen” Effects
35) ETF-first adoption curve. Households "own Bitcoin" via retirement accounts/brokerage ETFs - behaviorally entrenches custodial dependence.
36) Price discovery anchored where toggles exist. During stress, derivatives and ETF flows dominate; spot self-custody has less marginal impact.
37) Talent and vendor gravity. Startups build to compliance SDKs and custodial APIs; few build UX-clean self-custody for the masses - market follows the money.
38) Jurisdiction shopping ends at the fiat door. Even if an exchange is permissive, fiat banking sits under Basel/FATF; rails re-impose containment at the edge.
Now, let's look at the Falsifiers (Bitcoin escape conditions) that would make this entire post incorrect:
1) G-7/major SWF (Sovereign Wealth Fund) discloses even 1–2% Bitcoin reserves/collateral (not stolen, but bought). In other words, big governments start purchasing Bitcoin.
2) De-minimis tax relief for Bitcoin payments in multiple big economies.
3) Banks get permissive risk weights or HQLA-like treatment for Bitcoin.
4) Non-custodial wallets become ID-neutral by default in major app stores/payment ecosystems.
nevent1q…ad5u
More context on what OG Bitcoiners don't understand:
quotingHad a quick look at Bitcoin twitter the other day and it is shocking how clueless most Bitcoiners (even OGs) are.
nevent1q…s0uk
They fail to understand simple concepts and incentives, or at least pretend to not understand them.
Here are some of the things most fail to understand:
1. Confusing permissionless tech with permissionless adoption ( permissionless technology ≠ permissionless adoption).
- The system controls rails, not code; adoption is steered by defaults, custody concentration, and tax/reporting.
- Separate tech truth (permissionless, scarce, global) from adoption truth (defaults, rails, policy).
2. Ignoring revealed preferences.
- States repeatedly choose ring-fencing (ETFs, KYC, custody oligopolies) over Strategic reserve adoption. No G7 state is buying Bitcoin to pump your bags (they may steal it though), so stop begging 😂
3. Assuming "co-opt the State"
- In reality, the State co-opts Bitcoin by financializing price exposure while starving sovereign usage at scale.
- When I listen to Bitcoiners talk about how "Governments are so stupid and don't understand Bitcoin, but they'll understand it eventually", I have to laugh. These people might actually have a mental disability.
4. You can't enforce SoV (the 21 million cap) by not holding your coins, by investing in Bitcoin ETFs (remember GLD?), and by not asking treasury companies for Proof-of-Reserves, etc.
And I am not saying that you won't get incredibly rich by buying Bitcoin.
If you invested in gold in its infancy, you still got incredibly rich even with the State co-opting it.
What I am saying is that most Bitcoiners are buying Gold, while thinking they're buying Bitcoin.
In other words, digital gold for most, money for a few.
Again, the State's dominant strategy is containment, not capitulation (nor killing Bitcoin). Bitcoin will be tolerated as financial exposure (in surveilled wrappers) and as a self-custody tail hedge for individuals - but not as a parallel monetary base.
I have to write more about the Travel Rule / KYC hardening, etc, because the State has clearly shown its cards, but most Bitcoiners listen to words coming from charismatic politicians instead of looking at the actions of the string-pullers.
This has been a tough pill to swallow for me as well 😂, but burying my head in the sand is not an option for me. Mental weakness is not an option.