Bitcoin maximalism is over. Bitcoin “culture” is over. Bitcoin influencers are over. Every popular hardcore Bitcoin figure has disgraced themself in some way.

Bitcoin will remain, beneficially stripped of the cult around it.

— nic carter (@nic_carter) August 2, 2026

If I could sum up the above list in one pithy tweet, it would be the opening image of this mornth’s edition, by way of Nic Carter, who also found himself excommunicated from The Bitcoin Cathedral for indulging in shitcoinery.

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Written by Bryan Lutz, Contributor at The Sovereign Capitalist:

The FUD is back, baby.

Bitcoin is down nearly half from its 2025 high. And now, the obituaries are out of cold storage and back in heavy rotation. Sentiment surveys are scraping levels we haven’t seen since the 2022 crypto-winter, and the financial press has rediscovered its favorite genre: the Bitcoin post-mortem.

And this time they’ve got a chart to wave around. The Dow just had its best year against Bitcoin since 2022 – the Dow/BTC ratio has more than doubled off its August 2025 low, from 0.36 to 0.84.

Here it is. We’ll even draw the red line for them:

Anyone holding through it felt every point. If you wanted to write the “Bitcoin is finished (again)” piece, this is the chart you’d lead with.

Notice what the line still hasn’t done, though.

It hasn’t touched 1.0.

After the worst sentiment stretch in years, after a ~45% drawdown, after twelve months of losing to the most boomer-coded stock index on earth, the entire Dow Jones Industrial Average still cannot buy one Bitcoin.

Against thirty of America’s biggest companies, the coin wins, with change left over.

Flip the fraction.

If that seems impossible, it’s because you’re reading the fraction the way CNBC wants you to read it:

Bitcoin

───────

$$$$$$$

Bitcoin as the numerator, dollars as the denominator, and the numerator just got cut in half. Case closed, right?

Wrong fraction. As Mark Jeftovic laid out in It’s the denominator, stupid, the entire point of Bitcoin is that it isn’t the thing being measured. It’s the thing you measure with. Put the index where it belongs:

  DOW

───────

BITCOIN

Now extend the chart back a decade and hit the log button, which is a one-click jailbreak for fiat-denominated brains:

In 2014 it took more than 40 Bitcoin to buy the Dow. At the 2015 extreme, 84.

Today: 0.83.

Measured in the new denominator, the Dow has lost roughly 99% of its value in twelve years, and the “comeback” everyone is celebrating shows up on that chart as a wiggle at the bottom of a cliff. Bitcoin just took its worst beating in years and gave back approximately none of a decade of relative gains.

That’s what deflationary money does. It hits different.

It’s about the maths

The Dow is priced in dollars, and dollars multiply, inflate, depreciate, and then die… which is the business model for the whole fiat system. M2 only ever pauses on its way up, every crisis gets solved with more of it, and index earnings get marked up in the same shrinking units.

Bitcoin’s supply schedule, meanwhile, doesn’t attend FOMC meetings. The halvings keep halving. Twenty-one million, take it or leave it.

Run the numbers since January 2000: the Dow is up 361% in dollars. M2 is up 394%. Divide one by the other and the twenty-six-year bull market vanishes: measured in the money itself, the index has gone nowhere. Every point of “Dow 52,000” that isn’t printer output rounds to zero.

So, the fraction has a numerator inflated by an expanding money supply, sitting on top of a denominator that does not expand. Run that equation for a decade and the line on the chart is the only possible output. The drawdowns – 2018, 2022, this one – are volatility inside the trend. And that trend is division between fiat money and Bitcoin.

A Dow’s comeback measured in a shrinking yardstick must sprint just to stand still. This year, it’s rallied hard in dollars. In Bitcoin terms, it clawed back a rounding error.

Same story, slower clock.

If this framework sounds familiar, it should. Gold holders have been living it since 1971, just at a different tempo.

In 2001 the Dow cost 42 ounces of gold. Today, with the Dow at nominal record highs and the algos doing victory laps, it costs 12.7 ounces. Two-thirds of the index’s gold-denominated value, gone, during a quarter century of “stocks always go up”.

Yes, gold and Bitcoin diverged this cycle. Gold at $4,142 while Bitcoin sits in a drawdown. They have different volatility profiles, and different adoption curves. Yet, they share the same denominator maths. One asset is the incumbent hard money, the other is the challenger still crossing the chasm. The DOW index can’t outrun either of them over any window that matters.

“Stocks at record highs” is mostly the yardstick shrinking. It is always has been.

Deflationary Money Still Undefeated this Decade

Here’s the thing about extreme bearish sentiment: it’s a report on the emotional state of leveraged tourists, not on the asset. Nothing about Bitcoin(or gold) changed this year. The supply schedule didn’t change. The halvings didn’t change. The $300+ trillion in bonds denominated in a melting currency didn’t change, except to get bigger.

The only thing that changed is the price, quoted in the old denominator, and the old denominator’s entire job description is to go down.

So, the mainstream news cycle might be right about one thing:

Deflationary money doesn’t win every year.

However, it does win every decade, and it’s undefeated.

The data shows the opportunity cost of avoiding bubbles in the modern era.

Jeremy Grantham built a career calling bubbles. With his AUM ranging from the 65B to 120B level over his career, he’s been fairly prescient about avoiding them on behalf of his clients, and in the process became a billionaire himself.

In a recent appearance on Diary of a CEO, he cautioned about Amazon’s 92% drop during the dotCom bust, and he’s now warning about the AI bubble (as are many others). In a now viral clip on CNBC, he got into it with Joe Kernan and laid into Bitcoin using all the usual objections: “no use case”, “headed to zero”, and “not worth a bucket of spit”.

At least it’s not just Bitcoiners getting into scraps! pic.twitter.com/pfJyXM3ZFc

— JOEY (@JoeyTweeets) June 26, 2026

But if you actually look at the data, you would have been better off holding through bubbles instead of handing your wealth over to Grantham’s GMO Fund to protect you from them. And this remains true vs. most assets and across nearly all time frames.

You can see for yourself in this interactive widget I put together for the next Sovereign Capitalist newsletter (due out in a few days). Plug in an invetsment amount, pick an entry point: right before the DotCom bubble blew, or on the eve of the Global Financial Crisis, right on up into the pandemic: Grantham’s GMO lagged everything including simply indexing the S&P500.

Jeremy Grantham is making rounds sermonizing about Bitcoin and bubbles.

But if you look at the actual data, anybody following his advice would have been a lot worse off, across nearly every time frame over the last 30 years. pic.twitter.com/HgJenRBtsL

— Mark E. Jeftovic (@jeftovic) June 27, 2026

When The Monetary Physics Change

In the letter, I get into why this is the case: why are “the perma-bears” (in Grantham’s own words, and the title of his new book) may be looking at the wrong measure, and the wrong axis when it comes to figuring out what’s overvalued and what, if anything, is truly headed to zero (I’ll give you a hint: it’s not Space-X and it sure isn’t Bitcoin) but I’ll lay out the analogy here (which was admittedly cribbed from Alex Hormozi, who swiped it from Brian Johnson).

Hormozi used it in the context of how I is changing the world. This is true, but it also applies to the inexorable debasement of the monetary layer through debasement.

Here’s the analogy of “when the physics change“:

A school of fish are swimming around in water. A few of them become experts at swimming. They train their entire lives, they practice every day, they study the expert swimmers of previous eras, and they analyze nearly every aspect of the water they inhabit: it’s PH levels, acidity, currents, flow – everything.

They gain an intuitive feel for how even a slight variance in one factor impacts the others – they know “which way the current is going”.

But over time, the water heats up – they may pick up on this, but they’re never quite prepared for what it means beyond a certain point.

It’s the point that puts them wrong-footed, the phase-shift: the water evaporates – and now it’s gas. Steam.

Setting aside for our purposes how this would fry the fish, imagine they’re still alive, but now they’re trying to apply everything they know about swimming in water to this new environment, which is gaseous, not liquid.

They would be flailing and flapping around like the proverbial “fish out of water”.

What happened?

They were never wrong about their fluid dynamics.

The physics changed and they had no model for the new reality.

The measuring stick of fiat currency is the water that is boiling away.

I’ve been saying it forever, it’s the denominator stupid.

People like Grantham don’t even look at it. Over the course of the Diary of a CEO interview I don’t think he mentions it once. In his “The Making of a Perma-Bear” book, he mentions inflation in exactly three places, and always with respect to their effect on P/E multiples. In the third instance he only mentions to acknowledge that during the pandemic, multiples went the opposite direction he would have expected, given the higher inflation.

Go take a look at the data, plug in some numbers and starting dates for yourself. You’ll see exactly what the phase shift looks like.

More in this in the next edition of my premium newsletter The Sovereign Capitalist.

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If you are new to the Equibit story, please read The Assassination of Equibit, originally released in 2023.

When the Berlin Wall fell in November 1989, the world celebrated the end of one of history’s most oppressive regimes. East Germans stormed the headquarters of the Ministry for State Security — the infamous Stasi — desperate to seize and protect the mountains of files that documented decades of tyranny. What they uncovered was more horrifying than most could have imagined.

Among the archives was Directive 1/76, issued in 1976 by Stasi chief Erich Mielke. This document formalized Zersetzung — “decomposition” or “corrosion” — a systematic program of psychological warfare designed to destroy “hostile-negative” individuals and groups without the messiness of arrests, trials, or overt violence. The goal was simple and demonic: fragment, paralyze, disorganize, and isolate the target so completely that they could no longer function as a threat — all while maintaining the appearance of normal life.

The Sheer Evil of Zersetzung

Historian Hubertus Knabe, one of the foremost experts on the Stasi, described it chillingly: “The Stasi didn’t try to arrest every dissident. It preferred to paralyze them… by damaging their reputation, by organizing failures in their work, and by destroying their personal relationships.”

Tactics included:

• Covert home invasions to move furniture, change alarm clocks, or swap everyday items (classic gaslighting)
• Systematic smear campaigns using true, false, and twisted information
• Engineered professional and social failures
• Provocation, anonymous threats, and orchestrated “coincidences”
• Destruction of marriages, friendships, and family ties through rumors and planted evidence
• Sabotage of careers, vehicles, and medical care

Victims often had no idea the Stasi was responsible. Many believed they were losing their minds. Mental breakdowns and suicides were common outcomes.

One victim, Jürgen Fuchs, a writer and dissident, called it “psychosocial crime” and “an assault on the human soul.” Many survivors suffered lifelong trauma, paranoia, depression, and shattered trust. Some received modest compensation decades later, but for most, the damage was irreparable. Families were torn apart. Careers evaporated. Lives were slowly, methodically erased from within.

The Stasi built an enormous network of civilian informants — the Inoffizielle Mitarbeiter (IMs). By 1989, there were roughly 91,000 full-time Stasi employees and between 173,000 and 189,000 unofficial informants. This meant roughly one in every 50 to 60 East German citizens was actively collaborating with the secret police — an astonishing level of societal penetration. Some estimates, including occasional informants, run as high as one in six or seven adults.

These informants came from every walk of life: neighbors, colleagues, friends, even family members. Recruitment methods ranged from ideological appeal and bribes to blackmail and threats against loved ones. Once enlisted, they were used to spread rumors, provoke conflicts, sabotage opportunities, and report intimate details for the creation of detailed “psychograms” — psychological profiles used to exploit every weakness.

From East Germany to Canada: The Equibit Case

What happened to Chris Horlacher and Equibit Group bears unmistakable hallmarks of this same strategy — updated with 21st-century digital tools and operating within a Five Eyes democracy.

As documented across the Equibit Factum, technical forensic reports, live videos, court filings, and interviews on equibitlawsuit.com, the campaign against Horlacher and his company included:

• Prolonged surveillance and contact by prime-suspect Marc Godard beginning as early as 2010 — when Chris was engaged in online liberty activism.
• What appears to be the recruitment and corruption of Sergei Sachkov, lead Core developer at Equibit Group, by CSIS.
• Intense and malicious harassment by the Ontario Securities Commission, and demonstrable entrapment efforts.
• Marc’s attempts to involve Chris with questionable individuals post-Equibit, more entrapment schemes via financial crimes.
• Router compromises via the TR-069 protocol, with logs showing impossible 1981 timestamps and persistent remote access.
• DNS man-in-the-middle attacks rerouting traffic through U.S. servers.
• Microsoft ecosystem intrusions where private memos were observed copying themselves in real time.
• De-banking, institutional pressure, and coordinated defamation campaigns.
• Insider betrayal, code forking, rebranding (OCEAN → Tesseract), a coordinated effort to dismantle Equibit Group from within.

Marc Godard’s background in Cognitive Science would have been particularly useful in constructing the kind of detailed psychograms the Stasi relied upon — mapping personality weaknesses, relationships, and pressure points for maximum psychological effect.

This was not random crime or bad luck. It was a sustained, multi-vector operation designed to isolate, financially ruin, discredit, and psychologically break a founder who dared to become a fierce advocate for limited, constitutional government.

Zersetzung Has Gone Global

The Stasi needed a vast human network because they lacked today’s digital omnipresence. In the Five Eyes countries (Canada, USA, UK, Australia, New Zealand), agencies no longer need millions of informants on the ground. They have tools that allow remote, deniable, scalable decomposition: compromised routers, operating system-level access, financial system cooperation, and institutional capture.

What Horlacher has experienced — and meticulously documented — strongly suggests that modern Zersetzung is not only possible in Canada and its allies, but is likely already being deployed against innovators, dissidents, and threats to the established order throughout the country.

A Call to Global Conscience

This is cruel, inhuman, and degrading treatment. It is extrajudicial psychological torture dressed up in the language of national security. It violates every principle of human dignity and the rule of law.

We call on readers to take immediate action:

1. Visit https://equibitlawsuit.com — read the evidence, watch the videos, review the technical reports.
2. Submit a detailed complaint to the UN Special Rapporteur on Torture (sr-torture@ohchr.org), including all available documentation and requesting an urgent inquiry into the use of modern Zersetzung-style tactics by intelligence agencies in democratic nations.
3. Contact appropriate NGOs and oversight bodies:  Amnesty International, Human Rights Watch, the Canadian Civil Liberties Association, Privacy International, and the National Security and Intelligence Review Agency.
4. Share this story relentlessly. Public awareness is the greatest threat to these shadow operations.

What was done to Equibit and Chris Horlacher must not be allowed to become the new normal. If governments in the West can wage silent war on their own citizens — innovators, thinkers, builders — using the refined cruelty of the Stasi, then none of us are safe.

The Berlin Wall fell. The files were opened. The world saw the evil and recoiled in horror.

Today, new walls are being built in the digital realm — invisible, pervasive, and far more sophisticated. We must tear them down with the same courage and determination.

The time for silence is over. The time for exposure, outrage, and accountability is now.

Demand an international inquiry. Demand justice for the victims of digital Zersetzung. Demand that this hideous violation of human rights ends.

Because if we do not act, the decomposition will spread — until freedom itself is nothing but a memory.

Stay tuned to equibitlawsuit.com for more updates on the Equibit lawsuits against CSIS and related actors

If you are new to the Equibit story, please read The Assassination of Equibit, originally released in 2023.

Chris Horlacher has documented multiple sophisticated intrusions through his Microsoft ecosystem. These incidents go well beyond ordinary malware and align with key moments in his legal activities. They indicate a close collaboration between Microsoft and the Five Eyes to deliver undetectable spyware onto targeted devices in order to steal information and interfere with the normal functions of the computer.

Key Incidents of Unauthorized Access

• July 19, 2025 – Unauthorized Sharing of Sensitive Memo
  A confidential memo was suddenly made publicly shareable via OneDrive using Chris’s own Microsoft account. He did not perform this action. During the event, his computer’s built-in screen recorder was disabled. Luckily Chris was able to capture the event with his cell phone’s camera.

Watch the incident:

• August 27, 2025 – Spontaneous File Movement
  A critical security report analyzing router compromises was mysteriously moved to the desktop.
• October 27, 2025 – Camera Roll Breach
  OneDrive logs showed someone browsing the Camera Roll folder containing images taken directly by the device, as well as two files related to psychology that provide insight as to the hacker’s identity (more on that in later posts!)

Watch the Camera Roll intrusion:

Mass Windows & BIOS Updates – Highly Suspicious Timing

On August 18, 2025, immediately before a strategy call with his lawyers about upcoming discovery sessions, Chris’s computer began installing an unusually large wave of updates — including Windows, BIOS, and more than a dozen other components. He described it as one of the largest simultaneous update pushes he had ever experienced. Call quality then rapidly deteriorated and the connection was terminated exactly when the discussion turned to sensitive topics.

This event is especially concerning in the context of Bill C-22, Canada’s proposed Lawful Access Act. Part 2 of the bill would require electronic service providers (including software and operating system vendors) to build and maintain technical capabilities to facilitate authorized access to information by law enforcement and CSIS. Critics argue this could effectively compel companies like Microsoft to enable mechanisms for delivering signed updates or payloads that Windows would trust by default. Because Microsoft-signed updates are automatically trusted by the operating system, they represent a powerful and nearly undetectable vector for delivering targeted tools to specific users.

For more on Bill C-22:

• Department of Justice Backgrounder
• Michael Geist Analysis

Nightmare Eclipse Zero-Days and Browsergate

These incidents occurred against the backdrop of major Microsoft security controversies. In 2026, researcher Nightmare-Eclipse (also known as Chaotic Eclipse) publicly released several high-impact Windows zero-days, including exploits targeting Windows Defender and privilege escalation mechanisms. Some researchers have speculated that certain vulnerabilities may have been known internally for extended periods before public disclosure.

Additionally, Browsergate exposed serious allegations against LinkedIn (owned by Microsoft). According to a detailed report by Fairlinked e.V.:

• LinkedIn allegedly injected JavaScript that scanned users’ browsers for over 6,000 Chrome extensions.
• The script reportedly collected detailed device telemetry and extension data without clear user consent or prominent disclosure in the privacy policy.
• This allowed LinkedIn to build extensive user profiles, potentially identifying competitors, corporate tools, and other sensitive software.

The revelations led to privacy lawsuits and widespread criticism. You can read the original report here: BrowserGate.eu

Broader Implications

These events demonstrate deep access into Chris’s systems, precise timing aligned with legal activities, and the ability to manipulate core operating system functions. When combined with other documented technical attacks, they highlight growing risks around proprietary platforms and the potential for state-level exploitation.

Further Reading & Updates:

• Additional technical evidence and interviews in the Media section
• Ongoing lawsuit developments at equibitlawsuit.com

This case raises important questions about digital privacy, corporate responsibilities, and the balance between security and individual rights. Share this post if you believe these issues deserve greater public scrutiny.

Stay tuned to equibitlawsuit.com for more updates on the Equibit lawsuits against CSIS and related actors.

If you are new to the Equibit story, please read The Assassination of Equibit, originally released in 2023.

In the ongoing campaign of digital harassment and sabotage documented by Chris Horlacher, one of the most technical and intrusive episodes involves repeated compromises of his home routers in Mexico. These incidents directly affected Chris Horlacher’s ability to work, communicate securely, and access the internet—targeting only specific devices while sparing others on the same network.

This pattern aligns with advanced persistent threats, often linked to state-level or ISP-enabled capabilities.

Background: Part of a Broader Pattern

After fleeing Canada due to chronic digital intrusions and other events stemming from what he believed to be the lawsuits he just filed, Chris continued facing disruptions. VPN instability, selective device blocking, and unexplained connectivity issues prompted deeper investigation. Factory resets provided temporary relief, but problems returned rapidly—classic behavior of persistent malware or remote management exploits

The Attacks: Huawei HG8145V5V3 and ZTE F670L Routers

Key Anomalies Observed:

• 1981 Timestamps: Multiple log entries show dates like 1981-01-01. This is a strong indicator of Real-Time Clock (RTC) reset or deliberate log tampering/manipulation, often seen when firmware is altered or during boot-level interference. Security analysis reports explicitly flag these as “Backdated logs to 1981 (RTC reset or tampering).”
• Custom Firewall Rules & Selective Blocking: Firewall settings changed to “user defined.” Specific devices (Chris’s and his wife’s) lost internet access while others worked, consistent with targeted rules or a Remote Access Trojan (RAT).
• Rapid Re-infection Post-Reset: Issues returned within hours, even on a replacement router from the ISP (Telmex).

From the ZTE Log (August 2025, post-reset):

2025-08-04T16:16:01Z [Error] |dnsmasq| bind interface socket failed 99
2025-08-04T16:16:01Z [Error] !!!!!![high Alert for send msg in POWERON]...
[Warning] RunPCB process[omci] Event[0x3e81]...

High-priority OMCI/GPON messages immediately after boot, IPv6 route injections before full WAN negotiation, and MultiAPD errors point to remote provisioning activity.

From Huawei Logs (July 2025):

Numerous 1981-01-01 entries alongside PPPoE renegotiations, deprecated SSL methods, and DHCP NAKs (potential MAC spoofing or rogue activity). Frequent PPPoE sessions suggest possible DoS or disruption attempts.

Expert Security Analysis

Independent analysis by a professional (using SIEM-style detection) on both routers confirmed:

• TR-069/OMCI remote provisioning activity.
• Backdated logs and tampering indicators.
• Potential RAT presence and DoS patterns.
• Recommendations: Replace/reflash router, disable TR-069, scan devices, and isolate vulnerable hardware (e.g., older Smart TV).

Huawei Router Analysis Report (PDF)

ZTE Router Analysis Report (PDF)

TR-069 (CWMP) Vulnerabilities: This Broadband Forum protocol enables ISPs to remotely manage Customer Premises Equipment (CPE) like routers via an Auto-Configuration Server (ACS), often over port 7547. While intended for legitimate management, it is notoriously exploitable. Compromised ACS servers or weak implementations allow attackers full remote control, DNS redirection, firmware backdoors, and persistent access. It has been weaponized in botnets (e.g., Mirai variants) and enables exactly the selective targeting and re-infection seen here. Many ISPs do not allow users to fully disable it.

Video Evidence: Router Investigations

Watch Chris document the issues in real-time:

Part 1: Initial router access and strange behavior.

Part 2: Firewall changes, selective blocking, and admin interface interference.

Part 3: Factory reset, log downloads, and post-reset observations.

Part 4 (Short): Post-reset functionality vs. actual device connectivity failure.

Implications

These attacks go beyond typical criminal hacking. The precision (device-specific blocking), persistence across hardware swaps, use of ISP-managed protocols, and alignment with other documented sabotage (e.g., Microsoft OneDrive tampering, email spoofing, bank disruptions) point to sophisticated actors with significant resources—potentially leveraging intelligence or ISP cooperation.

Combined with the broader evidence in the Factum (honeypot hits from government networks, Keybase anomalies, etc.), this leaves little doubt that Chris Horlacher’s infrastructure was under targeted surveillance and disruption.

What You Can Do:

• Demand transparency from ISPs on remote management (TR-069/OMCI).
• Support calls for accountability in intelligence oversight.
• Share this post—stories like this highlight risks to innovators and due process.

Full logs and analysis reports (Huawei and ZTE PDFs) are available for review upon request for credible researchers/journalists.

This is not paranoia. This is documented technical evidence of invasive digital warfare against a Canadian entrepreneur and litigant, across national boundaries, violating the property of a foreign ISP.

Stay tuned to equibitlawsuit.com for more updates on the Equibit lawsuits against CSIS and related actors.

Dilution, Spreads, and the Modern Bitcoin Investor’s Dilemma

via Kane McGukin at the Mesh Point

This paper is the final in a three-part series examining Bitcoin Treasury Companies (BTC-TC). This third and final piece establishes the framework for viewing Bitcoin Treasury Companies as nothing more than new age version of the Business Development Company (BDC) structure [ ed note: the other two can be viewed here and here ]

ABSTRACT: What is most important to understand is the purpose BDCs have served in the traditional financial system (TradFi). These entities were established in 1980[1] by Congress and have served as critical infrastructure for extending the fractional reserve nature of our existing financial system. In a general context, the nature of these businesses is what we commonly refer to as Shadow Banks. Non-bank financial institutions that facilitate lending between investors and borrowers (credit intermediation). They are an extension of banking but do not rely on public deposits. Nor do Shadow Banks have direct access to central bank backstops.[2]

In short, Business Development Companies facilitate lending, securitize assets, and provide liquidity to markets, often using short-term financing for long-term investments.

Download the Paper

Over the last 24 months, as TradFi and Wall Street continued down the path of integration and adoption of Bitcoin, the narrative around Bitcoin and lending has shifted materially. This change in optics, in my view, is why it’s important to consider and understand BTC-TCs in the context of a BDC model.

As credit and debt have become the basis for our growing financial system, BDCs have historically facilitated the financialization of collateral assets and, most importantly, have played a prominent role in the extraction of substantial spreads between the underlying collateral and the market’s derivatives created atop. For Bitcoin’s purpose, investors should understand the short-term tradeoffs presented by yield and the long-term expectation of returns.

Sign up for the Bombthrower mailing list here. Follow Kane McGukin on Substack here.

The Walls Are Going Up: Capital Controls Have Already Arrived in the First World

Originally via @JoeyTweeets on X

They’re Coming For Cash, Too

Cash is the last truly private way to transact in the traditional system. So naturally, it’s being systematically restricted.

The EU passed Regulation 2024/1624 (the Anti-Money Laundering Package) with a vote of 482 to 47 in April 2024. Starting July 10, 2027, businesses across all 27 EU member states are prohibited from accepting or making cash payments above €10,000. This applies to single transactions or multiple payments over time that “appear to be linked.” The language is deliberately broad.

But the €10,000 cap is just the ceiling. Cash transactions above €3,000 now trigger mandatory identity verification: government-issued ID, KYC procedures, records retained for five years. Businesses must monitor payment patterns to detect structured transactions designed to circumvent the limits.

And now the net is expanding to crypto. The OECD’s Crypto-Asset Reporting Framework (CARF) is being adopted by jurisdictions globally. The UK enacted CARF regulations effective January 1, 2026. This closes what was the last significant gap in the automated reporting regime.

“Blue Horseshoe Loves Gold and Bitcoin”

Suddenly the likes of Goldman and  JP Morgan are talking about this and the mainstream press are framing it as “the so-called Debasement Trade”

Bitcoiners, of course, have been talking about this for, well since the beginning.

Except, it’s not a “trade.”

The trade du jour lasts for a couple weeks or a few months – then it starts getting referred to as “a crowded trade” and then some new theme emerges and all the hot-money rotates into that.

Less than two weeks ago a finance guru I’m aware of (I won’t name him) sold 90% of his Bitcon and crypto positions (via IBIT and ETH) “due to bearish MACD crosses and support breaks”. 

Bitcoin has since run to successive new ATHs.

As I’ve long said, Bitcoin isn’t a trade and trying to time it with chart patterns generally does not work. (Technical analysis in general  never carried any real predictive edge for me, and when it comes to BTC specifically, I’ve seen too many failed “death crosses” to change my opinion).

It’s a monetary regime change – if market participants are trading anything it’s getting rid of a currency (“it’s the denominator, stupid”) for a store of value – and we’re seeing it in spades with Bitcoin and gold:

what do you call this pic.twitter.com/qiWgG0bcGk

— Mark E. Jeftovic (@MarkJeftovic) October 6, 2025

To be fair to that finance influencer, I don’t follow him enough to know if he maintains separate core Bitcoin stack in self-custody, and these moves are just referring to his trading activities, as distinct from long term holds. He apparently rotated into TSLA and silver. He’s also since followed up, acknowledging that Bitcoin ran to fresh highs, but he still expects a 40% to 50% decline in cryptos over the next year because of that MACD crossover. That said, he sold his TSLA and went back into Bitcoin (which has since dropped about $4K  )

I don’t know if he’ll be proven right or wrong about a 50% drop  – what I do know, and something I found out the hard way right when I was about to launch The Bitcoin Capitalist Letter, was that trying to pick the intermediate tops and bottoms when it came to Bitcoin was a fool’s errand.

You end up getting whipsawed. It sure looks like I’m watching it happen to this guy right now.

The advice I’ve been giving to my subscribers over the years, both for Bitcoin and the stocks we hold in our portfolio has always been:

• Don’t try to time or trade the intermediate tops
• Whenever Bitcoin (or one of our holdings drops) we ask ourselves:
  • Is the underlying thesis intact?
  • If yes: the only decision is whether to buy more or hold through
  • If no: then you exit the position, at the moment your thesis is invalidated, regardless of the price.
• Beyond that – exit when your own personal financial goals are met.

That’s it,  basically the entire Bitcoin Capitalist playbook right here

What got me thinking about all this today was all these headlines we’ve been seeing lately about “The Debasement Trade”.

This has been so obvious to Bitcoiners (and before that, goldbugs), for so long, that I didn’t really “clue in” to the fact that our entire long-term thesis is finally in the process of being mainstreamed right now.

Mainstream establishment analyst wakes up to what we have been talking about for 5 years. In fact, some of us even wrote books about it! @elerianm (had to do a screen shot because he blocked me). Proof that the elites are late and are not even here yet. pic.twitter.com/oxxOKClRpi

— Lawrence Lepard, “fix the money, fix the world” (@LawrenceLepard) October 2, 2025

Gold and BTC hitting all-time highs together is sending a signal.

Bond yields going up even though central banks are cutting rates, is sending a signal.

Stonks are hitting levels that make the .com bubble look like a bombed-out value play.

Why?

Because these aren’t trades anymore.

It’s capital flight.

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Is the Core vs. Knots battle a replay of two ideological Federal Reserve Plans that ultimately centralized gold, the original sound money?

TL;DR: The Core vs Knots battle is an attack on the Bitcoin network. A monetary struggle no different than the fight to establish the Federal Reserve in 1913.

The 1900s, like today, began with bankers at war over the governing rules of money. Two competing factions, the Aldrich Plan and Glass-Owen Plan, launched an assault on sound money because men sought more power and nations demanded more control.

Gold, like Bitcoin, is money because of its first principle origins. Yet the misconception, then and now, is that survival requires more complexity.

History shows how fragile conviction can be. An offer for a seat at the table is enough to flip once passionate defenders of sound money to enablers of credit and unlimited debt. Original goldbugs like Keynes in the 1920s and Greenspan in the 1980s proved unable to brush off the emotional pull of notoriety, currency, and control. Each flippening reintroduces inflationary tactics that corrode money’s principles and value.

Cunning design and corrupt schemes have often proven far too great for man to overcome.

Never a Dull Moment

There’s never a dull moment in Bitcoin or in the world of finance, for that matter.

The latest continuous divide within the Bitcoin community may look like another technical battle. But does it point to something deeper? While it feels like there’s a never-ending need to have something technical to argue over, beneath the GitHub commits and mailing list debates lurks a ghost from the past. The ideological struggle that gave birth to America’s Federal Reserve.

The Fed’s creation was framed in the language of decentralization and regional representation.

Yet its foundation was built on two forces: filters and control (here and here). Behind the curtain, the true drivers in 1913 were the same as they are today. A desire for power, profit, and the ability to manufacture credit money from a hard money basis. A Paper Bitcoin Summer, if you will.

Ask any Bitcoin maximalist what they despise most, and the likely answers are: the Federal Reserve or the dollar’s undeniable debasement.

That’s what makes the current Core vs. Knots clash so fascinating. It’s not just a nerdy civil war inside Bitcoin development. Viewed through the lens of monetary history, the parallels come into focus. A reminder that only a little over 100 years ago, lines were drawn and sides were picked between two competing visions for a new financial system: the Aldrich Plan (big-bank, corporate centralization) and the Glass-Owen Plan (populist, individualistic ideology). With full hindsight, both promoted decentralization in name only.

Both claimed to defend the money with one important caveat, both plans led inevitably to the centralization of gold, the original “sound money”.

By expanding the Op_Return size (protocol inflation), are we not reintroducing the debasement Satoshi rooted out?

By offering a more centralized Bitcoin client, are we not centralizing trust?

Are both options not heading down a similar “Federal Reserve” path?

Regardless of side, the question we should be asking: will Bitcoin, too, cloak centralization in the language of decentralization?

Bitcoin Is a First Principle Asset

As we saw in 1913, a similar banking stalemate led to the Federal Reserve Act being pushed through on the eve of Christmas holiday. Plowing forward at all costs was not the right answer. History reminds us that just because you can, doesn’t mean you should.

Heated debates tend to harden into an us vs. them mentality, where momentum overrides principle. More often than not, the final path hasn’t resolved the gripes but has paved the way for political and centralized control of money.

“Smart cows show the other cows how to bypass the filters. You know, like you can open the gate. So, you know, it’s always been the case. You could always bypass these things, but I don’t think we would agree that we should bypass the dust relay fee and start seeing a massive amount of dust clog up the network.” – Samson Mow

In the world of banking, there have always been cops and robbers. Piles of assets and monetary value have always enticed the idea of a bank heist. Bitcoin and digital money are proving to be no different. The storage source has shifted, but the mentality to capture remains the same. It’s a reminder of how you embed a European Central Bank Plan inside of an American financial system. Divide and conquer.

If you look at ordinals, that’s one. They’re it’s kind of like an ICO but with pictures. You know, they’re selling these these PFPs or whatever wizard images and cat images and then they have a war chest and they don’t care. They can print more stuff. – Samson Mow

Whether it’s printing from the FED, ICOs, DATs, or Bitcoin Treasury Companies, the invisible hand is one of fractional reserve banking policies.

Furthermore, what Samson describes with ordinals and fee compression rhymes with history. Changing the cost to process a transaction to $0.01 sat/vbytes allows unintended consequences at some point. Just as “cheap trading” fueled reckless high-frequency speculation in equities around 2008. Cheap blockspace and zero-fee incentives risk repeating the same cycle and diluting the value of Bitcoin’s network.

Lowering friction may look like innovation, but history shows it usually ends in centralization and systemic fragility.

Low fees, in essence, remove the security of a financial moat.

Greed’s Temptation and Calling

At the height of the 1914 crisis, John Maynard Keynes was asked to brief the Chancellor of the Exchequer on whether the pound should remain tied to gold. Keynes argued emphatically that it must:

… he (Keynes) had come down very strongly in favor of maintaining the link: “London’s position as a monetary center depends very directly on complete confidence in London’s unwavering readiness” to meet its obligations in gold and would be severely damaged if “at the first sign of emergency that commitment was suspended.

… But whereas before the war he had thought that the best way to achieve this was to ensure that currencies such as the pound be fully convertible to gold at a fixed value, he had now come to believe that there was no reason why linking money supply and credit to gold should necessarily result in stable prices. – Lords of Finance

If the examples of John Maynard Keynes and Alan Greenspan, along with the parallel of 1913 versus today’s Bitcoin divide, reveal nothing else, it is that inflationary pressures, though often hidden, are always present. The history of currency is a long dotted line of individuals who ultimately bend the knee to the erosion of value systems.

Their words defended markets and sound money, but their actions were of centralized control.

Core vs. Knots feels like the same corporate-led sleight of hand that steered Keynes and Greenspan and that defined the Aldrich and Glass-Owen plans. It is the same temptation facing Bitcoin today.

What is clear is this: it is easy to praise sound money in theory, but far harder to defend it once the “in-crowd” offers you a seat at the table.

The lure of acceptance and the search for yield are powerful drugs. Both have the power to flip a goldbug into a credit junkie without leaving a trace of evidence.

The Simple Lesson That is Hard to Live By

First principles are non-negotiable. They are like primary colors in art. Remove one, and the structural foundation for all future innovation collapses. Cloud the palette with too many colors, and the core value is drowned by unnecessary bloat. Too many features introduce the Ethereum problem. Endless left-turns disguised as innovation, when the mission could be achieved in a few simple right-turns.

Gold’s important role as sound money was pushed aside, not because it failed, but because men failed to hold the line. Bitcoin faces the same test today.

If Core vs. Knots, ordinals, or fee games erode Bitcoin’s principles, then the ghost of 1913 will win again, only this time in digital form. In a future world, Bitcoin credit will be all the rage.

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