Strategic Bitcoin Reserve
A Sputnik moment and Trumponomics
“There's a lady who's sure all that glitters is gold…and she's buying a stairway to Heaven.” – Led Zeppelin
How we doin’, friends? Hanging in there? Volatility beating you up?
Lately, it feels like the exact opposite of the song because bitcoin took the elevator down recently, but stay strong. This is where conviction is built and diamond hands are formed. The price action has been frustrating lately, even for me! This has honestly been some of the most challenging months I’ve ever experienced in bitcoin since 2020. That’s saying something. The market is acting irrationally in my opinion, but such is life.
Speaking of gold, which is hitting new all-time highs in price (and bitcoin usually follows behind), although I’m not a huge fan of it, I understand its purpose as a physical commodity that is a store of value due to its relative scarcity. However, when you zoom out, it’s really not that scarce!
As an investor, this is NOT what you want to see. There is an exponentially rising supply, and technology is only rapidly improving to find and dig up more efficiently.
Regardless, it’s been the best money for over 5000 years (until now), and even though it’s a literal rock, it has increased in value over the past 5 years (~85% return compared to S&P500 ~130%). It also makes for great music lyrics.
When you look at the gold chart, it basically steps higher, keeping up with monetary debasement. This really kicked into high gear after 1971, when the US took the world off the gold standard, and every country was free to print as much money as they wanted. It lept even higher when gold ETFs were launched in 2004, and people didn’t have to store gold bars in their home safe anymore, and demand exploded.
Unfortunately, nothing rhymes with bitcoin, and it sounds terrible in music lyrics, but it’s up ~1300% in 5 years and 200% in 2 years. It's the best-performing asset over the past 16 years and the fastest asset to a 2 trillion market cap in history.
Gold can have music lyrics all it wants, I’ll take superior returns.
Think about those numbers for a second. For traditional investors in a 60/40 portfolio with a historical average of 8-10% returns that everyone LOVES, bitcoin is achieving in 2-5 years what traditional investors make in 20- 100+ years.
That's what happens when you save in absolute scarcity—exponential returns (riding enormous volatility) to help you outpace exponential fiat currency debasement. Otherwise, you're sprinting on the treadmill of life using stocks, bonds, gold, and real estate to keep up with REAL inflation (not manipulated CPI). Most people are not getting ahead using traditional assets; they're just keeping even. A lot depends on your age and financial situation, but in 2025, a zero percent allocation to bitcoin in any situation (unless you have zero savings) is incomprehensible to me.
Bitcoin is an emerging digital commodity representing a novel way to store value given its absolute (not relative, like gold’s) scarcity that is mathematically certain. 99.9% of people hear the word “digital” and automatically conclude bitcoin is a scam/ponzi because it CANNOT POSSIBLY BE SCARCE BECAUSE IT’S “DIGITAL”. I implore you…DO THE WORK. Learn bitcoin. Understand why digital scarcity IS THE INVENTION OF A LIFETIME. Everyone reaches the same conclusion over time…bitcoin is novel, verifiably scarce, and it is becoming/will be the best store of value humans have ever known. To be the best money, you must be a store of value FIRST.
As I look at the bitcoin chart, I believe it too is a stairway (to heaven) pattern, and it’s possible that the previous 4-year insane blow off top and then crash back down 80% cycle pattern is ending.
I discussed this in the prior “Supercycle” newsletter, but I’m increasingly believing it. Bitcoin is now a teenager (16 years old) and not a little punk kid. It’s becoming an adult slowly and steadily as years pass, and it proves its legitimacy. Its market cap is nearly 2 trillion dollars. It’s a big asset class, but still small, relatively speaking.
As it ages and continues to produce block after block without fail, trust in the bitcoin monetary protocol grows, and thus, more people choose it as a store of value, and its market cap grows. Given the unpredictability and uncertainty of global fiat currency monetary policy, which is on full display daily, bitcoin offers a reprieve to savers in a money that is outside the fiat money clown show/Ponzi scheme.
As the asset grows larger and becomes more widely adopted and accepted, it draws more money in from big institutions looking to protect their wealth due to its certainty and lack of counterparty risk. These institutions have deep pockets and long-term time horizons. They look at the long-term outlook of an asset class, allocate a percentage of their portfolio to it, and then wait. They’re not day traders.
Bitcoin has been primarily a speculative asset and full of traders. Don't get me wrong; there are still tons of traders and speculators, but on the margin, that is changing quickly. It’s in the transition phase of maturing to massive institutional/nation-state adoption. Everyone is working overtime to understand the most misunderstood asset in history, which they have neglected for the past 16 years and blown off as a Ponzi scheme.
In reality, fiat money (backed by "trust")is a Ponzi scheme, and bitcoin is the truth (real money), backed by energy and mathematics.
This shift towards less speculative interest/trading and a more long-term saving outlook drastically reduces the downside. It also reduces the insane blow off top upside. What you get is a more mature asset that grinds higher in a stair-step fashion. It may be boring, but when you look back and have a 20-50% CAGR after 20-30 years, you’re going to be very very very very very very very happy.
That’s what I see with bitcoin—a stairway to heaven.
Less mania (although there will be some), and less full-on despair (although there will be some). Don't get me wrong, Bitcoin will still be incredibly volatile for the foreseeable future, relatively speaking, compared to traditional stocks/bonds. Embrace it.
“Volatility is vitality” - Michael Saylor
That's what we're seeing right now. Stocks correct 10% and bitcoin corrects 30%. This is VERY TYPICAL in a bitcoin bull market. 30% corrections are NOTHING.
If you can't handle it, you have a few options: reduce your position size, get out entirely, or stop checking the price/forget about it for 10 years and touch some grass.
Don't be afraid of these pullbacks. If you're convicted in the asset, use it as an opportunity to BUY MORE. NOTHING HAS CHANGED regarding the fundamentals of bitcoin. Adoption is only INCREASING. Everything has only become stronger as I'll talk about in a moment. This is a "bitcoin"(not golden) opportunity.
Where do I see my stairway prediction going wrong? In about 10-20 years, bitcoin may get more volatile, which would be utterly insane given the law of large numbers (less growth and volatility the larger an asset gets, given the numbers get so big).
My reason is that we’ve never witnessed an asset with absolute scarcity. Historically, if there is high demand for an asset, more supply comes online. As the price of gold rises (like now), gold miners rush to dig more to cash in on the profits. Gold then floods the market and the price falls as supply rises.
When home prices rise, builders come in and build more houses.
When stock prices rise, founders issue more stock to sell.
With Bitcoin, the monetary policy is fixed. There are 21 million bitcoins, that’s it. The difficulty adjustment prevents anyone from getting more when there is high demand, so supply stays predictable and on schedule. Eventually, in 2140, no more bitcoin subsidies will be earned as encoded by the protocol. Absolute scarcity is achieved.
Right now, there is high demand for bitcoin, but there are still plenty of people willing to let go of it for fiat and trading. This is going to drastically decrease over the next 10-20 years, as does the bitcoin block subsidy (cut in half every 4 years). As years pass, there will be less and less bitcoin available for trading on the market, and when demand persists but supply decreases, that creates fireworks/volatility.
If there is one bottle of water to sell in the desert to a group of thirsty travelers, the price will rise exponentially.
When fiat money is hyperinflating, the cost to exit to bitcoin when the supply is fixed will be exponentially higher. That is NOT the case today, but I believe it’s coming.
A price increase is the only way to get people to sell their bitcoin. Everyone has a price. But as the price rises, you have to sell less and less bitcoin to obtain goods/services you desire to consume. Thus, fewer and fewer Bitcoins become available to the trading market. Bitcoin is the world's first DIGITAL commodity. With physical items, you have to sell the whole thing to give the other person what they desire, but with bitcoin and its digital nature, you can keep selling smaller and smaller fractions as the buyer is just interested in owning digitally scarce perfect money.
I’ve also written about bitcoin borrowing and lending, and the opportunities that are coming soon, where some people will never sell their bitcoin. Like with real estate, they will use the “buy, borrow, and die” strategy. Unfortunately for prime real estate, it now has to compete with bitcoin. It doesn’t mean real estate has no value, just much less. There is no better collateral asset on the planet than bitcoin. It is pristine collateral everyone will want. It's better than prime ocean front real estate in Miami, and hardly anyone understands that (but you, since you read Crypto Pulse!).
I have no clue what will happen in the future, but I’m prepared for boring stair steps higher, and yet I actually hope for the volatility and fireworks. I love the highs, but I also love buying bitcoin from lettuce hands at the lows (recently at 80k). It brings me great joy.
I’ll gladly take the stairs to a Bitcoin price in the multimillions, but I wouldn’t mind a rocket ship ride up and down instead. It's more fun, and my time horizon allows this. Regardless, the destination is much, much higher. I’m excited.
No, you are not bullish enough. No one is.
The Sputnik moment
When Russia sent the first satellite into space, America woke up out of fear, and suddenly, the space race was on.
A similar moment just happened with bitcoin, but this time America is leading the race.
In an executive order (EO), Trump signed the Bitcoin Strategic Reserve.
The USA will not sell the bitcoin it has in its possession and will look to find ways to buy more. Altcoins (Eth, XRP, Solana) are NOT included in this reserve, and the USA will not be looking to buy them. However, it can sell altcoins that are in its “stockpile”.
The US administration clearly identified that there is bitcoin, and then there is everything else. There is a bitcoin strategic reserve that is valuable, and there is a digital stockpile of shitcoins like XRP, ETH, etc. etc. that they will confisicate from criminals, possibly sell, and not buy more of.
It's the same thing I've been saying for 4 years now. Bitcoin only.
Bitcoin is the real breakthrough technology. Bitcoin is the world's first digital commodity.
The EO is not a "law"(passed by Congress), but it's still really powerful and a massive signal to the rest of the world. The bitcoin cyberspace race is now on, and every country just received a huge wake-up call from Trump and the USA.
You may think it's dumb and insignificant, but when it comes to money and assets, if it matters to the USA, it has to matter to everyone else. We're the financial capital of the world. If you don't play along, you're gonna get left behind.
The most influential person on earth, leading the most powerful country, just declared bitcoin as a strategic reserve of the United States of America. Read that 20 more times.
A. Bitcoin. Strategic. Reserve.
Are you kidding me????!!!!
Folks, if you aren't smashing the buy Bitcoin button on your phone or computer right now, I'm not sure what to tell you. This is historic stuff. The US is saying bitcoin is just as important as gold, but its current value is 10x LESS.
It's digital gold for the 21st century and is critical to maintaining our superpower status in the global order going forward. THAT’S WHY THEY CALL IT A “STRATEGIC” RESERVE.
It will be worth 10- 100,000x more than gold because it was designed for the 21st century, not the 17th.
The executive order also gave a MANDATE to go BUY MORE BITCOIN in taxpayer-friendly, budget-neutral ways.
ARE YOU KIDDING ME????!!!
The lead of Trump's digital asset committee said in an interview that they'll ACQUIRE AS MUCH BITCOIN AS THEY CAN, THEY CAN'T OWN ENOUGH!
Are you kidding me????!!!
I literally cannot believe what I've read over the past few weeks. Yet because of some nonsense macroeconomist fears that we're going into a recession (doubtful) and tariffs are inflationary (which is good for bitcoin), bitcoin is selling off TO HISTORIC BUYING OPPORTUNITY PRICES (I'm writing this as bitcoin trades at $82k).
Bookmark this. Shove it in my face if I'm wrong. Bitcoin is going much higher this year. I don't even think the bull market has really started yet. Yes, you heard me right.
I AM POUNDING THE TABLE, JUMPING ON IT, SCREAMING, SHOUTING INTO A MEGAPHONE, ACTING LIKE A DAMN LUNATIC FOR EVERYONE TO BUY BITCOIN AT THESE PRICES.
You think you're too late? You're not!
Michael Saylor just bought more!
There has NEVER been this much information asymmetry in the market. March 2020 was a great dip to buy, but bitcoin was not nearly as derisked then as it is today. The same goes for October 2022 during the FTX implosion.
The US government is grabbing you by the shoulders, shaking you, looking you dead in the eye and telling you, "Bitcoin is the future, we're buying as much of this as we possibly can before our allies and enemies do, and we're not going to sell it."
They then SLAP YOU across the face and say, "There is a fixed supply of bitcoin. Don't you understand? Don't be an idiot!"
I hope I've made my position clear and gotten my point across.
The human race has made incredible advances over thousands of years and invented incredible technologies that are absolutely life-changing, but not once has perfectly engineered money been created.
We needed computers, the Internet, cryptography, specialized hardware, electricity, and tons of other stuff to make it happen, but we finally did it. It's going to change everything, and so few realize it. Bitcoin is an invention. It’s a new technology to store value. It’s unfathomably disruptive. DO NOT IGNORE IT.
YOUR CURRENT NEST EGG = BLOCKBUSTER. BITCOIN = NETFLIX
Just like doctors couldn't comprehend treating deadly diseases with antibiotics before the understanding and awareness of germ theory, humans today can't possibly comprehend the future on an engineered sound money bitcoin standard. We're so early.
Trumponomics
There are people out there who worry about Trump’s monetary policy and how it will impact bitcoin. Let me summarize it in two words: higher (EVENTUALLY).
There are a multitude of reasons for this.
First of all, he and basically every member of his cabinet, as well as his friends and family, own it. Why would you hide that information? Of course he wants the price to go higher.
Tariffs – Insanely bullish for bitcoin.
Full disclosure: Most of this is way above my head, and I geek out on this stuff as a hobby. It’s crazy complicated, and not everyone agrees on everything, so take whatever I say with a grain of salt. This is how I interpret it, at least.
Tariffs lead to trade wars, which typically lead to currency debasement. If the US puts a tariff on another country, that country usually responds by devaluing its currency (relative to the USD) by printing money so that its goods are “cheaper” for other countries to buy. Bitcoin wins (thrives on currency debasement globally).
IF tariffs lead to slowing growth and deflation (unknown, but possible, and intolerable), this will ultimately lead to money printing to prevent the fiat ponzi system from collapsing. Bitcoin wins. There is no scenario where you don't want to own bitcoin due to tariffs (long-term, maybe some short-term pain). Bitcoin LOVES tariff wars. Bring it.
Tariffs also create distrust and chaos. Bitcoin thrives in this environment because it requires no trust and brings certainty to an uncertain world. If the US threatens tariffs, cutting a country off from the banking system (like they did with Colombia), or seizing its treasuries (like Russia), they can now opt out to bitcoin. There is an exit. Instead of countries only using the US banking rails for trade and buying US treasuries as a safe haven asset, countries will move to neutral money assets for trade outside the US financial system, like gold and bitcoin. The change will be gradual but profound over time.
Tariffs also SHOULD strengthen the US dollar over time. This is bad for the rest of the world, which owes dollar debt (debt costs rise as the dollar strengthens). A strong dollar will wreck every other world economy and lead to massive money printing as debt spirals accelerate. Beware dollar strength. It's a gift and a curse…see Triffin Dilemma
Reshoring American Manufacturing
Trump won the election for multiple reasons, but one critical reason was the middle class. He appealed to voters to vote for him to lift the middle class up out of poverty and restore American manufacturing jobs (debatable if Gen Z even wants those jobs and if robots will just take them anyway, but that’s just my opinion).
To be a superpower exporting nation, your currency must be weak relative to other countries’ fiat currencies. This makes your goods cheaper to buy. Everyone loves a discount, right?
A weak USD is mega-bullish for bitcoin (more money printing). A strong USD is a death blow for the world (see above). The only way for America to restore its manufacturing capabilities and export goods to the world is through a weak USD. As the USD gets weaker (as more money is printed), bitcoin just gets stronger.
What do other countries do to protect their exports from a weak USD? They debase and weaken their fiat currencies more! It's a race to the bottom, folks, for fiat currency. The weakest one "wins" to keep its exporting economy alive, but it ultimately impoverishes its citizens through inflation. Every fiat currency is going to cannibalize itself as Bitcoin's dominance grows.
Save in the one money that can't be debased and has a fixed supply - bitcoin.
Notably, Bitcoin isn't a competing country. It doesn't care about selling cheaper goods to anyone. It's just math and computer code. Bitcoin is the hardest/best money humans have ever known. It has no feelings, it is apolitical, it doesn't care about trade wars or tariffs, it's just an immutable ledger that forces you into submission because you can't beat/change/improve its monetary policy. It's EXACTLY what you want sound money to be. NEUTRAL. SCARCE. DIGITAL. DECENTRALIZED. IMMUTABLE. NOT A PHYSICAL COMMODITY ESSENTIAL FOR LIFE (oil).
As you can see, there’s no easy way out for Trump—you can't be a strong exporting nation AND be the global reserve currency WITH a strong currency. I think he’s using tariffs as a bargaining tool, fully recognizing that he needs a weaker dollar and lower bond yields in the long run. A strong dollar basically kills the world economy. He knows that.
What does a weaker dollar and lower bond yields mean for bitcoin? Up only.
A weaker USD and lower yields will be a massive liquidity impulse to the monetary system and bitcoin will sniff that out first. Sit back and enjoy the ride higher.
Additionally, on a longer-term horizon, one of the main reasons I am betting on Bitcoin is that the world needs a neutral money for storing value and trading so that the Triffin Dilemma, which the USD suffers from, disappears. Gold used to be that neutral money, but it has so many shortcomings that it can’t be used realistically in the 21st century. Bitcoin is here now. It’s digital gold, and it will reshape the entire world monetary system.
Immigration
I’m not sure how this will play out regarding the economy. It’s a very hot-button issue, and I don’t want to touch it. I see inflationary aspects but also deflationary ones. It probably nets out even. I will say—there is only one money in the world where you can memorize 12 words in your head and travel anywhere with it: Bitcoin. It's great for immigrants. Next topic.
DOGE
I’m all about finding out and cutting fraud. If you disagree, I’m not sure what your argument can be. We can debate specific programs and their value to society, but I am interested in DOGE discovering and eliminating fraud. Having your tax money get sent to dead people for social security or to many other clearly fraudulent people/organizations is an easy win. How successful DOGE will be is anyone’s guess, but it’s hard to bet against Elon (he landed a rocket booster from space, developed self-driving cars, satellite internet, etc., etc.). There will be a lot of lawsuits and fighting, so we’ll see. Regardless, there are a few things to keep in mind:
• Even if wildly successful, it’s unlikely DOGE can cut more than 500b- 1 trillion in waste/fraud. That means the US would still run a one trillion-plus annual deficit. Just for perspective, that gets us back to 2019 levels of deficit spending. Better, but not great.
• Going back to the Trifin dilemma. The US MUST continue to run deficits as the world reserve currency. They literally CANNOT run budget neutral or positive. The rest of the world would be starved for dollars (90% of all the debt in the world is denominated in USD), and the US dollar value (relative to other fiat currencies) would spike due to high demand and cause mass chaos. The US dollar MUST be weak and the US MUST run deficits (exporting dollars) to maintain its Global Reserve Currency (GRC) status.
It's an exorbitant privilege to be the GRC because it gets you cheap debt that no other country gets, but the price you pay is a hollowed-out manufacturing sector where you produce nothing, rely on the world for almost everything, and have a hyperfinancialized economy that is dependent on the stock market. This leads to massive social inequality, which leads to social unrest, a plummeting birth rate, suicide, violence, homelessness, drug/gambling addiction, and poor population health. Sound familiar to the USA? That's why I say...fix the MONEY...fix the world. Fiat money is the root cause of it all.
One thing that will be really interesting to see play out is how much the world economy right now is being driven by all this waste/fraud DOGE is trying to eliminate. Every dollar wrongly spent by the US government that is genuinely waste/fraud still gets cycled back into the economy and drives growth/GDP. People receiving millions of dollars in fraudulent or wasteful payments are SPENDING that money! That’s their income/paycheck! They buy food, clothes, cars, vacations, homes, stocks, etc. It’s not just sitting under a mattress. There is a world where cutting waste/fraud can be a MASSIVE SHOCK to the fiat system, triggering outright deflation as these individuals/corporations no longer receive income. That means less spending, default on payments, etc. That means LESS taxes collected and MORE SELLING of stocks, potentially. That means a BIGGER GOVERNMENT DEFICIT. This is all completely theoretical on my part, but it’s imperative to think about potential second and third-order effects. We’ll have to wait and see, but I find it fascinating.
Imagine if DOGE INCREASED the deficit due to falling tax receipts?! That would be ironic and WILD.
Regardless of the outcome of DOGE, I still think it's bullish for bitcoin because, ultimately, if DOGE succeeds, long-term interest rates will fall, and that’s good for bitcoin (and everyone). If DOGE is too successful and somehow creates deflation and a wider deficit, that is also good long-term for bitcoin (likely short-term pain) as the money printer will go into overdrive given widening deficits. Bitcoin protects you from this monetary debasement risk scenario.
Tax cuts
Trump wants to maintain the current tax cuts he proposed in 2017. He believes this stimulates the economy (right or wrong is debatable). Tax cuts INCREASE the deficit as the government takes in less revenue. How do they pay for that? Economic growth, tariffs, and DOGE (more revenue and less wasteful/fraud spending). As you can see, most of this stuff will likely cancel each other out, and the deficit will stay in the 1-2 trillion a year range. At 36+ trillion now with an aging population, rising healthcare costs, more social security/medicare demands, and rising interest payments...that’s a huge problem. Bitcoin once again protects you from the mandatory fiat currency debasement they MUST DO to inflate the unpayable debt away.
Innovation
Trump is really trying to lean into innovation like AI, energy, and deregulation to drive an explosion in economic growth. This would be great for everyone as technology and capitalism (not fiat money) are why you enjoy such an insane standard of living today compared to the Dark Ages when you needed candles at night and fire to stay warm. Lower energy prices would bring interest rates down (good for bitcoin), and drive higher economic growth where people have more excess cash to spend and save (also good for bitcoin).
Technology advances and the use of AI will also benefit Bitcoin (see prior newsletters discussing AI agents/robots paying each other in bitcoin and using the Bitcoin Lightning network for fast micropayments).
In addition, although technology often leads to MORE JOBS CREATED, there’s always a chance this time is different. AI and robotics are coming for both white and blue-collar jobs. It will take time, but it could lead to more jobless claims and a larger budget deficit, as fewer people have income to pay taxes and buy goods and services, and the government needs to hand out stimmy checks (universal basic income). It’s another fascinating, extremely complex, dynamic, multifaceted, once-in-a-generation event we’ll have to navigate and figure out. I think bitcoin benefits regardless, especially if stimmy checks happen.
A future deflationary world where lower costs due to technology improvements are allowed to be passed onto consumers and everything gets cheaper (as it should) is only compatible on a bitcoin standard (deflationary money). If the opposite continues to happen (like today), where despite technology lowering the costs of goods and services, prices still RISE for consumers (due to money printing that is required on a fiat money inflation standard), bitcoin will continue to do well to protect you against the fiat debasement robbing you.
A final word
All of this discussion is centered around Trump and his policies. But what about the next man/woman in office 4 years from now? We all have NO CLUE. The whole point of bitcoin is your CERTAINTY regarding its monetary policy. I can tell you precisely what it will be in the year 2125 today. I can't predict what the President and their policies will be tomorrow, let alone 100 years from today! As long as the bedrock of bitcoin’s monetary policy doesn’t change, I can make financial calculations and decisions about the future today, regardless of who’s in the White House. Thus, I sleep soundly with the certainty of bitcoin. A protocol that doesn't care who the President is, what policies they have, what the Fed is doing, who’s at war, or anything else that we humans get worked up about. Bitcoin is just money. Boring, misunderstood, but essential to everyday life.
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