Get back to work!
I've been paying attention to markets since the Great Financial Crisis. A little more than 16 years at this point, which isn't an amount of time that I would be comfortable considering myself a "seasoned" observer/participant. However, over this period, which roughly equates to half of my entire life on this planet, I have developed enough pattern recognition to sit back and feel somewhat relaxed during market downturns like the one we're experiencing now. I think ~12 years in bitcoin has certainly accelerated and hardened my ability to stomach volatility.
It seems that in recent years March has been the month of choice for market turmoil. 2020 brought with it the COVID scare. March 2023 was the mini banking crisis that led to a run on Silicon Valley Bank and others. And March 2025 is shaping up to be one of the more interesting months in the history of my market observations as the Trump administration attempts to intentionally reset the US economy and its relationship with the global economy by attempting to cut as much government spending as possible (at least posturing that it wants to do so), bring treasury yields down, and let the stock market fall off the cliff.
Whether or not this strategy is wise or will ultimately be successful is yet to be determined, but I certainly admire the effort. The global economy has been a government debt and central bank fueled Fugazi since I started paying attention. Any attempt to move markets away from government spending and centralized monetary policy and toward open competition on the free market is admirable in my book.
The question that remains is whether or not Trump, Bessent and crew will be able to make enough necessary structural change before the reality of the global debt situation forces the issue. Bond yields outside of the United States are blowing out to dangerous levels. Particularly for Japan, which just printed the highest close ever on the 40Y JGB.
British 10Y gilts, German 10Y bunds, and the Eurozone 10Y central government bond are all up on the year while the US 10Y treasury has fallen materially since January 1st. This is terrible for the Japan and its counterparts across the UK and Europe as Japan has the highest debt-to-GDP ratio in the developed world and needs to continuously roll over that debt as it has become a completely centrally controlled market. As we've said many times in the past, Japan is a canary in the coal mine that everyone should be constantly paying attention to. If the yen carry trade blows out again the likelihood of coordinated intervention increases dramatically. This is also bad for the UK, Germany and the broader Eurozone because they all have recently committed to beefing up their defense industries to support Ukraine in the war against Russia. Their long-term yield drifting higher at the exact time they are signaling intent to significantly increase their debt levels is not ideal.
We are about to find out how far Trump and Bessent can force the markets to take the necessary and harsh medicine that should have been taken after 2008. Will they be able to push forward with their tectonic restructuring of the US economy while all of this is going on abroad? Does weakness abroad play into their hands as investors flood into the US treasury markets to benefit from their perceived safety? That certainly seems to be happening.
Will enough be done on the fiscal side of things here in the US in short order to ensure that the restructuring that is underway has the potential to properly set? Unfortunately, I will not be holding my breath for this one.
Bessent and Trump seem to be doing the best they can in a short window of time to take advantage of the chaos, but considering how bad global debt markets are getting a reversion to the same old type of intervention from the Fed seems inevitable. Granted, this also seems to be part of Trump and Bessent's grander plan. However, I don't think it will help fix any of the systemic issues that exist in the system.
This environment couldn't make the case for bitcoin clearer if it tried. The world is drowning in debt and individuals need a neutral scarce asset that can't be manipulated by central planners now more than ever. Don't get caught up in the noise on intra-day price movements. Understand what bitcoin is and why you hold it. It's the best money the world has ever seen and you hold it so you can't be forced to operate in a world of Fugazi.
Gary Brode's institutional adoption thesis for Bitcoin continues to play out before our eyes. During our recent conversation, Brode emphasized how the approval of Bitcoin ETFs less than a year ago represented a watershed moment, creating the fastest adoption of any ETF product in history and bringing billions of dollars of capital into the ecosystem in record time. This influx of institutional money is just the beginning, as pension funds—representing trillions in assets—are only starting to determine their appropriate Bitcoin allocation strategies.
"Even if these institutions allocate just 50 basis points, 1%, 2%, does it matter? That's trillions of dollars of pension funds out there." - Gary Brode
State governments across the country are actively considering adding Bitcoin to their pension portfolios, with many bills already in process. Meanwhile, family offices managing wealth for high-net-worth individuals are exploring Bitcoin allocations at increasing rates. As Brode notes, even if these institutions allocate just a small percentage of their portfolios to Bitcoin, the impact on price discovery could be substantial given Bitcoin's fixed supply and increasing institutional demand.
TLDR: Bitcoin's institutional adoption accelerates as big money enters the space
Check out the full podcast here for more on the Federal Reserve's impossible debt situation, Trump's tariff strategy, and why government economic metrics like GDP are misleading indicators of economic health.
El Salvador Increases Bitcoin Holdings Amidst IMF Dialogue - via X
Trump Pledges Economic Boom as America Set to "Swim in Wealth" - via X
Bitcoin-Global M2 Correlation Returns After Brief Decoupling As Money Supply Rises - via X
US Strategic Bitcoin Reserve Shifts Investment Landscape for Institutions Worldwide - via X
Block rewards incentivize miners to validate transactions by offering bitcoins for mining blocks. The reward combines a block subsidy (new bitcoins) and transaction fees. The subsidy started at 50 BTC and halves every 210,000 blocks (approximately every four years), creating a fixed supply that diminishes over time. The current subsidy is 3.125 BTC, with the most recent block (#887,100) yielding 3.2269995 BTC total (including fees).
The reward serves dual purposes: providing economic incentive for miners to secure the network and distributing new bitcoins in a decentralized manner. Eventually, transaction fees will constitute the entire reward when the subsidy reaches zero, around 2140. Miners must wait 100 blocks before spending rewards.
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Final thought...
Yesterday was the last day of the season to justify making comfort chili because of the weather in Austin, Texas.
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