From the looming derivatives crisis in Bitcoin markets to the transformation of European finance and the future of US energy policy.
From the looming derivatives crisis in Bitcoin markets to the transformation of European finance and the future of US energy policy. Here are the three most significant predictions that emerged from these discussions.
Scott, a former Wall Street options trader with 25 years of experience, predicts that Bitcoin's unique properties as a bearer asset will trigger what he calls "the big long" - a derivatives market implosion that could become systemic to the global financial system. Unlike traditional assets, Bitcoin can be withdrawn to self-custody within hours, creating an unprecedented dynamic where institutional hedging strategies could catastrophically fail during the next financial crisis.
"We have an asset that's infinitely scarce. There's nobody to tap on the shoulder to print more of," Scott explained. He pointed out that when institutions like Goldman Sachs sell portfolio insurance on Bitcoin holdings, they need to borrow Bitcoin to hedge their exposure. But in a crisis, as investors withdraw Bitcoin to self-custody wallets, the available supply for borrowing will evaporate rapidly. This creates a feedback loop where funding rates explode, futures trade at steep discounts, and the derivatives complex locks up entirely. Scott believes this scenario will unfold within the next decade, though he admits "it could be next week, could be next month, five years, 10 years. I doubt we make it 10 years."
Phil, who runs a Bitcoin financial services company in Switzerland, predicts that institutional capital flooding into Bitcoin-backed lending will dramatically compress interest rates over the next year. Currently, Bitcoin-backed loans command rates of 6-8% on Swiss francs, 8-10% on euros, and 10-14% on US dollars - despite being overcollateralized with highly liquid collateral that trades 24/7.
"I would give it like 12 months, maybe max, they can still generate excessive returns," Phil stated. He's already working with Swiss banks that are preparing to deploy "a couple of hundred millions" into Bitcoin-backed lending at rates around 3-3.5% for Swiss francs. The catalyst is Switzerland's 0% interest rate environment, which is forcing banks to seek yield opportunities. Phil sees this as part of a broader trend where traditional finance recognizes Bitcoin as "super collateral" - superior to most private credit investments due to its transparency, liquidity, and inability to be rehypothecated when properly custodied. As more institutional capital enters the space, the current rate premiums will compress rapidly.
Yaël, a fellow at the Bitcoin Policy Institute with over a decade of policy experience, predicts that Congress will pass legislation exempting Bitcoin transactions under $10,000 from capital gains reporting requirements. This would represent a massive win for everyday Bitcoin usage, eliminating the current burden where every coffee purchase technically requires IRS reporting.
"There is enough groundswell here that we could actually implement that change and make it so that we don't have ugly dates every year with the IRS," Yaël explained. He sees bipartisan momentum building, noting that even Democratic Senator Andy Kim from New Jersey has become "super anti-bank secrecy act" after hearing from constituents about the burden of financial surveillance. The de minimis exemption has support from Senator Cynthia Lummis and is gaining traction as more ordinary people - from hair salon owners to auto parts dealers - share stories about wanting to use Bitcoin without tax penalties. Yaël believes the combination of grassroots pressure and the current pro-innovation stance in Washington creates a real opportunity for this common-sense reform to pass in the coming congressional session.
The Big Beautiful Bill delivers game-changing tax benefits for bitcoin miners through 100% immediate depreciation on hardware purchases, but simultaneously guts renewable energy tax credits that solar and wind-powered operations depend on.
Starting January 19, 2025, miners can write off entire ASIC purchases in year one rather than spreading depreciation over 5-15 years. A miner buying $50 million in equipment can deduct the full amount immediately. "Home miners may be able to operate profitably without paying income taxes on their mining rewards," notes Second Gate Advisory's Brandon Bailey, though he warns large public miners might see distorted earnings reports.
The catch: renewable energy tax credits vanish after 2027, with stricter phase-outs for Chinese-sourced solar panels. Soluna's CTO Dipul Patel predicts this will "raise power costs [and] decrease green energy on the grid" – potentially contradicting Trump's Nashville promise of abundant electricity.
Additional wins include enhanced interest deductions and immediate R&D expensing for mining tech developers. The bill ultimately favors smaller, bootstrapping operations over renewable-focused industrial miners, reshaping the competitive landscape as the industry awaits implementation details.
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