We've reached a tipping point.
Last week was a good week for bitcoin and the momentum seems to be increasing as this week begins. Today we saw a new all-time high above $126,000. It seems like we're about to hit escape velocity after multiple periods of chopsolidation between $80,000 and $110,000 throughout the year. As is tradition, the engine started revving at the tail end of September and the car left the garage in early October. This Fall should be a fun one.
Why is this happening?
I believe because the world is finally waking up to the fact that governments around the world are objectively bankrupt and their only way out of it is to completely debase their currencies. Last week, JP Morgan analysts revealed that they've been asking their clients why they're allocating to assets like gold and bitcoin to which they replied,"the world is on fire, inflation doesn't seem to be tamed, government deficits dictate more debt creation to paper over the existing debt, the Fed is clearly not independent anymore, fiat currencies are kind of whack when you think about them, and it's obvious that the dollar has fallen out of favor with some of the world's superpowers." The JP Morgan analysts have cleverly coined the trend of funneling your money into neutral reserve scarce assets as the "debasement trade". I'm not going to lie, it has a nice ring to it. It also validates one of the core themes of this newsletter and the discussions we've been having on the podcast for the last eight years.
The year is 2025 and longtime bitcoin skeptics like Mohamed El-Erian are finally waking up to the fact that more people are beginning to recognize this. The world has a problem. The denominators of the measurements of value (fiat currencies) are increasing at an accelerating pace, prices are rising and people are struggling as a result. The expansion of the denominators of value measurement is not only bad for the lower classes who feel the pressures immensely, it is also bad for the upper classes who are experiencing what I refer to as a "wealth mirage". Their stock tickers are moving up and to the right, and it makes them feel good inside. However, it is a mirage because the stock gains are barely keeping up with REAL inflation and are getting absolutely demolished by the returns of hard assets like bitcoin and gold. Luke Gromen made this abundantly clear last week when he charted the "debasement trade" by measuring stock indices and real estate returns in dollars, gold and bitcoin.
How long will bitcoin have to continue winning this dominantly before everyone bends the knee and makes a material allocation to bitcoin to avoid the consequences of global debt debasement? I don't think that long. After almost 17-years of beating the memetic drum of "fiat currencies bad", "number go up", "nothing stops this train", "centralized third parties are security holes", and a number of other easily digestible phrases that cut to the core of the world's problem, the people with immense amounts of capital are beginning to wake up. And I have a feeling that the normalization of the "debasement trade" will be the snowflake that causes the avalanche. Recognizing that debasement is the only way out of the debt problem has just been made "cool" in the eyes of some of the most respected institutions in the world. Whether or not that respect is deserved doesn't really matter. What matters is that people, rightly or wrongly, respect these institutions and act based off what they say.
Buckle up.
Luke Thomas argues that companies embracing AI while ignoring Bitcoin for treasury management are living a contradiction. He points out that VCs encourage startups to "embrace technology in every part of the business" except the balance sheet - a glaring inconsistency in the digital transformation narrative. As Luke notes, "digital transformation exists everywhere" and should naturally extend to how companies store value.
"The balance sheet shouldn't be off limits from technological innovation."- Luke Thomas
I've seen this firsthand at TFTC and through our portfolio at 1031. Companies that truly understand digital transformation recognize Bitcoin as essential infrastructure, not speculation. Luke's observation cuts to the heart of Silicon Valley's selective blindness: you can't claim to be building the future while storing your value in the past.
Check out the full podcast here for more on AI agents replacing white collar jobs, startup disruption patterns, and homeschooling with AI.
Goldman Sees More Institutions in Ethereum
Russia Exchange Seeks End to Retail Bitcoin Ban
Coinbase Samsung Partnership Enables Crypto Access
Treasury Clarifies No Tax on Unrealized Bitcoin Gains
JPMorgan Sees Bitcoin Upside to $165000 Versus Gold
BlackRock ETF Surpasses 777000 Bitcoin Holdings
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Final thought...
The Phillies are disappointing.
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