The markets are telling us something important right now.
The markets are telling us something important right now. Bitcoin sits at $108k with remarkably shallow drawdowns, while treasury companies multiply like mushrooms after rain. This week, I sat down with James Check to dissect what's really happening beneath the surface of this unusual cycle.
The proliferation of Bitcoin treasury companies represents this cycle's version of speculative excess, according to Check. While he distinguishes them from previous cycles' "shitcoins," he warns that investor behavior around these companies is following familiar patterns. "Bitcoin is trading like Bitcoin in 2025 - it's a different animal, low volatility, low drawdown," Check notes. "But companies like MicroStrategy live in this 2015-17 type volatility environment."
The math is straightforward but brutal: if a treasury company trades at a 2x premium to its Bitcoin holdings, the company could double its Bitcoin treasury while shareholders break even if that premium compresses to 1x. Check predicts most retail investors won't understand these dynamics until it's too late. "There will be points in time where people buy the hottest thing as these treasury companies, they'll pay a big premium... And then the market's just not going to perform the way people thought it would." He expects only a handful of companies to survive and thrive, with MicroStrategy in a category of its own.
James Check sees a clear path to $125k based on current market structure. The key insight? 55% of all dollars invested in Bitcoin have a cost basis above $90k - creating what he calls a "massive band" of support. "We're in a very, very healthy spot," Check explained. "Don't worry about price suppression. Look at the fact that there is so much demand that we've built this very stable floor at 90k."
Check expects long-term holder selling to remain muted until Bitcoin reaches $125k, at which point sell-side pressure will "start kicking back in." Above $150k, he warns, "you're in very, very thin air." The current environment shows funding rates neutral to negative despite prices near all-time highs, suggesting the market is actually net short rather than overleveraged. This creates potential for explosive upside as shorts get squeezed on any meaningful rally.
The current market is absorbing capital at a rate that would have been unthinkable in previous cycles. Check's analysis shows Bitcoin attracting $36 billion in monthly inflows - equivalent to Bitcoin's entire market cap in May 2017. "Everything up until May 2017, we absorbed in one month," he emphasized. This massive capital absorption is happening while Bitcoin maintains an unprecedented stair-stepping price pattern with minimal drawdowns.
Check believes this pattern will continue, driven by institutional allocations that view Bitcoin's newfound stability as an entry signal. "Think about the pools of capital who are now going to look at this price chart and be like, yeah, I'll allocate. Why not?" The combination of ETF flows, treasury company purchases, and traditional allocators discovering Bitcoin's "low volatility" profile creates sustained demand that previous cycles never experienced. While many cry "price suppression" at every consolidation, Check sees it differently: "We're going to be price-suppressed the whole way up. Stop being bored, guys. Be bullish."
The message is clear: this cycle is playing by different rules, and those waiting for traditional bear market patterns might be waiting a very long time.
Bitcoin miners are experiencing a severe revenue drought, with daily transaction fees plummeting from $2.8 million in 2021 to just $550,000 in 2025. In April, mining pool Foundry mined a block containing only 7 transactions—the emptiest non-empty block in over two years.
Three forces are crushing miner income: widespread SegWit adoption (now 90%+ of wallets), Bitcoin's financialization through ETFs shifting volume off-chain, and the collapse of "ordinals" activity. Off-chain trading volume now dwarfs on-chain by 7-16x, while high-value transactions ($100k+) dominate the network—up from 66% in 2022 to 89% today.
The ordinals ecosystem that drove 36% of fees in 2023 has collapsed to just 10% today. Despite new protocols like Alkanes creating brief fee spikes during token mints, sustained demand has evaporated.
"Bitcoin's mempool is a desert currently with little competition for blockspace," the analysis concludes. With no consensus on solutions—some developers push for more expressivity while others advocate patience—miners face an uncertain future as Bitcoin increasingly serves as institutional settlement infrastructure rather than retail payment network.
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Ten31, the largest bitcoin-focused investor, has deployed $150M across 30+ companies through three funds. I am a Managing Partner at Ten31 and am very proud of the work we are doing. Learn more at ten31.vc/invest.
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