Bitcoin’s Financial Legitimacy: From BlackRock to RIAs

Two major signs that Bitcoin is becoming a core part of the traditional financial system: BlackRock’s Bitcoin ETF is now more profitable than its flagship S&P 500 fund, and Ric Edelman, founder of the largest RIA in the U.S., has updated his recommended crypto allocations to as high as 40%.

• IBIT, BlackRock’s spot Bitcoin ETF, now generates more revenue than its S&P 500 ETF (IVV), despite IVV managing 9x more assets

• Larry Fink’s flip in 2023 from skeptic to Bitcoin advocate shows how incentives and fee revenue can shift Wall Street’s stance

• Ric Edelman now recommends that conservative portfolios allocate 10% to crypto, with 25–40% for moderate to aggressive investors

• While Edelman’s broad-based crypto approach may be flawed, his guidance marks a clear shift in how RIAs are being encouraged to think about the asset class

• The RIA market alone manages $144 trillion in assets, and most of it still hasn’t touched Bitcoin

Bitcoin Treasuries: Financial Innovation or Retail Trap?

The team debates the rise of Bitcoin-denominated public companies, firms issuing equity and debt to buy Bitcoin, and whether this trend represents genuine financial innovation or a new form of speculative mania.

• Michael Saylor’s MicroStrategy has paved the way by using capital markets to accumulate Bitcoin and monetize the corporate balance sheet, but its success may not be easily replicated

• Many recent entrants lack differentiation and are riding the wave to issue shares to early investors and buy Bitcoin, echoing ICO-era dynamics

• Insider incentives remain a concern: early backers benefit from retail inflows while bearing far less risk

• Bitcoin is a savings technology—these vehicles are speculative investments in “Bitcoin-adjacent” equities with execution, management, and counterparty risk

• Investors need to underwrite these vehicles accordingly and not confuse them with owning Bitcoin itself

The Illusion of Market Strength: Liquidity, Not Fundamentals

The team explains why all-time highs in equities may be masking structural fragility and how global liquidity, rather than fundamentals, is driving asset prices higher.

• Market breadth is at record lows, with a handful of tech names propping up the S&P 500 while most stocks underperform

• Liquidity tailwinds from post-2008 monetary policy have distorted risk signals and inflated valuations across asset classes

• Paul Tudor Jones’ recent allocation guidance—Bitcoin, gold, and high-growth tech—reflects growing awareness of this dynamic

• In real terms, most assets are underperforming; when measured against Bitcoin or gold, equity returns look far weaker

• David notes that when dividends are stripped out, long-term returns of gold and equities have nearly converged

Bitcoin as the Monetary Escape Valve

The team zooms out to explore why capital is increasingly flowing into Bitcoin, not just as an asset, but as a response to structural dysfunction in the global financial system.

• Tens of trillions in generational wealth are set to change hands, and younger investors are more open to Bitcoin as a foundational portfolio asset

• Advisors are under pressure to adapt, but many still need “air cover” to justify Bitcoin allocations within traditional compliance frameworks

• Institutions lag retail in part due to career risk and CYA dynamics, as David explains, but normalization is accelerating

• Amidst mounting deficits, political dysfunction, and monetary instability, Bitcoin is emerging as the release valve for capital seeking safety, sovereignty, and long-term value preservation

A July 4th Reflection: Bitcoin as the Next American Revolution

To close the episode, the team honors Independence Day with a reflection on Bitcoin’s ideological roots and why it represents a modern declaration of independence from broken systems.

• Jackson anchors Bitcoin to the Coinage Act of 1792, framing it as a return to honest money in an era of unchecked monetary debasement, once punishable by death

• David references Leviticus and the Liberty Bell’s inscription to highlight both biblical and constitutional traditions of sound money and liberty

• Brian critiques Elon Musk’s third-party ambitions, arguing that Bitcoin, not politics, is the real opt-out from a broken financial system

• Michael frames Bitcoin as a multi-generational reformation that will force society to confront what money is, what value means, and what work should reward

• The group concludes: Bitcoin is a peaceful revolution, a nonviolent, voluntary system that stands in contrast to the structural decay of the fiat regime

Quote of the Week

“Bitcoin is the ultimate declaration of independence.” – Michael Tanguma

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