Bitcoin’s Political Leverage and Nation-State Adoption

• Vijay argues that Bitcoin has entered its next monetization phase: nation-state adoption, the final stage in the Gartner Hype Cycle.

• Authoritarian or executive-led governments (El Salvador, Bhutan, UAE, Kazakhstan) were first movers, able to act decisively.

• U.S. politicians are now responding to voter pressure. Bitcoin is emerging as a single-issue political force, and Trump’s Bitcoin-friendly platform reflects its growing leverage.

• Vijay believes the nation-state attack vector is now closed, replaced by a political tailwind as adoption becomes politically beneficial.

• Sherrod Brown’s removal from the Financial Services Committee is a key data point for Bitcoin’s rising political influence and the emergence of a well-organized Bitcoin Lobby.

Institutional Demand Has Reshaped the Market

• The BlackRock Bitcoin ETF is now among the top 20 ETFs globally and is the firm’s highest-revenue product, despite its low 0.25% fee.

• This reflects a bottom-up groundswell: brokerage and advisory clients demanded access to Bitcoin, pushing institutions to respond.

• Vijay compares Bitcoin’s ETF-driven cycle to gold’s 2004 ETF launch, which drove a multi-year bull market as capital could more easily access the asset class.

• Unlike past cycles, Bitcoin is now supported by large, steady capital flows from retirement accounts, mutual funds, and RIAs, many of which are still on the sidelines, indicating early shifts in managed wealth.

• Institutional rebalancing behavior will likely “dampen” extreme volatility in both directions, creating more stable price action over time.

The Coming Bubble: Bitcoin Treasury Companies and Market Froth

• Every cycle has its mania. In 2017 it was ICOs, in 2021 it was NFTs and DeFi. In 2025, Bitcoin treasury companies may be the speculative bubble that defines the cycle.

• Vijay warns that public companies accumulating Bitcoin, without underlying business fundamentals, could create a dangerous feedback loop of hype and mispricing.

• As market sentiment peaks, many of these stocks trade at steep premiums to their net Bitcoin holdings, driven by FOMO and the hunt for leveraged exposure.

• The key signal to watch: when major treasury stocks trade at or below NAV, it may indicate the cycle top is near.

• While companies like MicroStrategy began with organic treasury accumulation, others are now using financial engineering to boost their Bitcoin-per-share metrics, often without an underlying business model.

• Vijay compares it to gold cycles: owning miners for leveraged upside sounds appealing—until hidden risks like management, geopolitics, or forex wipe out returns.

Bitcoin as a Global Savings Account, Stablecoins as the Bridge

• Vijay argues that Bitcoin is becoming a de facto global savings account, while stablecoins could function as modern checking accounts for everyday spending.

• Over time, users will store long-term wealth in Bitcoin and temporarily move into stablecoins when they need liquidity, reversing the traditional role of banks.

• The Genius Act's ban on stablecoin interest is a defensive move to protect banks from capital flight. If stablecoins could pay yield, deposits would drain from the banking system.

• Stablecoin issuers currently earn billions in profit by holding U.S. treasuries, profits that would be competed away in a free market.

• Vijay sees this dynamic, liquidity, accessibility, and rising demand, as a key driver behind the path to $1 million Bitcoin in the years ahead.

Bitcoin’s Final Frontier: The Quantum Computing Risk

• If quantum breakthroughs can break Bitcoin’s cryptography, attackers could steal coins from addresses with exposed public keys, such as Satoshi’s coins or old wallets.

• The key question is not whether quantum computing is possible, but whether the Bitcoin network can achieve consensus on how to respond.

• Past governance battles, like the Blocksize Wars, show that reaching consensus is hard, but possible under an existential threat.

• While the threat is likely decades away, Vijay warns: markets will price it in early if credible breakthroughs appear on the horizon.

• If Bitcoin can successfully navigate this risk, Vijay believes there is nothing left to stop it from becoming the global reserve currency.

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