Bitcoin’s ETF Surprise

Bitcoin has taken a hit, with a record outflow from bitcoin exchange traded funds, and bitcoin is down more than 20% since the inauguration of Trump. Why?

One realization may be that a US Treasury “bitcoin reserve” makes no sense, and would likely take an act of Congress to implement. Misunderstanding arises though, because the US Treasury does hold bitcoin — but only as seized assets from crime [1]. At the moment, the BIS has classification of some crypto assets subject to conditions of Basel 3, but not all.

Another issue may be that funds have slowed to the Ukraine from the United States and Europe. The Ukraine regime engages in capital flight to launder funds, and engages in criminal activity to hide billions that the Ukraine has received from Europe and/or United States tax payers.

Although the World Economic Forum article linked above only lists bitcoin donations to the Ukraine, bitcoin has been essential for the Ukraine’s highly criminalized Oligarch’s to launder western billions:  A definite practical use case for bitcoin indeed?  ..and note that the World Economic Forum pushes crypto in general, (ie CBDC) which should be a massive red flag to anyone and everyone.

Central banks also leverage bitcoin to engage in covert crime and/or capital flight. For example, in 2021 the CIA moved Afghanistan’s cash reserves out of that central bank via bitcoin, when the US regime in Afghanistan failed. The “official” amount that the CIA confiscated from the Afghanistan Central Bank in 2021 via bitcoin was about $7B US. But according to a former governor of the bank — who will remain anonymous! — the actual amount of Afghan cash looted by the CIA in 2021 was far higher. Interestingly, the US government does not recognize the jurisdiction of the Central Bank of Afghanistan today, because such recognition would supposedly confirm the Taliban as being the recognized government of Afghanistan.

A few central banks like Norway hold bitcoin as an “asset fund” — but not as a reserve. That’s because bitcoin is a derivative of fiat currency since bitcoin’s “value” is only derived in relation to fiat currency.  Bitcoin is a derivative of fiat currency and not a substitute for fiat currency; and bitcoin’s existence as a derivative of fiat — the fiat currency that Max and Mike (for example) supposedly abhor — is seldom discussed by analysts.

Anyway, beside being of zero practical use, a US “bitcoin reserve” held as a currency reserve in some form by the US Treasury is not going to happen. The obvious use case for BTC (bitcoin) is for crime and for sanctions and tax evasion – not as a central bank reserve.

Bitcoin’s negative for central banks is that, under certain asset classes, bitcoin may not qualify according to BIS Basel 3 rules now in effect. Bitcoin as qualifying central bank asset according to the BIS’s Basel 3 rules is a murky area, not well understood or documented, and apparently under review by some shady BIS working group.  (NB: The BIS central bank emphasis is on CBDC and stable coin tokenisation — not the adaptation of any particular crypto-currency as a reserve!)

Bitcoin’s online ledger advantage is due to visibility to anyone with a computer online; whereas Federal Reserve Notes in a bank account are not specifically allocated to a holder’s account. Put another way, Federal Reserve Note serial numbers — ie cash notes — are not specifically allocated by serial number to a bank account by the Federal Reserve.  Due to the adaptation of Modern Monetary Theory (MMT) for infinite creation of Federal Reserve Notes by the monetary powers-that-be in the west, it would be an irrelevance and an impossibility for the Federal Reserve to do so.

(So, the bitcoin public ledger recording of actual BTC allocation to an account is an advantage over Federal Reserve Note MMT — granted. However, Federal Reserve Notes — in the form of cash — have an advantage over bitcoin, because the paper notes do not require electricity and a computer to be transacted.)

Finally, although whale accounts in bitcoin are opaque, it appears that as few as fifty whale accounts, representing various different individuals and entities, have driven bitcoin’s performance for about ten years now. Beside the obvious HODLER characters like Raoul Pal  Mike Saylor, Zhao,  Max and Musk,  it appears that, according to ledger analysis, the big trades in bitcoin are down to just a few accounts.

As the late Bernie Madoff once described it, the Federal Reserve is a glorified Ponzi scheme, and of course bitcoin is a derivative of that ponzi. But the US governmental Fed ponzi scheme overall, is the most useful to our coup class criminals of all.

[1] US Treasury bitcoin holdings relate only to criminal seizures

Steve Brown