Halving, all-time highs, institutional openness, but a bitter end in this leap year.
2024 was a year of success and good news, which ended with a couple of setbacks.
In 2025, we will see more openness from the institutional world, with attempts at centralization.
A year of successes
As this and other media have mentioned several times, 2024 was a pivotal year for the legitimacy of Bitcoin in regulated finance, and, therefore, for its social acceptance in general. Let us remember that until 2023 the financial landscape was very hostile to Bitcoin in the U.S., with a government that almost openly hindered the interaction between the crypto economy and traditional finance in what became known as operation choke point 2.0.
2024 gave us what seemed like a 180° turn in these policies: first with the approval of Bitcoin investment funds; later with a presidential candidate who put the first cryptocurrency at the center of his campaign. In addition to that, 2024 was a halving year, which historically has inaugurated a bullish cycle starting six months after that event; something that also happened this year, giving Bitcoin new all-time highs above one hundred thousand dollars.
All of this generated a climate of widespread optimism among bitcoiners, in which it seemed that the establishment was already on our side.
A disheartened end of the year
The last month of 2024, a series of news from the institutional sphere partially shattered that optimistic sentiment. The first was that the Federal Reserve director said in an interview that the agency is not authorized to buy bitcoins, nor is it interested in changing that at the moment. While this is not serious, nor is it something unexpected, it was a cold shower for those who thought Trump's plan was just around the corner.
Perhaps the most relevant news was Microsoft's refusal to start a bitcoin acquisition strategy. This showed us that despite investment funds and the success of some bitcoin reserve strategies like MicroStrategy's, large tech corporations still remain skeptical about BTC.
But the one I consider most relevant of all was the concessions of El Salvador to the International Monetary Fund. The IMF is known, particularly by the more progressive sectors, as the face of neoliberal order or U.S. colonialism. This notion is shared by radical bitcoiners committed to human rights, such as Alex Gladstein in this note. The sentiment is mutual, as the organization has attacked Bitcoin from practically the beginning.
The discouraging thing about what happened with the government of El Salvador is that it had turned to Bitcoin as a way to free itself from the financial dominance of the U.S. through the dollar and the dependence on such organizations. However, in needing a loan from the fund, it had to comply with its conditions, sacrificing part of the autonomy it had managed to establish.
The challenges for 2025
The case of El Salvador shows us firsthand how the nocoiner establishment acts to maintain the hegemony of the dollar on the international stage, particularly in Latin America. Another case of this kind, although more subtle, is Argentina, where the IMF made it a condition of its agreement with the country to discourage the use of cryptocurrencies.
Even if the Argentine government were pro-Bitcoin (which it is not), it would still have its hands tied by the organization, under the threat of defaulting. That is why, continuing with the Argentine case, the so-called currency competition is confused with the dollarization plan. It is expected (and encouraged) that the U.S. dollar will take prominence over Bitcoin or any other.
Without aiming to delve into the realm of conspiracy theories, a new strategy from the establishment can be glimpsed on the horizon to maintain control, not by rejecting Bitcoin, but by trying to monopolize it. A bit like I mentioned in a previous article, there is a corporate sector pushing for mass adoption of bitcoin, but only as a savings medium, leaving the dollar as the currency of exchange. Trump's victory and his promise to create a strategic reserve of bitcoin for the U.S., perhaps partly inspired by Jason Lowery, refines this plan, also putting the State into play.
Although he is not part of the new government nor has much influence in it, Michael Saylor recently spoke of a plan by which the U.S. monopolizes the Bitcoin network and turns the dollar into a global CBDC.
"So my strategy would be – and I really believe it is an evil genius strategy; it's so good that our enemies would hate us, but our allies would also complain. And the U.S. would gain 100 trillion dollars in no time."
"This is the strategy: You get rid of gold, demonetize the entire gold network. You buy bitcoin – 5 million or 6 million bitcoins – and monetize the Bitcoin network. All the capital in the world, sitting in Siberian real estate or Chinese natural gas or any other derivative that is held as a long-term store of value – Europeans, Africans, South Americans, Asians, they all simply get rid of their worthless properties and worthless capital assets and buy bitcoin. The price of bitcoin goes to the moon."
"The U.S. are the big beneficiaries. American companies are the big beneficiaries. And while you do that, you normalize and support digital currency, and you simply define digital currency as the U.S. dollar backed by equivalents in U.S. dollars in a regulated and audited U.S. custodian. What happens next?"
"150 billion stablecoins become 1 trillion dollars, 2 trillion dollars, 4 trillion dollars, probably between 8 and 16 trillion dollars, and you create between 10 and 20 trillion dollars of demand for U.S. sovereign debt."
"While you are taking away some demand because the capital asset of bitcoin grows, you are adding demand back to back the stablecoin. [The digital U.S. dollar then] replaces the CNY, the ruble. It replaces all African currencies. It replaces all South American currencies. It replaces the euro."
"If you really believe in the U.S. world reserve currency and in U.S. values, every single currency in the world will actually merge with the U.S. dollar if it were freely available."
Michael Saylor – founder of MicroStrategy