Jimmy Song made a great video on what makes him concerned in the Bitcoin space.
We should definitely make this a trend and game theory more often.
So here's what worries me about Bitcoin - and this is anecdotal - but it seems to me that most Bitcoiners think we've already won and hubris is the folly of mankind.
When Bitcoiners say things like: "Governments are stupid and will panic-accumulate Bitcoin" and get little to no push-back, it makes me think we are way over our skis.
CBDCs are inevitable and the implications for Bitcoin are significant.
Expect Bitcoin to be positioned as: "You need CBDCs to protect you from volatile, criminal, climate-damaging, tax-dodging Bitcoin" in a coordinated attack on Bitcoin before/while CBDCs are rolling out.
Of course a crisis will be used to roll out CBDCs, e.g. a cyber attack.
CBDCs = Programmable money = Programmable populations
Did I also mention that there will be global coordination for CBDCs rollout?
In the same way there was coordination for:
- COVID policies: Nearly identical lockdown, mask, and vax-passport frameworks adopted within weeks worldwide.
- 2008 GFC response: Coordinated rate cuts, liquidity swaps, bank backstops.
- Sanctions regimes: US/EU/UK/JP harmonized instantly on Russia in 2022.
- Financial surveillance: FATF "Travel Rule" rolled out across dozens of jurisdictions in lockstep.
- Antarctic Treaty, Cold War-era arms control: even ideological enemies coordinate when the substrate of control is at stake.
So what are some of the chokepoints governments will use:
- On/off-ramps: Exchanges, stablecoins, custodial wallets - increasingly regulated, with AML/transaction monitoring locked in.
- Surveillance: All exchange/KYC’d Bitcoin addresses will be continuously monitored by AI analytics (already happening at Chainalysis/Elliptic).
- Programmability of CBDCs: Governments will make CBDC rails more convenient/cheaper than Bitcoin for everyday use, and throttle Bitcoin flows by limiting fiat gateways.
- Capital controls: Outright bans are unlikely in advanced economies - instead, de-banking pressure will make it harder to move large sums into/out of Bitcoin.
- Tax policy: Unrealized gain tracking, harsher reporting requirements, and selective tax enforcement can suppress open usage.
Everyday transactions will skew heavily toward CBDCs once government incentives (cashback, welfare payments, transit, payroll) go CBDC-only.
Bitcoin will shrink as a daily medium of exchange in most advanced economies.
The seemingly inevitable bifurcation:
- CBDCs: everyday payments, wages, taxes, and surveillance finance.
- Bitcoin: long-term wealth insurance, geopolitical hedge, black/grey market settlement rail.
CBDCs will not kill Bitcoin. They will make it harder to use, less liquid, and more surveilled at the fiat interface.
But those same pressures strengthen the need for Bitcoin as an uncensorable, neutral, borderless store of value.
However, we have to think about the market participants.
1. Retail Masses (Matrix Participants) - Believe government narratives. View Bitcoin as too risky, criminal, or bad for the planet.
They fully embrace CBDCs - convenient, subsidized (UBI/benefits direct), integrated with social credit/tax systems.
They exit Bitcoin or never touch it. No buy pressure from 90%+ of the population.
2. Institutional Allocators (Funds, ETFs, Pension Money) - Don’t care about ideology; they’re benchmark-chasers. They’ll only hold Bitcoin if it’s wrapped in State-approved rails (ETFs, custodians, banks).
They flow into ETF/Treasury companies versions of Bitcoin. These structures are easier for governments to synthetically suppress with paper-Bitcoin issuance.
Leads to short-term price dampening (due to synthetic exposure), but legitimization as a portfolio asset.
Those who hold real Bitcoin in self-custody will eventually get scarcity premium when Institutions need physical (think GLD vs gold bars).
3. Dissidents & Parallel Economy Builders - see CBDCs for what they are (control grid). Use Bitcoin/Monero/Lightning as opt-out rails.
They transact outside the CBDC framework and build shadow economies.
This is a minority - so low transaction volume relative to global GDP - but persistent, irreducible demand.
4. Elites/Controllers - understand Bitcoin perfectly. They don’t fear it, they use it. Bitcoin provides a release valve, a honeypot, and a test-bed.
They box Bitcoin as the opposition currency and use its volatility and media framing to make CBDCs look stable.
They manage Bitcoin like a pressure gauge on the system - too much systemic stress -> Bitcoin price spikes (Bitcoin's price becomes a signal of system fragility).
Retail thinks Bitcoin is dead.
Institutions think Bitcoin is just another portfolio line item.
Dissidents think Bitcoin is freedom.
Elites think Bitcoin is useful controlled opposition.
And the reality is that Bitcoin is all four at once.
If you want more context, check the post below.