Why is $97k the "magical number" in Bitcoinland for now.
It's got to do with Strategy's goal to qualify for the S&P 500.
To qualify for the S&P 500, a company must meet several criteria, including:
-Market Capitalization: At least ~$14.5 billion.
-Profitability: Positive GAAP earnings over the last four quarters (with the most recent quarter also being positive).
-Public Float: At least 10% of shares must be publicly available.
-Liquidity & Sector Classification: Sufficient trading volume and being in an eligible sector.
Srategy is meeting all of them, except for the profitability metric.
Why the FASB Rule Change Matters: Before Q1 2025, companies had to report Bitcoin under old accounting rules that only allowed for impairment losses (but not unrealized gains). The new FASB rules (effective in Q1 2025) allow fair value accounting, meaning unrealized BTC gains count towards GAAP earnings. This helps profitability, a key S&P 500 requirement.
So know. In light of some back-of-the-envelope calculation, we can state:
An end of quarter close (March 31, 2025) with BTC at โ $96.5K keeps pre-Q1 holdings profitable but barely offsets Q1 losses.
An end of quarter close with BTC at โ $97K ensures positive Q1 net income under FASB, increasing S&P 500 eligibility.
An end of quarter close with BTC > $100K creates a much stronger profitability case, reducing uncertainty.
So yes, $97K BTC is the real "safe" threshold right now. Should we move anywhere near this price level towards the end of March, things could become very interesting. Once the profitability threshold is met and eligibility for SPY inclusion increases, we should expect a lot of front-running (in MSTR) from market participants.
This situation is obviously highly reflexive.. Well, I guess, we are here and ready for it ๐๐ฅ
The Trump administration is actively reshaping the global monetary systemโright now.
YouTube: https://youtu.be/2k_ohSShYr8
Most discussions on this topic focus solely on the U.S. perspective. But what about the rest of the world?
Thatโs why I brought on Jim Bianco. Though heโs American, heโs uniquely positioned to challenge the U.S.-centric narrative and dive into the bigger picture:
โข How is this financial rewiring impacting Europe?
โข Is the U.S. tying itself in knots with contradictory policies?
โข Could Americaโs moves end up making the whole world poorer?
We tackle these questions and moreโdonโt miss
Trumpโs chaotic tariffs get all the headlines, but the real story is deeper: major monetary and geoeconomic shifts are underway.
I broke it all down with nostr:npub18wgtxzhx75qd2aq3gn35mcv5m8zx7z6xdsf6a95asltys70deekqqjr2wn โwhatโs happening, why it matters, and what it means for the future.
This is a conversation I learnt a ton. And so will you!
Check it out๐๐ป๐ฅ
https://youtu.be/Sf-EsP4O2NE?si=ZsH7kpvbMYadqzmb
Explaining the QT dynamics๐๐ป
So QT is slowed down by 80%, from $25b to $5b. This means that the Fed is slowing down the pace at which it reduces its holdings of U.S. Treasury bonds.
Instead of letting a large amount of bonds roll off its balance sheet each month (which removes money from the financial system), it will now reduce them by only $5 billion per month.
The $20 billion that the Fed was reducing each month but now isnโt effectively stays in the financial system.
Said differently: the Fed is reinvesting the remaining $20 billion into new Treasuries, keeping that money circulating in the economy rather than tightening financial conditions.
Why has the Fed decided to taper QT significantly just now?
Well, it has to do with the debt ceiling dynamics. Because the debt ceiling in the United States has not been resolved (might only be resolved in late summer), the US government will most likely have to drain their bank account at the Fed (called TGA).
With TGA falling, liquidity will be pushed into to the financial sector. What the Fed is concerned about is the time, when the debt ceiling is resolved and the TGA will need to be refilled. This will suck liquidity out of the commercial banking syshem. With QT significantly tampered and the Fed reinvesting the proceeds into government bonds, banks will supported and donโt have to give up to many reserves for thr refill, helping to avoid any stress in the reserve system.
One of the main drivers is that the Fed wants to avoid another 2019-style repo crisis, rather than having to be reactive and having to perform emergency OMOs all of a sudden.
Hereโs what happened in 2019 as a recap ๐๐ป
September 15, 2019 was a tax deadline, pulling about $100B out of markets as large corporations paid their dues to the IRS and funds flooded into the TGA.
Meanwhile, the Treasury issued new T-Bills to rebuild cash reserves following the post-debt ceiling resolution in August, draining another $50-100B as big banks and institutions absorbed the securities.
During this time, the Fed continued reducing its balance sheet (QT) down to $3.76T, but the balance sheet did not leave enough slack for unexpected cash drains to the system, such as corporate taxes and Treasury issuance.
Also, reserves were largely hoarded by a few of the larger banking institutions due to Liquidity Coverage Ratio (LCR) rules and a higher IOER at 2.1% vs the ON RRP rate of 1.7% - a 40 bp spread.
This caused a liquidity crisis in the US repo market because bank reserves held at the Fed ($1.36T) were too low and repo lending dried up. Banks werenโt able to access each otherโs reserves to fund daily operations.
Now, this is what the Fef is avoiding this time around.
Last point on this for now:
As explained already, slowing the runoff of Treasuries reduces the supply in the market, pushing their prices higher (assuming demand remains steady) and lowering yields.
Lower yields mean cheaper borrowing, increasing liquidity as investors seek higher returns in assets like stocks and crypto.
Meanwhile, the Fed maintaining its MBS runoff isnโt a major concern for risk assets since MBS (mortgage backef securities) are more directly tied to the housing market, affecting home sales, construction, and refinancing.
While MBS runoff does have indirect effectsโreducing economic activity in housing-related sectors like home improvement retailersโthe impact is more gradual. And we havenโt seen that many runoffs because people are in low mortgage rates for long-term and are not refinancing into higher rates.
For risk assets, a drop in the 10-year Treasury yield from 4.3% to 4% has a much bigger influence than a 0.2% rise in mortgage rates due to MBS pressure.
Latest LNMS interview๐๐ป
YouTube: https://www.youtube.com/watch?v=Plt4WtjFspQ
Truflation is the talk of the town! More and more people are using to gauge where markets are going.
I wanted to know why it is special and set down with Stefan Rust, CEO and founder of Truflation.
-How is Truflation different from traditional inflation metrics?
-What makes it more accurate?
-Why is it a leading signal, giving investor a potential edge?
Check out the conversation๐ฅ๐ช๐ป
This was a true masterclass for me from Aahan, founder and CEO of Prometheus Research
YouTube: youtu.be/6rg5sO914VU
In very clear terms and steps, he explained to me how any serious investor needs to think and approach markets.
We talked about the three basic concepts growth, inflation and liquidity and analyzed what components to look for in each.
Enjoy and please retweet if you like the content๐๏ธโโ๏ธ
For the latest LNMS epsiode, I had a fascinating discussion with economist Thomas Hougan, a senior fellow at the nostr:npub1978t0ppn7wc4akp8knsjhqyed3d776xptn7qvkuaf3nrj4qu32vqg28wxa
YouTube: https://www.youtube.com/watch?v=C2HMKWN-DQg
We talked about:
-Bitcoin as base money โ what it means and why it matters
-How base money in todayโs monetary & financial system differs from Bitcoin
-What the economy and credit would look like under a Bitcoin Standard
Some thoughts on the SBR announcement
-> The U.S. officially labels Bitcoin a strategic asset. This is quite big, confirming Bitcoinโs significant geoeconomic and geopolitical role
-> Expect to see more 13F filings by sovereign wealth funds
-> Sovereign and supranational bodies (like IMF) will have a harder time justifying anti-bitcoin policies
-> The probability that individual states in the U.S. will put bitcoin on their balance sheets just increased
-> Should individual states own Bitcoin, the probability that the US congress agrees to something like the Lummis Bitcoin bill (buying up to 1 million BTC over 5 years) increases as well
However: Labelling Bitcoin as strategic does have its downsides though
-> The establishment of a SBR is a โcareful what you wish forโ-moment
-> High likelihood the US will approach Bitcoin the same way they approach oil, gold, or critical infrastructure, meaning they will seek control, influence, and risk management over its supply and stability
-> In times of severe crises, we could see government commandeer or nationalize bitcoin miners. Or assume legal authority to aggressively seize private BTC holdings out of national interest
-> With Bitcoin being deemed strategic, centralizing forces around supply, custody, mining and development will intensify (Bessent already called for bringing crypto on shore)
-> If you understand the thinking of nation states around financial rails, labeling Bitcoin as strategic does not solely mean the government will buy bitcoin but lead to โoh we should control this networkโ
->Thereโs the risk that the US gov will not want to leave further Bitcoin protocol development to chance. Imagine a scenario where an army of NIST engineers, backed by virtually unlimited funding, suddenly steps in to influence or direct its evolution.
Remember, both the Secretary of Treasury (Bessent) and Commerce (Lutnick) have held Bitcoin in the past and understand its significance.
What is widely missed but hidden in the EO document called โPresidential Actionsโ (not the Factsheet broadly shared), is: โThe Secretary of the Treasury and the Secretary of Commerce SHALL develop strategies for acquiring additional Government BTCโฆโ
So, the actual text of the EO directs them to develop strategies to buy Bitcoin. This is very bullish price if you ask me.
There are many budget neutral strategies for acquiring Bitcoin.
-> Use USD surplus in Exchange Stabiliation Fund (ESF), netting to $39B
-> Revalue gold holdings, netting to about $800B
-> Demand IMF to include BTC in SDR or sell SDR for BTC
-> Issuing Bitcoin Bonds (Bit Bonds) -> Best option IMO, will examine in a future LNMS episode
-> Sell holdings from strategic cheese reserve held in Missouri caves, netting to about $3B (btw, hope this is Swiss cheese the US gov is holding. Every other cheese is shitcoin cheese)
-> Use tariffs proceeds to buy Bitcoin
-> Use DOGE savings?
This is an episode you don't want to miss.
YouTube: https://www.youtube.com/watch?v=89-YRqE0r3I
I got to talk to nostr:npub1qh5sal68c8swet6ut0w5evjmj6vnw29x3k967h7atn45unzjyeyq6ceh9r from Checkonchain about Bitcoin's latest price performance, the risk of entering a bear market, the key price levels to watch and the true meaning of the 69,420 price target๐คช
As always, a lot of real signal from the man himself
Hereโs my latest discussion for LNMS
YouTube: https://m.youtube.com/watch?v=7oc4pkP2JdA
Itโs with the very outspoken, yet controversial โBitcoin Maxi, Not Bitcoin Maxiโ Fred Krueger
He dropped quite some punchlines during the show.
I also tried to challenge him on a few things (especially his view on Solana๐ )
Enjoy and thanks for liking, as always๐
Next LNMS episode
I just published this show with the famous nostr:npub1d3f4m9dgvkdjxn26pqzsxn6lpfn78sxwllxyt8mp76q0a9zyyjlswhr4xv
This was quite a fun episode.
His statement, โnot all boomers are stupidโ was quite entertaining and obviously true as we rookies can still learn a lot from older generations!
We should have a ton of respect for what people like him built, despite the fiat system wreaking havoc on us today! Thank you๐ฆพ๐ค
Enjoy and donโt forget to like and comment! This really helps the show!
New US Treasury Secretary Scott Bessent recently said:
โ๐๐'๐๐ ๐๐๐๐๐ ๐ก๐ ๐๐๐๐๐ก๐๐ง๐ ๐กโ๐ ๐๐ ๐ ๐๐ก ๐ ๐๐๐ ๐๐ ๐กโ๐ ๐๐ ๐๐๐๐๐๐๐ ๐ โ๐๐๐ก ๐๐๐ ๐กโ๐ ๐ด๐๐๐๐๐๐๐ ๐๐๐๐๐๐. ๐๐ ๐๐๐ ๐๐๐๐๐ ๐ก๐ ๐๐ข๐ก ๐กโ๐ ๐๐ ๐ ๐๐ก๐ ๐ก๐ ๐ค๐๐๐, ๐๐๐ ๐ผ ๐กโ๐๐๐ ๐๐ก'๐ ๐๐๐๐๐ ๐ก๐ ๐๐ ๐ฃ๐๐๐ฆ ๐๐ฅ๐๐๐ก๐๐๐.โ
CT is still wondering what Bessent meant by this.
Hereโs one (likely) interpretation:
๐ ๐ผ๐ฟ๐ฒ ๐๐๐๐ฒ๐๐ (๐ฆ๐๐๐ณ๐ณ ๐๐ต๐ฒ ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ข๐๐ป๐):
The US government (US Treasury) owns a lot of gold. Think of the US Treasury like the governmentโs bank account.
Revaluing this gold to todayโs market price would increase the US Treasuryโs assets.
The US Treasury currently holds 261,498,926.241 troy ounces of gold, equivalent to approximately 8,134 tons. At todayโs market price of $2,900 per troy ounce, the total value amounts to around $758 billion.
However, this gold is still recorded at a book value of $42 per troy ounce, totaling just $11 billion. This means the market value is nearly 68 times higher than the official book value.
By revaluing its gold reserves to reflect current market value, the government would instantly recognize an additional $747 billion in assetsโeffectively realizing a substantial increase in its wealth without selling a single ounce of gold.
๐ ๐ผ๐ฟ๐ฒ ๐๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ถ๐ฒ๐ (๐ช๐ต๐ฎ๐ ๐๐ต๐ฒ ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ข๐๐ฒ๐):
To balance this out, the government issues "gold certificates" (fancy IOUs backed by gold) to the Federal Reserve (the US central bank).
These certificates tell the Fed: โHey, we now officially say our gold is worth more. Hereโs proof you can use to balance your books.โ
๐ ๐ผ๐ฟ๐ฒ ๐๐๐๐ฒ๐๐ (๐ฉ๐ฎ๐น๐๐ฎ๐ฏ๐น๐ฒ ๐ฆ๐๐๐ณ๐ณ ๐ผ๐ป ๐๐ต๐ฒ ๐๐ฒ๐ฑโ๐ ๐๐ฎ๐น๐ฎ๐ป๐ฐ๐ฒ ๐ฆ๐ต๐ฒ๐ฒ๐):
The Fed receives those new gold certificates from the Treasury.
These certificates increase the Fedโs assets because they represent valuable claims backed by US gold.
๐ ๐ผ๐ฟ๐ฒ ๐๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ถ๐ฒ๐ (๐ ๐ผ๐ป๐ฒ๐ ๐ข๐๐ฒ๐ฑ ๐ฏ๐ ๐๐ต๐ฒ ๐๐ฒ๐ฑ):
Hereโs where it gets interesting: the Fed, in return, credits the US Treasuryโs checking account (called the Treasury General Account, or TGA) with new money equal to the increased value of the gold.
The Treasury can now spend this newly credited money on public projects, debt repayment, or stimulusโwithout borrowing or raising taxes.
๐๐ผ๐ ๐ง๐ต๐ถ๐ ๐๐ ๐๐ถ๐ธ๐ฒ "๐ฆ๐ฒ๐ฐ๐ฟ๐ฒ๐" ๐ค๐๐ฎ๐ป๐๐ถ๐๐ฎ๐๐ถ๐๐ฒ ๐๐ฎ๐๐ถ๐ป๐ด (๐ค๐):
Normally, the Fed prints money (QE) by buying bonds from the market to pump cash into the economy.
But in this case, the Fed is not buying anything from the public. Instead, itโs crediting the Treasuryโs account simply because the gold is now valued higher.
Result: The Treasury now has more cash to spend, similar to QE, but without the Fed purchasing assets from banks or investors.
Hereโs the latest LNMS episode. This time with Shezhan from Lava.
We once more talk about Bitcoin-backed loans, why the Bitcoin blockchain is a more elegant solution for this than Ethereum (or other blockchains) and how you as a private individual can use Lava yourself:
https://youtu.be/cbuHge793ek?si=wGsbnD775UBr9Uj9
Thanks for liking and commenting๐ฅ๐
#Bitcoin #non-custodial #borrowing #Coinbase #loans #cryptocurrency #lending #liquidationrisk #oracles #wrapped #financial #security #DLCs #smart #contracts #stablecoins #interest #riskmanagement #fintech
This one was a banger! nostr:npub1qw6e8meaj5gzk49alamh9qf35lpmml5sq7ctjtxhcjk55qppmcjs0j2v52 delivered a true masterclass on money and its intricacies.
We talked about the differences betwen cash, currency and credit, what money is, why Bitcoin is better money and how fiat money is actually created. Is it the central banks, the commercial banks, the Basel Committee, the Treasury? Hint: Itโs more like a free for all!
Youtube: https://youtu.be/HeU0N08o49k?si=WXaWlvF9tSOd4fMO
#Bitcoin #macroeconomics #creditmoney #currency #financialsystem #BitcoinAge #layeredmoney #cash #globalbankingdollar #moneycreation #inflation #centralbanks #demand #treasuries #reserves #commoditymoney #bankmoney #BTC
I believe itโs crucial to engage with people who have different perspectives, which is why I really enjoyed this discussion with Tom Dunleavy.
We covered topics like celebrity coins, the role of moral judgment in financial decisions, and Ethereumโs foundation war!
YouTube: https://m.youtube.com/watch?v=4uRqGt2qOog
Thanks for sharing it around if you like
Last week, the buzz around Bitcoin and digital assets hit a new high with a flurry of initiatives making waves. I needed the perfect person to help make sense of it all.
Enter nostr:npub1fn2rvhmc3r8p7stpj20qcnk8em3wcqyz5cu0r5rmnh9ear76a4us3wedt9 from Galaxy โthereโs no one better to break it down.
In this conversation, we cover:
-The roles of the crypto task force, digital asset committees, and the crypto working group
-Why Trumpโs crypto executive order is better than Bidenโs.
-The significance of SAB 121, its recent repeal, and why itโs a game-changer for the industry.
-What is Bitcoinโs role in all of this? What is a stockpile and what about a strategic Bitcoin reserve?
https://youtu.be/aoVZXrCKbDo?si=NekVDM2ynpRUngY9
#crypto #regulation #executiveorder #AlexThorne #Galaxy #CFTC #SEC #digitalassets #Trumpadministration #blockchain #SAB121 #cryptocurrency #banks #custody #Bitcoin #stockpile #financialmarkets
