Netizen Premium | Bitcoin Deep Dive #23

Why The GENIUS Act Is Crypto's Trojan Horse

Why We’re Buyers On All Dips

We continue to remain in a GOLDILOCKS risk-on regime that began on 5/13/25, delivering exceptional gains: S&P 500 +7% (led by High beta stocks +14%), Bitcoin +13%, Gold +3%, Oil +9%, and USD -1%. Yet this regime has now reached the 95th percentile in signal strength, suggesting near-term consolidation risk that we view as buying opportunities given structural upside forces. We continue to believe inflation will not durably breakdown to the Fed's 2% target without a recession, and recent retail sales and industrial production data show we are nowhere near that, despite Wall Street's 35% recession probability. Most critically, markets have yet to price the brewing monetary regime shift as Kevin Hassett's likely Fed succession would combine easier monetary policy with Trump's existing fiscal dominance from the One Big Beautiful Bill Act. This dual-engine reflation setup creates a structural headwind for the US dollar while offering Bitcoin and risk assets fundamentally supportive tailwinds that remain underappreciated by the current market.

TLDR: Goldilocks extremes suggest near-term consolidation for stocks, but unpriced dovish Fed upside makes us buyers on dips until regime shifts.

GENIUS Act Masks Desperate Treasury Funding

While the crypto industry celebrated President Trump's signing of the GENIUS Act, we think it represents fiscal desperation disguised as innovation, designed to manufacture demand for U.S. government debt in an increasingly de-dollarizing world. Under the Act, stablecoin issuers must back reserves 1:1 with US Dollars or Treasury bills maturing within 90 days, effectively converting them into forced buyers of U.S. government debt. This legislation ensures stablecoins become a captive buyer for Treasury issuance that foreign governments increasingly shun. Holding stablecoins backed by U.S. Treasuries offers users no escape from the very monetary system they seek to sidestep. Rather than genuine crypto adoption, treat this legislation as evidence of Washington's growing difficulty financing its deficit spending.

TLDR: The GENIUS Act exposes the U.S. debt crisis by forcing stablecoin issuers into Treasury-backed tokens, reinforcing Bitcoin's appeal as the only true monetary escape.

Wall Street Banks Prepare Stablecoin Takeover

The GENIUS Act fundamentally transforms stablecoins from crypto innovation into extensions of the traditional banking system, with government and financial institutions now controlling this once-decentralized space. Circle benefits from USDC's existing Treasury compliance but faces intensifying competition as private banking giants like JPMorgan, Citi, and others prepare white-label stablecoin launches under the new charter framework. Tether confronts a strategic crossroads with approximately $8 billion in gold, $5 billion in Bitcoin, and $12 billion in other non-qualifying assets, likely forcing gradual liquidation of these reserves, though we expect markets will easily absorb this forced selling pressure without material impact. This regulatory capture reinforces that stablecoins remain fundamentally tethered to the U.S. dollar system as glorified IOUs, unlike Bitcoin's scarce, energy-based bearer asset properties. Expect the current duopoly to evolve into a bank-dominated oligopoly while stablecoins lose any pretense of monetary independence.

TLDR: Stablecoin co-optation by Wall Street reinforces their status as dollar derivatives, highlighting Bitcoin's unique position as the only genuine monetary alternative.

With Bitcoin and asset markets near all-time highs, let's examine what our Dynamic Dollar Cost Averaging model and on-chain data reveal about sustainability at these levels: