Some Musings on the Risk of Centralization of the Bitcoin System As America and Other Nations Probably Get on Board in the Coming Years.
What will be left for the people of this unique monetary revolution that is Bitcoin?
As every Monday since November 11, 2024, Michael J. Saylor has announced a new acquisition of BTC by MicroStrategy via his X account. Nevertheless, we can see that demand for his convertible bonds seems to be slowing down of late:
From 21,550 BTC acquired on December 9, 2024, Michael J. Saylor dropped to “just” 2,138 BTC acquired on December 30, 2024. We note that this announcement of a smaller purchase of BTC in volume is once again made with an average price above the current price of Bitcoin in weak money, which is around $94K as we approach the end of 2024.
We also note that MicroStrategy's average Bitcoin acquisition cost is rising rapidly, and now stands at $62,397:
This brings the total BTC held by Michael J. Saylor with MicroStrategy to 446,367 BTC. Yet as Michael J. Saylor lowered the amount of BTC acquired at each purchase in December 2024, the MicroStrategy share price fell. While the rise in MicroStrategy's share price remains spectacular over 2024, we still have to wonder about the -45% drop since the ATH recorded a few weeks ago:
This is all the more worrying given that, over the same period, the price of Bitcoin in weak money has remained virtually unchanged. The question is whether Michael J. Saylor will be able to continue borrowing billions of dollars to buy more BTC under these conditions.
This brings us back to my recent analysis: “Does Michael J. Saylor’s All-In Strategy With Bitcoin Threaten the Future of the Bitcoin Revolution?”
We'll have to keep a close eye on this subject throughout 2025, as it could have a major impact on the Bitcoin revolution.
Of course, this doesn't seem to be Michael J. Saylor's primary concern, judging by the interview he gave in December 2024 for the Galaxy Brains podcast. In this podcast, Michael J. Saylor denies that Bitcoin is money. For him, the real digital currencies are USDT and USDC. He would even like American banks to issue their stablecoins based on the US dollar, to strengthen the US dollar.
Michael J. Saylor's great betrayal doesn't stop there, as he goes on to detail his plan to reinforce the hegemony of the US dollar over the world and enable America to repay a large part of its colossal debt, which exceeds $36T. To do this, he proposes nothing less than to use the Bitcoin system, to see America take control of over 25% of all Bitcoin in circulation. How is this to be achieved? By printing more and more fiat currency out of thin air and selling all or part of the gold America owns (or claims to own).
It looks as if Michael J. Saylor has become a Bitcoin Villain, revealing his true face and, above all, the fact that he doesn't understand the deeper objectives of the Bitcoin revolution:
Following Michael J. Saylor's line of reasoning, it's easy to guess that the nations will engage in a fierce battle to own as much BTC as possible. No one wants to let America once again gain a decisive advantage in the emerging new world monetary order, with a Bretton Woods III in prospect:
Still following this logic, sooner or later we could arrive at a worrying situation for the future of the Bitcoin revolution. Of course, there's nothing we can do to stop this trend, as everyone is free to buy Bitcoin as and how they wish. This is a central strength of the Bitcoin system.
America, China, Russia, and other major powers could therefore very well enter the race to own as much BTC as possible by printing ever more fiat money out of thin air. This is what Michael J. Saylor constantly suggests when he says that the first nation to print its fiat currency en masse to buy Bitcoin will win.
At this rate, we could imagine that between the Bitcoin owned by Michael J. Saylor, that owned by financial giants (on behalf of their clients) like BlackRock, that owned by institutions and other companies, and finally that which the governments and central banks of the G20 might decide to accumulate, we could end up in a situation where something like 40 to 90% of the Bitcoin supply in circulation is owned by these powerful people. Perhaps even more!
We have always seen Bitcoin as a major technological disruption. Bitcoin challenges traditional systems of money and power with its decentralized asset-based system, of which there can never be more than 21 million units in circulation. Bitcoin has opened up a new way of thinking about wealth - beyond the financial aspect - value and individual sovereignty.
Looking at what's happening in the Bitcoin world, we can rightly wonder whether power isn't inadvertently being concentrated once again among a few powerful players in a different form.
Seeing these institutions and players, whether state-owned or private companies acquire so much BTC via debt creates a new dynamic that contradicts the original spirit of Bitcoin. Satoshi Nakamoto created Bitcoin as a P2P system, digital cash. Bitcoin as MoE was the goal, not a distraction as Michael J. Saylor claims.
This change in dynamic raises at least 4 questions to which I don't have any answers at present, but which have been bothering me for many months:
What happens when Bitcoin's scarcity means that most of it is locked up in reserves, held by entities that have no intention of transacting with Bitcoin?
If Bitcoin's role becomes primarily that of a store of value, what does this mean for the individuals who aspire to use it as a currency, giving them the power of self-determination and financial freedom?
What will the remaining 10-15% of retail funds do when the last Bitcoin has been mined and the vast majority of Bitcoins are in the hands of a few funds?
Is there a risk that the decentralization narrative will be eclipsed by increasing centralization of Bitcoin ownership?
Being a Bitcoiner shouldn't stop us from wondering and worrying. Perhaps my fears are groundless. I hope they are. But asking questions seems to me to be a healthy step. The true decentralization of the Bitcoin system must also involve diversifying the participants in this revolution, offering opportunities to as many people as possible, and giving communities the means to determine their financial trajectories.
For the future, Bitcoin must remain open to as many people as possible. The democratic aspect must remain the very essence of Bitcoin. The possibility for everyone to access self-sovereignty through the Bitcoin system must become the norm, and not remain an exception that would be hampered by the massive entry of these powerful players into the Bitcoin system. Players who have only one thing in mind: to resume their role as intermediaries within this unique system with revolutionary potential.
Finally, never lose sight of the fact that the aim of the Bitcoin revolution is not simply to offer everyone a Store of Value adapted to the digital world of today and tomorrow, but to go even further by offering everyone the possibility of leaving the fiat system behind and moving towards a superior monetary and financial system because it belongs to the people.
