Bitcoin's Most Dangerous Rally is Happening Right Now!

We have a node on the Bitcoin network right now. >> US leadership over the long term secures the primacy of the dollar as the reserve currency. >> The acceleration of war and the acceleration of financial profits go hand in hand. You can't vote to end this bank government nexus. >> Bitcoin is rallying out of a 50% draw down and nobody can believe it. With funding rates flat to negative, bears are getting squeezed by spot buyers. Meanwhile, a four-star admiral told Congress that Bitcoin is a power projection tool and confirmed the US military is running a node. The same week, the Treasury Secretary demanded Congress pass legislation to protect the dollar. Welcome to the most dangerous rally in Bitcoin history. My goal today is to show you what this week actually revealed. And why the real danger isn't in the price, it's in what happens when the most powerful institutions on Earth realize they can't co-opt the one thing that was built to replace them. This is Truth Block. I'm Hurley. Let's mine truth. Let's start by talking about what's actually happening here with this Bitcoin rally because the price move is a bit strange. When Bitcoin rallies on leverage, you see it in the funding rates. Longs pile in, funding goes positive and the whole thing unwinds the second sentiment shifts. We've all seen that movie. But this isn't it. Right now, funding is flat to negative. Shorts are paying longs. Bears are actively betting against the move and getting squeezed by spot buyers who just don't care. As Checkmate put it, this is a setup we haven't really seen before. And it gets more interesting when you zoom out. Since the start of the USIsrael conflict with Iran, Bitcoin has been quietly outperforming gold. The Bitcoin to gold ratio just bounced off its lowest RSI reading in history. And every time that's happened before, it marked the start of a multi-year bull run. So, it sure looks like the bottom is in and this rally is real. But take a look at the world it's rallying into. The UAE told the Trump administration through the Wall Street Journal that if they don't get dollar swap lines, they'll start transacting oil in yuan. Now, if you don't know what swap lines are, they're basically emergency credit lines where the Fed lends US dollars to foreign central banks so those countries can keep settling trade in dollars. So, when a country like the UAE says, "Give us the swap lines or we'd trade in yuan," they're saying out loud, "We have options." Now, that's a direct shot at dollar hedgeimonyy. Meanwhile, head of the European Central Bank, Christine Lagarde, is warning about food rationing. A third of the world's fertilizer ships through the Straight of Hormuz, which is sitting in the middle of a conflict zone right now. And the US is on what Jeff Ross is calling wartime economic footing, which is spending like the economy depends on it, because it does. Okay, so that's the backdrop. Now, let me show you what happened in Washington. Treasury Secretary Scott Besson sat in front of the Senate Appropriations Committee this week and demanded that Congress pass the Clarity Act. Now, Congress already passed the Genius Act. That's the stable coin focused legislation. The Clarity Act is broader. It's the full digital asset market structure framework, and Bessant wants it done. But listen to how he frames it. Not why digital assets matter, why they matter to the dollar. >> Can you talk about why it's so important that Congress pass digital asset legislation? Uh, Senator, uh, when the United States leads in best practices, safety, and soundness, uh, in in the financial world, whether it's our banking system, the our securities, or now digital assets, it's important for the US to lead for several reasons. Uh, one, uh, US leadership over the long term secures the primacy of the dollar as the reserve currency. Uh two, the our best practices will emanate to the rest of the world because uh what had happened is digital assets uh were in dark unregulated places and they will come into the US and we will be able to use our uh a anti-moneyaundering and the KYC and have a much better handle on uh digital assets the both for payment payments and I think this is going to be a very important payment rail and again the the US has to lead here. We are the technological leader in the world. We should be the payments leader in the world. >> Did you catch it? US leadership secures the primacy of the dollar as the reserve currency. Not freedom, not sovereignty, not sound money. Dollar primacy. That's the whole game. Every move this administration has made on digital assets, the stable coin push, the regulatory framework, the clarity act, it all makes sense when you see it through that one lens. They're not adopting Bitcoin. They're trying to build a regulatory moat around the dollar in a world that's looking for exits. The monetary order is changing. They know it. And Besson just told you the plan. But we need to slow down here because the question isn't just whether the dollar keeps its throne. The question is what the monetary system has already done to us, to our communities, to the things that used to hold people together. Natalie Smeinsky is an anthropologist, a software executive, and the editor of the Satoshi Papers. And when Natalie Bernell asked her what happened, why America feels so different now, why community has fallen apart, why it feels like nobody cares anymore. Smalinsky didn't start with politics. She went somewhere deeper. >> Um, I think there are a number of factors. Um there's a sense in which there's been uh a fundamental I mean there have been fundamental transformations in in the structure of the family um in uh religious practice um the third spaces you know that people used to go to that weren't work or home uh have for many people gone away um >> or they've they've become a lot of additional work uh discretionary effort that um they don't have the time to do. um financial procarotization um a debt economy >> um uh a sense of institutions scaling up so like uh let's say college you know universities these are these are often when you raise children in the United States or at least this used to be the case >> their trajectory was to go through you know education make it to college and then you know find a career um these these uh institutions which you know used to be much smaller >> have a lot less capital >> um were nevertheless able to afford a kind of care of the soul of the children uh or the young people coming there that is no longer the case now they're factories they have customers they're you know hedge funds maybe with educational institutions attached to them so um I think that there's been a financial ization of everything >> um and an erosion of local communities and local power that together have created this uh precarious dystopia. >> Notice what she names alongside the financial factors, the decline of religious worship. We don't talk about this enough in Bitcoin circles because it makes people uncomfortable, but she's naming something upstream of even the money. When a society stops orienting itself around something transcendent, the state fills that vacuum. The government becomes the highest authority. The central bank becomes the priest and the money becomes the sacrament. You worship what you trust. And when God leaves the picture, you end up trusting Caesar. That's not a new observation. That's his oldest civilization. But it matters here because fiat money doesn't just debase your savings. It debases the social order that money was supposed to serve. The community erosion Solinsky is talking about didn't happen in a vacuum. It happened because we built a system that financializes everything. it touches including the things that used to hold us together. So if spiritual and cultural erosion is the root, Smealinsky then connects it to the machine that drives it. >> It seems like uh the financialization of the world or the economy seems to be going handinhand with an acceleration of warfare. >> And how are these things possibly connected? Well, um I think one of the intuitions that many Bitcoiners had, which has been proven out, is that there's there's something about the relationship between bank and state that isn't good for the people. And you know the the nature of that problem has been described in various ways. But I think at root um the the issue is that uh once once banks historically um consolidated as um protectors of commodities and facilitators of exchange, they were in a position to issue credit and bank credit. Who's you know the biggest customer for bank credit? Governments. And what do they use bank credit for? Largely to wage war. Um which in turn uh the banks profit off of. >> And so what we've seen over the last few hundred years is this kind of social ratchet effect where you have these two institutions, banks which control the money, uh governments which control violence, and they're mutually in in this like symbiotic relationship where they're all profiting. And so um what does that lead to? It leads not only to war but to the proliferation of credit asym asymmetrically of course through the canon effect. Um so that generates high inflation um makes saving impossible. Um and uh and also creates volatility, high asset volatility, which in turn is an opportunity for those with insider knowledge >> to profit. >> And so the acceleration of war and the acceleration of financial profits go hand in hand. They are tied together. And the challenge that Americans have right now is that it's not possible to solve this problem by voting it away >> anywhere in the near term. Like you can't vote to end this bank government nexus. Um the the most effective thing you can do is take back financial sovereignty and actually as an individual be your own bank without an intermediary. And that's why obviously governments don't don't like this because their entire model falls apart. >> Banks control the money. Governments control violence. And they're mutually in this symbiotic relationship where they're all profiting. That's not a conspiracy theory. That's just how the incentives work. And the part that should land hardest, you can't vote your way out of it because this nexus operates below the level that elections reach. The ratchet only turns one direction. More credit, more inflation, more war, more concentration of power. And the Cantalon effect makes sure that people closest to the money printer benefit first while everyone else eats the cost. That is the system Scott Besson is trying to preserve. When he says dollar primacy, that's what he means when you follow it all the way down. But here's where the story takes an unexpected turn. In 2023, a US Space Force officer named Jason Lowry submitted his master's thesis at MIT, calling it soft war. And the argument was pretty radical. In Lowry's eyes, Bitcoin is not primarily money. It's a power projection technology. Proof of work is the first system that imposes real physical cost in cyerspace. Energy that can't be faked, can't be gained, can't be overridden by some administrator. In his view, that makes Bitcoin a strategic security system, not just a financial network. The thesis was very controversial in the Bitcoin space for obvious reasons. But then, mysteriously, Lowry went dark. The book was pulled from print with no explanation. I'll let you draw your own conclusions about what happens when a military officer argues Bitcoin is a national security technology and then goes quiet. Now, fast forward to this week. And Admiral Samuel Papero, four-star commander of US Indopacific Command, testified before the Senate that Bitcoin shows incredible potential as a tool for national security. Sounds a lot like Lowry, doesn't it? The next day, he sat down in front of the House Armed Services Committee and he went even further. Admiral Paparo, yesterday you testified that Bitcoin held potential as a tool for national security. Recent research from the Bitcoin Policy Institute estimates China has approximately 194,000 bitcoins while the United States has approximately 328,000 bitcoins. In this era of digital competition, would it be to our strategic advantage to maintain a lead in this regard as we do with other strategic resources like gold and oil? Sir, um, our interest in Bitcoin is as a tool of cryptography, a blockchain and reusable proof of work, as an additional tool to secure networks, and to project power. And so I am I think this protocol is here to stay. I think the computer science of it has direct implications for the projection of power not financial but from a computer science standpoints from the securing of networks and so I am supportive of those applications uh all instruments of national power are important but from the military application standpoint my interest in Bitcoin is as a computer science tool as projection of power >> I appreciate that I agree with you and I'd also like to hear your thoughts on monetary competition over the coming decades. What role does Bitcoin play in spreading digital property rights? >> Well, I I you know, people use Bitcoin today right now to protect their own intellectual property. Uh and that's the reusable proofof work protocol that's combined with blockchain for accountability and cryptography for security. And so that's the role that I see for it. uh I see direct national security implications and then I'm supportive for anything that maintains our own uh dollar dominance worldwide. >> I appreciate that. Do you think we're adequ adequately prepared to counter China's strategic direction regarding digital assets? >> I think that uh our recent act with the Genius Act is a great step forward that moves us in that direction. And I'll lastly I'll ask you as we continue to craft the NDAA, what authorities and resources does Indopaccom need to address as respects the national security dimensions of digital assets? Presently, we're in experimentation. So I'll give you a deeper look into that. Presently, we have a node on the Bitcoin network right now. We're not mining Bitcoin. We're using it to monitor and we're going we're doing a number of operational tests to to secure and protect networks using the Bitcoin Bitcoin protocol. >> I appreciate that, Admiral. Thank you. I yield back, Mr. Chairman. >> The United States military is running a Bitcoin node. Let that sink in. They're not studying it, not writing a report. They're running the software, performing operational tests using the Bitcoin protocol to secure and protect networks. The software thesis just walked into the congressional record in military uniform. And the coolest thing, the node the US military is running is identical to yours and mine or the one some kid is running out of his mom's basement right now. Same software, same rules, same transactions being verified. It doesn't matter if you're a four-star admiral running the largest military command on Earth or you're stacking SATs from your living room. Your node has the same power as theirs. Nobody gets a special version. That's Bitcoin. Now, let's think about the game theory here. If the US military is running a node, who else is? China's central think tank already published research on Bitcoin as a strategic asset. This pressure is not theoretical anymore. Nation state adoption isn't coming from the financial system down. It's coming from the military up. So, the game theory is real. The military sees it. The Treasury sees it. But here's the complication. And this is where you need to listen carefully because what they're building may not be what you think it is. >> Um, stable coins are they're interesting. I mean they're they can be likened to uh different types of like commercial uh money, bank created money, bank issued money. Um you know they've been called crypto dollars by some um to liken them to the euro dollar uh for example. They're a source of demand for US treasuries. Um so some some people like them for that reason. Um, but they I mean they're ultimately still connected in with the central banking system that is a part of this ratchet effect of war and inflation. Um, and so they can only do so much. They're they're not a self-s sovereign technology. They don't promise the same kind of individual um empowerment that let's say a Bitcoin does. um and they are a path to CBDC's for um for many countries in including in the United States. The same the same technologies you use to implement stable coins can and likely will be used to create a CBDC. Um and so there's no there's no expecting bank and state to police themselves to limit their own power. The whatever they can do they will do. And so the individual now has the responsibility. Whatever they can do, >> they must do. >> I know most of you already know this, but stable coins are not sovereignty. They're dollar hedgeimonyy with a blockchain rapper. As Solinsky makes clear, the same technologies used to build stable coins can and will be used to build the CBDC. Besson already told you the goal. Dollar privacy, not your freedom. And Brian Armstrong, the CEO of Coinbase, is still out there calling stable coins the best form of money while knowing full well that Bitcoin solves the problem stable coins are pretending to solve. But stable coins make Coinbase money. Bitcoin in cold storage doesn't. So what are we actually looking at here? The monetary order that's held since Bretton Woods is breaking down. The UAE is threatening to price oil in Yuan. The US military is quietly running Bitcoin nodes. The Treasury Secretary just told Congress the quiet part out loud. and the cultural decay that people feel every day. The loss of community, the financialization of everything, the wars nobody voted for. Smelinsky showed us that none of that is random. It's downstream of a monetary system that turns everything it touches into a financial product, including the things that used to hold us together. And in the middle of all that, Bitcoin just rallied 35% off its lows on nothing but spot demand. This is the most hated rally in Bitcoin history. So, what does this tell you? It tells you that the vote is already happening, not at the ballot box, but onchain. People are slowly choosing to exit, one sat at a time. But here's the part that's not mentioned enough. Buying Bitcoin is not the whole answer. Smelinsky named something real when she talked about the erosion of community. The monetary system broke the social fabric. Fixing the money doesn't automatically stitch it back together again. That part's on us. It's local. It's face to face. It's showing up for your neighbors, your church, your community. The unglamorous actual work of rebuilding trust from the ground up, peer-to-peer, the way Bitcoin does it, the way we used to do it. The most dangerous rally in Bitcoin history isn't dangerous because of the price. It's dangerous because it's real. And real things, real money, real community, real conviction. That's what the current system can't survive. But now I want to hear from you. What's the most important thing you've done to build community outside of Bitcoin? Did the Admiral Paparo testimony change how you think about Bitcoin's role? Leave your thoughts in the comments below. And if you're still here, don't forget to like the video and share it with someone whose news feed doesn't give them the full picture. And if you haven't already, subscribe to the Simply Bitcoin channel so you don't miss the next one. Have a great weekend, everyone, and I'll catch you on Monday.