Grassroots development at Bitcoin Ekasi
As we wrap up the year, it’s hard not to marvel at Bitcoin’s historic milestone: crossing the $100,000 mark in its 15th year. This all-time high is not just a number—it’s a symbol of how far we’ve come. Just a year ago, there were no crypto ETFs yet today there is more than $120bn worth of crypto assets under custody at the world’s largest asset managers. Two years ago we were grappling with the fallout of FTX, the industry-wide taint it left behind, and the SEC’s aggressive clampdown yet today SBF is in jail and Gary Gensler has left office. Over the years, I’ve often spoken about the regulatory pendulum and its potential to swing in the other direction. Today, that shift is well and truly underway, with momentum building in favor of crypto. We expect the market will eventually get ahead of itself regarding the US strategic bitcoin reserve and volatility should always be expected along the path but there is still a tone of good news to price.
Regulatory Paradigm Shift
In case you are in any doubt, the regulatory shifts in the U.S. under the Trump administration are monumental. We have a change in leadership at the SEC and Treasury as well as the appointment of an AI & crypto czar, David Sacks. This signals a fundamental shift from the discriminatory leadership of the Biden administration. Going forward we are watching out for
Market Structure Bill with clearer rules for crypto market participants which could drive institutional adoption further.
Application of Securities Laws: Definitive clarity on crypto as a security or commodity would eliminate lingering ambiguity.
Stablecoin Bill will further integrate crypto and tradfi, expanding the gateway into non-state digital assets
Reserve Asset: Monumental but Timeline Unclear
Among these developments, one stands out: the possibility of Bitcoin becoming a U.S. reserve asset with the US Treasury actively holding and perhaps purchasing bitcoin. Such a move would redefine global financial structures and trigger a bidding war among sovereign governments. Treasury secretaries worldwide will take notice, elevating the standing of the asset class. Already, conversations like this are inspiring global calls for action. My friend David Ansara at the Free Market Foundation has advocated for Bitcoin as a strategic reserve asset in South Africa.
If Bitcoin does achieve reserve asset status in the U.S. within the next 18 months, a $200,000 price target is not out of the question. However, the path is far from straightforward. Congressional debates, fiscal challenges, and concerns about the U.S. dollar’s reserve status could delay this outcome. For example, holding bitcoin as a Treasury reserve asset could feasibly place undue pressure on the US dollar’s reserve status by reducing global appetite for US Treasuries in favour of bitcoin.
Setting the record straight, bitcoin is destined for global reserve asset status. I just wonder whether the timeline is slightly longer than the market may price in the next few quarters. A pragmatic, patient approach may be warranted.
While I expect the US government may face a few hurdles in implementing a strategic bitcoin reserve, US corporates may front-run the eventuality. Amazon shareholders recently requested the board to consider holding bitcoin. This comes after Microsoft polled its shareholders appetite to hold bitcoin. Institutional adoption continues and it will eventually lead to nation-state adoption.
Forget the ‘Trump Trade’, Think Bigger than Politics
There is a misconception that Bitcoin’s current rally is purely a "Trump trade." Bitcoin is much more than any single political figure or event. It’s a revolutionary technology that allows censorship-resistant, counterparty-free transfer and storage of value, without intermediaries, to anyone, anywhere in the world, at any time of day.
This capability has existed since Bitcoin’s inception in 2009, and what we’re witnessing today is just another step in its adoption cycle. Sure, a Trump presidency may provide a short-term price boost, but the fundamental value Bitcoin offers to millions—if not billions—of people around the world will inevitably find expression in its price over time.
History has shown that Bitcoin repeatedly defies its detractors, proving even the smartest skeptics wrong. For 15 years, it has overcome countless predictions of its demise, underscoring its resilience and revolutionary potential.
The Froth is Coming: Navigating the Next Stage of the Cycle
As optimism grows, we’re entering the part of the cycle where froth inevitably emerges. This is the phase where crypto companies sponsor Super Bowl ads, major sports teams and events, and celebrity endorsements abound. Unfortunately, this exuberance often coincides with a wave of scams, Ponzi schemes, and speculative mania.
In June 2021 the Miami Heat named their premises the FTX Arena after the crypto exchange FTX
Over the next 6 to 12 months, we can expect a frenzy where everyone seems to be making money, but often it’s those making the least judicious decisions who reap the biggest short-term gains. Pumped small-cap assets, insider schemes, and flashy, overhyped projects will dominate headlines. Social occasions will become platforms for crypto bros to boast about their newfound wealth—alienating many from the space entirely.
Reflexivity Suggests Significant Blue Sky Returns
Despite the awareness of these risks, we expect significant strength in the market over the coming 6-12 months. Historically, breaking to new highs often signals the start—not the end—of a major bullish phase:
2013: After a clear breakout, bitcoin soared 750% in just 7 weeks, with no significant pullback.
2017: Two pullbacks of around 35% occurred near the all-time high (one before, one after), but bitcoin still followed up with a 140% rally over the next 7 weeks.
2021: A 20% pullback occurred, followed by a 110% increase over the following weeks.
This sentiment pendulum—swinging from depression to irrational exuberance—is a feature of every crypto cycle. The “reasonable middle” is fleeting. While this is frustrating, it’s also an opportunity to remind ourselves of why we’re here, the principles that guide us, and the long-term vision we believe in. It is these principles and vision that should allow us to act with a semblance of logic and coherence in the face of volatility and confusion.
Grassroots Development at Bitcoin Ekasi
This past month, I had the privilege of visiting Bitcoin Ekasi in Mossel Bay, and what an inspiring experience it was.
Bitcoin Ekasi started as a surf school, teaching kids from the local township how to surf. But thanks to its founder Herman’s discovery of Bitcoin, it has evolved into something truly transformative. Today, the surf coaches are paid in Bitcoin, and kids are rewarded in Bitcoin for attending a certain number of lessons.
What’s remarkable is how this has changed their relationship with money. Earning in Bitcoin encouraged them to save rather than spend, fostering a long-term mindset and reducing frivolous spending. It’s a powerful testament to the impact Bitcoin can have, particularly at a grassroots level. Remember, there are more people with smartphones than bank accounts—opening a Bitcoin account requires only a phone and internet, unlike banks, which demand proof of address and ID documents that can be restrictive in townships.
Beyond the local impact, Bitcoin Ekasi is now connected to the global Bitcoin community, receiving funding and donations from around the world. Driving into the township, I saw shops proudly advertising that they accept Bitcoin, with some locals earning small monthly advertising incomes directly from global Bitcoin companies. Luthando, a key leader in the project, has even inspired other merchants in the area to accept Bitcoin, spreading the adoption beyond the township.
The ripple effects are undeniable, uplifting the community and providing access to a savings vehicle and a global network of support. Seeing Bitcoin change lives in such a tangible way has my mind racing with ideas about how similar initiatives could benefit other communities in South Africa—and beyond.
If you’re curious about Bitcoin Ekasi, I highly encourage you to learn more about this incredible project. You can donate on their website. And if you’re ever in Mossel Bay, visit Herman, Luthando, and the team. They are doing something truly special, and I wish them every success.
Looking Ahead
The regulatory pendulum has swung, Bitcoin has reached new heights, and the market is heating up. But amidst the noise and exuberance, our focus must remain on the long term principles, value-add and expectations. In the short-term, consolidation and perhaps even weakness back into the $80Ks is a potential scenario. Funding rates are elevated which suggests leverage and perhaps overly optimistic expectations have crept into the market.
Bitcoin is flowing onto exchanges again, which heightens potential sell liquidity. However, this could be easily absorbed by corporate purchases from companies like MicroStrategy, Amazon, or Microsoft.
If it does transpire, I would not expect weakness to last. There are plenty of new potential buyers and numerous regulatory changes still need to come into effect as bitcoin heads into this frothier phase of the bull market.
