All eyes in global finance are glued to liquidity. As the global broad money supply reaches a record $142 trillion, this monetary firehose has macro investors sitting up in their seats. Surging 6.7% year-on-year as of September, China, the EU, and the U.S. are driving this unprecedented expansion, and Bitcoin and the broader crypto market may be next in line.
The countdown to QE: NY Fed sets the stage
New York Fed President John Williams signaled on Friday that the era of Quantitative Easing (QE) could return sooner than markets were prepared for. With persistent liquidity pressures and money market signals flashing amber, Williams confirmed the central bank is poised to end Quantitative Tightening (QT) and may need to expand its balance sheet again.
Once the balance sheet has reached ample reserves, he told attendees at the European Bank Conference, “it will then be time to begin the process of gradual purchases of assets,” hinting that bond purchases could resume to support market stability.
Many analysts now expect the Fed could restart asset acquisitions as soon as Q1 2026, which would be a watershed event for global liquidity. As macro investor Raoul Pal urged his followers:
“You just need to get through the Window of Pain and The Liquidity Flood lies ahead.”
Massive money supply: Where does the cash go?
The ripples from the money press are global. The Kobeissi Letter broke down the numbers: since 2000, global broad money supply has grown by 446%, up $116 trillion from the turn of the millennium.
Global broad money supply: The Kobeissi Letter on X
China now leads the pack with $47 trillion, followed by the EU and U.S. at $22.3 trillion and $22.2 trillion, respectively. In other words?
“Money supply is through the roof.”
That’s a compounded annual growth rate of 7.0%, and a flood of potential capital hunting yield and shelter from currency debasement.
When liquidity surges like this, it doesn’t slosh evenly; risk assets, hard assets, and new money narratives become magnets for global flows. Bitcoin, notoriously volatile but increasingly institutionalized, looks better positioned than ever to absorb the next reallocation wave, especially as bond yields compress and traditional assets stagnate.
Bad price action… Or bad assumptions?
Crypto Twitter, for all its noise, has spent the week tearing itself apart over red numbers and portfolio trauma. Dan Tapiero, founder of 10T Holdings and a longstanding macro trader, reminded us that bull markets rarely end when panic is everywhere.
“This bull phase in BTC and crypto ends when no one thinks it’s ending (ie not now)… Bad price action is supposed to shake weak hands. Mkts 101.”
He’s not alone in this perspective. Even with frustrating tape and sentiment-charged exits, the structural story of money supply through the roof, and central banks flashing pivot, looks like the perfect setup for another speculative surge.
In fact, the most dangerous time for new capital chasing yield is often when the crowd is convinced the run is already over.
With the NY Fed ready to roll out QE once more and global liquidity showing no sign of slowing, the conditions are ripening for another rally in Bitcoin and crypto.
Weak hands may wobble, but as seasoned macro voices note, real bull phases end in euphoria, not despair. Money pouring into the system must find a home, and the sequence of the global money supply flows may soon ignite the next big leg up in digital assets.
Renowned short seller James Chanos has officially closed his $MSTR/Bitcoin hedged trade after 11 months, marking an end to his high-profile bet against Bitcoin-linked equities and Strategy stock. The unwinding of institutional short positions is a trend reversal indicator that could mean the worst for Bitcoin treasury companies is behind them.
The bitcoin treasury ecosystem has been battered and bruised in recent weeks. Most companies’ stock is significantly down from peaks earlier this year, and analysts have been calling investors to short stocks like MSTR. They fervently cautioned that a bubble was present in bitcoin treasury companies, and it was about to unceremoniously burst.
But just as the shorting pressure was reaching fever pitch, a reprieve may be on the horizon. On Saturday, Pierre Rochard, CEO of The Bitcoin Bond Company and treasury sage, declared that the bear market for Bitcoin treasury companies is “gradually coming to an end.”
To his mind, the unwinding of institutional shorts, one of the cleanest signals in the game, suggests the tide may be turning:
“Expect continued volatility, but this is the kind of signal you want to see for a reversal.”
Not exactly champagne-popping territory, but for those who have waded through endless bearish sentiment and mNAV headaches, hope is about as welcome as rain in a desert.
James Chanos unwinds his Bitcoin treasury short
One of those shorts belonged to none other than James Chanos, the renowned investor and long-time foe of anything with “Bitcoin” on the label.
Chanos has officially closed out his $MSTR/Bitcoin hedged trade after 11 months, marking the end of a high-profile bet against the poster child for corporate BTC accumulation. For those keeping score at home, MicroStrategy is now holding over 640,000 BTC, and steadily buying every dip as if Michael Saylor never heard of risk management.
Chanos confirmed the move on X, sparking a flurry of takes and “is this the bottom?” threads across crypto Twitter. He posted:
“As we have gotten some inquiries, I can confirm that we have unwound our $MSTR/Bitcoin hedged trade as of yesterday’s open.”
The institutional players changing the game
Meanwhile, the institutional mood is quietly shifting. Traditional finance heavyweights are entering the chat; not as naysayers, but as stakeholders, participants, and, crucially, treasury innovators.
JPMorgan’s recent maneuvering in BlackRock’s spot Bitcoin ETF, plus a slew of custody and settlement deals popping up in the news, point to a world where corporate Bitcoin adoption is less “wild west,” more boardroom strategy. Whether it’s pushing up ETF flows, tweaking treasury yield strategies, or rating digital assets on par with real-world securities, the shift is happening beneath the surface.
Of course, none of this suggests an imminent escape from volatility for Bitcoin treasury companies. Bitcoin remains haunted by the ghosts of macro uncertainty and regulatory U-turns. But the closure of headline shorts, especially those run by high-profile skeptics like Chanos, isn’t just about dollars; it’s a psychological turning point.
For both Bitcoin’s price and the institutional narrative, the message is clear: the worst may just be behind us, and the next chapter isn’t being written by the usual suspects.
United States President Donald Trump announced on Sunday that most Americans will receive a $2,000 “dividend” from the tariff revenue and criticized the opposition to his sweeping tariff policies.
“A dividend of at least $2000 a person, not including high-income people, will be paid to everyone,” Trump said on Truth Social.
The US Supreme Court is currently hearing arguments about the legality of the tariffs, with the overwhelming majority of prediction market traders betting against a court approval.
Kalshi traders place the odds of the Supreme Court approving the policy at just 23%, while Polymarket traders have the odds at 21%. Trump asked:
“The president of the United States is allowed, and fully approved by Congress, to stop all trade with a foreign country, which is far more onerous than a tariff, and license a foreign country, but is not allowed to put a simple tariff on a foreign country, even for purposes of national security?”
Investors and market analysts celebrated the announcement as economic stimulus that will boost cryptocurrency and other asset prices as portions of the stimulus flow into the markets, but also warned of the long-term negative effects of the proposed dividend.
While a portion of the stimulus will flow into markets and raise asset prices, Kobeissi Letter warned that the ultimate long-term effect of any economic stimulus will be fiat currency inflation and the loss of purchasing power.
The proposed economic stimulus checks will add to the national debt and result in higher inflation over time. Source: The Kobeissi Letter
“If you don’t put the $2,000 in assets, it is going to be inflated away or just service some interest on debt and sent to banks,” Bitcoin analyst, author, and advocate Simon Dixon said.
“Stocks and Bitcoin only know to go higher in response to stimulus,” investor and market analyst Anthony Pompliano said in response to Trump’s announcement.
UK citizens are currently blocked from viewing certain Ledger blog pages, including an educational post on multisig wallets, due to new compliance rules. When visiting these pages, users in the UK receive a message:
“Due to new rules in the UK, certain Ledger.com webpages are restricted.”
These restrictions affect crypto educational resources and are linked to more stringent financial promotions rules instituted by UK regulators in late 2025, requiring strict registration and approval processes for crypto-related content or inducements.
This clampdown means that important guides, like Ledger multi-sig instructions, meant to help users secure their assets or download associated technical materials, are currently inaccessible if their connection is detected as UK-based. Some users have reported needing to rely on VPNs just to access documentation or binary verification files for their hardware wallets.
The Ledger block is part of a broader regulatory trend in the UK
The Ledger situation is part of a broader regulatory trend, as the UK implements a suite of new rules designed to tightly govern crypto communications, restrict unapproved financial promotions, and regulate access to certain investment products.
The intention, according to official statements, is increased consumer protection. But critics argue it puts practical blockchain education and security at arm’s length for UK retail users.
Further reflecting this tightening regulatory environment, a recent Coinbase advertisement was banned in the UK for allegedly making misleading claims and criticizing local economic conditions. The ad was ultimately distributed via online channels after being pulled from television and billboards.
Major banks, particularly NatWest, also continue to restrict crypto transactions for UK residents, refusing business clients who accept Bitcoin and capping deposits for retail customers. Many UK banking apps now warn users against crypto spending or block outbound payments to exchanges, a trend seen as stifling access to digital assets for everyday investors.
Reduced privacy, increased surveillance
Beyond the blocking of certain Ledger pages, the UK’s digital ID scheme, announced in September 2025, will make digital identification mandatory for work eligibility and accessing public services, with government assurances of strong encryption and personal privacy.
Civil liberties groups, however, warn that such systems, especially given their expansion into real-time database checks, pose major risks of surveillance, exclusion, and data breaches, with fears that vulnerable populations could be further marginalized.
The scheme puts Britain squarely into a global trend, as Europe advances a digital euro for retail settlements and discusses programmable central bank digital currencies (CBDCs). This initiative has drawn parallel concerns about anonymity and data use.
Globally, the crackdown on privacy-centric crypto projects has intensified as well. The recent sentencing of Samourai Wallet developer Keonne Rodriguez in the U.S. highlights how privacy-enhancing technologies are being policed and increasingly equated with criminal activity by regulators.
As UK regulators impose heavier controls across banking, advertising, and personal identification, the partial Ledger website blockade could be just one of many more such issues to come.
Bitcoin’s recent struggle to hold the $100,000 level has revived familiar doubts about whether institutional demand is durable.
However, in a new filing with the US Securities and Exchange Commission, BlackRock signals the opposite conclusion, saying its conviction in Bitcoin’s long-term relevance remains intact despite short-term market weakness.
The firm frames Bitcoin as a decades-long structural theme shaped by adoption curves, liquidity depth, and the declining credibility of legacy monetary systems.
While this view acknowledges volatility, it argues that Bitcoin’s strategic value is accelerating faster than its price suggests. That tone contrasts with a market where each pullback often renews questions about institutional endurance.
The paradox of slowing prices and rising institutional demand
A central pillar of BlackRock’s argument is Bitcoin’s network-growth profile, which it describes as one of the fastest seen in any modern technology cycle.
The filing cites adoption estimates showing that Bitcoin surpassed 300 million global users roughly 12 years after launch, outpacing both mobile phones and the early internet, which each took significantly longer to reach similar thresholds.
Bitcoin Adoption Curve (Source: BlackRock)
For BlackRock, this curve is more than a data point. It reframes Bitcoin as a long-duration asset whose value reflects cumulative network participation rather than month-to-month price moves.
The firm also includes a decade-long performance matrix showing that, despite wild swings in individual years, which often place Bitcoin at either the top or bottom of annual return tables, its cumulative and annualized performance still exceeds that of equities, gold, commodities, and bonds.
That framing positions volatility as a built-in cost of exposure rather than a structural flaw.
Bitcoin Yearly Returns Since 2015 (Source: BlackRock)
For an asset manager whose products are designed for multi-decade allocations rather than short-cycle momentum trades, temporary stagnation appears less like a warning and more like a familiar feature of Bitcoin’s cyclical rhythm.
The filing also emphasizes that the asset’s current slowdown has not dented institutional participation. If anything, BlackRock argues, Bitcoin’s underlying fundamentals of digital adoption, macroeconomic uncertainty, and the expansion of regulated market infrastructure continue to strengthen even as spot prices cool.
How IBIT changed Bitcoin’s market structure
A second theme in the filing is the argument that BlackRock’s own product, the iShares Bitcoin Trust (IBIT), has reshaped access to the asset in ways that support deeper institutional involvement.
The firm highlights three areas, including simplified exposure, enhanced liquidity, and the integration of regulated custody and pricing rails.
BlackRock stated that IBIT reduces operational frictions by allowing institutions to hold Bitcoin through a structure they already understand.
According to the firm, custody risks, key-management issues, and technical onboarding, which have historically been barriers for institutions, are abstracted away in favor of traditional settlement channels.
At the same time, BlackRock also highlighted liquidity as one of the most significant impacts IBIT has had on the market.
Since its launch, the product has become the most actively traded Bitcoin ETF, contributing to tighter spreads and deeper order books. For large allocators, execution quality acts as a form of validation: the more liquid the product, the more institutionally acceptable the underlying asset becomes.
Moreover, BlackRock also highlighted its multi-year infrastructure work with Coinbase Prime, regulated price benchmarks, and strict audit frameworks as evidence that Bitcoin exposure can now be delivered with standards comparable to equities or fixed income.
Because of that design, the firm has processed more than $3 billion in in-kind transfers — a sign, it says, of institutional and whale confidence in its custody architecture.
Notably, IBIT flows reinforce all of the points above. Since its launch, IBIT has emerged as the dominant Bitcoin ETF product in the market, with cumulative net inflows of $64.45 billion and over $80 billion in assets under management.
BlackRock’s IBIT Key Metrics Since Launch in 2024 (Source: SoSo Value)
The most assertive section of the filing is labeled “global monetary alternative.” BlackRock describes Bitcoin as a scarce, decentralized asset positioned to benefit from persistent geopolitical disorder, rising debt burdens, and long-term erosion in fiat credibility.
The firm does not frame Bitcoin as a direct replacement for sovereign currencies, but the implication is clear: the asset’s relevance increases as traditional monetary systems face stress.
BlackRock also situates Bitcoin within a broader technological transition. As the most widely adopted cryptocurrency, Bitcoin functions as a proxy bet on the mainstreaming of digital-asset infrastructure, including blockchain-based payments, settlement systems, and financial market rails.
In this context, Bitcoin has two intertwined identities as a monetary hedge and a technological exposure.
This dual narrative helps explain BlackRock’s sustained bullishness. One pillar of the thesis is macroeconomic, tied to inflation dynamics, fiscal trajectory, and geopolitical fragmentation. The other is structural, tied to the ongoing global expansion of blockchain networks.
Considering this, the recent slow price action does not meaningfully disrupt either thesis.
“We don’t want a weekly close below this at any cost,” trader Max Crypto warned.
BTC/USD one-week chart with 50EMA. Source: Cointelegraph/TradingView
The risk of a “death cross” involving simple moving averages (SMAs) on the daily chart, meanwhile, was of interest to trader SuperBro.
Such a scenario occurs when the 50-period SMA crosses below the 200-period equivalent.
“The 4th ‘death cross’ of the bull cycle is approaching. Each time we’ve seen reversion to the mean and a sustained bottom,” he told X followers on the day.
“But so far, a lukewarm reaction at the 365 SMA. Let’s see if bulls can get it together and reclaim the Q3 low for the weekly close.”
BTC/USD one-day chart. Source: SuperBro/X
Bitcoin analyst sees “expansion” if US gov’t shutdown ends
Beyond chart signals, crypto markets hoped for positive news on the US government shutdown.
Anticipation that lawmakers would take steps to end the impasse was increasing, as its effects became more problematic for the US economy.
Additionally, expectations were that the US Supreme Court striking down international trade tariffs — a decision due soon — would provide an instant boost to stocks.
“If the US government shutdown ends, we could see an expansion soon,” Cas Abbe, a contributor to onchain analytics platform CryptoQuant, summarized.
Abbe uploaded a chart to X, which suggested that the end of the shutdown could also mark the end of a “manipulation” phase for BTC price action.
BTC/USDT one-day chart. Source: Case Abbe/X
Crypto investor and entrepreneur Ted Pillows was cautious, predicting that BTC price could suffer if market expectations were not satisfied soon enough.
“BTC is still consolidating around the $102,000 level. The markets were expecting the end of the government shutdown this weekend, but it didn’t happen,” he stated.
“I still think Bitcoin could go a bit lower, given that institutional demand has gone and OG whales are selling.”
BTC/USDT one-day chart. Source: Ted Pillows/X
Bitcoin whales, Cointelegraph reported, have produced sustained selling pressure throughout 2025.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
For decades, research in distributed systems, especially in Byzantine consensus and state machine replication (SMR), has focused on two main goals: consistency and liveness. Consistency means all nodes agree on the same sequence of transactions, while liveness ensures the system continues to add new ones. Still, these properties do not stop bad actors from changing the order of transactions after they are received.
In public blockchains, that gap in traditional consensus guarantees has become a serious problem. Validators, block builders or sequencers can exploit their privileged role in block ordering for financial gain, a practice known as maximal extractable value (MEV). This manipulation includes profitable frontrunning, backrunning and sandwiching of transactions. Because transaction execution order determines validity or profitability in DeFi applications, the integrity of transaction ordering is vital for maintaining fairness and trust.
To address this critical security gap, transaction order-fairness has been proposed as a third essential consensus property. Fair-ordering protocols ensure that the final order of transactions depends on external, objective factors, such as arrival times (or receiving order) and is resistant to adversarial reordering. By limiting how much power a block proposer has to reorder transactions, these protocols move blockchains closer to being transparent, predictable, and MEV-resistant.
The Condorcet paradox and impossibility of ideal fairness
The most intuitive and strongest notion of fairness is Receive-Order-Fairness (ROF). Informally defined as “first received, first output,” ROF dictates that if a sufficient number of transactions (tx) arrive at a majority of nodes earlier than another transaction (tx′), then the system is required to order tx before tx′ for execution.
However, achieving this universally accepted “order fairness” is fundamentally impossible unless it is assumed that all nodes can communicate instantaneously (i.e., operating in an instant synchronous external network). This impossibility result stems from a surprising connection to social choice theory, specifically the Condorcet paradox.
The Condorcet paradox illustrates how, even when every individual node maintains a transitive internal ordering of transactions, the collective preference across the system can result in what are known as non-transitive cycles. For example, it is possible that a majority of nodes receive transaction A before B, a majority receive B before C, and a majority receive C before A. Hence, the three majority preferences form a loop (A→B→C→A). This means that no single, consistent ordering of the transactions A, B and C can ever satisfy all majority preferences simultaneously.
This paradox demonstrates why the goal of perfectly achieving Receive-Order-Fairness is impossible in asynchronous networks, or even in synchronous networks that share a common clock if external network delays are too long. This impossibility necessitates the adoption of weaker fairness definitions, such as batch order fairness.
Hedera Hashgraph and flaw of median timestamping
Hedera, which employs the Hashgraph consensus algorithm, seeks to approximate a strong notion of receive-order fairness (ROF). It does this by assigning each transaction a final timestamp computed as the median of all nodes’ local timestamps for that transaction.
However, this is inherently prone to manipulation. A single adversarial node can deliberately distort its local timestamps and invert the final ordering of two transactions, even when all honest participants received them in the correct order.
Consider a simple example with five consensus nodes (A, B, C, D and E) where Node E acts maliciously. Two transactions, tx₁ and tx₂, are broadcast to the network. All honest nodes receive tx₁ before tx₂, so the expected final order should be tx₁ → tx₂.
In this example, the adversary assigns tx₁ a later timestamp (3) and tx₂ an earlier one (2) to skew the median.
When the protocol computes the medians:
For tx₁, the timestamps (1, 1, 4, 4, 3) yield a median of 3.
For tx₂, the timestamps (2, 2, 5, 5, 2) yield a median of 2.
Because the final timestamp of tx₁ (3) is greater than that of tx₂ (2), the protocol outputs tx₂ → tx₁, thus reversing the true order observed by all honest nodes.
This toy example demonstrates a critical flaw: The median function, while appearing neutral, is paradoxically the actual cause of unfairness because it can be exploited by even a single dishonest participant to bias the final transaction order.
As a result, Hashgraph’s often-touted “fair timestamping” is a surprisingly weak notion of fairness. The Hashgraph consensus fails to guarantee receive-order fairness and instead depends on a permissioned validator set rather than on cryptographic guarantees.
Achieving practical guarantees
However, to circumvent the theoretical impossibility demonstrated by Condorcet, practical fair-ordering schemes must relax the definition of fairness in some way.
The Aequitas protocols introduced the criterion of Block-Order-Fairness (BOF), or batch-order-fairness. BOF dictates that if sufficiently many nodes receive a transaction tx before another transaction tx′, then tx must be delivered in a block before or at the same time as tx′, meaning no honest node can deliver tx′ in a block after tx. This relaxes the rule from “must be delivered before” (the requirement of ROF) to “must be delivered no later than”.
Consider three consensus nodes (A, B and C) and three transactions: tx₁, tx₂, and tx₃. A transaction is considered “received earlier” if at least two of the three nodes (a majority) observe it first.
If we apply majority voting to determine a global order:
tx₁ → tx₂ (agreed by A and C)
tx₂ → tx₃ (agreed by A and B)
tx₃ → tx₁ (agreed by B and C)
These preferences create a loop: tx₁ → tx₂ → tx₃ → tx₁. In this situation, there’s no single order that can satisfy everyone’s view at once, which means strict ROF is impossible to achieve.
BOF solves this by grouping all the conflicting transactions into the same batch or block instead of forcing one to come before another. The protocol simply outputs:
Block B₁ = {tx₁, tx₂, tx₃}
This means that, from the protocol’s perspective, all three transactions are treated as if they happened at the same time. Inside the block, a deterministic tie-breaker (such as a hash value) decides the exact order in which they’ll be executed. By doing this, BOF ensures fairness for every pair of transactions and keeps the final transaction log consistent for everyone. Each one is processed no later than the one that precedes it.
This small but important adjustment lets the protocol handle situations where transaction orderings conflict, by grouping those conflicting transactions into the same block or batch. Importantly, this does not result in a partial ordering, as every node must still agree on one single, linear sequence of transactions. The transactions inside each block are still arranged in a fixed order for execution. In cases when no such conflicts occur, the protocol still achieves the stronger ROF property.
While Aequitas successfully achieved BOF, it faced significant limitations, particularly that it had very high communication complexity and could only guarantee weak liveness. Weak liveness implies that a transaction’s delivery is only guaranteed after the entire Condorcet cycle it is a part of is completed. This could take an arbitrarily long time if cycles “chain together.”
The Themis protocol was introduced to enforce the same strong BOF property, but with improved communication complexity. Themis achieves this using three techniques: Batch Unspooling, Deferred Ordering, and Stronger Intra-Batch Guarantees.
In its standard form, Themis requires each participant to exchange messages with most other nodes in the network. The amount of communication required increases with the square of the number of network participants. However, in its optimized version, SNARK-Themis, nodes use succinct cryptographic proofs to verify fairness without needing to communicate directly with every other participant. This reduces the communication load so that it grows only linearly, which allows Themis to scale efficiently even in large networks.
Assume five nodes (A–E) participating in consensus receive three transactions: tx₁, tx₂, and tx₃. Due to network latency, their local orders differ:
As in Aequitas, these preferences create a Condorcet cycle. But instead of waiting for the entire cycle to be resolved, Themis keeps the system moving using a method called batch unspooling. It identifies all transactions that are part of the cycle and groups them into one set, called a strongly connected component (SCC). In this case, all three transactions belong to the same SCC, which Themis outputs as a batch-in-progress, labeled Batch B₁ = {tx₁, tx₂, tx₃}.
By doing this, Themis allows the network to keep processing new transactions even while the internal order of Batch B₁ is still being finalized. This ensures the system stays live and avoids stalling.
Overview:
The concept of perfect fairness in transaction ordering may seem straightforward. Whoever’s transaction reaches the network first should be processed first. However, as the Condorcet paradox demonstrates, this ideal cannot hold in real, distributed systems. Different nodes see transactions in different orders, and when those views conflict, no protocol can build a single, universally “correct” sequence without compromise.
Hedera’s Hashgraph tried to approximate this ideal with median timestamps, but that approach relies more on trust than on proof. A single dishonest participant can distort the median and flip transaction order, revealing that “fair timestamping” is not truly fair.
Protocols like Aequitas and Themis move the discussion forward by acknowledging what can and cannot be achieved. Instead of chasing the impossible, they redefine fairness in a way that still preserves order integrity under real network conditions. What emerges is not a rejection of fairness, but its evolution. This evolution draws a clear line between perceived fairness and provable fairness. It shows that true transaction-order integrity in decentralized systems cannot depend on reputation, validator trust or permissioned control. It must come from cryptographic verification embedded in the protocol itself.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Cointelegraph does not endorse the content of this article nor any product mentioned herein. Readers should do their own research before taking any action related to any product or company mentioned and carry full responsibility for their decisions.
Welcome to Slate Sunday, CryptoSlate’s weekly feature showcasing in-depth interviews, expert analysis, and thought-provoking op-eds that go beyond the headlines to explore the ideas and voices shaping the future of crypto.
Michael Burry, the “Big Short” protagonist whose bet against the mortgage bubble made him a living legend, is back in the business of raining on parades. This time, instead of subprime debt, his sights are locked on Silicon Valley, specifically, the AI bubble he believes is about to pop.
This week, Burry’s hedge fund revealed a whopping $1.1 billion in put options against the AI titans Nvidia and Palantir. For those less versed in Wall Street lingo, that means Burry is betting that the stocks will… well, go splat.
Why is this important? Because when Michael Burry thinks there’s a bubble, people listen (if not for investment advice, at least for the entertainment value). After all, for every housing-market Cassandra, there’s a hundred Chicken Littles. But Burry is no stranger to calling out absurd market exuberance (and making bank while doing it).
‘Bats*** crazy’ vs. billion-dollar bets: The Palantir perspective
Enter Alex Karp, Palantir’s CEO, wielding a verbal flamethrower. Karp’s response to Burry’s big bet? The notion that anyone would short AI companies is utterly absurd. He retorted:
“The two companies he’s shorting are the ones making all the money, which is super weird.”
He didn’t stop there, doubling down:
“The idea that chips and ontology is what you want to short is bats*** crazy… He’s actually putting a short on AI.”
Palantir’s numbers do back up a certain bravado. The company upgraded full-year revenue forecasts after a record Q3 and posted 173% gains over the last year.
Yet Wall Street’s obsession with AI is a double-edged sword, and even as Palantir beats forecasts, its share price can tumble 8–10% in a single breath, all thanks to valuation jitters and the swirling specter of “AI bubble trouble.”
Nvidia’s cycle: Virtuous or viscous?
As for Nvidia, CEO Jensen Huang had his own take, downplaying investor fears.
“I don’t believe we’re in an AI bubble,” Huang asserted in a Bloomberg Television interview, immediately after announcing a slew of new partnerships and the company’s projection to generate half a trillion dollars in revenue.
Huang isn’t fazed by the bubble talk; he’s too busy selling the world’s hottest chips and projecting a multi-trillion-dollar industry. If anything, the Nvidia CEO believes the U.S. isn’t doing enough to develop AI, and its restrictive policy vis-à-vis China will ultimately hurt the world’s number-one superpower. He ruefully told reporters at the Financial Times’ Future of AI Summit on Wednesday:
“China is going to win the AI race… we need to be in China to win their developers. A policy that causes America to lose half of the world’s AI developers is not beneficial in the long term; it hurts us more.”
Still, if you peek under the hood, Nvidia’s stock (which has soared more than 50% this year) slipped 3–4% intraday on November 4, on news of Burry’s short.
And some investors remain jittery, especially with looming U.S. chip export restrictions to China and the trillion-dollar question: Is momentum fueling monstrous valuations, or is it genuine demand?
AI bubble mania meets reality: Trillions on the table, triggers everywhere
Let’s zoom out. Nvidia just became the world’s first tech firm worth $5 trillion. That’s bigger than all the banks in the U.S. and Canada combined. The “Magnificent Seven” tech stocks (including Nvidia) now occupy a regal 35% of the S&P 500’s entire market cap.
AI investment has soared past $1 trillion a year, while consumer stocks like Kraft Heinz are getting trounced. As global capital markets expert, The Kobeissi Letter, pointed out:
“There are 2 US economies: Rich vs Poor, and AI is the lifeline of it all.”
Car repossessions are climbing. Wage growth is stalling. And Americans are carrying record levels of credit card debt, with interest rates hovering near historic peaks. Unless you count the influence of AI and data centers, America’s real economic growth is barely limping along, clocking in at just 0.01% according to Harvard economist Jason Furman.
Meanwhile, Wall Street’s top performers are running laps around Main Street, which is still struggling to catch its breath. The gap between winner-takes-all tech stocks and everyday households paints a pretty stark picture of today’s economy. If and when the AI bubble bursts, it’s going to hit like a Tyson left hook.
Macro analyst and goldbug Peter Schiff, never one to miss an opportunity to dunk on Bitcoin, is wholly pessimistic as ever. Not only does he believe that crypto is about to blow up, but he’s right up there with Burry on AI:
“The losses that will be suffered by Bitcoin HODLers and crypto investors will be staggering. More money will be lost in this bubble than was lost when the dot-com bubble popped. But if this signals an aversion to risk in general, look out for the even bigger AI bubble to burst.”
Yet the most poignant critic of the moment is Burry himself, betting 80% of his portfolio on the AI bubble. He mused to his audience on Twitter:
“Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”
Technicals, tension, and the trouble with timing
If the spectacle feels familiar, that’s because it is. In the dot-com era, pet-food websites with no earnings became household names, only to crash harder than a piano from a fourth-floor window.
Today, instead of dogs.com, it’s chips and data lakes; “chips and ontology,” as Karp jibes, with RSI readings above 70, price-to-earnings ratios exceeding 200 for Palantir, and price-to-book rocketing past 69. Nvidia and Palantir are riding a wave of profitability, but also expectations that would make a seasoned gambler sweat bullets.
The sell-off that followed Burry’s disclosure was real: Palantir shares dropped nearly 9%, Nvidia shed over 3%, and the S&P 500 retreated alongside tech sector peers Oracle and Tesla. The sell-off bled into crypto as well, with Bitcoin briefly falling below $100,000 a coin for the first time since June.
CNBC reported Karp’s outrage, suggesting Burry’s actions were bordering on market manipulation as much as macro pessimism. He seethed:
“I think what is going on here is market manipulation. We delivered the best results anyone’s ever seen… I mean, these people, they claim to be ethical, but you know, they’re actually shorting one of the great businesses of the world.”
Big tech’s bubble or a decade of dominance?
Meanwhile, OpenAI CEO Sam Altman has openly acknowledged that the AI market is likely in a bubble. He told reporters:
“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes… When bubbles happen, smart people get overexcited about a kernel of truth.”
Still, he also argued that bubbles don’t kill revolutions, and sometimes they birth the next economy. Wall Street isn’t sure whether to clap or cringe. And Burry’s short has gotten them nervous.
Palantir, despite “otherworldly growth,” now has to deliver on 40–50% annual revenue expansion and 50% gross margins just to justify its price. The sector-wide rally is monumental, but a single tweet or earnings miss could knock out tens of billions in minutes.
The punchline: Everything’s absurd; until it isn’t
Burry’s bearishness, Karp’s swagger, Huang’s angst; the AI bubble debate is a masterclass in financial melodrama. Are we witnessing history rhyming, or is tech simply flexing its muscles in a world desperate for new growth drivers?
If you trust Burry’s gut, there’s pain ahead. If you prefer your tech with a heaping side of chips (the silicon kind), maybe this is just the beginning. Karp insisted:
“I do think this behavior is egregious, and I’m gonna be dancing around when he’s proven wrong.”
Either way, bubbles are only obvious after they burst. Until then, thank Michael Burry for keeping the punch bowl spiked (and the market narrative anything but dull).
French crypto hardware wallet provider Ledger is considering a New York listing as surging cyberattacks drive record demand for its hardware devices, sending revenues soaring into the triple-digit millions in 2025.
CEO Pascal Gauthier recently told the Financial Times that the company, founded in Paris in 2014, is seeing its best year yet as both individuals and companies rush to protect their digital assets from increasingly sophisticated hackers.
“We’re being hacked more and more every day … hacking of your bank accounts, of your crypto, and it’s not going to get better next year and the year after that,” he said.
The boom comes amid a record year for crypto-related thefts. Hackers stole $2.2 billion worth of digital assets in the first half of 2025, surpassing the total for all of 2024. About 23% of these attacks targeted individual wallets, the FT reported, citing Chainalysis.
Gauthier said Ledger secures about $100 billion worth of Bitcoin (BTC) for customers, and might further benefit from seasonal spikes during Black Friday and Christmas.
He added that the company is preparing to raise funds next year, either through a private round or a US listing. He added that Ledger is expanding its New York headcount, noting that “money is in New York today for crypto, it’s nowhere else in the world, it’s certainly not in Europe.”
Competitors such as Trezor and Tangem also offer “cold storage” wallets, but Ledger remains the most prominent name in the market. The company was last valued at $1.5 billion in 2023, backed by 10T Holdings and True Global Ventures.
Developers like pcaversaccio accused the company of straying from its Cypherpunk roots, claiming Ledger is turning its app into a centralized “choke point” to extract revenue from users.
Optimism around Bitcoin was far stronger at the start of the year, but it may not be long before the cryptocurrency regains that same level of hype, according to Galaxy Digital’s head of research, Alex Thorn.
“Attention will come back to Bitcoin, it always does,” Thorn said during an interview with CNBC on Friday, emphasizing that “Bitcoin was the hottest trade of the year at the start of the year” after Donald Trump’s win in the US presidential election.
“For everyone worldwide and all sorts of asset classes…That’s just not true for the rest of the year.”
Investor attention has been distracted in other areas
Thorn said investors have turned their attention toward areas like AI, nuclear energy, quantum technology, and gold. “There were a lot of other places to get gains this year that impeded the allocation to Bitcoin,” he said.
“We’re entering a much more mature era, where distribution from old hands to new is incredibly healthy for distributing the ownership of Bitcoin,” Thorn added.
While Thorn remains long-term bullish on Bitcoin (BTC), he reduced Galaxy Digital’s year-end price target to $120,000 from $185,000. A move to $120,000 represents an increase of around 17% from Bitcoin’s current price of $102,080, according to CoinMarketCap.
Bitcoin is down 15.72% over the past 30 days. Source: CoinMarketCap
Many of the sectors Thorn said are pulling investor attention away from Bitcoin, especially gold, are the same ones it’s often compared to.
JPMorgan analysts recently said that the rise in gold volatility during its rally to all-time highs in October makes the precious metal riskier and Bitcoin “more attractive to investors,” based on the Bitcoin-to-gold volatility ratio falling to 1.8, meaning BTC carries 1.8 times the risk of gold.
Quantum computing continues to divide the Bitcoin industry
As for AI, it was reported on Oct. 10 that Bitcoin and Nvidia stock (NVDA) are now moving more in sync than at any point in the past year. That has some market watchers worried about a looming crash similar to the dot-com bubble era in the late 1990s.
Meanwhile, the ongoing debate over the potential threat of quantum computing to Bitcoin continues to divide experts. Borderless Capital’s Amit Mehra recently said quantum computing remains years away from threatening Bitcoin.
Meanwhile, Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole, said the situation is far more urgent and argues that the industry must implement solutions as soon as possible before it is too late.
