1/9/25 Roundup: All Roads Lead to Bitcoin
Onramp Weekly Roundup
Written By Brian Cubellis
Before we get started…
Introducing the Onramp Institutional Series!
Join us next week on January 16th, 2025 (at 415PM ET), as James Lavish and David Foley of the Bitcoin Opportunity Fund kick off the first installment of this monthly webinar series geared toward institutional allocators and the professional investment community.
They’ll dissect the macro forces shaping bitcoin adoption—covering inflation, fiscal policy, interest rates, and key market drivers for 2025—and share their hybrid investment strategy for balancing public and private markets.
Stay until the end for a Q&A with James, David, and members of the Onramp team. We’d love to have you join and please extend the invite to any folks in your network who might be interested.
And now, for the weekly roundup…
All Roads Lead to Bitcoin
This week’s financial gyrations continue to underscore the same underlying tension: inflation remains a stubborn concern, bond yields are spiking as a result, and long-term U.S. debt finds fewer and fewer willing buyers. While this cycle of “debt is piling up, and the system must eventually inject liquidity by printing more money” is nothing new, it’s now more glaringly evident that central banks have few viable exit ramps. Equities continue to fluctuate in response, and—unsurprisingly—bitcoin is momentarily moving in tandem with other risk assets.
As we’ve previously discussed, bitcoin isn’t a “risk-on” asset in our view; it merely trades like one in the short term because swaths of the traditional market lump it in with tech. From a high-level perspective, however, the inevitability of global fiat debasement is precisely what underpins bitcoin’s long-term value proposition. Said another way: if central banks cut rates and print, bullish for bitcoin; if they hold rates higher for longer and eventually print anyway, still bullish for bitcoin.
At current prices in the mid-ninety thousands, bitcoin’s underlying thesis is as robust as ever: it’s a finite, digital form of base money competing for capital flows against every other store-of-value asset on the planet. Indeed, the persistent erosion of fiat currencies across the board practically begs for a non-sovereign store-of-value. For those with a long-term horizon, five figure bitcoin represents a fleeting opportunity to accumulate satoshis at a discount.
Part of the rationale for the sell-off in bitcoin back below six figures could potentially be attributed to a report from yesterday that the DOJ was cleared (on December 30, 2024) to liquidate ~$6.5 billion of seized Silk Road bitcoin. Whether this is just coincidental timing resulting from the adjudication of various claims and lawsuits related to the seizure of those assets, or one final antagonistic action towards bitcoin from the departing administration, is largely irrelevant.
It’s possible that all or part of this ~69,000 bitcoin has already been sold over the past several days, contributing to recent declines. But given conflicting reports and vagaries of the details, it’s also possible none of it has been sold, and this is just another instance of misleading headlines around the potential liquidation of these assets and associated legal processes. Importantly, regardless of the last minute actions of the current lame duck administration, the incoming administration has perpetuated a deliberately positive view towards bitcoin, eager to embrace the asset.
But perhaps the most notable and under-appreciated aspect of bitcoin’s evolving role in sovereign-level considerations is that historically, when nation-states engage in game-theoretic behavior—think arms races, resource control, or strategic alliances—individuals have no meaningful seat at the table. Bitcoin inverts this dynamic; individuals, corporations, and even governments all interact on the same playing field. No actor, regardless of size, possesses special privileges to alter the protocol or create new units of currency. Ownership is not equivalent to control, a radical departure from traditional geopolitics. For more information on bitcoin’s emergent role in sovereign-level game theory dynamics, read our recent report on the topic.
Amid the broader macro turbulence this week, investors also witnessed a dramatic plunge in “quantum technology” equities. Several quantum-computing-focused companies, which surged tremendously last year, collapsed by over 40% in a single day on Wednesday after NVIDIA’s CEO, Jensen Huang, indicated that workable quantum computers might be 20, 30, or even 40 years away—longer than many have posited. That revelation caught investors off-guard, highlighting the sector’s uncertain profitability timeline. In essence, no one invested in those companies (including executives) can really discern if or when quantum technology becomes commercially viable.
Uninformed critics sometimes compare the volatility of equities like quantum computing stocks to that of MicroStrategy’s instruments as if they’re analogous. But the difference is significant: Saylor’s wager is on bitcoin as a digital commodity with finite supply and no operational overhead. Meanwhile, quantum computing firms face potentially decades of expensive R&D before they can deliver on any revenue expectations. Zooming out to the period over which MicroStrategy has implemented their bitcoin treasury strategy (shown below, since August 2020), the recent performance of quantum stocks is a blip on the radar. This is an apt reminder that the fundamental thesis around bitcoin as a strategic asset separates it from the landscape of emerging technology equities with which it’s often conflated.
Predictably, the recent attention around quantum computing has reignited the longstanding fear, uncertainty, and doubt (FUD) over whether a future quantum computer could break bitcoin’s encryption. In reality, bitcoin is arguably the most prepared public infrastructure to adapt to such developments, as proposals for quantum-resistant upgrades have been on the table for years. And if we ever reached the point where quantum computing could feasibly threaten bitcoin, far larger targets—like global banking infrastructure and nuclear defense systems—would likely be the first points of attack.
Equally critical is the parallel growth of cryptographic technology. Just as hardware and software have advanced in tandem historically, encryption methods will evolve alongside quantum computing. Quantum-resistant algorithms are already under development in academic and open-source communities, and bitcoin’s upgrade model (via BIPs; Bitcoin Improvement Proposals) offers a tested pathway to implementing these defenses. Any substantial quantum leap in computing power would be met by a near-equivalent leap in cryptographic standards—meaning the network can proactively adapt well before any real threat materializes.
The big picture remains that short-term noise—whether it’s inflation scares, Fed policy, or quantum stock volatility—does not undercut bitcoin’s core proposition. It’s finite, has no counterparty risk, and stands as one of the best-performing assets in modern financial history. Crucially, bitcoin’s unique “sovereign game” invites participation from everyday citizens, corporations, and governments alike, all on equal footing. And with central banks seemingly trapped on a treadmill of debt issuance and potential money printing, the macro case for a non-sovereign store-of-value only grows stronger.
Chart of the Week
“After today’s release of economic data, risk assets are falling and bond yields are spiking as investors ask the all important question: are we about to see a resurgence of inflation? Is it Déjà vu all over again?”
— James Lavish on X (source image from Torsten Sløk of Apollo Global)
Quote of the Week
“Before we even address bitcoin’s staggering 2024 performance, it is worth noting a startling trend in traditional finance. In a year when only four top-tier hedge funds managed to beat the S&P 500 (+23.3%) and only two beat the Nasdaq (+28.6%), many investors still paid substantial management and performance fees for results that trailed these basic market benchmarks. This persistent underperformance is further underscored by the realization that the S&P 500 itself relies heavily on the outsized gains of seven mega-cap tech firms (more on this later)—driving home the point that complex investment strategies often fail to justify their costs. It’s worth noting that bitcoin’s analog predecessor, gold, delivered +27.2% on the year.
Against this backdrop, bitcoin delivered approximately 120% returns, eclipsing not only the S&P 500 but also the top hedge funds—and all other asset classes, for that matter (outside of a basket of quantum computing stocks). From our vantage point, this reveals a powerful truth: the simplest route to outpacing the ongoing debasement of fiat currencies is to buy and hold the best form of money. Rather than engineering intricate trading models or multi-layered derivatives strategies, simply accumulating bitcoin can provide long-term outperformance that challenges the very foundations of traditional portfolio management.”
Podcasts of the Week
The Last Trade E079: Onramp X Google Fiber in Nashville
In this special edition of The Last Trade recorded on December 2nd, 2024 in Nashville at Onramp’s private client event co-hosted with Google Fiber, this roundtable discussion with Michael Tanguma, Cam Doody, & Emily Trapani covers emerging tech, bitcoin, & Nashville’s role as an innovation hub.
The Last Trade E080: Corporate Catalysts & 2025 Outlook with Tim Kotzman
In this episode of The Last Trade, Tim Kotzman, host of the Bitcoin Treasuries podcast joins to discuss corporate adoption, MSTR & new BTC products, sovereign adoption, 2025 predictions, custody considerations, market structure & more.
Closing Note
Onramp provides bitcoin financial services built on multi-institution custody. To learn more about our products for individuals and institutions, schedule a consultation to chat with us about your situation and needs.
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Until next week,
Brian Cubellis