The Commodity Futures Trading Commission on Thursday sent a proposal to the White House to regulate crypto transactions and markets. 

It isn’t clear what the regulations will look like from the post on the Office of Management and Budget’s website. The proposal is titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets.”

The CFTC’s move comes after lawmakers blocked the long-awaited crypto legislation Clarity Act on Tuesday. Despite the law not advancing, both the CFTC and Securities and Exchange Commission have said they would go ahead with crypto rulemaking anyway. 

CFTC Chair Mike Selig said on Wednesday that while the Clarity Act didn’t move forward, the watchdog would still help U.S. President Trump “get the job done” in regulating the crypto space. 

“The outcome of yesterday’s Senate vote was unfortunate,” Selig wrote on X, adding that the CFTC was “locked in and ready to ship its rules for the new frontier of finance.”

Before the procedural vote on the legislation this week, Selig had said would proceed with rulemaking whether or not the Clarity Act is enacted — with the aim of finalizing rules before the administration’s term is out.

Senators last year approved Selig as the regulator’s chair. Formerly chief counsel at the SEC’s Crypto Task Force, Selig was described by White House’s Crypto and AI Tsar, David Sacks, as “instrumental in driving forward the President’s crypto agenda” 

President Trump campaigned on a ticket to help the crypto space after regulators under the previous administration hit digital asset businesses with lawsuits — mostly for allegedly selling unregistered securities. 

Since Trump became president, the SEC and CFTC have taken a much friendlier approach to watchdogging the space. 

The CFTC isn’t the only regulator going ahead with rulemaking: the SEC earlier this week approved tokenized stocks trading. In August, it also proposed its own framework for crypto asset offerings, pressing ahead while the landmark legislation stalled. 

President Trump last month urged lawmakers to pass the Clarity Act, calling the legislation “very powerful” — but Republicans said that Democrats were deliberately holding it back.  

Democrats mainly took issue with the ethics side of the bill. Trump received backing from major industry players while campaigning and since becoming president, his family has made money from digital asset ventures. 

Some lawmakers have alleged conflicts of interest. The White House has always denied any wrongdoing. 

A new draft of the bill started circulating in July tackling the issue of ethics and banning officials from making money from crypto. But some Democrats said it didn’t go far enough. 

The Clarity Act wants to formally divide oversight between regulators, distinguishing which digital assets are securities, commodities or stablecoins. 

This post CFTC Sends Proposal To Regulate Crypto Transactions Following Clarity Act Fail first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Bitcoin’s price on Friday shot above $81,000 — despite a week of setbacks for the crypto industry. 

The biggest coin was recently trading for $80,982, after jumping as high as $81,055 at one point Friday morning in New York. Over the past 24 hours, it has risen by nearly 6%. 

Its surge comes after lawmakers on Tuesday blocked long-awaited crypto legislation, the Clarity Act, and the Federal Reserve on Wednesday hiked interest rates. 

Digital asset industry bigwigs had long called for clear rules to regulate the crypto space and the Clarity Act — which wants to divide oversight between regulators — aimed to do that. But lawmakers blocked the landmark digital asset market structure bill in a procedural vote. 

And the Federal Reserve increased borrowing costs for the first time due to skyrocketing inflation in the U.S. The central bank’s chair, Kevin Warsh, said that price stability in the U.S. was the Fed’s number one priority. 

“The plain fact is that inflation is too high, and has been for too long,” Warsh said. “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”

Bitcoin has in the past done well in a low interest rate environment because it means there is more liquidity to trade the asset. 

While Bitcoin’s price dipped initially news of the Clarity Act blockage and Fed’s move, it shot up on Friday. 

Bitcoin exchange-traded funds in the U.S. have so far this week experienced net negative flows, with investors cashing out nearly $427 million from the vehicles, according to Farside Investors data. 

Flows on Thursday turned positive, with investors chucking nearly $160 million at the funds following two days of consecutive outflows. 

In a research note Thursday, asset manager Grayscale said that it didn’t expect bitcoin’s price to be hurt by the Fed’s decision because the move reflects a mid-cycle adjustment, not a cyclical change. 

And despite lawmakers blocking the Clarity Act, regulators like the SEC are already pushing ahead with pro-crypto regulation. 

This post Bitcoin Price Surges Over $81,000 Despite Clarity Act Fail and Interest Rate Hike first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Quantum computing is a risk to Bitcoin but the community recognizes the issue, according to asset manager VanEck’s Head of Digital Assets Research. 

Speaking to CNBC on Friday, Matthew Sigel said that while progress on addressing the issue may be slow because of the crypto network’s decentralized nature, the community was working on it. 

The crypto community has sounded the alarm about hypothetical advancements in quantum computers that could in the future be able to break Bitcoin’s cryptography. 

Some in the space — including Bitcoin developers — have started preparing for a post-quantum future by testing quantum-resistant signatures on live sidechains. 

“It’s a risk,” he said. “But the community has recognized the scope of the issue. There’s a lot of talent that’s now come together with a framework of how to upgrade the system.”

He added: “The upgrades don’t happen as fast because there’s no CEO who can tell the devs, ‘hey, do it now.’ There’s a governance process — it takes more time, it’s a little bit messier, but there are technological paths for quantum resistance, and I think you’ll see more of that over the next couple of years.”

Quantum computers do exist but make mistakes and a machine that can break Bitcoin’s cryptography currently does not exist. Bitcoin currently is the biggest computer network in existence. 

Major companies in the space — including America’s biggest crypto exchange, Coinbase, and Bitcoin infrastructure firm, Blockstream — are already working on solutions. 

Back in July, Coinbase said it plans to deliver a post-quantum signing pipeline using secure enclaves and threshold cryptography. 

A Bitcoin Security Consortium — made up of BlackRock, Fidelity Digital Assets, Block, and others — formed in July and donates funds and dedicates engineers to open-source work supporting proposals like BIP-360, which aims to introduce a new transaction output type to reduce long-exposure quantum computing risks.

This post Bitcoin Community Recognizes Quantum Computing Risk: VanEck first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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SALT Lending CRO Hunter Albright says a growing number of Bitcoin holders may eventually borrow against their bitcoin rather than sell it, creating a new relationship between bitcoin, credit and stablecoins.

Bitcoin-backed lending could become an increasingly important part of how holders access the value of their bitcoin without selling it, according to Hunter Albright, Chief Revenue Officer of SALT Lending.

Speaking on BMTV, Albright said he expects borrowing against bitcoin to become more common as the market matures and holders become more comfortable using bitcoin as collateral.

“I’d like to think we will see a growing percentage of the population of bitcoin holders borrow against it,” Albright said.

For Albright, that shift could also change how bitcoin and stablecoins function alongside one another.

“I do believe people borrowing against their bitcoin and leveraging stables is the difference between money in motion and money at rest,” he said. “The speed of conversion really creates a utility and advantage for people willing to operate in that ecosystem.”

In that framework, bitcoin increasingly becomes “money at rest” – an asset held for the long term – while stablecoins serve as “money in motion,” providing liquidity that can be transferred and used more easily without requiring holders to sell their bitcoin.

A Behavioral Shift for Bitcoin Holders

Getting there, however, will require more than simply building lending products.

Albright said greater education around both Bitcoin itself and the mechanics of borrowing against bitcoin will be necessary before the behavior becomes mainstream – something SALT Lending has made part of its own efforts in the market.

It also requires a change in how Bitcoin holders think about the value stored in their assets.

Instead of viewing bitcoin only as something to accumulate and eventually sell, holders can potentially use it as collateral to access liquidity while maintaining their bitcoin exposure.

That model is already common elsewhere in finance, where owners of real estate, equities and other assets regularly borrow against their holdings rather than liquidating them.

For Bitcoin holders, there can also be tax advantages. In the U.S., borrowing against an asset generally does not itself constitute a taxable sale, whereas selling appreciated bitcoin can trigger capital gains taxes. Individual tax consequences depend on the structure of the transaction and the borrower’s circumstances, readers should consult a tax advisor.

Albright sees that combination – long-term bitcoin holdings, growing stablecoin adoption and easier access to credit – as part of a broader shift in how Bitcoin holders may eventually use their wealth.

Rather than bitcoin needing to move every time its value is put to use, bitcoin can remain at rest while liquidity moves around it.

SALT Lending is the Official Liquidity Sponsor of BMTV. Learn more about borrowing against your bitcoin and explore SALT’s BMTV offer at https://saltlending.com/bmtv/?utm_source=bmtv&utm_medium=article&utm_campaign=52783658-BMTV%20article&utm_term=BMTV

Disclaimer: SALT Lending is a paid sponsor of BMTV and serves as BMTV’s Official Liquidity Sponsor. This article is sponsored content and does not necessarily reflect the views or opinions of Bitcoin Magazine. The information provided is for promotional purposes and should not be considered financial advice. Readers are encouraged to conduct their own research before making any investment decisions related to Bitcoin or other financial products mentioned herein.

This post The Next 3-5 Years of Bitcoin Lending first appeared on Bitcoin Magazine and is written by Josh Plischke.

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Two years ago, Bitcoin-backed digital credit barely existed. Today it’s a roughly $16 billion market and Dan Hillery of UXTO thinks the financialization layer on top of Bitcoin could one day rival the network itself. In the debut episode of The Allocators Edge, Hillery breaks down how variable-rate preferred securities like STRC and SATA are priced, why buybacks keep them anchored near $100 par, and what separates digital credit risk from digital equity risk. He also walks through the structured credit fund he’s building, including its senior and junior tranches.

0:00 — Digital Credit Is the Fastest-Growing Part of Bitcoin’s Capital Structure
1:18 — Why STRC’s Variable Rate Design Has No Precedent in Market History
2:59 — What Flat or Falling Bitcoin Prices Mean for Strategy and Strive
4:17 — Short-Duration Bitcoin-Backed Notes and the Next Five Years of Products
5:45 — The Biggest Misconceptions Investors Have About Preferred Securities
6:58 — How Buybacks and Capital Markets Activity Anchor STRC Near $100 Par
8:09 — Why Major Fund Classes Still Can’t Touch Digital Credit Today
9:10 — Inside the UXTO Credit Fund: Senior and Junior Tranche Structure
10:35 — Where the Leverage Comes From and How Volatility Risk Gets Transferred
11:50 — Liquidity, Redemptions, and Digital Credit in a 60/40 Portfolio

This video is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Past performance is not indicative of future results. Investments in digital assets involve significant risk and may result in loss of capital. Both UTXO Management and BTC Inc., producer of BMTV, are owned by Nakamoto Inc. (NASDAQ: NAKA)

DISCLAIMER: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine, or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax, or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

This post Dan Hillery: Digital Credit Could Rival BTC’s $1.5 Trillion Market Cap first appeared on Bitcoin Magazine and is written by Patrick Green.

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The U.S. is continuing to target Iran’s use of bitcoin. 

In a Thursday statement, the U.S. Department of the Treasury designated BitBank, an Iranian crypto exchange, as part of Operation Economic Outcast — the Trump Administration’s whole-of-government economic campaign against the Islamic Republic of Iran and its enablers. 

The U.S. has sanctioned Iran for decades. This year, the Middle Eastern country has stepped up its use of cryptocurrencies — including bitcoin — in order to skirt around economic penalties. 

“Today’s designations of Iranian digital asset infrastructure make perfectly clear that efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC’s reach,” Secretary of the Treasury Scott Bessent said in a statement. 

“If you support the Iranian regime, the Department of the Treasury will sanction you.”

The sanctions target designated Iranian financier Babak Zanjani, along with its software developer, Pishtaz Simorgh Electronic Trade Company, and three of Zanjani’s associates: Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein, and Seyed Adel Heidari.

Since June, the Iranian Hormuz Safe Marine Services Authority has used BitBank to move bitcoin to the Iranian regime, according to the Treasury. 

Thursday’s sanctions aim to hit the “architecture Zanjani built to launder funds,” it added. 

“The Department of the Treasury will continue to not only target the Iranian digital asset ecosystem, but also international entities and actors which help facilitate it,” the statement continued. 

Iran started a bitcoin-backed insurance service for its counties shipping companies earlier this year.

The U.S. in July said that it had frozen crypto linked to the Iranian regime, mostly in the form of Tether’s stablecoin. 

Stablecoins like Tether’s USDT can be frozen by the company that issues the asset. But bitcoin, being decentralized and having no single issuer, cannot. 

The U.S. Treasury’s Office of Foreign Assets Control in July said Iran had been dodging sanctions by accepting pay in bitcoin from ships passing through the Strait of Hormuz. 

OFAC said at the time that Hormuz Safe, developed by Iran’s Ministry of Economy, “accepts payment in Bitcoin and other digital assets” so it can bypass sanctions. 

This post Treasury Sanctions Iranian Crypto Exchange BitBank Over Bitcoin Transfers to IRGC first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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The Federal Reserve hiked interest rates for the first time since 2023 on Wednesday and it sent the bitcoin price — briefly — all over the place. 

But then it settled and currently sits a modest 1% higher over a 24-hour period. 

And according to asset manager Grayscale’s crypto research team, bitcoin is unlikely to be bothered by the Fed’s decision. 

“We believe yesterday’s move was a mid-cycle adjustment, not a cyclical change,” wrote the firm’s head of research, Zach Pandl, in a Thursday note. 

“And we doubt the one or two rate hikes expected for 2026 will lead to much change in capital allocation.”

Bitcoin has — in the past but not always — done well in a low interest rate environment. And when the Federal Reserve has in the past increased borrowing costs, the price of the leading digital asset has slid. 

That’s because low interest rates means more liquidity for investors to take risks and buy assets like bitcoin. 

Pandl added that when the Fed in 2022 started ramping up interest rates to contain inflation, it “probably weighed on the price of bitcoin” because it “meaningfully affected the opportunity cost of holding non-interest-bearing assets.” 

But this time feels more like 1997, argued Pandl, when the Federal Reserve did a one off hike and the Nasdaq kept moving higher.

Bitcoin’s price recently stood at close to $76,581, up 18% over the past 30 days. The coin  in August benefited from news that the U.S. Treasury would at least double the size of its liquidity-support buyback operations.

The U.S. is currently in the grips of an affordability crisis and inflation is hurting households as oil prices surge. 

Federal Reserve Chair Kevin Warsh said the central bank was focused on bringing down inflation. 

“The plain fact is that inflation is too high, and has been for too long,” he said on Wednesday. 

U.S. President Donald Trump has repeatedly said that he wants interest rates to be lower. Writing on his Truth Social platform on Wednesday, he said: “Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR.”

This post Bitcoin Price Unlikely To Be Bothered by Interest Rate Hike: Grayscale first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Bitcoin exchange-traded funds could be three times bigger than their gold counterparts as younger investors grow up, an ETF expert has said. 

Speaking to Bitcoin Magazine TV on Thursday, Bloomberg senior ETF analyst, Eric Balchunas, said that while bitcoin’s price is currently volatile, things would change in the future. 

Bitcoin ETFs debuted in 2024 after a decade of denials from the U.S. Securities and Exchange Commission. The ETFs had the most successful launch in the history of the products and currently manage nearly $100 billion in assets, according to Coinglass data. 

“I do believe the Bitcoin ETFs will triple gold in assets,” said Balchunas. 

“I always say Bitcoin is like gold as a teenager — you know, gold is 5,000 years old, it was mentioned 450 times in the Bible. I mean that’s old, and Bitcoin is 17 years old.” 

Balchunas went on to say that younger generations could end up being drawn to Bitcoin as the government continues to spend wildly and things become to expensive. 

He said that right now, Generation Z is rebelling against government deficits and inflation by voting for socialist politicians, but Bitcoin might be a better bet — because the government can’t confiscate it. 

One of Bitcoin’s selling points is its censorship resistance but investors appear to be more focused on buying the asset as a way of hedging against currency debasement. 

The so-called debasement trade was hot last year and is becoming popular again in 2026 as investors buy non-yielding assets like gold and bitcoin while the dollar becomes weaker. 

Balchunas added that as bitcoin’s price becomes less volatile, big institutions will be more interested in buying the asset as a store of value. 

Bitcoin in 2025 has its least volatile year in its short history. 

“As that volatility and correlation get closer to gold — look out,” he said. 

“I think that’s when you have the inflection moment where even the big institutions are like, okay, it’s finally ready for me to use as a sort of reliable store of value, possibly even a safe haven and an alternative.”

This post Bitcoin ETFs Could Triple Gold Counterparts as Asset Matures: Expert first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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The U.S. Securities and Exchange Commission has approved tokenized stocks trading in a move indicating that the regulator will push ahead with rulemaking despite the Clarity Act not moving forward. 

Wall Street’s top regulator said Thursday that it was offering a five-year exemption to platforms that facilitate trading of tokenized stocks. Major crypto companies have long wanted to get such assets on the blockchain. 

Lawmakers blocked the Clarity Act in a procedural vote on Tuesday. Regulators had said before the vote that regardless of whether the landmark legislation passed, they’d still start regulating the crypto industry. 

“Congress was unsuccessful in advancing the Clarity Act despite the tireless efforts of many,” SEC Chairman Paul Atkins said in a statement. 

“So today, the Securities and Exchange Commission is taking a significant step forward, within its statutory authority, to bring America’s capital markets into the digital age by facilitating onchain trading of certain tokenized stocks.”

Jamie Selway, Director of the SEC Division of Trading and Markets, added: “Today’s approval of exemptive relief for on-chain secondary trading on a TSV–known as the ‘Innovation Exemption’–marks an important milestone for the Commission’s work to open our capital markets for tokenized securities.”

The SEC’s move is the latest by regulators pushing ahead despite major crypto legislation stalling. The Commodity Futures Trading Commission Chair Mike Selig on Wednesday said that the top regulator would use its powers to advance crypto legislation despite the Clarity Act being blocked. 

The Clarity Act aims to formally divide oversight between regulators, distinguishing which digital assets are securities, commodities or stablecoins. 

President Donald Trump last month urged lawmakers to pass it but senators mostly voted against advancing the legislation — 49 for and 50 against — that the digital asset industry has long called for.  

Republicans for months have accused Democrats of deliberately holding back the bill. Some lawmakers had issues with Trump’s family making money from crypto ventures. Trump and the White House have always denied any conflicts of interest. 

This post SEC Green Lights Tokenized Stock Trading Despite Clarity Act Fail first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Top financial advisor Ric Edelman has compared buying bitcoin today to Amazon back in 1999. 

Edelman, founder of Edelman Financial Engines, told Bitcoin Magazine TV on Thursday that he also expects the price of the leading cryptocurrency to hit $500,000 by 2030.  

The leading cryptocurrency was recently priced at nearly $76,522 after jumping 1% over the past day. The coin had its best run in years in August after months of trading below $65,000 — significantly below its October record of $126,080. 

“Back in 1999, people were arguing over whether to invest in Amazon,” Edelman said. “Nobody has that argument — everybody owns it, and Bitcoin will have the same trajectory in the future.”

Regarding price, Edelman said that while he expects bitcoin to hit $500,000, it should reach a higher price if people end up allocating more than 1% of their assets to the coin. 

Edelman said: “If everybody in the world allocates 1% of assets to bitcoin, that translates to a $500,000 price — it’s really that simple.”

“You don’t have to go to a website and look at that arithmetic, and there’s nothing that I see that’s going to interfere [with my price prediction] — in fact, just the opposite.”

“I have a feeling we’re going to discover that my prediction is wrong on two counts: one, it’ll be more than $500,000, and second, it’ll probably be before 2030,” he continued. 

Edelman, a top American financial advisor and author has long been a bitcoin advocate. He told BMTV that he was mocked for telling people about the top cryptocurrency back in 2013. 

“I was booed off many a stage in 2013, 2014, trying to convey to my colleagues in the financial services field to pay attention to [Bitcoin],” he said, adding that most people in the traditional finance space now acknowledge at the very least that the asset is “here to stay.” 

This post Ric Edelman: Buying Bitcoin Today Is Like Buying Amazon in 1999 first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Peter Schiff says the bond market didn’t break recently, it broke in 2020, and everything since has been a slow unwind. Across this conversation with Grace Remington and Sean Hagan, he connects rising Treasury yields, the Fed’s expected rate decision, the dollar’s loss of purchasing power, and the central bank rush into gold. He argues that a stock selloff driven by higher rates would be deeply bearish for Bitcoin and the broader crypto market, and that political capital in Washington has already turned against it. The episode ends with Schiff and the hosts going head to head on whether anything actually backs Bitcoin.

00:00 — Peter Schiff says the bond market already broke in 2020
01:44 — How long the Treasury bear market could realistically last
04:18 — What Schiff would enact to actually bring inflation down
06:32 — Spending cuts, higher rates, and the recession nobody will accept
07:39 — Are we in the early stages of a dollar crisis?
08:26 — Rate hike odds and whether Warsh surprises the market
10:51 — Why Schiff calls it a cosmetic hike with no credibility behind it
12:33 — Why gold ran to 5,500 while Bitcoin lagged 23% off its highs
14:20 — Bitcoin priced in gold and the case that it peaked in 2021
17:29 — Tokenized gold vs Bitcoin: counterparty risk and what backs money

DISCLAIMER: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine, or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax, or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

This post Peter Schiff: “The Fed Has Already Lost The Battle Against Inflation” & BTC vs GOLD Debate first appeared on Bitcoin Magazine and is written by Patrick Green.

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Bitcoin’s price swung before settling largely unmoved over a 24-hour period after the Federal Reserve hiked interest rates — as expected — for the first time since 2023. 

The leading cryptocurrency was recently priced at nearly $75,813 after dropping as low as $75,355 in the hour after the U.S. central bank gave its decision to increase the benchmark federal funds rate to a range of 3.75% to 4%. 

Over a seven-day period, the coin is down nearly 4%. 

Traders had bet there was a more than 90% chance that the Fed would raise interest rates ahead of its September meeting. Major Bitcoin trades therefore likely happened before Wednesday. 

Speaking to reporters on Wednesday, Federal Reserve Chair Kevin Warsh didn’t reveal much about the central bank’s next moves but made it clear that price stability in the U.S. was its number one priority. 

“The decision we made today was a sober decision, serious decision, responsible decision, one that we have been preparing for and thinking about in my 110 or 120 days here,” Warsh said. 

He added: “The plain fact is that inflation is too high, and has been for too long. This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”

Wash — who has previously praised Bitcoin — said last month in his first major speech as head of the U.S. central bank that inflation was too high and had to be brought down. 

The new chair is seemingly going against President Donald Trump’s wishes; the president has repeatedly called for lower interest rates and even threatened to fire the ex-Chair of the Federal Reserve for refusing to do so. 

In a post on his Truth Social platform last week, the president wrote: “We should have the LOWEST RATE of any country in the World, like ‘the old days.'”

When asked by reporters about what he would say to the president, Wash replied: “I’ve got nothing for you on a discussion with the president.”

Bitcoin typically does well in a low interest rate environment because there is more liquidity to buy the asset. 

The U.S. is currently in the midst of an affordability crisis and war in the Middle East has pushed up the price of oil, in turn compounding the problem as the cost of everyday goods in the world’s largest economy rises.

This post Bitcoin Price Wobbles Before Settling After Fed Raises Rates  first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Commodity Futures Trading Commission Chair Mike Selig has said that the top regulator will go ahead and use its powers to advance crypto legislation despite the Clarity Act being blocked. 

In a Wednesday statement released on X, Selig said that the regulator would still help U.S. President Trump “get the job done.” 

Lawmakers blocked the Clarity Act on Tuesday in a procedural vote, with the long-awaited legislation missing the 60 votes needed to advance it. The bill aims to formally divide oversight between regulators, distinguishing which digital assets are securities, commodities or stablecoins. 

“Americans deserve regulatory clarity, legal certainty, and consumer protections in crypto asset markets,” Selig wrote. 

“President Trump promised to deliver a future-proof crypto asset regulatory market structure one way or the other, and we will help him get the job done using our existing statutory authorities.

“The U.S. is and will remain the crypto capital of the world. The CFTC is locked in and ready to ship its rules for the new frontier of finance.”

President Donald Trump last month urged lawmakers to pass the Clarity Act, calling the legislation “very powerful” — but Republicans said that Democrats were deliberately holding it back.  

Regulators are now more crypto-friendly since President Trump appointed them and took the White House and are widely expected to continue pushing rules that help the crypto space. 

The Securities and Exchange Commission last month proposed its own framework for crypto asset offerings, pressing ahead despite a vote on the Clarity Act stalling. 

Despite being passed by the House of Representatives last year, the Clarity Act was in a deadlock for most of this year after the banking lobby clashed with lawmakers and crypto businesses over whether platforms like Coinbase should be able to pay customers yield. 

Some lawmakers have sought to change wording in the bill regarding ethics, and a new bill started circulating in July. The draft bans government officials from promoting and making money from crypto. 

But other Democratic lawmakers said it still fell short; a number of pro-crypto Republicans accused Democrats of deliberately playing politics and delaying the bill. 

This post CFTC Chairman Says Agency Will Write Crypto Rules After Clarity Act Vote Fails first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Morgan Creek Capital CEO Mark Yusko has said that bitcoin’s fair value is $105,000 based on Metcalfe’s Law. 

Speaking on Bitcoin Magazine TV on Wednesday, the investment management firm said that now was the best time to buy the leading cryptocurrency as it is “on sale.” 

Metcalfe’s Law, an observation by Internet entrepreneur Robert Metcalfe, states that the value of a network is proportional to the square of the number of users. Bitcoin touched a high in October 2025 of $126,080 but was recently trading 40% lower than that, at $75,701. 

“So the fair value of bitcoin today, based on Metcalf’s law — Tim Peterson runs a model that tracks this really nicely — it’s about $105,000, but it’s $75,000,” Yusko said.  

“Okay, so it’s on sale — you should accumulate things that are on sale.”

Yusko went on to say that bitcoin was the best way to protect one’s value and that investing in companies wasn’t good for the long-term. 

“The problem is over a 30-year period, equity, 85% of companies disappear over 30 years. It’s amazing stat,” he said. 

“What you really need is something to protect your value — and historically, for 5,000 years, there was one asset: gold.”

“Now we’ve got gold and bitcoin,” he added. 

Bitcoin started rallying in August following news that the U.S. Treasury would at least double the size of its liquidity-support buyback operations. The announcement hurt the dollar but non-yielding assets have benefited.  

Since then, some experts have said that the so-called debasement trade — when investors buy an asset as a way to hedge against a currency losing value — is back and will benefit bitcoin. 

The trade was hot last year, and helped bitcoin’s run, but the digital asset lost steam after October as traders turned their attention to stocks related to artificial intelligence. 

This post Bitcoin Is on Sale and Should Be Accumulated, Says Morgan Creek Capital CEO first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Bitcoin’s quantum debate is quite a quagmire. This is not merely a technical debate regarding the trade-offs of different types of cryptography and their strengths against a theoretical quantum computer. It is a debate about which properties of Bitcoin’s ethos are strongest when it is faced with a difficult dilemma: uphold the promise that valid coins remain spendable by their owners, or favor supporting the security of the system by not allowing a significant portion of its monetary supply to be raided via a vulnerability that was well known for many years.

The conundrum at the crux of this controversy is that every serious option violates a principle that Bitcoin users care about. Doing nothing may preserve today’s consensus rules while allowing future quantum-capable actors to take coins whose owners never consented. Freezing vulnerable coins may prevent that theft, but it retroactively invalidates long-standing spending conditions. A forced migration to quantum-resistant signatures may be prudent engineering, but it can also look like a deadline-backed confiscation regime. The debate is ugly because there is no clean path that perfectly preserves property rights, economic predictability, censorship resistance, backward compatibility, and user sovereignty all at once.

This is why I consider the problem to be fascinating. It’s multifaceted: simultaneously technical, sociological, philosophical, and economic in nature. Thus any serious discussion of the problem must consider every angle.

Throughout this essay I’ll be making the case that the quantum migration debate is far more nuanced than just a question between freezing or not freezing vulnerable bitcoin. Rather, it’s a question of how to minimize total property-rights violations once elliptic curve signatures no longer reliably authenticate rightful ownership.

The Quantum Threat

Bitcoin’s current authorization scheme to ensure that funds are only spent by their rightful owners depends on elliptic-curve cryptography. Legacy ECDSA signatures and Schnorr signatures both use the secp256k1 elliptic curve. Under ordinary classical computing assumptions, deriving a private key from a public key is computationally infeasible. A cryptographically relevant quantum computer running Shor’s algorithm changes that assumption: once a public key is available, a sufficiently capable quantum attacker could derive the corresponding private key and sign a transaction to spend the funds that would be accepted as valid by the network. Quantum computers threaten to break the public-key-to-private-key hardness assumption behind ECDSA and Schnorr.

That distinction matters because not all Bitcoin outputs expose the same information at the same time. Some output types reveal a public key immediately and remain vulnerable indefinitely. Others hide the public key behind a hash until the owner spends. This creates two broad attack classes. A long-range attack targets outputs whose public keys are already visible on-chain, such as old pay-to-public-key outputs and Taproot outputs. A short-range attack targets coins at the moment of spending: the owner broadcasts a transaction, the public key becomes visible, and a fast quantum attacker attempts to derive the private key quickly enough to replace or front-run the transaction.

The mining threat is different. Grover’s algorithm can in theory speed up brute-force searching for a valid block hash, but it only provides a quadratic speedup while Shor’s algorithm provides a superpolynomial speedup. Thus the competitive advantage is far less practical to bother using a quantum computer for mining.

The Quantum Quantum Threat

Amusingly, the threat of quantum computers is itself in a quantum state of superposition. A quantum computer worth worrying about may or may not be built and no one can prove or disprove that it will happen. Quantum skeptics don’t dispute that Shor’s algorithm could break ECC. They claim there is no good reason to believe we will ever build the kind of powerful, fault-tolerant quantum computer needed to run Shor’s algorithm at a cryptographically relevant scale.

Everyone agrees that breaking ECC isn’t possible with today’s noisy quantum processors. It requires many reliable logical qubits, extremely low error rates, lengthy computations with high coherence, and quantum error correction running successfully at scale.

A strong skeptical argument is that the quantum fault-tolerance threshold theorem depends on assumptions that may not be physically satisfiable with the required precision. Such assumptions include sufficiently independent noise, sufficiently accurate gates, limited unwanted interactions, and the ability to keep errors below an acceptable threshold across a huge system. Mikhail Dyakonov argues that the theorem assumes idealized conditions and does not tell us the real engineering precision needed to satisfy every assumption in an actual device.

Gil Kalai’s criticism is more structural. His argument is that realistic quantum systems may suffer from correlated noise and noise accumulation that prevent the formation of high-quality quantum error-correcting codes. In his 2011 paper, he proposes that physical realizations of quantum codes, correlations in stochastic systems, and accumulated noise could lead to failure of scalable quantum computers.

This may be the strongest skeptic argument: quantum error correction works only if the noise is tameable. If real high-qubit systems generate adversarially correlated errors, then adding more qubits may very well make the computer more fragile and unreliable.

Quantum scalability is a major unknown. Skeptics argue that progress from 50, 100, or 1,000 physical qubits does not automatically extrapolate to millions of physical qubits or thousands of logical qubits. Quantum systems are analog, delicate, and coupled to their environment. The engineering challenge is not just “make more qubits”; it is “make more qubits while suppressing crosstalk, leakage, correlated errors, calibration drift, thermal effects, measurement errors, fabrication variation, and control noise.” This is why critics reject simple timeline extrapolations. They view “we increased qubit count by X this decade, so we will break ECC by year Y” as weak reasoning.

Finally, quantum computer demonstrations have shown that current devices can only outperform classical simulations on carefully selected sampling tasks. Critics have a good point that this says little about executing long, structured algorithms like Shor’s algorithm with enough reliability to recover a 256-bit ECC private key.

Why Post-Quantum Migration Matters

Assuming that a cryptographically relevant quantum computer appears, merely adding the option for Bitcoiners to use post-quantum cryptography won’t be sufficient to stop a quantum attack. The total set of quantum-vulnerable bitcoin includes early pay-to-public-key coins, coins controlled by reused public keys, Taproot outputs, and cases where public keys or extended public keys have been revealed outside the chain. One striking figure is the concentration of BTC in old P2PK outputs, which are a tiny fraction of UTXOs by count but represent a much larger share of value, about 1.7 million BTC. Broader estimates via on-chain analysis of output types, activity patterns, and known ownership lead us to believe that at least 2.6 million BTC would remain vulnerable even if all active Bitcoin users migrated their wallets to post-quantum cryptography.

As such, even with opt-in post-quantum (PQ) cryptography, we should expect there to be a systemic risk sized pool of vulnerable coins lingering indefinitely. These coins could be employed by a quantum attacker to harm the system in a wide variety of ways – not just via selling them and dropping the spot price of BTC. Thus, protecting those vulnerable coins from a quantum threat requires some sort of rule changes that would effectively “lock out” a quantum attacker.

The rhetoric around this issue often uses terms like “confiscation,” “burning,” “freezing,” “stealing,” or “recovery,” but these describe different mechanisms. A freeze would not transfer coins to the state, miners, developers, or some recovery fund. In its most basic form, it would mean changing consensus rules so that certain outputs can no longer be spent using vulnerable ECDSA or Schnorr signatures. That is why advocates sometimes say “burn” rather than “confiscate”: the coins are not reassigned; they become unspendable via their private key. But for a rightful owner who still has the original key, the practical effect can still feel confiscatory: a spend that used to be valid is no longer valid.

BIP-361 divides the migration concept into phases. First, once a quantum-resistant address type exists, the Bitcoin network would stop allowing new coins to be sent to quantum-vulnerable addresses. Later, after a multi-year window, legacy ECDSA and Schnorr spends would become invalid. Finally, there remains the question of recovery options for users who can prove, without solely relying upon broken ECC, that they are the legitimate owner – such as through a zero-knowledge proof derived from a seed phrase or HD wallet structure. The proposal’s primary purpose is not to pick a post-quantum signature algorithm; rather the goal is to create incentives and deadlines so that users, exchanges, custodians, wallets, and institutions actually migrate in a timely fashion and thus allow us to deprecate ECC in order to prevent a quantum attack.

The Case for Freezing

The strongest pro-freeze argument starts from a simple claim: a quantum attacker who derives a private key from a public key is not the legitimate owner in any morally meaningful sense. Under this view, “just let vulnerable coins be taken” is not neutrality; it is allowing a new class of actors to loot old outputs because the protocol failed to strengthen a lock that is known to be weak. Freeze advocates argue that the resulting harm from allowing quantum theft is not just to negligent owners but to all holders, because a successful quantum sweep would redistribute wealth to whoever possesses early quantum capability. This is problematic because that amount of bitcoin in a single actor’s hands who spent relatively little resources to obtain them can be quite dangerous for the ecosystem’s security. Bitcoin’s security model assumes economically rational participants that are incentivized to protect the value of their coins, but a quantum-capable actor has the potential to break that assumption. The pro-freeze position is that Bitcoin should not reward the first entities to break ECC with ammunition that could be leveraged to harm the system.

This argument is especially true for coins believed to be lost. If lost coins are suddenly recoverable by quantum attackers, the circulating supply effectively increases. That does not violate the formal 21 million cap, but it does change the economic landscape: coins that the market may have treated as inert can re-enter circulation, possibly rapidly and in concentrated hands.

The pro-freeze side also argues that the threat is not limited to ordinary profit-seeking. A quantum-capable adversary could attack Bitcoin politically, destabilize markets, undermine public confidence, grief the network for many years, or even acquire enough hashrate to 51% attack the network. Analysis of the game theory in play shows that we can’t simply assume an attacker sweeps vulnerable BTC to sell it and ride off into the sunset; there is a far wider range of strategies and undesirable outcomes.

A related argument is about market panic. Pieter Wuille’s comments in the mailing-list debate sharpen this point: the medium-term danger may be not only an actual cryptographically relevant quantum computer, but the credible belief that one may exist soon. If markets come to believe that a large share of Bitcoin’s supply can be seized at any moment, merely offering voluntary post-quantum outputs may not be enough to restore confidence. A credible plan to disable vulnerable spends could itself be a sufficient reassurance mechanism.

The pro-freeze camp also sees deadlines as necessary because voluntary migration is likely to be slow. People procrastinate; institutions move slowly; hardware wallets, exchanges, custodians, estate plans, multisig coordinators, and cold-storage procedures all need time to implement changes and plan for migrations. Matt Corallo has argued that Bitcoin should add a simple post-quantum capability well in advance of it being necessary, because wallets need to start embedding or committing to quantum-resistant public keys long before any later emergency decision about freezing vulnerable UTXOs becomes credible.

There is also a fiduciary responsibility argument. Public companies, ETFs, custodians, and exchanges will be unable to ignore a known migration deadline. A locked-in consensus change gives compliance departments and risk committees something concrete to act on. It also turns an abstract future threat into a project plan: upgrade software, generate new addresses, move funds, verify backups, communicate with customers, and complete migrations before a known date. BIP-361 explicitly argues that exchanges and custodians would face fiduciary and legal pressure to act once a deadline exists.

It’s also worth noting that all of this migration planning is applicable to more situations than just the emergence of a cryptographically relevant quantum computer. Most of the arguments in this debate apply to ANY situation where ECC is known to have been weakened. Generally speaking, cryptography tends not to withstand the test of time and any given cryptographic algorithm tends to be weakened over long time frames (decades) as researchers find flaws and develop new techniques that break prior assumptions.

Finally, freezing advocates argue that Bitcoin has always depended on users enforcing rules that protect the system as a whole. A soft fork that objectively disables a known-insecure spend path is not the same as arbitrary political confiscation, in their view. The proposed line is not “these people are disfavored” but “these script types require cryptography that no longer meets the bar for Bitcoin’s security assumptions.” If the rule is mechanical, objective, announced years in advance, and paired with a viable migration path, proponents argue that it is more akin to replacing a broken lock than blacklisting an owner.

Anti-freeze Arguments

The strongest anti-freeze argument starts with the opposite premise: Bitcoin’s social contract is that a valid coin remains spendable by the holder of the corresponding key under the consensus rules accepted when the coin was received. Retroactively invalidating that spend path crosses an inviolable line. It turns “not your keys, not your coins” into “not your upgraded-by-deadline, not your coins.” Even if no one else receives the frozen coins, the original owner loses practical control. That is why critics describe forced freezing as confiscatory, not merely protective.

This objection is not just sentimental. Bitcoin’s credibility depends heavily on the expectation that developers and node operators will not pick winners and losers among UTXO owners. A freeze aimed at “vulnerable coins” may be technically objective, but it still targets a subset of owners based on past address choices, wallet design, dormancy, or inability to act. Critics worry that once the network accepts retroactive invalidation for one reason, future coalitions may find other reasons: sanctions, theft recovery, inheritance disputes, state pressure, “obviously” lost coins, or other emergencies.

A second objection is that freezing cannot distinguish between lost coins, careless owners, dormant owners, imprisoned owners, dead owners with heirs, users in hostile jurisdictions, timelocked arrangements, forgotten cold storage, and deliberately long-term savers. Bitcoin has many users whose goal is to avoid being forced to stay online and responsive to policy changes. A person who stored coins safely for decades should not necessarily lose them because the rest of the network later declared their storage method obsolete. It’s worth noting that there is an incentive conflict between active current holders who benefit from reducing the effective supply and inactive rightful owners who may be unable to take action to defend themselves.

A third objection is uncertainty. A cryptographically relevant quantum computer may arrive later than expected, may not arrive in the form feared, may remain secret for some time, or may be countered by less drastic tools. If Bitcoin permanently burns millions of coins and the threat does not materialize on the assumed timeline, the network will have committed an irreversible self-inflicted property-rights violation. Critics therefore argue that premature freezing is worse than measured preparation.

A fourth objection is governance and legitimacy. Freezing vulnerable coins would be one of the most controversial consensus changes in Bitcoin’s history. Some have warned that announcing a freeze of old UTXOs could damage Bitcoin’s image more than a quantum attack itself and could produce a major fork in which one side accepts the freeze and another preserves old spendability. In that scenario, the “solution” creates a new political attack surface: exchanges, custodians, miners, and users must choose which chain’s property-rights model they prefer.

A fifth objection is legal risk. Some participants in the mailing-list debate warned that developers, companies, or miners involved in consciously changing code to freeze funds could face liability claims from owners whose coins become unspendable. Even if those claims ultimately fail, the legal process itself could chill development, divide institutions, and make consensus coordination harder.

A sixth objection is technical humility. Post-quantum cryptography is real, but not free. NIST has standardized ML-DSA, SLH-DSA, and ML-KEM, with more work continuing, yet Bitcoin has unusual constraints: every byte matters, verification cost matters, wallet compatibility matters, and consensus failures are catastrophic. Chaincode’s comparison of candidate schemes in their quantum deep dive report shows why the choice is not trivial: post-quantum signatures and keys can be much larger than Schnorr or ECDSA, and schemes differ sharply in maturity, signature size, public-key size, signing cost, verification cost, and assumptions.

That makes critics wary of forcing migration before the destination is mature. A bad post-quantum migration could reduce throughput, raise fees, bloat the UTXO or witness data burden, introduce new cryptographic assumptions, or force another migration later if the chosen algorithm weakens. Conventional Schnorr signatures are tiny compared with many hash-based post-quantum signatures, while lattice based cryptography has other trade-offs and maturity questions. On a related note, given the larger data sizes of signatures, this will increase the cost of transacting on chain and could price out less wealthy users.

Doing Nothing vs Doing Something

As I stated over a year ago in my first essay on this topic: if quantum computing becomes a threat to Bitcoin’s elliptic curve cryptography (ECC), an inviolable property of Bitcoin will be violated one way or another.

You’re probably familiar with the fundamental principle coined by Andreas Antonopoulos:

“Not your keys, not your coins.”

I posit that the corollary to this principle is:

“Your keys, only your coins.”

The point is that keys don’t merely authorize spending, but that signatures are supposed to be unforgeable evidence of control by the legitimate keyholder. A quantum-capable entity breaks the corollary of this foundational principle. We secure our bitcoin with the mathematical probabilities related to extremely large random numbers. Your funds are only secure because truly random large numbers are safe from being discovered by anyone else in the world.

The do-nothing position is often caricatured as “let quantum thieves steal everything.” Taking a noninterventionist stance against quantum theft is certainly principled: Bitcoin is a voluntary bearer asset governed by rules, and users are responsible for managing known risks. If a coin is encumbered by a script that becomes weak over decades, perhaps that is no different from losing a seed phrase, using weak entropy, trusting an insecure custodian, or failing to follow any number of other best practices. Under this view, the network’s job is not to guarantee the security of every historical locking script forever; rather it’s to enforce the rules as written.

This camp can also state that total supply is the only guarantee of the network, not effective circulating supply. The 21 million cap does not say “21 million minus coins assumed lost.” It says no more than 21 million coins will be issued. If a lost-looking coin later moves because its key is found, inherited, cracked through poor entropy, or recovered through quantum attack, the total issued supply has not changed. That argument is unsatisfying to people who see quantum funds sweeping as theft, but it is internally consistent: protocol rules define validity, not subjective moral beliefs about rightful ownership.

The do-nothing side also values operational simplicity. Any freezing rule requires defining what constitutes a vulnerable bitcoin redeem script, choosing activation dates, coordinating wallets and miners, communicating to users, handling edge cases, and absorbing political fallout. Doing nothing avoids a contentious consensus change. If post-quantum tools become available, users who care can migrate voluntarily, while users who do not migrate bear their own risk.

But the weakness of the “pure do-nothing” perspective is that it treats quantum theft as an individual-risk problem when it may actually become a system-risk problem. If enough coins are exposed, and if the market believes a capable attacker can use them to harm the ecosystem, the damage is not confined to owners who failed to migrate. It affects public confidence in the system which then cascades into negative pressure on the exchange rate, thermodynamic security (miner revenue,) and the revenue of many Bitcoin businesses. That is why even many people uncomfortable with freezing still support early preparation.

Apathetic “code is law” Bitcoiners are free to do nothing, but they should not delude themselves into thinking that they can stop others from trying to do something.

Alternative Proposals

Because “freeze all vulnerable UTXOs” and “do nothing” are both brutal in their own ways, much of the interesting work is in alternative proposals that would help users retain their property rights in the face of a quantum threat.

1. We could prevent new vulnerable outputs while not yet freezing old ones. This is the least coercive part of forced migration. Once a safer output type exists, consensus or policy rules could discourage or even disallow sending bitcoin into vulnerable locking scripts. That reduces future damage without immediately invalidating old property claims. BIP-361 includes this as Phase A, and several critics are more open to this kind of forward-looking restriction than to permanent retroactive burns.
2. Alternatively, the network could enforce a temporary lock rather than permanent burn. Boris Nagaev suggested that if old EC spends must be disabled, the lock could include a future re-enable height or some other mechanism that gives the community time to build recovery paths. Conduition explored how such a phase might interact with P2QRH/P2MR-like outputs and warned that simply banning all EC checks could accidentally affect hybrid constructions unless the rule is designed carefully. The appeal of a temporary lock is political as much as technical: it signals emergency containment rather than permanent confiscation.
3. Another option is rate-limiting, represented by the Hourglass proposal. Hourglass V2 focuses on old P2PK coins and would restrict spending so that only one P2PK input could be spent per block, with a net limit of one BTC per block from those outputs. Its authors present it as a way to avoid both immediate burning and unconstrained quantum liquidation: coins are not destroyed, but their ability to flood the market is throttled. The proposal estimates that unconstrained P2PK sweeping could be extremely fast, while the one-BTC-per-block design would stretch full P2PK movement over decades.
   
   Hourglass has its own critics. Opponents argue that it still violates permissionless spending by imposing special restrictions on a class of otherwise valid coins. It may also create a long-running race between legitimate owners and quantum attackers rather than resolving ownership. Some critics say that if the quantum threat is real, taking decades to clear exposed P2PK outputs gives attackers plenty of time; if the threat is not real, the rule is needless interference.
4. There is the concept of commit-delay-reveal, sometimes discussed through Guy Fawkes-style constructions. The basic idea is that a user first commits to a future spend in a way that a quantum attacker cannot exploit immediately, waits for the commitment to become deeply confirmed, and later reveals the secret needed to validate the spend. This can prevent a short-exposure quantum attacker from seeing a public key and instantly stealing the coin before confirmation. Chaincode describes commit-delay-reveal as opt-in and potentially useful, while the Optech summary notes that these schemes can let safely spendable bitcoins avoid destruction and reduce migration urgency.
5. Quantum safe funds recovery without EC signatures, especially for HD wallets, should be feasible. Or Sattath and others discussed “signature lifting” ideas where the owner proves knowledge of a seed or derivation path rather than proving control through the vulnerable public key. Olaoluwa Osuntokun built a proof-of-concept using zk-STARKs to prove that a Taproot BIP-86 output key was generated from a BIP-32 seed path. This would certainly be a last resort scenario for procrastinators to recover funds, given that the latest optimized version of the scheme requires a 200 KB proof. It would certainly price out recovery of small UTXOs, because a best case scenario would likely cost several hundred dollars in transaction fees but could easily run into the thousands or tens of thousands at higher transaction fee rates.
   
   This recovery path is attractive because it changes the moral shape of the debate. If rightful owners can later recover frozen coins through non-EC proofs, freezing no longer has to mean permanent destruction. But the costs are serious: large proofs, complex verification, privacy leakage, wallet-derivation assumptions, inability to cover every historical wallet type, and the danger of adding novel cryptography to Bitcoin consensus. Critics of the zk-STARK approach emphasized that megabyte-scale proofs and multi-second verification times are difficult to reconcile with Bitcoin’s conservative design.Though further research is already finding optimizations that are more efficient.
6. Dual-signature or market-driven migration. Marc Johnson and others suggested enabling quantum-resistant outputs, allowing optional dual signatures, giving fee or policy incentives, and letting users choose their own risk instead of imposing a hard loss deadline. This approach preserves property rights better than forced freezing, but it won’t solve the systemic-risk problem if too many high-value coins remain exposed.

Tricky Technical Trade-offs

The migration debate cannot be fully separated from the choice of quantum-resistant signatures because the size of signatures will affect the system throughput. NIST’s post-quantum standards provide a serious foundation: FIPS 204 standardizes ML-DSA, FIPS 205 standardizes SLH-DSA, and FIPS 203 covers ML-KEM for key establishment. But Bitcoin needs digital signatures and script-compatible ownership proofs, not just general-purpose cryptographic standards. A scheme suitable for TLS or government communications is not automatically ideal for a blockchain with limited block space and global verification requirements.

Hash-based signatures are conservative and appealing because their assumptions are simple, but they are large. Lamport-style signatures can be enabled in some form with script upgrades such as OP_CAT, but the Taproot key-path problem remains: if a Taproot output has a quantum-vulnerable key path, placing a Lamport signature in the script path does not make the whole output quantum safe unless the vulnerable key path is removed or disabled. BIP-347’s OP_CAT discussion explicitly notes this problem.

Lattice signatures such as ML-DSA offer more compact signatures than many hash-based options, but they bring different assumptions and implementation risks. Falcon-style signatures are compact but historically more delicate to implement. SPHINCS+/SLH-DSA is conservative but large. Experimental schemes may be attractive on paper but too immature for Bitcoin consensus. This is why a credible migration plan likely needs algorithm agility, test deployments, wallet experiments, careful fee modeling, and perhaps multiple acceptable post-quantum paths rather than a single rushed winner.

The block space problem is severe but not intractable. Chaincode estimates that migrating all UTXOs would take roughly 76 to 142 days if migration consumed all block space, and 305 to 568 days if it consumed 25% of block space. That is just raw migration throughput; it does not include human coordination, wallet upgrades, institutional approvals, support for air-gapped signing, hardware replacement, accounting workflows, etc.

A full timeline for UTXO set migration is measured in years, not weeks. Chaincode’s high-level estimate sketches a best case of roughly five years and a worst case closer to fifteen years for research, BIP work, implementation, deployment, and migration. The same report notes that in an emergency the timeframe could potentially be accelerated to 2 years, but historical emergency protocol fixes are not really analogous because the quantum migration problem touches every layer of the ecosystem.

The Ethics of Property Rights

The moral disagreement comes from two competing definitions of ownership.

The anti-freeze side supports a “code is law” perspective: ownership means control under the consensus rules. If an output is spendable by an ECDSA or Schnorr signature, then disabling that spend path violates the owner’s property rights. The network does not know whether a coin is lost, abandoned, inherited, intentionally dormant, or inaccessible for temporary reasons. Therefore, freezing is collective punishment imposed on a subset of users for failing to follow a new migration demand.

The pro-freeze side says ownership cannot mean “anyone who can break the cryptography gets the coin.” Bitcoin’s signatures are intended to authenticate the legitimate keyholder, not to create a prize for whoever first builds a machine that defeats the authentication scheme. If quantum capability turns public keys into private keys, then an EC signature no longer carries the same moral information it carried before. Under this view, refusing to freeze is not neutrality; it is a security failure to knowingly allow a compromised authentication mechanism to transfer wealth.

Both positions are coherent. The first protects rule stability and bearer-asset finality. The second protects the deeper intent of the locking script. The painful point is that Bitcoin’s consensus rules are the only practical arbiter. The protocol cannot read intent. It can only accept or reject transactions according to rules. Any attempt to encode “rightful ownership” after ECC breaks either becomes overly broad, relies on new proofs, or leaves some victims behind.

I submit that property rights have been violated on Bitcoin before. Allow me to introduce you to the Value Overflow Incident as it is commonly known.

On August 15 2010, it was discovered that block 74,638 contained a transaction that created 184,467,440,737.09551616 bitcoin for three different addresses. Two addresses received 92.2 billion bitcoins each, and whoever solved the block got an extra 0.01 BTC that did not exist prior to the transaction. This was possible because the code used for checking transactions before including them in a block didn’t account for the case of outputs so large that they overflowed when summed.

A new version of the client was published within five hours of the discovery that contained a soft-forking change to the consensus rules that rejected output value overflow transactions. The blockchain was forked. Although many unpatched nodes continued to build on the “bad” blockchain, the “good” blockchain overtook it at a block height of 74,691 at which point all nodes accepted the “good” blockchain as the authoritative source of Bitcoin transaction history.

The bad transaction no longer exists for people using the chain with the greatest cumulative proof of work. Therefore, the bitcoins created by it do not exist either.

Thus, from a pure property rights perspective, the person who followed the rules of the network at the time had their property confiscated from them because the overwhelming majority of other actors on the network considered their action to be undesirable and a threat to the network.

Anti-freeze folks will likely say that this is not a problem because the INTENT of protocol rules is what matters, and the intent was for the network to guarantee a maximum supply of 21 million BTC. I would tend to agree, and make the counter-claim that the INTENT of using ECC to secure BTC is to ensure that it’s infeasible for anyone to guess your private key.

Economic Stakes

A sudden sweep of funds by a quantum-capable entity could affect Bitcoin through several channels.

1. Coins thought dormant would re-enter circulation, increasing the effective bitcoin supply.
2. Markets could panic before any actual sweep if credible evidence appears that a CRQC exists or is near.
3. Miners could be affected if price falls sharply, because their budget is tied to block subsidies and fees in BTC terms converted into operating revenue.
4. Exchanges and other businesses could face operational stress and massive drops in revenue if customer deposits are exposed or if market structure breaks under uncertainty.

“Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.” – Satoshi Nakamoto

If true, the corollary is:

“Quantum recovered coins only make everyone else’s coins worth less. Think of it as a theft from everyone.”

If a large amount of BTC is permanently lost, remaining holders benefit from a lower effective circulating supply. If quantum attackers revive those coins, remaining holders lose that benefit. Critics of freezing respond that this is exactly why active holders have a conflict of interest: they may prefer burning dormant coins because it makes their own coins scarcer. That is not a trivial objection. A freeze can be framed as protecting the network, but it can also be framed as enriching active holders at the expense of inactive ones.

That conflict is why the specific definition of vulnerable coins matters greatly. Freezing only ancient P2PK outputs with already exposed public keys is easier to justify than freezing every vulnerable output, because the funds are far more likely to be lost. Freezing Taproot outputs is more complicated politically because Taproot is recent and intentionally adopted by users who were following modern wallet guidance. Freezing reused outputs raises another problem: the vulnerability may come from user behavior rather than address type. Freezing based on on-chain public key leakage is also a half measure because the chain can not know what was leaked off-chain; many wallets share their xpubs with third parties, for example.

A broad freeze could therefore be both underinclusive and overinclusive. It could miss off-chain exposed keys while capturing dormant but legitimate owners. A narrow freeze could reduce the worst risk but leave enough vulnerable value to sustain panic. This is why I believe the optimal solution is complex and requires a multi-phased approach, rescue proofs, and objective script rules rather than discretionary address lists.

Herding Cats

Bitcoin is an anarchic system of rules without rulers. It has no authority that can dictate changes to consensus rules. A rule to deprecate ECC would need broad agreement among node operators, miners, exchanges, wallets, custodians, merchants, and users. In formal terms, many proposals are soft forks: they make previously valid spends invalid under stricter rules. But in social terms, a soft fork that disables old coins is much heavier than an ordinary tightening rule. It directly affects property expectations.

This governance problem gets worse under emergency conditions. If Bitcoin waits until there is credible proof of a CRQC, the community may have to act during panic, misinformation, market stress, and adversarial pressure. But if Bitcoin acts too early, it risks freezing coins before the threat is real enough to justify it. Chaincode explicitly warns that planning and communication should happen before the threat becomes acute, while also acknowledging that stakeholder coordination, regulation, taxation, and user communication are major obstacles.

This creates a paradox. The best time to design a quantum migration is before it is urgently needed. The hardest time to persuade people to accept controversial measures is also before they are urgently needed. Once the emergency is obvious, technical and social options narrow dramatically. In short, because: Bitcoin moves slowly, some action must happen before the relevant computer arrives if we want a non-chaotic outcome.

A credible process therefore matters almost as much as the final rule. The community would need clear definitions, simulations, reference implementations, wallet support, testnet deployments, activation thresholds, recovery research, and communication to nontechnical users. Without that, an ECC deprecation proposal would look like coordination against dormant holders. With it, even opponents could at least evaluate concrete trade-offs instead of reacting to abstractions.

Governance Game Theory

The threat of a quantum attacker is similar to The DAO incident that Ethereum had to deal with in 2016. In other words: the ecosystem had time (about a month) to take action to stop an attacker from getting away with taking ownership of 5% of all ETH at the time. For 5% of all ETH to go into the hands of a malicious actor was considered to be a systemic risk.

To put this in context, from my own analysis of the blockchain I think a reasonable estimate for the number of lost coins with exposed public keys is roughly 2,600,000 BTC, or 13% of the current total supply. In other words, this is about how much BTC I expect would be unable to migrate to a quantum safe locking script if we come to consensus on implementing a post-quantum signature scheme.

However, note a crucial difference between the DAO situation and this one. With the DAO, the Ethereum community had to hard fork in order to regain control of stolen tokens. With a BIP-361 style change, it would be a soft fork. Which is to say:

Opposing the DAO fork was relatively easy: needed not to do anything and stayed on the chain with the original set of rules. That chain is now known as Ethereum Classic.

Opposing a quantum migration soft fork, assuming it has a supermajority of hashrate, would require dissenting users to coordinate a User Rejected Soft Fork, which has never been done before.

The Slippery Slope of Centralization

Some have stated that a forced migration proposal like BIP-361 is untenable because it would set precedent for “centralized planning” over who gets to use Bitcoin. In other words, this could lead to similar types of freezing to stop anyone who is considered a “bad actor” from using the system, such as in response to major thefts and hacks.

We already know that nothing about Bitcoin’s rules is truly immutable. It’s not possible to create a protocol that is impossible to change – the best you can do is to align incentives that make it unlikely to change. In the case of proposing changes as controversial as altering ownership / the money supply, you should expect that such proposals only have the slightest glimmer of being accepted if the alternative is expected to be detrimental to nearly all Bitcoiners.

As for the claim that it will lead to protocol-level confiscation in response to hacks and such, it’s simply not possible for an ecosystem as distributed as Bitcoin to coordinate a response fast enough to outpace an individual actor. To be more precise: trying to blacklist a specific address / set of addresses is infeasible because the “target” of such a protocol-level blacklist would simply move their funds faster than the ecosystem could coordinate freezing them.

Prior Precedents

The DAO was a special case in which a decentralized community actually had time to react to a massive theft, because The DAO’s smart contract essentially had a “cooldown rule” that made them have to wait for a month after initially redirecting funds into their own control before they could send them anywhere else, such as to “cash out.” As such, there was time to gather consensus from the wider ecosystem (they even conducted coin voting) in order to pass a pretty controversial hard fork.

What was the end result? We can actually observe how the market reacted. Despite all of the controversy, the economic reality was clear. Ethereum Classic, which abided by “code is law” and “do nothing” perspective, allowing the attacker to retain control of 5% of the network’s tokens, struggled to even reach 10% of the market value of interventionist Ethereum, which changed the rules of the network in order to return funds to their rightful owners.

As previously mentioned, Bitcoin also had the Value Overflow Incident in which bitcoin created by someone who was just “following the rules of the protocol” had them taken away by a coordinated consensus change.

These are stark examples of why I believe that economic incentives can and will trump moral and philosophical principles. Some will surely say that Ethereum and Bitcoin have little in common, and it’s certainly true that these different networks tend to have very different ethos and driving factors. But from an economic perspective, they share the same incentive structures with regard to a malicious entity controlling a substantial portion of the market cap. Bitcoin in 2026 is a very different ecosystem from Bitcoin in 2016. Consider all of the new entrants, many of which did not adopt BTC as a result of the libertarian standpoint.

It’s a pretty tough sell to get mainstream audiences to believe that bad actors should not be stopped if there is a means to do so. It’s an even tougher sell to tell companies and institutions that are making millions if not billions of dollars off of managing an asset that they should stand idly by and watch an existential threat to their business line carry out an attack that can be prepared for not just months, but potentially years or decades ahead of time.

Framing Matters

I think the worst possible framing of this debate is “quantum safety versus irresponsible users.” That trivializes the property-rights objection. Another terrible framing in my mind is “freezing is always theft, therefore no preparation is needed.” That trivializes the systemic-risk problem and overlooks the options we have to help protect property rights.

Matt Corallo has astutely pointed out that the debate over deprecating the use of vulnerable signatures is interesting because it can be framed in very different ways that sound the same on the surface.

1. “Protect people’s property rights to the greatest extent possible.”
2. “Don’t freeze anyone’s coins.”

The first perspective supports freezing ECC spends while also adding the maximum number of ways to safely recover funds (BIP-32 proofs, pre-Q-day commitments for non-BIP-32 wallets and timelocked coin wallets, etc).

The second stance actually minimizes the number of people who get to keep their coins and maximizes theft exposure. But it’s far simpler and avoids a controversial fork.

Thus I think this is not a binary debate of “to freeze or not to freeze.” Rather, a superior framing of the problem is: what is the optimal set of rules that minimizes property rights violations under conditions where the original cryptographic authentication mechanism is no longer reliable to authenticate rightful ownership?

Under that framing, deprecation of ECDSA signatures becomes more defensible if several conditions are met.

1. There must be a widely reviewed quantum-resistant destination. Users cannot be coerced to migrate into a half-baked or experimental mechanism. The destination may be P2MR plus future PQ script paths, a standardized and well-vetted PQ signature type, a commit-reveal construction, or a hybrid. But it must be usable by ordinary wallets and institutions, not just technically imaginable.
2. The migration window must be long enough for real-world users. Our block space throughput estimates show that raw transaction capacity is only one bottleneck. A serious deadline must account for wallet upgrades, hardware devices, multisig coordination, inheritance, institutional controls, cold storage logistics, and fee spikes. A five-year window may sound long in software terms but may be short for global bearer-asset migration.
3. The deprecation rule should be as objective and narrow as possible. Freezing by named addresses or presumed identity would be poisonous. Freezing by clearly vulnerable spend conditions is more defensible, though still controversial. Even then, designers must avoid accidentally disabling hybrid or recovery constructions that still use EC operations in non-dangerous ways.
4. Frozen funds rescue options are mandatory. A permanent burn maximizes clarity but also maximizes moral injury. Temporary locks, seed-knowledge proofs, commit-reveal paths, or other non-EC ownership proofs may preserve more of Bitcoin’s property-rights ethos. The current recovery ideas are not mature enough to rely on, but they are critical because they change a binary burn-versus-steal choice into a more humane migration path.
5. The community should define warning criteria in advance while accepting that perfect evidence may never arrive. A public CRQC demonstration against secp256k1 would be too late for some attack classes. But vague fear is not enough to justify burning coins. Reasonable criteria might include credible advances in fault-tolerant quantum error correction, government migration deadlines, expert cryptanalytic consensus, observed market stress, or other public signals. The NSA and NIST transitions show that major institutions already consider post-quantum migration a serious planning problem, but institutional caution is not the same as proof that Bitcoin must freeze coins now.

A Goldilocks Problem

A common critique of BIP-361 (other than “quantum computers aren’t real”) is that it is “rushed.” I think this is due to people making incorrect assumptions around activation. No one is claiming that BIP-361 should be activated today or even soon… it’s not even possible until a PQC scheme is activated. Rather, the point of BIP-361 is to have a contingency plan in place in case it looks like the threat is real and a migration becomes desirable.

We settled on a five year migration timeframe for BIP-361 because there are cons to migrating too early and to migrating too late. Migrate too early and we may be imposing great costs upon the ecosystem when it’s not necessary. Also, since post-quantum schemes and quantum safe funds rescue schemes are under active research, migrating too soon could lock us into a suboptimal solution. Migrate too late and we leave the ecosystem open to a systemic threat that could cause massive harm and loss of confidence in the network. We also know it needs to be a multi-year approach because of how long it takes for protocol changes to propagate throughout the ecosystem.

I don’t expect anyone to seriously suggest BIP-361 for activation unless it looks highly likely that a cryptographically relevant quantum computer is less than 10 years away.

Deprecation of ECC could eventually become defensible, but only as a last-resort consensus choice after a viable migration path exists, after objective rules are specified, after a long public deadline is published, and after rough consensus is achieved that allowing vulnerable coins to remain spendable via ECC would create greater rights violations than disabling it.

The most intellectually honest conclusion is that both sides of this debate are defending Bitcoin’s principles, just with slightly different interpretations. The ECC deprecation side defends protocol security, system survival, and property rights against quantum attacks. The do-nothing side defends protocol rule stability, censorship resistance, and the rights of inactive users.

The Path Forward

Bitcoin’s quantum problem is not urgent in the sense that users should panic today. It is urgent in the sense that decentralized systems must solve hard coordination problems before they become emergencies. Waiting until a quantum attacker is visible will leave us with the worst set of possible choices.

The next steps for the foreseeable future do not include BIP-361. Rather, we should focus on preparation:

1. reduce address reuse
2. research recovery proofs
3. reduce reliance on xpub sharing
4. research more optimized PQ schemes
5. activate opt-in quantum safe locking scripts
6. develop multiple contingency plans to prepare for various scenarios

Bitcoin’s quantum migration debate is not a choice between respecting property rights and violating them. It is a choice between competing kinds of property-rights failure. We should treat the quantum threat as a realistic but unquantifiable systemic risk, but not use uncertainty as a premise for premature controversial changes.

Even if a cryptographically relevant quantum computer fails to emerge, showing that Bitcoin takes tail risks seriously will boost confidence in the network and reduce uncertainty about its future.

This piece is featured in the latest Print edition of Bitcoin Magazine, The Quantum Issue. We’re sharing it here as an early look at the ideas explored throughout the full issue.

This post The Quantum Issue: To Freeze Coins Or Not first appeared on Bitcoin Magazine and is written by Shinobi.

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Deutsche Bank said Wednesday that it would debut a bitcoin custody service for European corporate and institutional clients this year. 

The German multinational said that the service was subject to the completion of the applicable regulatory timeline.

Deutsche Bank’s announcement comes as top banks worldwide launch crypto custody services. BNY Mellon, State Street, Standard Chartered, U.S. Bank, and Citigroup have all either launched or committed to direct crypto custody over the past 18 months.

“Digital assets are not a replacement for the traditional financial system but an important complement to it,” Gerald Podobnik, Co-Head Corporate Bank, Deutsche Bank, said in a statement. 

“We see them as new rails that can coexist with existing market infrastructures while benefiting from the trust, security and safeguards that regulated financial institutions provide. Our aim is to offer clients a secure and regulated gateway to this evolving market. The service will be further developed in line with client demand, regulatory requirements and the bank’s risk appetite.” 

Germany’s biggest lender added it would support a “selected range of digital assets,” other than bitcoin — including stablecoins. 

“The range of supported assets may be expanded over time, subject to client demand and the bank’s product-approval, risk management and regulatory processes,” a statement added. “Tokenized financial instruments are also included in the roadmap.”

News first dropped of the bank working on debuting bitcoin custody services in 2025. A report said that the German banking giant would integrate Bitpanda’s custody infrastructure while working with Taurus to build the solution for corporate and institutional clients.

Just last month, Citi said it would this year debut a bitcoin custody service, allowing institutional investors to custody both traditional assets and bitcoin within one framework, rather than needing separate systems. 

This post Deutsche Bank To Debut Bitcoin Custody for Institutional Clients first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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For decades, the mechanics of global equity indexing were treated as plumbing—hidden, technical, and resolutely administrative. Providers like Morgan Stanley Capital International (MSCI) designed benchmarks to reflect the economic reality of public markets, not to shape it. Their mandate was descriptive, serving as a transparent mirror of global capital flows, sector weightings, and free-float market capitalizations.

That architectural assumption has quietly fractured. Today, the sheer scale of passive index-tracking capital has transformed benchmark administrators from passive cartographers into de facto market regulators. When an index provider determines the eligibility criteria for inclusion in indexes such as the MSCI Global Investable Market Indexes (GIMI), it is no longer merely measuring a company’s market value; it is dictating its access to institutional capital, influencing its cost of borrowing, shaping its shareholder register, and driving its liquidity profile.

Nowhere is this transformation more evident—or more contentious—than in MSCI’s ongoing confrontation with public Bitcoin treasury companies. Following a failed attempt in late 2025 to explicitly target digital-asset holding vehicles, MSCI launched a sweeping consultation on August 3, 2026, aimed at redefining and restricting the index eligibility of “non-operating companies.” While the proposal is drafted in neutral financial terminology, its practical architecture threatens to eject major corporate Bitcoin adopters, most notably Strategy (formerly MicroStrategy), from global benchmarks.

This clash is much more than a corporate dispute over index weighting. It raises a profound structural question for contemporary capital markets: What happens when a private, for-profit index provider acquires the power to penalize corporate balance-sheet innovation, and by extension, exercise private market governance without regulatory accountability?

From Direct Exclusion to Structural Filters

To understand the current crisis, one must trace MSCI’s regulatory maneuvers over the past twelve months. In late 2025, MSCI opened a consultation specifically addressing “Digital Asset Treasury Companies,” proposing to strip index eligibility from any corporate issuer whose digital asset holdings represented 50 percent or more of its total assets. Market participants quickly recognized the measure as an explicit screen against companies that had pivoted their corporate treasuries into Bitcoin.

Facing intense pushback from issuers and institutional investors who pointed out the arbitrary nature of singling out a specific asset class, MSCI shelved that direct approach on January 6, 2026. Rather than dropping the inquiry, however, the index provider retreated to draft a more sophisticated mechanism.

On August 3, 2026, MSCI announced a broader, ostensibly asset-agnostic consultation regarding the eligibility of “non-operating companies” for the GIMI framework. Rather than naming Bitcoin directly, the new proposal establishes a two-step quantitative sieve designed to catch companies deemed to be operating primarily as holding vehicles or investment funds rather than traditional operating businesses.

The methodology proceeds in two distinct stages:

1. The Core Screen: MSCI applies a primary balance-sheet test to determine whether an issuer maintains substantial operating assets. A company clears this initial hurdle if its operating assets exceed 50 percent of its total assets.
2. The Exclusion Screen: For any issuer failing the core screen, MSCI applies five non-industry-specific financial ratios: operating asset intensity, expense intensity, operating cash flow, fair value intensity, and capital dependence. If a company triggers failing thresholds on at least four of these five metrics, it is classified as a non-operating company and rendered ineligible for index inclusion.

While existing constituents receive modest procedural protections—such as a more lenient 10 percent operating asset floor rather than 20 percent and a requirement to fail the screen in two consecutive annual filings before removal—the structural intent is clear. The simulation accompanying the August 2026 consultation revealed that applying the screen to the MSCI ACWI IMI universe using mid-2026 data would immediately flag and delete major public Bitcoin treasuries, including Strategy and Japan’s Metaplanet, alongside UK-based uranium holding vehicle Yellow Cake plc, while placing firms like SharpLink, Center Laboratories, and Lydia Holding onto a public watchlist.

The Targets and the Quantitative Realities

The primary focal point of this methodology is Strategy. Following its multi-year pivot into accumulating Bitcoin as its primary treasury reserve asset, Strategy has amassed over 845,050 bitcoin, making it the largest corporate holder of the asset globally. In the simulation data released by MSCI, Strategy—boasting a float-adjusted market capitalization exceeding $23.9 billion among the flagged entities—accounts for the vast majority of the affected market value.

The financial stakes of index inclusion for a company of this scale are frequently misunderstood. Critics of corporate Bitcoin strategies often assume that index exclusion triggers a terminal liquidity catastrophe. Yet empirical analysis of trading volumes reveals a more nuanced picture. Industry estimates indicate that passive funds tracking MSCI GIMI indexes hold roughly 3.1 percent of Strategy’s basic shares outstanding, amounting to approximately 13 million shares. When measured against Strategy’s robust trading velocity—where daily volume regularly absorbs hundreds of millions of dollars—that passive exposure represents less than a single average trading day.

Consequently, the true threat of MSCI’s proposal is not a mechanical liquidity shock, but rather a structural and narrative penalty. Index exclusion closes doors to specific institutional mandates, benchmark-restricted pension pools, and broad-market ETFs that are legally or contractually bound to replicate MSCI indexes. It penalizes a company not for operational failure, but for balance-sheet structure.

The Accounting and Legal Clash: GAAP versus Index Discretion

Strategy launched an aggressive counter-offensive in late August 2026, led by founder Michael Saylor and CEO Phong Le. In formal communications to MSCI and public filings, the company blasted the consultation as a “misguided,” “flawed,” and “discriminatory” pretext designed to achieve through backdoor ratio screens what MSCI failed to accomplish with its direct digital asset proposal in 2025.

The core of Strategy’s legal and accounting argument hinges on the definition of an operating business. Strategy noted that its terminology—dividing issuers into “operating” and “non-operating”—has no formal grounding in U.S. Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), or any recognized statutory securities framework.

Furthermore, Strategy underscored that it reports its Bitcoin activities as an official operating segment under U.S. GAAP, a classification arrived at through extensive engagement and alignment with staff at the U.S. Securities and Exchange Commission (SEC). By treating Bitcoin treasury operations, capital markets issuance, and asset management as core segments of an enterprise that employs over 1,500 people globally and generates hundreds of millions in software revenue, Strategy argues that MSCI is substituting its own arbitrary policy judgments for established regulatory and accounting standards.

In a particularly sharp rhetorical turn, Strategy’s pushback weaponized MSCI’s own historical regulatory positions. The company highlighted a 2022 SEC concept release examining whether information providers and index administrators exercise sufficient market power to bring them within the purview of the Investment Advisers Act. By forcing index providers to judge whether an asset class like Bitcoin belongs inside an operating business, MSCI risks undermining its foundational claim to absolute neutrality—the bedrock principle that index providers merely reflect market reality rather than passing moral or strategic judgment on corporate balance sheets.

The Double Standard of Asset Concentration

Beyond technical accounting definitions, the institutional debate centers on consistency. Critics of MSCI’s methodology argue that the proposed financial ratios are applied unevenly across asset classes.

Consider the treatment of real estate investment trusts (REITs) and mortgage REITs (mREITs). MSCI benchmarks routinely include entities whose balance sheets are overwhelmingly concentrated in a single asset class—commercial real estate, residential mortgages, or physical property portfolios—and whose revenues and valuations are driven entirely by external market cycles, rental yields, and continuous capital raises via debt and equity markets. These entities rely heavily on external capital dependence to scale their portfolios, mirroring the capital-raising mechanics utilized by Bitcoin treasury companies.

Yet under MSCI’s proposed framework, asset concentration and capital dependence in real estate are deemed fully compatible with index inclusion, whereas identical structural strategies executed in digital assets are classified as disqualifying non-operating traits. This disparity exposes the fundamental vulnerability of MSCI’s criteria: they rely on subjective definitions of “operations” that can easily be tailored to exclude disfavored asset classes while sheltering traditional ones.

The Structural Crisis of Private Governance

The confrontation between MSCI and Bitcoin treasury companies transcends the crypto asset ecosystem. It illuminates a broader institutional crisis concerning the unaccountable power of private index providers.

Over the past two decades, the migration of capital from active management to passive index-tracking funds has concentrated immense economic leverage in the hands of a small oligopoly of index administrators, dominated by MSCI, FTSE Russell, and S&P Dow Jones. These firms operate as private, for-profit entities, yet their methodology documents function with the force of public law for corporate issuers.

When an index provider unilaterally alters its inclusion rules to penalize specific corporate treasury models, it engages in private market governance. Unlike regulated public exchanges or statutory securities regulators, index committees operate behind closed doors, subject to limited public transparency, no formal administrative procedure acts, and virtually no recourse for aggrieved issuers other than public lobbying.

If MSCI succeeds in establishing the precedent that holding non-traditional reserve assets on a corporate balance sheet strips a public company of its operating status, it creates a dangerous chilling effect. Today, the target is Bitcoin; tomorrow, it could be corporate holdings of physical commodities, strategic technology stakes, gold, real estate, data centers or alternative monetary reserves that conflict with the prevailing preferences of institutional ESG or benchmark committees. Corporate directors lose the sovereign right to optimize their balance sheets for shareholder value if doing so risks excommunication from the passive capital ecosystem.

The Timeline, the Stakes, and the Regulatory Reckoning

The immediate resolution of this conflict is rapidly approaching. The public consultation period for MSCI’s non-operating company proposal closes on September 30, 2026, with a final determination expected by October 16, 2026. If adopted in its current form, constituent reclassifications will be published on November 11, 2026, and implemented on December 1, 2026.

Yet for institutional investors, asset managers, and corporate executives, the stakes extend far beyond the ticker symbol MSTR. The outcome will test whether public companies retain the autonomy to innovate their balance sheets in an era dominated by passive gatekeepers, or whether benchmark administrators have officially crossed the line from measuring markets to regulating them.

The solution does not lie in government micromanagement of index design, but in statutory accountability. The U.S. Securities and Exchange Commission and global securities regulators must stop treating index providers as invisible software plumbing. When an index committee’s discretionary classifications can dictate corporate access to capital, distort price discovery, and bypass standard administrative notice-and-comment safeguards, that committee is acting as a de facto market regulator.

Regulators must revisit the framework governing dominant index providers under the Investment Advisers Act, demanding transparent due process, strict standards against arbitrary discrimination, and formal accountability for decisions that alter capital formation.

Until market authorities recognize that index providers have become systemic gatekeepers, the free market for corporate control will no longer be governed by shareholders, boards, and public statutes—it will remain at the mercy of unelected private arbiters in New York and London.

Take Action to Protect Index Neutrality

The boundary between measuring market value and regulating corporate behavior is being erased. MSCI’s proposed “non-operating company” screen threatens to penalize balance-sheet innovation, misclassify legitimate operating businesses, and set a dangerous precedent for private governance in capital markets.

Don’t let private index administrators dictate corporate treasury strategy behind closed doors. The public consultation window closes on September 30, 2026.

Join business leaders, institutional investors, and advocates for open capital markets:

• Sign the Open Letter: Add your voice or your organization’s signature to demand that MSCI withdraw the proposed screen and publish all market feedback at msci.bitcoinforcorporations.com.

Disclaimer: This content was prepared on behalf of Bitcoin For Corporations for informational purposes only. It reflects the author’s own analysis and opinion and should not be relied upon as investment advice. Nothing in this article constitutes an offer, invitation, or solicitation to purchase, sell, or subscribe for any security or financial product.

This post How MSCI Shifted from Objective Benchmark to Defacto Market Regulator first appeared on Bitcoin Magazine and is written by Nick Ward.

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Bitcoin’s price tumbled — along with crypto-related stocks — following the blockage of the long-awaited Clarity Act. 

The price of the leading cryptocurrency recently stood at $75,939, down 4% over the past day, after dropping as low as $75,038 at one point on Tuesday. 

Lawmakers blocked the landmark digital asset market structure bill in a procedural vote Tuesday. Major companies in the digital asset space have long called for clear rules to be put in place to regulate the industry. 

Bitcoin wasn’t the only asset that dropped: BTC-related stocks such as Coinbase (NASDAQ: COIN) and Strategy (MSTR) were also down. 

America’s biggest crypto exchange’s stock dropped by more than 10%; Strategy, the largest corporate holder of bitcoin slid by over 5%. 

Major publicly traded bitcoin miners also dropped in price, with MARA, CleanSpark, and Core Scientific all slipping by 5% or more over the past day. 

Senators mostly voted against advancing the legislation — 49 for and 50 against — that the digital asset industry has long called for. 

The bill aims to formally divide oversight between regulators, distinguishing which digital assets are securities, commodities or stablecoins. 

President Donald Trump last month urged lawmakers to pass it, helping spur a bitcoin rally. But Republicans warned for months that Democrats were deliberately holding it back. 

And hold it back they did: anti-crypto senator Elizabeth Warren warned congress against voting for the bill on Tuesday, slamming the bill as “a massive risk to families.”

While Senator Bernie Sanders wrote on X that the bill was “corrupt.” 

Lawmakers had a problem with the bill because they said it unfairly allowed Trump to make money from the crypto industry. The president’s family has cashed in with numerous crypto ventures since Trump took office but the White House has always denied any wrongdoing. 

“Crypto billionaires have spent nearly $300M on the midterm elections,” added Sanders. 

“Meanwhile, Trump and his family have pocketed more than $1.4B from crypto deals.”

Pro-crypto senator Cynthia Lummis slammed Democrats for blocking the bill. 

Writing on X, the Republican said: “The once-proud Democratic party is anti-consumer and pro-illicit finance, anti-ethics, anti-free enterprise, anti-worker, anti-livable wage jobs, and pro-socialism. The Democrats are now anti-American.” 

This post Bitcoin, BTC-Related Stocks Tumble After Senate Blocks Clarity Act  first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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What happens when the Fed and Treasury finally step in to suppress long-end rates? Matt Cole says the dollar becomes the release valve and scarce assets rip. In this interview with Grace Remington and Sean Hagan, the Strive CEO lays out his three-part macro thesis on the dollar, long-end treasury rates, and Bitcoin reclaiming its role as the fastest horse against gold. He also shares his base case of roughly 50% annual Bitcoin returns into 2030.

DISCLAIMER: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine, or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax, or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

This post Strive’s Matt Cole: Bitcoin is Primed for 30% Growth into 2030 first appeared on Bitcoin Magazine and is written by Patrick Green.

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Bitcoin wallet manufacturer BitBox is putting Lightning in users’ pockets. 

Owners of any BitBox hardware wallet can create a Lightning hot wallet inside the mobile BitBoxApp, fund it directly from their on-chain balance and pay invoices without bouncing between apps, wallets or third-party services, the company announced Tuesday. 

And users don’t need a new recovery phrase. The Lightning wallet is derived from the BitBox backup they already have, so there are no extra words to write down — the two wallets stay distinct. 

The Lightning side runs as a hot wallet built for small amounts and everyday spending — coffee, invoices, a quick transfer — while long-term savings stay locked behind the hardware device. 

Inside the BitBoxApp, users can scan and pay Lightning invoices, send and receive bitcoin, claim their own Lightning address, top up from their on-chain wallet, and sweep funds back again.

Under the hood, the feature runs on the Breez SDK, which now counts BitBox among more than 100 integration partners. Spark handles the plumbing that has long kept casual users off Lightning — no node to run, no channels to open, no liquidity to babysit. Custody stays with the user throughout.

Breez in August debuted Glow, an app that allows developers to see what’s working under the hood with the Lightning wallet so they can build their own products.

This post Lightning Lands on BitBox — And It Doesn’t Ask for a New Seed Phrase first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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Lawmakers blocked the Clarity Act on Tuesday a procedural vote, with the long-awaited legislation missing the 60 votes needed to advance it.

Senators mostly voted against advancing the legislation — 49 for and 50 against — that the digital asset industry has long called for. 

The bill aims to formally divide oversight between regulators, distinguishing which digital assets are securities, commodities or stablecoins. President Donald Trump last month urged lawmakers to pass it but Republicans said that Democrats were deliberately holding it back. 

Bitcoin’s price dropped sharply on the news and was recently trading for $75,997, a 4% 24-hour drop. 

Both Republicans and Democrats blocked the bill but Democrats had mostly been accused of trying to deliberately stall it by pro-crypto lawmakers for months. 

Democratic Senator Elizabeth Warren, of the crypto industry’s loudest critics, told congress ahead of the vote that the bill “posed a massive risk to families.” 

“This bill would put us all at risk of a crypto-fuelled economic crash,” she said, adding that the U.S. still needed proper crypto legislation. 

Warren’s biggest gripe — along with other lawmakers — is that Trump has unfairly benefited from deals in the crypto industry. 

President Donald Trump campaigned on a ticket to help the crypto space but some Washington lawmakers have criticized the way the Trump family has profited from digital asset ventures, such as the President’s memecoin, $TRUMP, and World Liberty Financial project. 

Trump and the White House have always denied any conflicts of interest. 

“Trump won big time on crypto,” Warren added. 

A revised draft circulated in July added an ethics title aimed at officials profiting from crypto. It would bar the president, vice president, members of Congress, federal judges and their spouses from issuing or sponsoring a digital asset for compensation. 

Late Sunday, a further draft gave state attorneys general power to sue to enforce those rules — alongside the Justice Department, which Democrats had argued could not be relied on to act against Trump.

Despite the bill being blocked on Tuesday, regulators are still pushing ahead with rules for the industry. 

The Clarity Act was passed by the House of Representatives last year but has mostly stalled in 2026, with the banking lobby frequently clashing with crypto companies over paying customers stablecoin yield. 

This post Senate Blocks Clarity Act, Likely Killing It for 2026 first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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The Senate is voting today, but not on what most people think. John Deaton joins Grace Remington and Sean Hagan to break down why the Clarity Act cloture vote is really a vote on whether to even debate the bill, and why 53 Republican senators aren’t enough to get there. He explains the math behind needing eight to ten Democrats, where Josh Hawley and Rand Paul stand, and what happens to American digital asset companies if Congress stalls again. Deaton also makes the case that the U.S. is still regulating blockchain with 1930s statutes.

DISCLAIMER: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine, or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax, or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

This post Why the Clarity Act Could Decide America’s Financial Future w/ John Deaton first appeared on Bitcoin Magazine and is written by Patrick Green.

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Artificial intelligence may turn out to be an unexpected driver of Bitcoin adoption, according to Nakamoto Holdings CEO and Chairman David Bailey.

In a discussion hosted by investment bank TD Cowen, Bailey’s argument was that the friction getting people on board with Bitcoin has always been the interface — and not the asset. 

Wallets, addresses, private keys, and the general onboarding process have kept mainstream users at arm’s length for well over a decade, he argued. AI-powered tools could abstract that complexity away and make the asset far easier for ordinary individuals and institutions to actually use.

TD Cowen analyst Lance Vitanza, who published a note on the conversation, described the idea as speculative but worth attention, noting that it moves the adoption conversation beyond the familiar territory of monetary policy, regulation, and institutional flows.

Bailey added that institutional adoption of Bitcoin has barely begun: spot ETFs, corporate treasury programs, and sovereign-level interest have transformed access over the past year — more, in Bailey’s estimation, than the previous decade-plus combined. He argued the addressable opportunity ahead remains considerably larger than what has been captured.

Asked whether Bitcoin is reshaping traditional finance or the reverse, Bailey came down firmly on the former. Institutions, governments, and public companies are participating at scale, but the asset’s underlying properties have not bent to accommodate them. The adaptation, he argued, is running one direction — toward an asset whose rules none of those players control.

With direct exposure now widely available through ETFs, Bailey downplayed the usual distinction between “treasury company” and “operating company.” The question that matters, he said, is whether a business can grow the amount of Bitcoin it holds per share over time — a test of capital allocation and execution rather than balance-sheet size.

Nakamoto itself has moved in that direction, positioning as an integrated Bitcoin platform spanning media, conferences, education, asset management, advisory work, and treasury operations. Vitanza called it one of the more differentiated strategies among Bitcoin-native public companies, while noting the approach has yet to prove itself.

TD Cowen rates Nakamoto Holdings (NASDAQ: NAKA) Buy. TD Securities discloses that it makes a market in the stock.

Bitcoin Magazine is published by BTC Inc, a subsidiary of Nakamoto Inc. (NASDAQ: NAKA)

This post AI Could Be Bitcoin’s Next Onboarding Engine, Nakamoto CEO Says first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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The U.S. Department of Justice said Monday that it had filed to forfeit $61 million in crypto generated from oil sales linked to Iran’s government. 

Iran used Chinese entities who, via accounts on crypto exchange Binance, funneled over $1.5 billion in oil proceeds to the Middle Eastern country, U.S. prosecutors allege. 

It comes after the U.S. tries to crack down on Iran’s use of the leading cryptocurrency: the U.S. in July said that it had frozen crypto linked to the Iranian regime, mostly in the form of Tether’s stablecoin; Iran started a bitcoin-backed insurance service for its counties shipping companies earlier this year.

There was no mention of bitcoin in Monday’s claim — but the Iranian government is also using bitcoin to skirt around sanctions. Bitcoin has no issuer, so no blacklist function and bitcoin held without intermediaries can’t be frozen

“The Government of Iran relies on black-market sales of sanctioned crude oil to fund its military and foster terrorism in the Middle East and around the world, along with other malign efforts to develop a nuclear program and ballistic missiles capable of delivering nuclear payloads,” Deputy U.S. Attorney Sean S. Buckley said in a statement. 

“As alleged in the complaint filed today, the Government of Iran used a network of cryptocurrency actors in China and elsewhere to launder more than $1.5 billion in illicit oil money intended to benefit the Iranian military and the terror-designated IRGC.”

The filing alleges that the illicit oil money was laundered via Chinese companies Blessed Trust Limited and Hexa Whale Trading Limited.

Once the money was laundered, it was funneled back to Iran’s government, its agents, and its proxies, feds said. 

The U.S. Treasury’s Office of Foreign Assets Control in July said Iran had been dodging sanctions by accepting pay in bitcoin from ships passing through the Strait of Hormuz. 

OFAC said at the time that Hormuz Safe, developed by Iran’s Ministry of Economy, “accepts payment in bitcoin and other digital assets” so it can bypass sanctions. 

The Financial Times last week reported that the Middle Eastern country was using bitcoin to settle cross-border transactions through Iranian crypto exchanges after the central bank advised its countrymen to do anything necessary to help the economy.  

This post DOJ Seeks $61M in Iranian Oil Proceeds Laundered Through Binance Accounts first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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US debt-to-GDP has pushed past 120%, and Jack Mallers thinks the debate over whether the Fed hikes or cuts is beside the point, both roads lead to inflation. The Strike founder and CEO joins Bitcoin Magazine to explain why he told investors to study Japan, where outright yield curve control and central planning intervention are now required to hold the currency together. He argues the US is heading to the same place and that Bitcoin, as the asset most sensitive to fiat liquidity, is the fastest horse in that environment. Mallers also breaks down Strike’s shift into Bitcoin-backed lending and what it means to build a full Bitcoin financial stack under one roof.

DISCLAIMER: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine, or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax, or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

This post Strike CEO Jack Mallers: Inflation Outlook, Bond Stress and BTC vs Gold first appeared on Bitcoin Magazine and is written by Patrick Green.

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