Do U.S. Liquidity, Stablecoins, and Security Guarantee a Bitcoin Rally?

When explaining Bitcoin’s long-term bullish outlook, U.S. banking regulations, Treasury demand, stablecoins, national strategy, and the power grid are often woven into a single narrative. Each element includes real policy changes, but directly linking different systems to “money printing” or “national Bitcoin accumulation” puts the conclusion ahead of the evidence.

This report is not investment advice but an assessment of individual claims. In particular, because the latest status of regulatory amendments and laws may have changed since their announcement, the original documents from the Federal Reserve, U.S. Congress, and White House should be checked again.

Assessment of Key Claims

The Halving Is Not a Defunct Formula but One Supply Variable

Bitcoin’s difficulty is adjusted so that a block is produced approximately every 10 minutes on average. Current new issuance is about 140 BTC per day. The figure of 140 BTC per day is not a value calculated by applying the current reward and average number of blocks.

It is true that the halving reduces new supply. However, the circulating supply that determines price includes not only newly mined coins but also selling by existing holders, exchange balances, flows into exchange-traded products, derivatives leverage, and long-term holdings. It is also inaccurate to treat the entire amount already issued as supply actually available for sale. Lost coins or long-term holdings may not enter the market.

It is therefore safer to interpret the halving’s effects as follows.

• Structurally declining new issuance supports the long-term scarcity thesis.
• There is no mechanical rule that price automatically rises immediately after a halving.
• Dollar liquidity, real interest rates, risk appetite, and spot demand can overwhelm the supply effect.
• The sample of past cycles is small, and the monetary and regulatory environment differed in each period.

Why SLR Reform Is Different from Quantitative Easing

The supplementary leverage ratio (SLR) is a regulation requiring banks to hold a certain amount of core capital in proportion to their total leverage exposure. Unlike capital ratios that consider only risk-weighted assets, U.S. Treasuries and central bank reserves may also, in principle, be included in the exposure calculation.

U.S. financial regulators recently eased the SLR rules applied to large banks. The aim was to reduce problems caused by a fixed ratio that could hinder Treasury-market intermediation and to better align the risk profiles and capital burdens of global systemically important banks.

However, the following three points must be distinguished.

1. Reduced capital burden: Banks may gain room to intermediate more assets with the same amount of equity capital.
2. Banks’ actual behavior: Even if capacity becomes available, banks may not increase their assets, depending on profitability, liquidity, other capital regulations, and internal risk limits.
3. Quantitative easing: A policy under which the Federal Reserve purchases Treasuries and other assets, supplies reserves, and expands the central bank’s balance sheet.

An SLR adjustment falls under the first channel and is not the same as the third. It may improve Treasury-market liquidity and repo trading, but it is impossible to calculate in advance that a specific amount of money will flow into stocks or Bitcoin. Experts and the market estimate that SLR regulatory easing will generate $3 trillion to $6 trillion in additional liquidity.

Stablecoins Change Dollar Payments but Do Not Automatically Multiply the Money Supply

Stablecoins can be transferred on blockchains, and as long as the network is operating normally, payment instructions can be made on weekends or outside banking hours. Their potential use for cross-border transfers and as settlement assets in cryptoasset trading is an advantage that differs from the conventional banking system.

However, in the macroeconomic equation of exchange, M × V = P × Y, V is not simply the payment system’s operating hours. The velocity of money is an ex-post measurement calculated by dividing nominal output over a given period by a specific measure of money supply. Compared with banking hours, 24-hour payments increase V by at least three times.

Stablecoin issuance also generally follows a structure in which users exchange bank deposits or cash for the issuer’s token liabilities, while the issuer holds reserve assets. This transaction alone does not add an equal amount to the economy’s total net money supply. However, if issuers hold short-term U.S. Treasuries as reserve assets, they can affect Treasury demand and the structure of short-term funding markets.

Actual Bullish and Bearish Channels

The Actual Scope of the U.S. Strategic Bitcoin Reserve

The timing and legal basis for establishing the Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile should be verified in the original White House documents. The primary funding source for the Bitcoin reserve is BTC held by the federal government through criminal and civil forfeiture proceedings. The executive order provided a framework for generally not selling BTC placed in the reserve and for considering budget-neutral acquisition methods that would not impose additional costs on taxpayers.

This is an important change indicating that Bitcoin has begun to be treated as a strategic asset by the U.S. government. However, the following conclusions do not automatically follow.

• An obligation for the government to purchase unlimited amounts of BTC on the open market
• A confirmed plan to make regular purchases using the defense budget
• A government price floor to support the price
• A determination that Bitcoin has officially been classified on par with nuclear deterrence

It is also difficult to explain U.S. Bitcoin holdings solely as an effort to prevent hostile countries from taking control of the network. The executive order also includes the goals of U.S. leadership in digital assets, management of existing government assets, and preservation of their financial value. A “Nash equilibrium” or “prisoner’s dilemma” is a possible interpretive model, not evidence of policy decisions in itself.

Sanctions Evasion and Bitcoin: Possibilities and Limitations

There have been cases in which sanctioned countries or organizations used cryptoassets to transfer funds. However, the broad claim that tankers carrying Iranian crude oil generally settle payments in Bitcoin cannot be treated as fact without transaction-specific data and confirmation from sanctions authorities.

Bitcoin transactions are pseudonymous but permanently recorded on a public ledger. Difficulty determining who controls an address is not the same as the transaction itself being invisible. Exchange regulations, blockchain analytics, and controls at fiat conversion points also create the risk of tracking or freezing. Cryptoassets are one of several tools used to evade sanctions, and traditional methods such as cash, shell companies, ship-to-ship transfers, and falsified trade documents must also be considered.

Problems with Claims of a 60% U.S. Hashrate and Network Control

The share of hashrate by country is difficult to observe directly. Estimates use mining-pool server locations, miner IP addresses, and facility data disclosed by companies, but virtual private network use and undisclosed mining create errors. The Cambridge Bitcoin Electricity Consumption Index’s estimates of mining shares by country should be checked on the institution’s public mining map, and historical figures cannot simply be used as current shares.

A rise in the block share of a particular U.S.-affiliated mining pool also does not mean that all computing equipment is located in the U.S. Miners can switch pools, and the nationality of the pool operator may differ from the location of the mining facility.

More importantly, hashrate share is not the same as control over Bitcoin. Majority hashpower can increase the risk of transaction reordering or double spending, but it does not grant the power to arbitrarily change the issuance limit or seize other users’ private keys. Changes to consensus rules also require acceptance by node operators, developers, businesses, and users.

The Relationship Among Mining Facilities, AI Data Centers, and the Power Grid

Bitcoin mining facilities can rapidly reduce their electricity consumption, allowing them to participate as demand-response resources when electricity prices surge or the grid is constrained. This can provide flexibility to power grids where generation output is difficult to adjust immediately.

However, calling mining facilities “batteries” exaggerates their function. Mining facilities do not store electricity and return it later; they are flexible loads that stop consuming power when requested, leaving capacity available for other demand. Their contribution to the grid depends on regional contracts, transmission constraints, the generation mix, and whether curtailment commitments are fulfilled.

AI data centers and mining facilities both require large-scale power connections, cooling, sites, and substations. Some mining companies may convert their facilities to high-performance computing operations, but there is insufficient public evidence to generalize that the two industries have been integrated into a single U.S. national-security power grid. The possibility that they may instead compete for the same electricity and grid interconnection rights, increasing costs, must also be analyzed.

Verifying Claims About Satoshi Nakamoto and Adam Back

Adam Back developed Hashcash, which implemented the proof-of-work concept before Bitcoin, and the related research is cited in the Bitcoin white paper. However, it has not been verified that he is Satoshi Nakamoto. Claims that a particular media outlet definitively exposed his identity can be evaluated only if the original article, reporting evidence, and confirmation from the person concerned are presented.

Even if the creator’s identity is disclosed, that person would not gain the authority to change the Bitcoin protocol alone. However, if coins from early addresses associated with Satoshi actually move, it could affect market sentiment and the supply outlook. Speculation about identity and on-chain asset movements should be treated as separate events.

Indicators for Testing the Bullish Thesis

Verifying actual transmission channels rather than relying on sweeping narratives can reduce errors in investment decisions.

1. Federal Reserve balance sheet and reserves: Determine whether actual central bank liquidity is expanding.
2. U.S. Treasury-market indicators: Examine whether dealer inventories, repo rates, and market depth improve after SLR reform.
3. Bitcoin spot-product flows: Determine whether institutional demand appears as actual net inflows.
4. Stablecoin supply and reserve assets: Consider not only issuance but also redemptions, depegging, and reserve-asset composition.
5. Real interest rates and the dollar’s value: Assess whether the opportunity cost of holding non-interest-bearing assets is rising.
6. Futures funding rates and open interest: Distinguish whether gains are being driven by excessive leverage rather than spot demand.
7. Government reserve transactions: Use official data to verify whether additional budget-neutral acquisitions have actually been executed.

Risks Easily Overlooked in Investment Decisions

Even if U.S. policy is favorable to Bitcoin, its price path will not be linear. High volatility, exchange and custody risks, regulatory changes, stablecoin depegging, forced selling by miners, and derivatives liquidations can all act simultaneously.

If considering a purchase, investors should first determine their tolerable loss limit, investment horizon, custody method, and allocation within total assets rather than assuming that “the price must rise because the government is buying.” Even if the long-term bullish thesis is correct, poor entry timing and inappropriate position sizing can result in substantial losses.

Conclusion

The U.S. Strategic Bitcoin Reserve and the institutionalization of stablecoins are evidence that digital assets have moved from peripheral financial products to objects of policy. SLR reform may also affect the Treasury market and financial intermediation. A scenario in which these three changes support Bitcoin demand can be explained plausibly.

However, interpreting the SLR as trillions of dollars in immediate QE, 24-hour payments as a threefold increase in the velocity of money, or government reserves as a promise of unlimited purchases goes beyond the verified facts. The credibility of the Bitcoin bullish thesis should be judged not by the scale of the narrative but by actual capital flows and official implementation data.