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The Era of Money Illusions Is Over

Coinbits's Photo
by Coinbits
Friday, Nov 21, 2025 - 19:35

The mask is slipping. For decades, central bankers maintained the fiction of independence. Enlightened technocrats dutifully implementing two percent inflation targets, they maintained a veneer of being divorced from the mess of politics. That era is coming to an end.

President Trump openly called Federal Reserve Chair Jerome Powell "incompetent" and floats firing him. Does anyone believe his replacement will be an independent hawk focused on inflation targets? Of course not. The next Fed Chair will serve the White House; the pretense that he or she will act independently will be all but gone, and monetary and fiscal policy will fully merge.

This isn't a uniquely American problem. The world's two largest economies (the U.S. and China) now operate central banks that increasingly coordinate with government fiscal policymakers. The neoliberal experiment in monetary technocracy is over. We're entering an era of raw power, open mercantilism, and grand strategy where money printing serves political objectives without apology.

Economist F.A. Hayek warned that in centrally planned systems, "the worst get on top." Politicians will always sacrifice the currency at the altar of power. This is inevitable when money creation sits in human hands. Now, the concept of enlightened public servants implementing policy based on economic expertise and application of theory is fading away.

In this new era, bitcoin will persist, with its monetary policy remaining beyond the reach of presidents, central bankers, technocrats, and cabals. Twenty-one million units is what humans will have to coordinate economic activity and determine the highest, best use of scarce resources – come what may.

Bitcoin Policy Institute endorses landmark legislation allowing Americans to pay federal taxes in bitcoin

The Bitcoin Policy Institute endorsed Rep. Warren Davidson's Bitcoin for America Act, which codifies the Executive Order creating a Strategic Bitcoin Reserve and enables Americans to pay federal taxes directly in bitcoin without incurring capital gains liability – a first in U.S. history. BPI unveiled a proprietary model calculating the financial impact of tax payments in bitcoin, demonstrating how voluntary contributions could build a national reserve through market-driven accumulation rather than government mandate.

Democracy meets sound money

Rather than forcing bitcoin acquisition through top-down mandates, this legislation creates the world's first truly voluntary, democratic pathway for national bitcoin accumulation. Giving Americans the option to pay taxes in bitcoin transforms the Strategic Bitcoin Reserve from political theater into a market signal about which form of money people actually trust.

Basel Committee chair admits global banking rules on bitcoin need complete overhaul as U.S. and U.K. refuse implementation

Erik Thedéen, chair of the Basel Committee on Banking Supervision, told the Financial Times that global rules requiring banks to hold 1,250% risk-weighting on bitcoin assets need to be reworked after the U.S. Federal Reserve and Bank of England refused to implement them. The admission comes as the $300 billion stablecoin market has forced regulators to reconsider treating all digital assets with permissionless blockchains as venture capital-level risks, with Thedéen acknowledging "we need to be fairly quick on it."

Bitcoin recognized for what it is, not what regulators assume

Once Basel revises its framework to assess bitcoin based on observed volatility and liquidity rather than nonsensical blanket prohibitions, banks will be able to use bitcoin as high-quality collateral throughout the financial system.

Block launches "Capital Gains Coffee Truck" in D.C. to push for bitcoin tax reform

Jack Dorsey's Block Inc. deployed a three-day mobile campaign across Washington, D.C. offering free coffee while advocating for a de minimis tax exemption on small bitcoin payments. The initiative, partnering with Compass Coffee locations citywide, gave visitors $5 in bitcoin through Cash App to demonstrate frictionless payments while educating lawmakers about how current tax rules requiring capital gains reporting on every bitcoin purchase – even a $3 coffee – discourage everyday adoption.

Bitcoin payments need tax parity with foreign currency

Current U.S. tax law treats bitcoin less favorably than foreign currency, which is exempt from small-transaction reporting requirements. Block's campaign highlights the absurdity of requiring Americans to track capital gains on routine purchases while bipartisan congressional momentum builds for a de minimis threshold. As Dorsey noted in October when Block eliminated merchant fees for bitcoin payments through 2026, removing tax friction is one of the last steps for bitcoin to fulfill its destiny as superior everyday money.

Bybit security lab exposes fund-freezing functions in 16 major blockchains

Bybit's Lazarus Security Lab analyzed 166 blockchain networks and found that 16 major chains include code allowing them to freeze or restrict user funds, with another 19 easily able to add such functions with minor protocol changes. The report documented cases like Sui freezing $162 million after the Cetus hack and BNB Chain using hardcoded blacklists to contain a $570 million bridge exploit.

Bitcoin's permissionless design proves its superiority

While these networks often tout decentralization, their ability to freeze funds exposes centralized control that bitcoin fundamentally lacks. Bitcoin's consensus rules cannot be overridden by any central authority – meaning your bitcoin remains yours regardless of politics, hacks, or institutional pressure.

BITCOIN ADOPTION CONTINUES

Metaplanet launched a two-tier preferred share structure raising $150 million through MERCURY perpetual preferred equity with 4.9% fixed dividends and bitcoin-linked upside, becoming the third bitcoin treasury company to offer preferred equity financing.

American Bitcoin (NASDAQ: ABTC) quadrupled Q3 revenue to $64.2 million and grew its bitcoin holdings to 4,004 coins through mining expansion and strategic accumulation.

New Hampshire's Business Finance Authority authorized the nation's first $100 million bitcoin bond, to be backed by private partners pending state Executive Council approval.

Lendasat launched Lendaswap, a non-custodial atomic swap exchange enabling instant bitcoin-to-stablecoin trades.

Strategy executive chairman Michael Saylor confirmed the company is accelerating bitcoin purchases during market volatility, with holdings now totaling 641,692 bitcoins acquired at an average price of $74,079 per coin.

Standard Chartered's Geoffrey Kendrick says bitcoin's 30% correction from all-time highs is likely complete with key metrics suggesting seller exhaustion and a rally into year-end remaining his base case.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week:

The Lesson of the Final Penny

The United States Mint produced its final penny in Philadelphia this week, ending 232 years of continuous production. The reason: each $0.01 coin costs about $0.037 to manufacture – nearly four times its face value. When it costs more to produce money than the money is worth, the monetary system has fundamentally broken down.

While over 250 billion pennies will remain in circulation, their obselencence demonstrates how inflation eats away at purchasing power, eventually rendering fiat currency in any amount worthless. The penny didn't become useless because copper got more expensive. It became useless because the dollar lost purchasing power.

Since the Federal Reserve's creation in 1913, the dollar has lost over 92% of its value. Since 2000 alone, it has shed 40%. This should be unsurprising to anyone who understands how fiat works – the system must continuously expand the money supply.

Economist Saifedean Ammous explains that technological progress is naturally deflationary. Improvements in production make goods and services cheaper over time. But fiat currencies mask this deflation through perpetual inflation, creating the illusion that prices rise when really the money is worth less.

The death of the penny illustrates why savers need bitcoin. A monetary system that makes its smallest denomination too expensive to produce is a system optimized for debasement, not preservation of value. Bitcoin's mathematical scarcity ensures that savers aren't slowly robbed through inflation – instead, they benefit as productivity gains are reflected in appreciating purchasing power.

COIN CHECK

By how much did the U.S. money supply (M2) expand between February 2020 and its 2022 peak?

A. About 12%
B. About 25%
C. About 40%
D. About 70%

Check your answer at the end of the page.

FROM THE MEME POOL

Follow us on X for more fresh content

ANSWER

Answer: C. About 40%.
M2 rose from roughly $15.5T pre-pandemic to a peak around $21.7T, an increase of about 40% in just two years. That surge reshaped the value landscape by front-loading new dollars into the system, while bitcoin’s issuance stayed fixed and predictable through the entire period.

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