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All Aboard the Sound Money Train

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by Coinbits
Monday, May 04, 2026 - 22:18

Fed Chair nominee Kevin Warsh re-emphasized to the Senate Banking Committee that he does not trust the official inflation statistics, and that he prefers the "trimmed mean" measure. This method throws out outlier prices, which, when you do so, shows inflation is currently running well below the headline number. Warsh’s statement provides a pretext for lower interest rates, which is needed to enable the financial engineering required to fuel the AI transition of the U.S. economy.

What’s going on under the surface? In our view, it’s clear that Treasury Secretary Scott Bessent is running this play. And this administration does not move slowly. An unscheduled Fed meeting and a 100-basis-point cut soon after May 15 are well within the realm of possibility.

The mechanics are simple: lower rates fuel bank lending, bank lending grows M2, and the next credit-and-inflation cycle begins. AI hyperscaling and energy buildout will be able to access the debt financing they need to grow capacity to meet demand. If the bond market wakes up to deeply negative real yields, it sells off hard, the Fed defends the long end, and we get the next "Big Print" on the balance sheet. GFC was $3.6 trillion. COVID was $5.0 trillion. The next one will be larger — against a $39 trillion federal debt load and a $6.6 trillion Fed balance sheet that the Fed cannot meaningfully shrink without breaking the Treasury market. As Lawrence Lepard explains:

Meanwhile in Las Vegas, the Bitcoin 2026 conference is delivering the receipts of bitcoin acceleration from other quarters of government: the Secretary of War disclosed classified Pentagon bitcoin projects on the Hill, a NATO central bank governor defended his sovereign bitcoin allocation from the Nakamoto Stage, the DOJ promised to stop prosecuting open-source developers.

There’s never a wrong time to own sound money, but it does feel like we are approaching a tipping point. If the AI boom hasn’t even really started in earnest, the next growth cycle could see massive increase in asset values, bitcoin included.

NEWS

Hegseth tells Congress the Pentagon has classified, ongoing bitcoin projects

U.S. Defense Secretary Pete Hegseth told the House Armed Services Committee on Thursday that the Pentagon has classified, ongoing bitcoin projects that "provide a lot of leverage in a lot of different scenarios." This comes a week after Indo-Pacific Commander Admiral Paparo confirmed the military is running a bitcoin node. Texas Republican Lance Gooden told the same hearing that bitcoin has evolved "from a fringe asset into a matter of national security."

Bitcoin enters the U.S. national security framework

The Pentagon does not develop classified projects around things it considers irrelevant, and a major U.S. government official with personal bitcoin holdings is no longer an outlier in Washington.

Czech National Bank governor takes the Bitcoin 2026 stage to defend his 1% bitcoin allocation

Czech National Bank Governor Aleš Michl delivered a keynote at Bitcoin 2026 in Las Vegas explaining the central bank's decision to add a 1% bitcoin allocation to its $180 billion foreign exchange reserve portfolio. According to the CNB's published analysis, even a 1% bitcoin position raises expected returns in koruna terms while leaving overall portfolio risk roughly unchanged — a function of bitcoin's low long-term correlation with traditional reserve assets.

"Conservative in monetary policy. Innovative in how we work."

A NATO central bank governor who personally brought 20% Czech inflation back to 2% in two years through hawkish policy just defended a sovereign bitcoin allocation from the floor of the Bitcoin Conference. There is no longer a meaningful debate among serious central bankers about whether bitcoin belongs in a reserve portfolio; there is only the question of how much.

Tether moves to consolidate bitcoin treasury, mining, and Strike under Twenty One Capital

Tether Investments proposed merging Twenty One Capital (XXI) with Jack Mallers's Strike financial services platform and Elektron Energy, a miner controlling roughly 5% of the bitcoin network's hashrate at all-in production costs below $60,000 per coin. The combined company would unite a treasury holding 43,514 coins, about 5% of global hashrate, and consumer financial services, lending, and capital markets under one publicly listed entity.

A vertically integrated bitcoin holding company emerges

Bitcoin now has a meaningful blue-chip platform built around it on the public markets — treasury, mining, payments, and lending operating under one roof.

Lightspark and Visa launch Grid Global Accounts, a Bitcoin-rail dollar account that works in 65+ countries

David Marcus, CEO of Lightspark, unveiled Grid Global Accounts— a dollar-denominated account that routes payments over bitcoin, stablecoins, and fiat under the hood, paired with a Visa debit card for spending across Visa's global merchant network. The product offers branded U.S. dollar accounts, payouts to more than 65 countries and 14,000 banks, instant bitcoin conversion, and an API that lets any app become a global financial hub without a banking license.

Bitcoin becomes the neutral settlement layer beneath global payments

The world moves 10 billion payment transactions per day with no universal layer underneath. Lightspark just delivered a candidate — invisible to the end user, settled in bitcoin, and functional across the planet. We finally have a viable candidate for global bitcoin-based payment infrastructure that plays nicely with the existing banking system.

Lightspark isn’t the only company betting big on Lightning:

BITCOIN ADOPTION CONTINUES

Ark Invest's Big Ideas 2026 report projected bitcoin's market cap will reach $16 trillion by 2030 — implying a price of ~$730,000 per coin — driven by accelerating ETF, corporate, and sovereign accumulation.

Steak 'n Shake disclosed that bitcoin Lightning payments are saving them $6 million every year in card-processing fees, helping them fund a switch to 100% grass-fed beef and the removal of microwaves from every kitchen.

Acting Attorney General Todd Blanche and FBI Director Kash Patel told the Bitcoin 2026 Conference that the DOJ will no longer "regulate by prosecuting" bitcoin developers, signaling an end to enforcement actions against open-source builders.

Aven launched a bitcoin-backed Visa card at Bitcoin 2026 offering credit lines up to $1 million at rates from 7.99% APR, with no annual fee, 2% cash back, BitGo custody, and an advisory board including Fed Chair nominee Kevin Warsh.

MARA Holdings launched the MARA Foundation with an initial $100,000 community-voted grant supporting bitcoin development across network security, open-source software, self-custody, public policy, and education.

Blockstream launched Jade Core, a simplified open-source hardware wallet designed to lower the barrier to bitcoin self-custody for first-time users while preserving the company's audited security model.

Amboss activated RailsX, enabling peer-to-peer, fully self-custodial USDT and USDC trading directly over the Lightning Network for the first time.

Bitcoin Beyond 66 launched The Bitcoin Evidence Base, an open-source AI tool that generates evidence-based responses to bitcoin FUD using more than 22 peer-reviewed papers, including the latest Cambridge data showing 52%+ of bitcoin mining now runs on renewable energy sources.

HOW BITCOIN WORKS

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

Innovation vs. the casino

At Bitcoin 2026 this week, River CEO Alex Leishman delivered a sharp critique of modern finance. His thesis was that, as housing affordability collapses and bank savings fall behind inflation, young people are increasingly concluding they have to gamble or speculate to build the financial future their parents earned through saving.

Mainstream fintech apps that market themselves as "democratizing finance" (c.f. the “Let the people trade” tagline that Robinhood used when it launched, a company that royally screwed retail traders during the GME saga in favor of big financial firms) are integrating sports betting and prediction markets into their core banking experience. Banking and gambling, historically separate, are merging on the phone screens of millions of Americans who simply cannot afford to have more of their money siphoned away by big firms.

Leishman is right, of course. But it’s worth taking the time to examine how we got here.

Financial innovation, broadly speaking, is good. Democratizing access to global equities for investors in emerging markets, building better hedging tools for individuals and small businesses, opening new capital markets for entrepreneurs — these are productive activities that expand human prosperity.

The problem isn't financialization itself, it's that financialization's negative externalities, which include predatory speculation, addictive gambling products delivered to low information customers with a veneer of ‘serious investments,’ and churn-based business models are amplified by the inflationary nature of fiat.

When a currency loses purchasing power every year, saving becomes a losing strategy, and speculation becomes a matter of survival. Think of it like treading water – spending energy just to stay afloat. Inflation pushes time preferences higher, and higher time preferences make people more vulnerable to gambling. Research has repeatedly linked rising inflation to increased gambling. The financial industry, observing the demand in today’s environment, builds products to meet it.

Under a bitcoin standard, savers are rewarded for delaying consumption, time preferences fall, and capital that today flows into prediction markets and gamified trading instead flows toward productive long-term ventures like AI, energy, and space infrastructure – investments in humanity’s future that will pay out for hundreds of years. Financial innovation would still be possible under a bitcoin standard, it would just become less predatory because the conditions that drive the production of predatory products no longer exist.

Leishman’s remarks point the right direction, but the deeper insight is that bitcoin dissolves the incentives that drove the casino's expansion in the first place.

COIN CHECK

Who is the longest‑serving Chair in the history of the U.S. Federal Reserve?

A. Alan Greenspan
B. Paul Volcker
C. William McChesney Martin Jr.
D. Ben Bernanke

Check your answer at the end of the page.

FROM THE MEME POOL

Follow us on X for more fresh content

ANSWER

Answer: C. William McChesney Martin Jr. served as Fed Chair for 18 years and 9 months, between 1951 and 1970. He narrowly edged out Alan Greenspan’s tenure, which lasted from 1987 to 2006, which amounted to 18 years and 5 months.

The runner‑up is the more interesting study for bitcoiners. Two decades before he was nominated to run the Fed, Greenspan published a 1966 essay titled "Gold and Economic Freedom," in which he argued that without a gold standard there is no way to protect savings from inflation, that deficit spending is a scheme for the confiscation of wealth, and that "gold stands in the way of this insidious process."

By the end of his eighteen‑year tenure, Greenspan had presided over one of the largest peacetime expansions of credit and the dollar monetary base in American history – the very dynamic his 1966 essay warned against.

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