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The Worst Bear Market Ever

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by Coinbits
Monday, Jun 01, 2026 - 14:54

A lot of bitcoiners are bearish. Some are even worse – apathetic. Yet, when FTX imploded and bitcoin fell to $16,000, many thought bitcoin might not have a future at all. Exchanges were going bankrupt left and right, and the rest of the financial market was happy to poke fun.

Yet bitcoin came roaring back to all time highs.

So you ask the perennial question: is this time different? We would humbly assert that it is not. Against bitcoin's own history, this cycle's drawdown is a walk in the park. Previous cycles handed holders peak-to-trough declines of 80% and more. This one, in the $60,000 range, doesn’t come close. One explanation for the difference is that bitcoin has recently achieved sufficient liquidity that, along with dampened volatility has contributed to a rising floor price. None of this existed in 2018, and it barely existed even in 2022.

Sentiment data tells the same story from the opposite direction. On the Bitcoin Dialectic podcast this week, Michael Sullivan walked through his work on gauging investor sentiment where he crawled X to map the moods of various cohorts of bitcoiners against price. The read right now is striking: anger among accounts associated with retail investment is at an all-time high, and it is coupled with unusually high conviction. People are not just bearish; they are certain they are bearish. At the same time, the cohorts with the best and longest track records in bitcoin commentary — the OGs, the pragmatists, the accounts that stay muted at tops and calm at bottoms — are quietly optimistic. As Sullivan put it, "the time to be optimistic is when people are really annoyed and angry and bearish, especially when coupled with conviction."

Sentiment is interesting, but the reason to stay bullish is structural. Roughly $500 trillion of the world's financial assets are parked in bonds and money — fixed income and M2 — earning a modest nominal return in exchange for minimal risk.

A flood of this magnitude is not easily priced because it has never happened before. Bitcoin did the one thing no other crypto asset has done – it created a genuinely new monetary asset, on the strength of its monetary properties, and it is still early in monetizing against the largest pool of capital on the planet. The spotlight is elsewhere for now, vacuumed up by other trades, so bitcoin’s price has remained boring, but potential energy does not announce itself before it releases. When global liquidity turns and the reservoir starts to flow, this stretch of gloom will look obvious only in hindsight.

NEWS

United Texas Bank wins a national charter to become the latest bitcoin bridge into the U.S. banking system

United Texas Bank completed its OCC-approved conversion from a Texas state-chartered bank to a national bank, giving the Dallas institution the same direct access to the Federal Reserve's wire and ACH rails as money-center banks while retaining its FDIC insurance. It already clears roughly $10 billion a month for foreign banks, OTC desks, and exchanges, and is pairing the charter with UTB Atomic, a 24/7 AI-driven payments network built to restore the round-the-clock liquidity lost when Silvergate and Signature collapsed.

Capital voting with its feet?

A Texas bank is now challenging Wall Street to bank bitcoin, and the geography is the key to the story. For years businesses have been leaving New York and Delaware for Texas, trading legacy prestige for lower costs, a lighter regulatory touch, and a state that actually wants their business.

That is the same move, one layer up, that a saver makes when she leaves dollars for bitcoin: when you can choose your jurisdiction or your money, you exit the system that takes you for granted and reprice toward the one competing to earn you. United Texas Bank is betting that bitcoin banking will attract capital away from Wall Street and toward whoever competes hardest to win it.

Ledn says the bitcoin-backed loan market could grow 300x to $1 trillion

Bitcoin lender Ledn published research projecting the consumer bitcoin-backed loan market could grow 300x, from roughly $3 billion to $1 trillion within a decade. Its survey of 1,244 holders found 88% would consider borrowing against their coins but only 14% do – a gap driven not by confusion but by trust concerns over volatility, liquidation, and regulation. This comes even as Ledn closes the first investment-grade bitcoin-collateralized bond, a $200 million deal whose senior tranche S&P rated BBB-.

Digital credit, retail edition

This is the institutional trade shrunk to retail size: don't sell your bitcoin, borrow against it instead. Fully 72% of holders say these loans let them tap cash without giving up an asset they expect to keep appreciating, which is exactly how the wealthy use securities-backed lending. An S&P rating on a bitcoin-backed bond is the trust infrastructure maturing in real time.

Cash App turns on fee-free USDC for 59 million users, calling stablecoins a path to bitcoin

Block's Cash App went live with fee-free USDC transfers across four networks with no separate wallet, meaning that transfers settle straight from a user's USD balance. This instantly makes its roughly 59 million monthly active users one of the largest consumer on-ramps to internet-native money rails. Block's bitcoin lead Miles Suter framed it bluntly: "once people are on open rails, bitcoin is a step away." Jack Dorsey was more conflicted, stating "I don't like that we're going to support stablecoins... I don't think it's wise to go from one gatekeeper to another."

Stablecoins are an onramp, not the destination

Both men are right. A stablecoin is still a dollar with an issuer who can freeze or debase it. Stablecoins simply swap a trusted counterparty at a bank for a counterparty at a stablecoin reserve, as Dorsey warns. But the 59 million people learning to move money on open networks is a funnel that points one way. Bitcoin is the only step that removes the gatekeeper entirely.

Elon Musk could become a top-5 corporate bitcoin holder if Tesla and SpaceX merge

CNBC reported that Musk has discussed merging Tesla and SpaceX, a combination that would pool Tesla's 11,509 bitcoins and SpaceX's 18,712 into 30,221 coins worth roughly $3.3 billion – the fifth-largest public corporate stack, trailing only Strategy, Twenty One Capital, Metaplanet, and Marathon. Neither company has confirmed their plans.

Top five by accident

Neither Tesla nor SpaceX is a treasury company. Both bought bitcoin years ago and held it, and SpaceX's stack hasn't moved since 2024. A back-office merger would accidentally mint a top-five holder.

BITCOIN ADOPTION CONTINUES

Bitcoin miner TeraWulf acquired a hyperscale 1-gigawatt-plus high-performance computing campus in eastern Kentucky, sending its share price up 13% as bitcoin mining infrastructure anchors the AI datacenter gold rush.

Strategy completed a $1.5 billion repurchase of its zero-coupon convertible notes at roughly an 8% discount, booking a 13.3% BTC Yield year-to-date and treating its balance sheet, not just its bitcoin, as productive working capital.

NYSE American-listed DDC Enterprise added another 131 bitcoins to its corporate treasury, its second purchase in seven days, lifting holdings to 2,714 coins and its bitcoin per share by 13.9% with no new equity issued.

Strive's SATA preferred-stock vehicle briefly absorbed more bitcoins in a single day than the entire network produces, after setting a weekly purchase record of roughly 794 coins.

Samsung Securities, Samsung SDS, and Samsung Card agreed to acquire a combined 4% stake in Dunamu, operator of South Korea's largest bitcoin exchange Upbit, for roughly $408 million, valuing the company at about ₩15.3 trillion and pulling one of the country's largest conglomerates into the stack.

Italy's Banca Sella became the first Italian bank cleared under the EU's MiCA framework to offer regulated bitcoin custody and transfer services, joining roughly 20 major European banks now operating MiCA-licensed digital-asset services.

HOW BITCOIN WORKS

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

Why "ETH is money" quietly failed, and what bitcoin had that no other chain can copy

Bankless co-founder David Hoffman, one of Ethereum's most influential advocates for the better part of a decade, sold his ETH last week and published an essay titled "ETH is Money Was Always a Longshot". His frame is striking: the thesis didn't fail, he writes — it "played out." Ethereum has "earned the market cap it deserves," and he no longer sees ETH being rerated as an asset in either direction. Such a message coming from the ultimate ETH insider, about the only asset that was widely seen as a challenger to bitcoin, is quite something. It deserves some brief analysis and a little bit of gloating.

Hoffman's diagnosis for the failure of ETH as money is that smart-contract chains are priced on fees, and a native asset rises only when its chain captures and holds dominant L1 revenue. Ethereum briefly did this, but then lost to Solana and others. More damning, Ethereum is, in his words, "a giver, not a taker," because it is engineered to commoditize blockspace, push margins out to apps and L2s, and take only the minimum margin required to sustain the network. The value of ETH the asset is, by design, arbed out. And the utility Ethereum supplies flows upward to whatever already is money: stablecoin market cap on the Ethereum network has grown from $3 billion to $163 billion – 54x – almost entirely dollar-denominated and accruing to U.S. dollar hegemony rather than to ETH.

The deeper lesson is about bitcoin. Hoffman writes that Ethereum chose to add everything to its blockchain to maximize the utility of its blockspace, while bitcoin chose to strip everything except its monetary qualities.

None of this is new to those who watched the proof-of-work-versus-proof-of-stake debate a few years back. On Bankless's own podcast, Lyn Alden argued that the architectural choice itself reshapes the asset. Bitcoin, secured by external energy, behaves like a commodity. Its value is exogenous to the protocol used to mine it and move it around. On the other hand, ETH, secured by staked capital that earns network yield, behaves more like equity in the protocol.

This is what every project chasing bitcoin's monetary status eventually discovers. You can fork the codebase but you cannot fork the social consensus that made bitcoin the Schelling point of money. Bitcoin was not so much invented as discovered – a one-time emergence of a neutral monetary standard in a world that had never had one before. Hoffman's essay is likely the first of many honest acknowledgments of that asymmetry to come from inside a competing camp, and every other project with monetary aspirations should read it carefully. Even Vitalik seems focused elsewhere.

The settlement layer for the world's value will converge toward the best asset.

COIN CHECK

Over the past few weeks, an oil price shock from the Iran war has driven a global government bond selloff. U.S. 30-year Treasury yields climbed toward their 2023 peak while 10-year yields jumped about 12 basis points, and the 30-year reached roughly 5.2%, its highest level since 2007. Crucially, the rout was led by longer-dated bonds.

When inflation expectations suddenly rise, why do long-dated bonds (like the 30-year) typically lose more price value than short-dated bonds (like the 2-year), even when both are issued by the same government?

A. Long bonds have a higher default risk, and inflation makes default more likely.
B. Long bonds have greater duration, so their price is more sensitive to any given change in yield.
C. Short bonds pay higher coupons, which cushion them against inflation.
D. Central banks directly control long-term yields, so they fall first.

Check your answer at the end of the page.

FROM THE MEME POOL

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ANSWER

Answer: B

The key concept is duration: the weighted-average time until a bond's cash flows are received, which measures how sensitive its price is to a change in yield. A 30-year bond delivers most of its value far in the future, so discounting those distant cash flows at a higher rate slashes the present value dramatically. A 2-year bond returns your principal soon, so a yield change barely dents its price.

 

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