← Coin Stories with Natalie Brunell
Coin Stories with Natalie Brunell
News Block: Bitcoin to $40k? AI Agents Get Wallets, Unrealized Gains Taxes & Ledn Makes History
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Welcome to the Coin Stories news block, powered exclusively by LEDN. I'm Natalie Brunel and in about 10 minutes or less I'll provide you with insightful updates on Bitcoin, financial markets and the global economy. Everything you need to know in one block. Let's go. Bitcoin continues to hover just under $70,000 and appears to be trying to build some support at this level. But the technical picture is showing some real downside. Risk analysts are pointing to $40,000 as a possibility, which up with how past bear markets have played out for long term holders. That kind of pullback isn't new territory, it's a pattern. I was at Bitcoin Investor Week in New York last week and my takeaway sentiment is a mixed bag given this recent price action. The biggest topics of conversation at the conference were without a doubt the continued momentum of institutional adoption and how AI will impact not just Bitcoin, but the broader markets. AI driven deflation has a lot of people concerned, and for good reason. The potential impact on both jobs and productivity is becoming impossible to ignore. All technology is deflationary by nature, but AI is advancing rapidly and its impact is already showing up in economic data. Truflation, which tracks real time consumer prices, is reading inflation at just 0.68% while the official CPI still says 2.4% and that's a massive gap. Lynn Alden framed it simply. Inflation equals money supply growth minus productivity growth. AI is blowing up the productivity side of that equation, which could result in a deflationary impulse. Side note, I had the privilege of sitting down with Lynn for a brand new show to discuss her macro outlook. So make sure you give that episode a listen when it drops this week. Now, the big thing to understand is that a deflationary bust doesn't happen simply because of a powerful new technology. A true bust happens when the deflationary of that technology collide with an over leveraged credit based financial system that requires inflation to stay afloat. And of course that's the system we have today. So when I think about AI and Bitcoin, there are two critical points to make. First, the AI disruption is real and it's only a matter of time before we see it show up in the labor market and the valuations in the stock market. But if and when we do see a deflationary impulse, make no mistake, the government and the central bank will step in with liquidity. They always do. If they didn't, it would be a complete departure from how they've responded to every single market scare over the last 25 years. Allowing the sovereign debt bubble to implode would simply be too destructive. So they will inject liquidity. And in that environment of monetary expansion, Bitcoin tends to thrive. Second, it's becoming increasingly clear that Bitcoin will be the money of choice for AI agents. It's something I mentioned in my recent Fox Business News hit, and we just took another major step forward on that front. Lightning Labs released a new open source toolkit last week that gives AI agents native access to the Bitcoin lightning network. No human approval, no bank accounts, no logins, no API keys required. At the core is a tool called Inget that automatically handles lightning payments in the background. An AI agent can now sell data or compute while another buys it, and the lightning network settles the transaction instantly and globally. The machine payable web just moved from theory to reality and Bitcoin is the rail that makes it possible. As Major Jason Lowry, Special Assistant to the Commander at the US Indo Pacific Command put it, AI agents independently discovering that Bitcoin gives them cyber sovereignty and then starting a bidding war with humanity over the only remaining Bitcoin available is not priced in. The bottom line is Bitcoin is probably one of the cleanest ways for investors to bet on the AI revolution because it gives direct exposure to the technology trend. And it's also a bet on the money printing that will inevitably follow to try to offset the deflationary impacts. Need cash, but don't want to sell your Bitcoin? Leden is the global leader in Bitcoin backed loans, issuing over $9 billion in loans since 2018 and they were the first to offer proof of reserves. With Leden, you get custody loans, no credit checks, no monthly payments, and more. Visit Leden IO Natalie to learn more and get a quarter percentage point off your first loan. Now let's talk about something that should concern every investor whether you own Bitcoin or not. Last week the Dutch House of representatives passed a 36% tax on unrealized capital gains on stocks, bonds and crypto. The bill now heads to the Senate and if it passes there, it will likely take effect in 2028. Now let me be clear about what this is, because there are some American politicians and candidates out there who are proposing the same policy. This is straight up wealth confiscation and a complete infringement of property rights. And here's what makes this so outrageous. Governments around the world have debased their currencies for decades, destroying people's ability to save. So what did people have to do they had to become investors and take on risk. They were forced to invest their earnings because holding cash meant watching their purchasing power evaporate year after year. And now, instead of being rewarded for being right with their investments, the government wants 36% of gains that they haven't even realized yet. They haven't sold a single share or satoshi. They haven't locked in a single euro of profit, and the government still wants more than a third of it. So, to summarize, they destroy the money. So you have no choice but to invest. Then, when your investments go up on paper, they. They tax the paper gains. They are systematically closing every door and deflating every life raft. And do you think the government will reimburse these people for losses on their investment? Of course not. Let's walk through an example. Say bitcoin doubles from €50,000 to €100,000. That means you owe about €17,000 in taxes on those unrealized gains. But what if the market drops before your tax bill is due? Well, tough luck. You're still on the hook. You would likely have to sell your bitcoin to cover taxes on the gains that no longer, longer exist. How insane is that? And if you think the Dutch people are just going to sit back and take this, think again. We've already seen how this has played out in other countries. Back in 2022, Norway raised its wealth tax, expecting around $150 million in new revenue. Instead, $54 billion in wealth fled the country, reducing overall tax revenue by 594 million. In other words, wealthy people packed their bags and left, and it backfired completely. This is what the end game of fiat currencies looks like. They debase your money, force you into risk assets, then tax gains you never realized. And when you try to escape, they hit you with more taxes. And if you think this can't happen in your country, think again. As debt builds and currency debasement, accelerates, taxes and capital controls always follow. This is exactly why bitcoin matters. Bitcoin is digital capital that anyone can carry anywhere on earth with just 12 to 24 words in their head. No government can seize it. No border can stop it. No bank can freeze it. A tool for the sovereign individual. And it's a saving sanctuary, open to all. And it's only a matter of time before more people around the world wake up to that, as the fiat system grows more and more hostile. Before we wrap up, a few more developments that grabbed my attention from this past week. First, some major news about our partner Leden S and P Global has assigned a triple B minus rating to let in his first Bitcoin backed loan securitization, a near nearly 200 million dollar pool of loans backed by over 4,000 Bitcoin. This is the first time a bitcoin related credit product has ever received an investment grade rating from a major credit rating agency. What makes it even more impressive is that this rating came after Bitcoin's recent price crash. The deal obviously survived that stress test and it might have something to do with Leden's track record. That's institutional grade resilience and a signal that Wall street is starting to take Bitcoin backed lending more seriously. Second, on the flip side, we saw an example of why not all Bitcoin lenders are created equal. Blockfills, an institutional crypto trading and lending platform serving over 2,000 clients and facilitating more than $60 billion in trading volume, last year announced that it halted client withdrawals and deposits. The firm says the suspension is temporary and we'll see if that's true. But I can't help being reminded of when similar announcements came from Celsius, Blockfi, Voyager and Genesis during the crypto blowups of 2022. We've seen this story before and we'll be watching closely for any updates and signs of contagion related to other lenders or Blockfill's clients, which includes several mining companies. And finally, Michael Saylor and Strategy made moves to address rising concerns about Quantum computing. During Strategy's Q4 earnings call, Saylor announced a bitcoin security program to bring together the cybersecurity and bitcoin communities to make sure the network stays ahead of emerging threats. His view is that quantum computing is advancing, but still early and likely at least a decade away from posing any real risk. And if a protocol upgrade is ever needed, Bitcoin will do what it always does reach consensus, upgrade and come out stronger. Saylor put it like this it is likely that consensus will form and solutions will form at the right time in a responsible fashion. What I like about this is that he's not dismissing the concern, but he's also not panicking on or rushing for a quick fix. Strategy is acknowledging the investment community's concerns and they're leading an effort to make sure bitcoin is prepared. And that is the kind of institutional stewardship the network needs. That's it for the News Block your weekly Bitcoin and economic news update, powered exclusively by ledn. I'm Natalie Brunel. Make sure you're subscribed to Coinstory, so you never miss an episode. This show is for educational purposes and should not be construed as investment advice.