TFTC: A Bitcoin Podcast

Episode #656: Q2 2025 Monetary Base Update with Matthew Mežinskis

Date: September 3, 2025
Host: Marty Bent
Guest: Matthew Mežinskis

Episode Overview

In this episode, Marty Bent welcomes back Matthew Mežinskis for their regular “Monetary Base Update,” taking a data-driven look at Bitcoin’s price action, long-term adoption, cycles, network effects, and macroeconomic context. They go deep into the so-called “power curve” of Bitcoin growth, compare it to fiat monetary bases, discuss institutional and cyclical trends, and explore possible futures for both Bitcoin and the global financial system.

The tone is thoughtful, optimistic, and occasionally cautionary: the hosts ground listeners in fundamentals and historical data, warning against hype and fear and instead urging a focus on long-term adoption, self-custody, and the importance of network effects. They also explore open philosophical questions at the frontier of money, technology, and finance—where the power curve of Bitcoin meets the superexponential demands of the TradFi world.

Key Discussion Points & Insights

1. The State of Bitcoin: Is Everything On Track?

• Power Curve Overview (00:11–13:30)

  • Main concept: Bitcoin’s long-term price follows a “power law” (or “power curve”), with growth slowing over time but still outpacing traditional assets by a wide margin.
  • August 2025 closed at $108,316, 2.5% below the power curve’s “trend”; July was 6.2% above trend. These modest deviations are completely normal; no cause for concern.
  • Marty: “The overall picture as far as I can tell...nothing has really changed underlying...as far as I’m concerned, it’s like nothing to worry about. Totally normal behavior.” (10:06)
  • Data-sensitive listeners are encouraged not to be distracted by emotional reactions or impatience with cyclicality.

• The Four-Year Cycle & Sentiment

  • Many people expect explosive post-halving price action based on past cycles, leading to disappointment in the “boring” but upwardly trending price action of the current year.
  • Matthew: “Many market participants...are anchoring to those expectations and becoming sorely disappointed that they’re not materializing...underappreciating that we have this very regimented, structured up-and-to-the-right. It’s boring, but it’s still moving in the right direction.” (11:42)
  • The hosts stress that “boring is good”—and that the cycle isn’t dead until the data shows it.

2. Power Curve Deep Dive: Adoption, Price Multiples, and What to Watch

• Visualizing the Price Range (18:00–25:22)
  • Using percentiles above and below trend, the hosts illustrate how previous bull runs routinely see price run 2–3x above trend (e.g., 250k–375k prospective highs by end of 2025-early 2026).
  • Marty: “If [Bitcoin] doesn’t get above the 80th/90th percentile—say, above 170k–250k in the next 6–9 months—I’d reconsider the four-year cycle idea.” (21:00)
  • Lower highs are possible as the asset matures, but until that’s clear in the data, the “bullish message” stands.
  • Matthew: “Base case: 2 to 3x the trend by the end of the year—or the first couple months into next year. That’s 250k to 375k. That would be how I’d look at it.” (24:00)

3. Institutions, Leverage, “Paper Bitcoin,” and Market Manipulation

• Concerns about ETF-driven leverage, rehypothecation (e.g., “paper Bitcoin”), and suppressive derivatives are discussed.
  • Marty: “Plenty of coins are coming onto the market...nobody ever sells their bitcoin, they said. It was all paper bitcoins, they said. I think that summarizes it pretty clear to me.” (29:35)
• There’s no clear evidence that paper Bitcoin is suppressing price beyond normal cyclical activity; long-term distribution trends (OGs taking profit, newer cohorts learning the game) are visible.

4. Macro Context: TradFi Growth vs the Power Curve

• Fedwire & Transaction Volume Comparisons (32:35–39:12)

  • Bitcoin network volume remains miniscule compared to Fedwire ($7T vs $1,100T yearly), but the “catch-up” is happening as price/adoption rise.
  • Marty: “Don’t get worried. We’re going to wake up tomorrow and there’s still going to be a Fedwire...but Bitcoin can absolutely get there. The only thing that needs to happen is the price to rise.” (37:46)

• Monetary Base, M3/M4, and Global Money (39:12–40:36)

  • The global broad money supply is now ~$150T; Bitcoin has a long way to go in terms of “absorbing” global liquidity.

5. Exogenous vs Endogenous Drivers of Bitcoin

• Network Effects Over Macro Policy

  • Matthew: “If you want to anchor in confidence and filter out all the noise...just view it as network adoption, of which price is just an output of that adoption. I think it makes a lot of sense.” (36:19)
  • The hosts agree: ~95% of Bitcoin's price movement is driven by network growth/adoption, not macro policy or Fed decisions.

• Stock Market Superexponential Growth vs Bitcoin’s Sustainable Curve (44:18–53:17)

  • TradFi markets (stocks, etc.) have seen ever-faster growth rates, driven by fiat expansion and the need to outrun debts (“superexponential growth”), while Bitcoin is slowing and stabilizing into a sustainable power curve.
  • Marty: “What will happen when superexponential TradFi meets the gentle decelerating growth of Bitcoin? Is that the singularity? Is that the new bitcoin standard?” (47:46)
  • Even with slowing growth, expected “normal” returns for Bitcoin remain 20–40% CAGR for decades to come, far higher than stocks.

6. Philosophical Futures: What Happens When the Curves Collide?

• Potential Scenarios

  • Bitcoin could become “Gold 2.0”—a great hedge, but the system persists as is. Or, it could become the new base layer, disrupting debt financing and possibly shifting to equity-driven economics.
  • Marty: “Why would you accept fiat interest as a lender when you know that you’re going to get paid back in some fiat interest on those satoshis...you might not get your collateral back?” (54:00+)
  • If Bitcoin remains on its power curve, “interest rates” as we know them may not work—equity finance may become dominant.

• Emerging Bitcoin-Based Financial Ecosystem

  • Early signs: companies like MicroStrategy, miners using BTC as collateral, and hybrid equity/debt deals.
  • Equity-based finance through bitcoin could upend today’s hierarchy of debt and equity, with profound societal effects.

7. The Banking Stack: Free Banking, Coordination, and State Resistance

• Layer 2 Innovations
  • Lightning Network, open-source banking protocols (Fedimint, Cashu), and developments in BTC-based financial contracts signal early maturity of a truly decentralized monetary “banking” stack.
  • Concerns: Even in free “banking” systems, concentration, state capture, or bad actors (guardians, coordinators) can introduce risk.
    • Matthew: “With every new layer, there’s a risk it can be made ‘unfree’ by regulation or monopoly capture.” (71:08)

8. Self Custody, State Threats, and Institutionalization

• ETFs and Treasury Companies: Risks of Custodialization

  • The increasing role of ETFs and “paper” bitcoin means there’s a trend toward more BTC being held on behalf of investors, rather than individually custodied—a risk if governments enact 1930s-style gold confiscation moves.
  • Marty: “If the government says, ‘No withdrawals for Americans,’...that’s when you take to the streets and say no. Don’t wait for that to happen. Be active, get it into your own wallet, secure your own private keys.” (87:45)

• Speculative Theories: Government/Corporate Collusion

  • Playful speculation about US government building a BTC reserve by acquiring big corporate holders (e.g., MicroStrategy) via buyouts or legislative action.

9. Closing: The Long View

• When Does Bitcoin "Win"?
  • The “real” crossing point, when Bitcoin equals the global monetary base, is projected around 2041 at $120T+ market cap.
  • Marty: “This is kind of the real bitcoin dominance. If fiat base money is $40T, gold/silver/fiat base money, Bitcoin is $2T...When do we cross? 2041...120 trillion” (101:02)
  • “Trend is your friend, tune out the noise. Twitter is not real life.” (107:03)
  • The best signal: price and adoption on the network, not emotional prophecies or online chatter.

Notable Quotes & Memorable Moments

• Power Law vs Exponential Growth:

  • Marty: “If bitcoin was growing like the stock market or gold or any other tradfi market, then on log scale you’d get a straight line...but Bitcoin has this nice, gradually sloping curve.” (06:00)

• On Cyclical Disappointment:

  • Matthew: “Many market participants...are anchoring to those expectations and becoming sorely disappointed...underappreciating the fact that we have this...structured up and to the right. It’s boring, but it’s still moving in the right direction.” (11:42)

• Four-Year Cycle:

  • Marty: “I don’t think there’s any reason to discount… the four-year cycle yet. We can look at some charts if you want to talk about paper Bitcoin and all the rest.” (15:36)

• What if BTC never gets above the trendline?

  • Marty: “If [Bitcoin] doesn’t get above...say, 170k–250k in the next 6–9 months, then I would consider the four year cycle being invalidated.” (21:00)

• On Network Growth:

  • Matthew: “I think anchoring to [the power curve]...and just taking price and exogenous factors...out of it, and just view it as network adoption, of which price is just an output...makes a lot of sense.” (36:19)

• TradFi Exponential Growth Trap:

  • Marty: “What will happen when this superexponential growth of TradFi meets this decelerating growth of bitcoin? Is that the singularity? Is that a new bitcoin standard? I have no idea.” (47:46)

• Self Custody as Defense:

  • Matthew: “If you want to protect yourself from the withdrawal button being turned off by the US government at exchanges, don’t wait for that to happen. Be active, get it into your own wallet, secure your private keys.” (88:40)

• On Bitcoin’s Place in World Finance:

  • Marty: “It’s inevitable that [people] will get fed up and look for other options. And bitcoin’s going to be there. Gold failed there...Bitcoin is not doing that...absolutely, you know, actually capturing it, actually...being able to control the market price—we’re a long, long way from that.” (82:23)

• On the Global Monetary Crossing Point:

  • Marty: “If fiat base money is 40 trillion...Bitcoin dominance, 5.6%. When do we cross? That would be here—2041, roughly 120 trillion.” (101:02)

Timestamps for Major Segments

| Timestamp | Segment | |-------------------|------------------------------------------------------------------------------| | 00:00–02:30 | Episode intro, bitcoin as safe haven, current sentiment | | 02:30–06:00 | Power curve model explained; August/July price context | | 06:00–13:30 | Visualization of the power curve, percentiles, and cyclical expectations | | 13:30–16:18 | Psychology of holders; market behavior and four-year cycles | | 18:00–25:22 | Upper bounds and base-case scenarios for BTC price in this cycle | | 29:35–32:35 | Paper Bitcoin, rehypothecation, and "who's selling?" | | 32:35–39:12 | Bitcoin settlement volume vs Fedwire and fiat monetary base context | | 44:18–53:17 | TradFi superexponential growth vs Bitcoin's power curve, future projections | | 54:00–60:28 | Coexisting/competing asset-base futures; debt vs equity financing | | 67:30–72:30 | Free banking, L2 protocols, centralization/capture risks | | 82:23–86:08 | Resilience against state capture and optimism for Bitcoin's future | | 101:02–105:56 | Final “when BTC passes TradFi money supply” chart and closing notes | | 107:03–107:56 | Message to listeners: filter noise, follow fundamentals, and hodl |

TL;DR — The Takeaway

Bitcoin's price and network growth are right on track, following a predictable power curve that counters both bear and bull noise. The four-year cycle isn't dead until proven otherwise, and even if adoption slows, long-term returns for BTC vastly outstrip those of any traditional asset. Institutional involvement and new layer-2 tech present both opportunities and challenges, especially regarding custodial risk and state capture—but the only true defense remains self-custody and network resilience. Ignore the Twitter noise, focus on adoption, and run your own node.