August 2025

INDIVIDUALS

Has BTC crossed the chasm?

In 1991 Geoffrey Moore wrote a book describing a particular challenge faced by tech companies: tech adoption happens in distinct waves but many products don't make it past the first 2 waves.

The Early Market is divided into 2 waves:

• Innovators (tech enthusiasts) - are highly eager to try new things
• Early Adopters (visionaries) - willing to take risks for competitive advantage

The Mainstream Market (3 waves) are slower to embrace new tech:

• Early Majority (pragmatists) - want proven, reliable solutions
• Late Majority (conservatives) - skeptical and price-sensitive
• Laggards (skeptics) - flat out resistant to change

So far, so good. But the Moores' key insight was "the chasm" that separates the Early Adopters from the Early Majority. You see, the Early Majority largely considers the Early adopters to be …well, geeks and weirdos, to be honest.

Early Adopters are attracted by a new tech's promise and vision. They're willing to endure a bit more pain and a steeper learning curve (and risk) if the product aligns with their vision.

The Early Majority scoffs at the excited rantings of the Early Adopters. They prefer established products with clear manuals, a proven track record, and endorsements from voices they trust. Pie-in-the-sky promises that start with "what if" need not apply.

Until recently, it was fairly obvious that BTC was still in the Early Adopter phase. The arrival of the (wildly successful) ETFs was the first sign that maybe the Early Adopters are not alone anymore, and the latest craze of new BTC treasury companies being announced every week is certainly novel.

So, are we there yet? Can we claim the Early Majority has arrived?

I personally don't think so. There's one event coming up next month that may give us a definitive answer…

It's fairly obvious we're nowhere near adoption by the Late Majority —most corporations still prefer to use their excess cash for stock buybacks instead of BTC Treasuries. It's questionable whether we can even claim to have reached Early Majority adoption levels. I mean, BTC allocation for most global funds is still zero and almost 80% of them have less than 2% of their funds allocated to BTC.

And while its true that the number of "Bitcoin Treasury Companies" is growing rapidly, most of these are either companies that are already deep into the Bitcoin / crypto space (like miners Mara and Riot), re-purposed zombie companies, or custom-built corporate vehicles launched by Bitcoiners (like XXI, Bitcoin Standard Treasury, etc).

Sure a few big names —most recently the Harvard Endowment— are waking up to Bitcoin and loading up on MSTR or iBit, but 20 rain drops do not a shower make.

Rails

What is undeniable is the rails and infrastructure to accommodate that Early Majority is being built out. Connections and ramps between tradfi and Bitcoin are expanding. Banks —including Keybank, PNC, Old National and even larger brands like Bank of America— are hyping up Bitcoin…

and announcing plans to incorporate Bitcoin into their offerings, even if they're doing so in a low-effort way, like partnering with a BTC custodian.

All of this is to say, when the Early Majority arrives, they'll have a wealth of options in terms of how they want to participate in the network. This is not without drawbacks (probably less emphasis on self-custody) but it's not unexpected.

An Upcoming Test

Coming back to the question of whether we've crossed the chasm, there is one event, due less than a month from now, that will be an interesting litmus test for this question:

MSTR's inclusion in the S&P 500.

Going by metrics, MSTR is now eligible to be included in the S&P 500 but admission is discretionary upon committee approval and high volatility (it would be the most volatile stock in the S&P 500) could be a sticking point despite its massive outperformance —179% YTD vs S&P's 22%

To be fair their latest blowout quarter —which may have established a new record by surpassing analysts expectations by a mere 46,000%— should make it crystal clear that MSTR is playing a different game and I won't pretend to explain their strategy here —as Preston Pysh recently said— the prerequisites to understanding MSTR are understanding Bitcoin, understanding security analysis and understanding the unwind of a 40-year fixed income market.

This is not an endorsement of MSTR (full disclosure: I do own some shares) but rather an explanation of why I won't be shocked if the committee decides not to include them in the index this time around. The fact Goldman Sachs did not include them in their top 15 contenders for inclusion says something about mainstream sentiment.

Also worth noting, there is precedent for committee denials for inclusion despite meeting other qualifications —Tesla was snubbed back in 2020, even if only for a few months.

MSTR's inclusion in the S&P 500 would not be sufficient to conclude Bitcoin has now crossed the chasm, but a denial would certainly signal we are "not there yet".

The good news of all this is: you're still early to the adoption of Bitcoin.

I know price is near all-time highs but if you have not yet deployed allocated, you may want to lock in and make a decision. Your challenge is to look past the short term volatility and focus on the long term thesis —which in my opinion looks better than ever.

As always, we believe the best place to start is by holding some BTC in self-custody —a topic on which we recently hosted a well-received live presentation. If you need some guidance, that's what we do at Baselayer.

CORPORATIONS

Bitcoin Treasury Companies: The New “Altcoin Season”?

Lately, I’ve noticed a new trend keeping me up at night: the sudden emergence of Bitcoin Treasury Companies. Every week, it feels like another “Treasury Co.” is announced, almost like a fresh altcoin launch during the hype cycles of years past.

In fact, I’ve started to wonder: is this the new altcoin season — only this time dressed up as corporate Bitcoin treasuries?

The Rise of the Treasury Co. Model

The concept is simple: instead of a token, the company itself becomes the vehicle. Raise capital, park it into Bitcoin, and market yourself as a “Bitcoin Treasury Company.” On the surface, it looks elegant. It offers investors exposure to Bitcoin without direct custody. It leverages familiar structures like LLCs or C Corps instead of token issuance.

But dig a little deeper, and not all of these ventures stand on solid ground. Many are popping up without a real operating business, no proven cash flows, and no true strategy beyond “buy Bitcoin.” I call them “Zombie Treasuries.” These are entities that survive as long as they can raise capital — but contribute no genuine value creation to the ecosystem.

History has shown us what happens to ventures without fundamentals. Call it a bubble, call it natural selection — but capitalism has a way of sorting winners from losers.

Not All Treasuries Are Equal

That doesn’t mean every BTC Treasury Company is doomed. Some will fail, yes. But others will adapt, build resilient operations, and scale into the future. That’s the beauty of competition. The strong remain in the market, while the weaker players are forced to pivot or exit.

The archetype of a successful Bitcoin Treasury Company is already here: MicroStrategy (MSTR). Michael Saylor and Phong Le have built something more than a treasury vehicle — they’ve built an institution. Their strategy is deliberate, their leadership is strong, and their conviction has proven both resilient and, arguably, antifragile.

It’s worth remembering that while new entrants scramble to “become the next MicroStrategy,” they’re already years behind. MSTR has too much of a head start, both in scale and in credibility.

A Wild Thought: Nationalization?

Here’s where my “crazy take” comes in: I believe MicroStrategy might one day become so strategically important that the U.S. government could nationalize it — transforming its Bitcoin holdings into a de facto Strategic Bitcoin Reserve of the United States.

If that sounds radical, consider history. Governments have stepped in before to secure strategic resources, from oil to gold. If Bitcoin becomes the monetary bedrock of the 21st century, why wouldn’t the largest publicly traded Bitcoin treasury be viewed through the same lens?

Conclusion: Between Mini Bubbles and Structural Shifts

So, are Bitcoin Treasury Companies the new altcoin season? In some ways, yes — especially for the “Zombie Treasuries” with no real business model. But dismissing the entire movement would be a mistake. We’re watching the early stages of a corporate experiment: testing how Bitcoin can be institutionalized not just on balance sheets, but as the foundation of corporate identity itself.

Some of these companies will collapse, some will merge, and a few will grow into pillars of a new financial system. That’s capitalism at work. And if history is any guide, it won’t be the fast imitators who win — it’ll be the disciplined leaders with vision, resilience, and the courage to stay the course.

VCs / STARTUPS

Bitcoin Is Entering Traditional Finance Infrastructure: Three Critical Bridges to Mass Adoption

For over a decade, Bitcoin existed primarily on the periphery of traditional finance—an interesting experiment embraced by cryptographers, early adopters, tech enthusiasts, and libertarian-minded investors, but largely ignored or dismissed by mainstream financial institutions. That era is rapidly coming to an end.

Today, Bitcoin is not merely knocking on the doors of traditional finance; it's being actively integrated into the very infrastructure that powers how people save, invest, and build wealth. This integration isn't happening through regulatory mandates, but through three distinct, practical bridges that are fundamentally changing how everyday investors and institutions interact with Bitcoin.

These bridges—spanning wealth management, employee benefits, and real estate—represent more than just new products or services. They signal a strategic shift in how Bitcoin adoption is occurring: rather than expecting people to reimagine their financial lives around Bitcoin completely, innovative companies and financial professionals are meeting people exactly where they are, integrating Bitcoin into existing financial frameworks and decision-making processes.

The Infrastructure Revolution in Progress

The current wave of Bitcoin integration into traditional finance infrastructure differs markedly from previous adoption cycles. Rather than requiring individuals to create new accounts on cryptocurrency exchanges, learn about private key management, or completely overhaul their investment strategies, this new phase of adoption leverages familiar financial products and intermediaries.

This infrastructure-first approach addresses one of Bitcoin's most significant barriers to mainstream adoption: complexity. While Bitcoin's underlying protocol remains unchanged—maintaining the decentralization and security features that give it value—the user experience is becoming increasingly familiar to traditional investors.

When Bitcoin becomes accessible through existing financial infrastructure, it transforms from an alternative asset requiring specialized knowledge into a standard component of diversified investment strategies. This shift has the potential to dramatically accelerate adoption while maintaining Bitcoin's core properties.

Bridge One: Revolutionizing Wealth Management

The wealth management industry, with its trillions of dollars in assets under management, represents perhaps the most significant opportunity for Bitcoin integration. However, this sector has also been one of the most resistant to Bitcoin adoption, with traditional financial advisors remaining largely "Bitcoin-ignorant," as wealth management expert Andy Edstrom observes.

This resistance stems from multiple factors: regulatory uncertainty, volatility concerns, and simply a lack of understanding about Bitcoin's fundamental value proposition. Many financial advisors, trained in modern portfolio theory and traditional asset classes, struggle to categorize Bitcoin or recommend appropriate allocation percentages to their clients.

However, the landscape is shifting rapidly. Edstrom's work reveals that fear-based adoption strategies are currently proving more effective than optimism-based approaches when working with traditional financial advisors. Rather than leading with Bitcoin's profound potential or its possible price appreciation, successful integration efforts focus on Bitcoin as a hedge against currency debasement, inflation, and systemic financial risks.

This pragmatic approach acknowledges that most financial advisors are fiduciarily responsible for preserving and growing their clients' wealth within understood risk parameters. By positioning Bitcoin as a defensive asset—a form of digital gold that provides portfolio diversification and protection against monetary policy risks—advisors can more comfortably recommend small allocations as part of a broader risk management strategy.

As Edstrom notes, "Bitcoin will reach its potential as long as it stays decentralized and secure." This observation highlights a crucial aspect of Bitcoin's integration into traditional finance: the infrastructure being built must preserve Bitcoin's fundamental properties. Wealth management platforms that offer Bitcoin exposure through ETFs, trusts, or direct custody solutions are succeeding because they provide familiar investment vehicles while maintaining exposure to actual Bitcoin rather than derivatives or Bitcoin-adjacent products.

The wealth management bridge is particularly significant because financial advisors serve as influential gatekeepers, managing investment decisions for millions of individuals who might never independently research or invest in Bitcoin. As these professionals become more comfortable with Bitcoin allocation strategies, they create a multiplier effect that could drive substantial inflows into Bitcoin.

Bridge Two: Transforming Employee Benefits

Perhaps the most innovative bridge being constructed spans the employee benefits sector, where companies like Scott Dedels’ Block Rewards are pioneering Bitcoin savings plans with employer matching. This development represents a fundamental shift in how individuals might accumulate Bitcoin over their working careers.

Traditional 401(k) plans have been the primary vehicle for U.S.-based retirement savings for decades, channeling trillions of dollars into U.S. stock and bond mutual funds. The introduction of Bitcoin savings plans with employer matching creates a parallel pathway that could potentially redirect a significant portion of this flow toward Bitcoin accumulation.

The early results are compelling. Dedels reports real evidence of employees switching from traditional 401(k) contributions to Bitcoin plans when given the option. This behavioral shift suggests that many workers are actively seeking Bitcoin exposure but have been constrained by the lack of convenient, employer-sponsored options.

The employee benefits bridge is strategically important because it introduces Bitcoin to individuals through the trusted relationship with their employer. Most employees already rely on their companies for health insurance, retirement planning, and other financial benefits. Adding Bitcoin savings options to this framework removes many of the psychological and practical barriers that prevent individual Bitcoin adoption.

Moreover, the systematic, regular investment patterns typical of employee benefit plans create natural dollar-cost averaging effects, potentially reducing the impact of Bitcoin's volatility while building significant Bitcoin holdings over time. As employees accumulate Bitcoin through these plans over their working careers, they could potentially retire with substantial Bitcoin holdings without ever having to actively trade or manage Bitcoin investments.

Bridge Three: Reimagining Real Estate and Bitcoin Ownership

The third major bridge addresses one of the most significant dilemmas facing Bitcoin holders: the tension between maintaining Bitcoin exposure and accessing the equity tied up in traditional assets, particularly real estate. Horizon's work in developing home equity to Bitcoin swaps represents a breakthrough in resolving this conflict.

Historically, Bitcoin holders who owned real estate faced an uncomfortable choice: they could either sell their Bitcoin to purchase or upgrade homes, or they could take on debt to finance real estate while maintaining their Bitcoin positions. Neither option was optimal. Selling Bitcoin meant giving up potential future appreciation, while taking on debt created ongoing financial obligations that might force future Bitcoin sales.

The home equity-to-Bitcoin swap mechanism eliminates this trade-off. U.S.-based homeowners can convert a portion of their home equity directly into Bitcoin without taking on debt or triggering taxable events. As Joe Consorti explains, "Bitcoin allows people to live in their Bitcoin", eliminating the traditional conflict between home ownership and Bitcoin accumulation.

This innovation becomes even more significant in light of recent U.S. regulatory developments. The recent FHFA directive allowing Bitcoin to serve as a mortgage qualification asset opens entirely new possibilities for Bitcoin holders seeking to finance real estate purchases. Rather than being forced to sell Bitcoin to qualify for traditional mortgages, holders can use their Bitcoin holdings as part of their qualification criteria.

These developments suggest a future where Bitcoin and real estate ownership become complementary rather than competing financial strategies. As Consorti explains, this infrastructure eliminates a fundamental dilemma that has constrained Bitcoin adoption among property owners who previously faced an uncomfortable choice between maintaining Bitcoin exposure and accessing real estate equity.

The implications extend beyond individual financial optimization. By creating efficient bridges between the $370 trillion global real estate market and Bitcoin's $2+ trillion market, these innovations could gradually redirect capital flows toward Bitcoin while simultaneously making real estate more affordable. As Consorti notes, this process involves "siphoning the monetary premium from real estate and making properties homes again, rather than investments."

Innovation in Bitcoin Financial Models

The emergence of these three bridges represents more than just new product categories—it signals the development of Bitcoin-native financial engineering. Rather than simply creating Bitcoin investment funds or ETFs that provide exposure to Bitcoin's price movements, entrepreneurs are developing tools that leverage Bitcoin's unique properties and are also creating entirely new categories of investment opportunities.

Scott Dedels' work at Block Rewards exemplifies this through Bitcoin-secured convertible debentures used for funding their company. These instruments allow companies to raise capital using Bitcoin as collateral while providing investors with exposure to both Bitcoin appreciation and traditional equity upside. This approach addresses a common challenge in Bitcoin company funding: how to structure investments that satisfy both Bitcoin-focused investors who want exposure to the underlying asset and traditional investors who expect equity participation.

The evolution toward Bitcoin-native financial models represents a maturation of the ecosystem beyond simple "buy and hold" strategies. These instruments acknowledge that Bitcoin's ultimate value lies not just in its appreciation potential, but in its superior monetary properties that enable new forms of financial innovation impossible with traditional assets.

Conclusion: The Bridge to Mainstream Adoption

The three bridges being constructed between Bitcoin and traditional finance infrastructure—wealth management, employee benefits, and real estate—represent more than just new product categories. They constitute a fundamental shift in how Bitcoin adoption occurs, moving from individual conviction-based investment decisions to systematic integration into the financial infrastructure that governs how individuals save, invest, and build wealth.

This infrastructure-first approach to Bitcoin adoption addresses the most significant barriers that have limited Bitcoin's mainstream penetration: complexity, accessibility, and integration with existing financial planning approaches. By meeting people where they are rather than requiring them to completely reimagine their financial lives, these bridges create pathways for Bitcoin adoption that could eventually reach tens of millions of individuals through their existing financial relationships.

The early results from companies pioneering these bridges suggest strong demand for Bitcoin exposure when it's delivered through familiar, trusted channels. From employees voluntarily switching from traditional retirement plans to Bitcoin savings programs, to homeowners seeking ways to optimize their capital allocation without lifestyle disruption, the market validation continues to build for Bitcoin-integrated financial products.

Perhaps most importantly, these developments occur while preserving Bitcoin's fundamental properties. The infrastructure being built maintains Bitcoin's decentralization and security features while making them accessible to mainstream audiences through familiar interfaces and trusted intermediaries.

The transformation currently underway suggests that Bitcoin's future lies not in replacing traditional financial systems, but in becoming the monetary foundation that makes those systems work better for everyone. Through systematic integration into wealth management, employee benefits, and real estate finance, Bitcoin is positioning itself to serve as the store of value layer that enables people to preserve and grow their purchasing power over time, regardless of their level of technical expertise or conviction about Bitcoin's broader revolutionary potential.

For professionals, entrepreneurs, and early-stage technology investors, these developments represent both validation of Bitcoin's long-term trajectory and early indicators of the massive infrastructure development opportunities that remain ahead. The bridges being built today are just the beginning of a comprehensive transformation that will ultimately touch every aspect of how individuals interact with money, savings, and wealth building.

The question is no longer whether Bitcoin will integrate with traditional finance infrastructure, but how quickly this integration will occur and which companies will lead the development of the next generation of Bitcoin-native financial products. For those positioned to capitalize on this infrastructure development phase, the opportunities are substantial—and they're happening right now.