Bitcoin's future will be decided by how the dollar is repaired, not by bitcoin

By Mickey M. Maini and R. Christopher Whalen

October 5, 2026 | Bitcoin has had a strange year. It fell by half from its October 2025 high while gold rose to a record. Then it rose 40 percent from its June low while gold fell and the Federal Reserve raised rates. In the last week of September, the American spot funds took in more money than in any week for a year. Anyone looking for a single story in that has not found one, because there is not one.

We come at this from different places. One of us has spent forty years in bank credit and has never been persuaded that bitcoin is money. The other has spent a career measuring how large systems move from one state to another, and treats bitcoin as a conditional asset, useful only while it stays outside anyone's control. We agree on three facts, and they matter more than the price.

First, the dollar has taken bitcoin's rails. The new law on dollar tokens, the GENIUS ACT, has put about $320 billion of privately issued dollars onto public networks, backed mostly by Treasury bills. Machine to machine payments, the use case that bitcoin was supposed to own, now settle more than 99 percent in dollar tokens. Every new user of those rails is a new buyer of American government paper. The plumbing of the next system is being built, and it is dollar plumbing.

Second, Wall Street has captured the coin. One fund issuer holds about 62 percent of all the bitcoin in American exchange traded funds. Two American entities, a fund issuer and a listed company, hold about 8 percent of all the coins that will ever exist. Most fund coins sit with one custodian. A strategic reserve is on the government's books. Nobody needed to ban bitcoin. Owning it was enough. That is good for the price and bad for the original idea, because the people who can freeze an account now hold the keys.

Third, the states that will design the next monetary settlement are buying gold, not bitcoin. Central banks have added to their gold for nearly two years without a break, and a record share of them say they will add more. Official holdings are around 37,000 tonnes. Official bitcoin holdings are close to zero. When governments sit down to repair a system that no longer clears, they anchor it in something all of them already own. That is gold.

Put those three facts together and bitcoin's future stops being a question about bitcoin. It becomes a question about how the dollar system crosses from here to whatever comes next. There are three roads.

The first road is drift. Rescues continue, repricing is deferred, and nothing is redesigned. Bitcoin rises over years, because the number of holders grows and the number of coins does not, and it falls by half each time stored stress breaks through. This is the road we are on, and it is the most likely one.

The second pathway is a managed transition. Governments revalue gold and settle between themselves in it, with dollar tokens as the rails. Gold rises a great deal. Bitcoin is not in the design and lags, because a large part of its price today is the chance that people will one day need a way out. A repair that works removes that chance. There is one exception. If the repair writes bitcoin into official reserves, bitcoin is inside the design, and then it rises the most. The same word, transition, produces opposite outcomes depending on who writes the design.

The third road is a break. First comes the liquidity crash, in which bitcoin falls with everything else, as it did in March 2020 and again early this year. Then comes the response. If the response is controls on people's money, or printing while inflation is still high, bitcoin becomes the exit. In every country that has imposed capital controls, the local bitcoin price has traded above the world price by roughly the size of the restriction. A large economy reaching that point would be the biggest bitcoin event of the decade.

So bitcoin is paid for two things: disorder, and inclusion. It is not paid for order that excludes it. That is a very different claim from the ones usually made for and against bitcoin. Its supporters say it wins because governments fail. Its critics say it loses because governments prevail. Both miss the most likely case, in which governments prevail and choose gold.

There is one test that would change our minds. Bitcoin has sold off in every stress episode of this cycle. It behaves like a risk asset, not like a store of trust. The first day it rises together with gold while equities fall, it will have passed the test that gold passed long ago, and it will deserve a larger place in the conversation. Until then, treat it the way one of us has treated it in print: small, conditional, and behind gold.

Mickey M. Maini is the founder of Solstice Laboratory and the author of The Entropy Trap. R. Christopher Whalen is an investment banker and author, and the editor of The Institutional Risk Analyst.

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