Bitcoin dictates: freedom or protection. You can’t have both. Bitcoin promised liberation from the centralized control of banks, and it delivered. But it also stripped away the safety nets that investors rely on. Bitcoin wasn’t just money, it was an ideology. A protest against the old order. And in that difference lies the entire story of privatized money, because freedom without limits doesn’t stay free for long.
“Whales” are the largest wallets in the Bitcoin ecosystem — addresses that hold thousands or even tens of thousands of BTC. On-chain data shows that a relatively small minority of addresses hold a disproportionate share of the total supply. In 2025, about 1% of all Bitcoin addresses control over half of the total supply. The practical consequence is clear: when a large address (or small cluster of addresses) moves — for example, moving tens or tens of thousands of BTC — this reduces the supply of “liquidity” in the market and/or triggers a liquidation mentality, resulting in immediate and sometimes significant price movements. Some of the largest wallets belong to exchanges or custodians, others represent private institutions or anonymous entities, few of which are subject to any external accountability.
In the Bitcoin ecosystem, the term “mining” does not refer to physical mining but to solving complex cryptographic problems. Miners’ computing units compete to find the right solution — each successful solution ensures the addition of a new block of transactions to the public ledger, the blockchain, and entails the issuance of new coins as a reward. This process keeps the network operational and secure without the intervention of a central authority: thousands of machines verify and cross-check transactions using cryptographic protocols. However, the technology and algorithms operate independently of human competence — as demonstrated by the collapse of Mt. Gox in 2014, when approximately 850.000 Bitcoins were lost. Despite the fact that the blockchain publicly recorded the movements, the funds were not recovered; the reason was human failure in custody and management, not a malfunction of the protocol. This is the fundamental contradiction: Bitcoin eliminates traditional intermediaries, but it also eliminates the conventional mechanism for revocation or recovery, as every transaction is irreversible and every human error can be permanent. There is no authority to turn to when something goes wrong. Every transaction is final. Every mistake is final. And as the wider world of cryptocurrency has exploded, so have scams. In 2022 alone, crypto users lost over $3.8 billion to hacks and scams, one of the highest on record.
The history of markets shows that any asset can be valued at extreme levels when speculation prevails. There are historical examples such as the tulip hysteria, when the bulbs exceeded the value of an Amsterdam apartment, or the rapid, short-lived rise of companies like Pets.com (where the price went from $11 in 9 months to $0,22 before disappearing completely) that prove that prices can take off and collapse just as quickly.
Traders claim that they can sell whatever their customers ask for, as long as they make a profit. Today there are many customers who are fanatical about cryptocurrencies in pursuit of easy profit, so it is a golden age for cryptocurrency “traders” like Strategy (former microstrategy). Strategy's Michal Saylor has built his entire company on the assumption of Bitcoin's scarcity (as only about 19,5 of the 21 million Bitcoin units the algorithm is programmed to produce have been issued).
Strategy capitalized on the stock’s volatility by issuing low- or zero-coupon convertible bonds, which are bought by hedge funds that don’t necessarily believe in the company or the underlying crypto, but can make money through gamma trading, by short-selling the stock in proportion to be market neutral, and then constantly adjusting their position size as the stock price changes. They only care about the stock price fluctuating too much to make money.
The funds are used to buy cryptocurrencies, and this transaction alone contributes to the increase in demand for Bitcoin, thus increasing its price. But the company's share price often rose even more than Bitcoin did. Such companies are called "crypto treasury companies."
Strategy went from being a small software company to a Bitcoin vault. It holds about 650.000 Bitcoins, worth about $58 billion, for which it paid about $48 billion. In other words, it has an unrealized gain of over $10 billion and controls about 3% of all Bitcoin that will ever exist.
In 2024 and 2025, investors were willing to pay about $2 for every $1 of Bitcoin on Strategy’s balance sheet, creating free leverage without having to liquidate the leverage, which would have to happen if they had bought bitcoin outright and its price had fallen. The investor simply held the position and waited for the recovery. So, for example, since the stock was trading at $200 but represented only $100 in Bitcoin, the company could issue new shares at a premium of $200, allocate the funds to buy Bitcoin, and as a result, the “Bitcoin per share” of existing shareholders would rise. The magic was that the more shares Strategy issued to buy Bitcoin, the richer the existing shareholders became. If attracting new followers directly increased someone's net worth, they would work much harder to attract new investors to cryptocurrencies.
Strategy’s price has fallen about 40% year-to-date. Retail investors have flocked to leveraged single-stock ETFs tied to Strategy, such as MSTX and MSTU, which have lost about 85% in 2025. Shares of Japanese peer Metaplanet are down 80%, while UK-based Smarter Web Company is down 45%. Many of the top 100 similar treasury companies have started selling crypto to fund share buybacks or service debt.
The point is that Strategy has issued preferred shares such as “Strife” (10% coupon), “Strike” (8%) and “Stretch” (variable interest rate close to 10,75%). Without having almost no other source of revenue. By the end of 2025 it owed $800 million dollars a year in dividends and interest payments on debt.
At the end of 2025, it issued $1,4 billion in new shares, not to buy bitcoin but to create a dollar reserve to cover preferred stock dividends for 600 days.
When a company begins to raises funds from new investors to pay old investors has reached the point of a familiar "pyramid" shape just before collapse.
Without a new catalyst that could increase crypto demand with a next wave of buyers, crypto remains a purely speculative asset. And when the last potential investor has bought, the “fuel” for the price rise runs out, so huge price drops come, as leverage works negatively. The appeal of Bitcoin and other cryptocurrencies is based on a complete loss of confidence in the ability of the state and institutions to protect unsuspecting investors.
Bitcoin cannot be manipulated by governments. But it can and is manipulated by people with enough capital to move the needle. This is not decentralization. It is a new oligarchy with better technology. It is a myth of digital freedom and a mirror reflecting every flaw of human greed.
It’s the same old story of freedom promoted as opportunity, speculation sold as revolution. Because in the absence of regulation, lawlessness is always camouflaged as freedom. Freedom without a control structure leads to chaos. And chaos ultimately requires new rulers. Bitcoin doesn’t need governments to survive. But societies still need laws to function. Without them, financial power simply migrates from parliaments to computer protocols, from bankers to whales, from regulation to lines of computer software code. The blockchain records truth, not justice. It is perfect in transparency but zero in accountability.
photo IgorShubin, https://pixabay.com
