Replaying 1929: Bitcoin Treasury Companies and the Historical Cycle of Investment Trusts
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Replaying 1929: Bitcoin Treasury Companies and the Historical Cycle of Investment Trusts
Leverage, premium, reflexivity—the essence of finance remains unchanged after a century.
Navigating Web3 tides with focused insightsAuthor: Be Water
Translation: TechFlow
Speculative Attack, Part III
In financial markets, speculative fervor often has powerful vested interests behind it, even when that frenzy borders on madness—as in 1929. This is undoubtedly a cautionary tale for anyone commenting on or writing about current market trends. Yet there are fundamental principles at play here that cannot be ignored, and the cost of ignoring them is far from trivial. Those who dismiss all contemporary warnings tend to suffer the most.
—JK Galbraith, “The Crash of ‘29—A Parallel,” The Atlantic Monthly, January 1987, before the 1987 crash
While Bitcoin treasury companies are currently just a minor anomaly within the vast financial matrix—and indeed, studying them closely might seem absurd given that Fartcoin has a $1.5 billion market cap—their resemblance to 1920s investment trusts reveals recurring pathologies of speculation that extend well beyond their present scale. In fact, they offer a universal blueprint for reflexive bubbles. Thus, the shared mechanics between trusts and treasury firms provide a perfect lens through which to understand broader financial history and the dynamics unfolding today.
In Speculative Attack, Part I, we explored how Michael Saylor’s MicroStrategy weaponized Wall Street’s own financial engineering by subverting the alchemy of risk against the traditional financial system; now hundreds of companies are racing to replicate his blueprint.
Speculative Attack, Part II examined the parallels between today’s Bitcoin treasury companies and the “investment trusts” of the 1920s. These trusts began as variations of respected British investment vehicles but became corrupted when American financiers amplified them with leverage. By mid-1929, trust mania had peaked. Goldman Sachs Trading Corporation became the era’s “MicroStrategy,” with new trusts launching daily and investors eagerly paying two or three times the value of their underlying “scarce” assets.
Yet how could a futuristic concept like Bitcoin treasury companies possibly relate to 1920s financial trusts—a time before computers were widespread, let alone blockchain, when the SEC didn’t exist and had yet to begin curbing Wall Street’s flamboyant abuses? At first glance, structural differences between 1929 trusts and modern treasury firms appear both obvious and insurmountable.
We argue these differences are superficial. Every era in financial history exhibits unique characteristics shaped by its context. Fixating on surface distinctions is a long-standing human tendency to rationalize away valid historical warnings about emerging financial risks and excesses. Market participants treat each event as if humanity is encountering financial alchemy for the first time, ignoring the “warning to posterity” recorded in The Great Mirror Of Folly (1720). But this approach is akin to preparing for the last war rather than mastering enduring principles applicable to current battles.
This pattern has become especially evident over recent decades across domains—from “private credit” to trillions in negative-yielding bonds, to real estate bubbles historically rampant (now seemingly receding) in Australia, Canada, Sweden, and the UK. Take those housing bubbles: market participants dismissed concerns by pointing out the absence of complex U.S.-style derivatives (like CDOs, NINJA loans), rampant fraud, non-recourse lending, and bank failures during the 2008 crisis. Like champagne purists insisting it must come from specific French slopes, many today believe only crises featuring the signature elements popularized by The Big Short—including sushi-eating CDO cube managers in Las Vegas—qualify as legitimate housing bubbles.
The result is a literalism of history: structural differences are treated as proof of safety, though these differences are often exaggerated, misleading, or irrelevant. For instance, in practice, each country simply developed its own unique mechanisms serving similar alchemical functions.
Supporters of Bitcoin treasury companies make a similar argument: comparing them to 1920s investment trusts is fundamentally flawed because those trusts relied on opaque pyramidal structures, hidden leverage, and unregulated market fees, whereas Bitcoin treasury firms are transparent single-entity corporations, free of management fee layers, subject to modern SEC disclosure rules, and holding what is currently the most desirable asset. In short, they argue, apparent similarities mask deep differences in structure, agency relationships, and information flows.
While we agree with some—if not all—of these points, we reach a different conclusion. The striking fact isn’t how different Bitcoin treasury companies are from 1920s trusts, but how the same core dynamics recur—making deeper similarities impossible to ignore. Both exhibit massive net asset value premiums, “value-enhancing magic,” and reflexive feedback loops where purchases boost the underlying asset price, increasing their own valuation and borrowing power. Investors in both eras embraced “clever” long-term leverage and the seductive promise of easy money via financial alchemy to profit from seemingly “sure bets.”
These patterns represent more than mere historical echoes—they reveal timeless aspects of human behavior and financial reflexivity that lie at the root of credit bubbles, transcending era and asset class. Therefore, the fate of these early trusts offers an objective vantage point not only on the emerging phenomenon of Bitcoin treasury companies but also on the recurring nature of financial alchemy that defines bubble formation across centuries.
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Not investment advice. For educational/informational purposes only. See disclaimer.
“Investment Trusts Multiply Like Locusts”
The explosive growth of Bitcoin treasury companies mirrors the rise of 1920s investment trusts. Both gold rushes stemmed from a perfect storm of greed: strong investor demand for scarce assets created net asset value (mNAV) premiums, which sponsors rushed to monetize. If Goldman could extract massive profits from its trusts in the 1920s, why couldn’t others? If MicroStrategy can monetize its mNAV premium, why shouldn’t other companies follow?
Galbraith documented the explosion in 1920s trusts:
In 1928, approximately 186 investment trusts were formed. By early 1929, one was being established nearly every business day, totaling 265 for the year.
The scale of capital raised was equally striking, accounting for 70% of all funds issued in the 1920s. Just in August and September 1929, new trust issuance reached $1 billion—equivalent to $20 billion today using purchasing power parity, or $130 billion relative to today’s economy:
In 1927, trusts sold about $400 million in securities to the public. In 1929, that figure rose to an estimated $3 billion—accounting for at least one-third of all new capital issued that year.
By autumn 1929, total assets held by investment trusts exceeded $8 billion, an elevenfold increase since early 1927.
Source: DeLong/Shleifer
Frederick Lewis Allen corroborates Galbraith’s account. In Only Yesterday: An Informal History of the 1920s, Allen vividly described how “investment trusts multiplied like locusts”:
There are said to be nearly five hundred such trusts today, with a total paid-in capital of about three billion dollars, holding stocks worth about two billion dollars—many bought at current high prices. Among these trusts are both honestly managed, shrewd enterprises and wildly speculative ventures launched by ignorant or greedy promoters.
The Cambrian Explosion of Bitcoin Treasury Companies
Today, Bitcoin treasury companies show a strikingly similar pattern: as firms worldwide rush to emulate MicroStrategy’s success, new entities launch weekly. The “Cambrian explosion” of Bitcoin treasuries can be tracked in real-time via web data dashboards:
Source: BitcoinTreasuries.net
The Golden Age of Grift
Innovation quickly turns exploitative. Galbraith and Allen emphasize this wasn’t an era defined by isolated bad actors, but a systemic opportunism driven by soaring prices and eroding ethics.
The most profitable role during the trust boom wasn’t the investor, but the promoter. Galbraith makes clear insiders extracted value upfront and continuously, while the public bore ultimate risk:
The greatest rewards came from public enthusiasm for investment trust securities. Almost invariably, investors paid substantial premiums above issue price. The sponsoring firm (or its promoters) typically received allocations of shares or warrants, giving them the right to buy stock at issue price. They then immediately sold at higher market prices for profit.
New issues were often sold slightly above net asset value to insiders or favored clients, but many quickly traded at large premiums. For example, Lehman Brothers Corporation was heavily oversubscribed at $104 per share for $100 in assets (though its management contract required paying 12.5% of profits to Lehman Brothers; its true net asset value may have been only $88). Upon public trading, the fund jumped to $126 per share. Organizers profited not only from the $4-per-share spread and future hefty management fees but also gained privileged initial investor status. Additionally, they retained a right—worthless when funds trade at discount but valuable at premium—to receive management fees in the form of new shares priced at current net asset value.
Similarly, today’s Bitcoin treasury companies often feature comparable arrangements—founder stock grants, insider options, and incentive schemes for promoters and podcasters. This time, however, these mechanisms are publicly disclosed under SEC rules designed precisely to prevent 1920s-style abuses. Yet transparency neither eliminates risk nor resolves misaligned incentives:
The speculative frenzy and rapid pace of trust formation in the 1920s provided ideal cover for malicious promoters. The proliferation of dubious trusts and holding company structures exemplified what Galbraith saw as typical financial excesses of the decade. He noted American enterprise had “admitted an extraordinary number of promoters, grafters, swindlers, impostors, and frauds,” calling it “a flood tide of corporate thievery.” Allen agreed:
So long as prices rose, questionable financial practices could be tolerated. A bull market conceals countless sins. For promoters, it was a golden age, and “he” went by many names.
These observations resonate with other periods of speculative and fraudulent mania, including today’s “golden age of grift” and historical episodes like John Law’s Mississippi Bubble—discussed in our “Alchemy of Risk” series and satirically chronicled in The Great Mirror Of Folly (1720). But beneath outright fraud lies another risk—perhaps less visible but equally dangerous: structural risk alchemy embedded in the capital design of trusts.
Financial Alchemy
Some call it alchemy. I call it valuation.
—Phong Le, CEO of MicroStrategy
Source: MicroStrategy
MicroStrategy provides a video and chart illustrating the “leverage effect”—amplified exposure to Bitcoin price movements—across different layers of its capital structure (stocks, convertible bonds, preferred shares, etc.):
Michael Saylor rejects comparisons to closed-end funds like GBTC (see Part II here), noting MicroStrategy’s greater flexibility as an operating company:
Sometimes I see…a Twitter analyst say, oh, this is like when GBTC and Grayscale dropped below mNAV by a factor of one. What they miss is that Grayscale (GBTC) is a closed-end fund. We are an operating company.
[Funds like GBTC]…have no operational flexibility to manage their capital structure…They can’t choose to refinance or take on leverage or sell securities, buy securities, restructure capital, or repurchase their own stock.
An operating company like MicroStrategy has much more flexibility. We can buy stock, sell stock, restructure capital, and raise debt to cover or solve funding gaps.
Yet this distinction overlooks a historical irony: 1920s investment trusts pioneered the capital structure innovations that make today’s Bitcoin treasury companies so attractive to investors—and created the same reflexive dynamics we observe now.
As Galbraith documented, investment trusts evolved into something far more complex than simple pooled investment vehicles like GBTC—they became flexible corporate structures, precisely the kind Saylor boasts of today:
The investment trust effectively became an investment company. It sold securities to the public—sometimes common stock alone, more often combinations of common stock, preferred shares, bonds, and other debt instruments—and then the management invested the proceeds as it saw fit. By selling non-voting shares to common shareholders or transferring voting rights to a voting trust controlled by management, interference by common shareholders in managerial actions could be prevented.
The Investment Company Act of 1940 explicitly restricted these practices because they proved both highly effective and dangerously destabilizing in pre-1929 market speculation. When Greyscale and its lawyers structured GBTC, they likely chose this form (at least partly) to avoid registration under the ‘40 Act’. That funds like GBTC cannot deploy MicroStrategy’s full toolkit isn’t due to inherent limitations, but deliberate SEC policy aimed at preventing a recurrence of 1920s investment trust excesses and their consequences.
The capital structures of 1920s trusts are nearly indistinguishable from today’s MicroStrategy: both issue securities—stocks, bonds, convertibles, preferred shares—sold at mNAV premiums to attract investors with varying risk (“leverage effect”) preferences and income needs. For example, convertible bonds, central to MicroStrategy’s financing strategy, were also a hallmark of 1920s trusts documented by Allen:
The conversion of new trust-issued bonds into stock or the attachment of warrants allowing future stock purchase gave them a respectable speculative flair, becoming fashionable.
During the 1929 boom, many investment trusts derived their business model less from asset management than from financial alchemy. Complex capital structures and layered leverage weren’t passive financing tools to enhance returns—they were the core of the enterprise. Their goal was to create a steady supply of speculative securities to satisfy insatiable public demand. This demand was fueled by a belief—captured perfectly by Galbraith—that the stocks purchased by trusts had acquired some “scarcity value,” and the most coveted stocks were about to vanish entirely from the market.
But the public wasn’t merely buying diversified portfolios of scarce stocks—they were betting on the trust’s own performance in financial alchemy: the real “product” was the trust’s own securities and net asset value. They functioned like alchemy labs, transforming public appetite for speculative gains into newly minted securities out of thin air.
Clever Long-Term Debt
This MicroStrategy-like strategy allowed 1920s trust managers to access quality leverage: long-term corporate bonds (sometimes lasting 30 years), instead of margin loans or “call” loans requiring immediate liquidation. In theory, these extended maturities allowed trusts to maintain leverage across the business cycle without facing immediate refinancing pressure, while their relatively low yields reflected widespread investor complacency and systemic mispricing of risk.
Lyn Alden made a similar observation about contemporary Bitcoin treasury companies:
Public companies can access better leverage than hedge funds and most other capital types. Specifically, they can issue corporate bonds…often with maturities spanning multiple years. If they hold Bitcoin and prices fall, they don’t need to sell prematurely. This gives them greater resilience against volatility compared to entities relying on margin loans. Although certain bearish scenarios could still force liquidation, these would require prolonged bear markets and thus are less likely.
Long-Term Debt and Reflexivity
Lyn’s analysis—while accurate for any individual firm—overlooks the systemic risks that arise when such “safer” leverage structures proliferate. Just as 30-year fixed mortgages failed to prevent the 2008 crisis, no long-term debt inherently eliminates systemic risk—and may even amplify it.
During the late 1920s boom, financial alchemy amplified returns via the same self-fulfilling prophecy benefiting today’s Bitcoin treasury companies: rising asset prices and mNAV premiums enabled higher leverage and “leverage effects,” further boosting asset prices. But this reflexive loop made the system inherently unstable. As we’ve seen, these complex capital structures were far more than passive financing tools—they played essential roles in inflating bubbles and accelerating their collapse.
Just as cheap hurricane insurance after several calm seasons fuels construction booms, the apparent safety of long-dated debt in a bull market may encourage higher leverage, creating larger positions and asset inflation that ultimately magnify rather than dampen downside volatility. Newly discovered “affordable” forced liquidation protections trigger astonishing expansions of risky coastal development—until the inevitable hurricane hits and the insurance market itself collapses. When hundreds of firms adopt identical capital structures and business models for “one-way bets,” prudent individual behavior easily becomes collective instability. In financial “progress,” dosage determines toxicity.
Path Dependence and Pyramid Schemes
Like extreme mortgages in 2005–2006 designed almost to default at first payment, many 1920s investment trusts nearing the end of the bubble were effectively pyramid schemes from inception—dependent on new inflows or price appreciation to meet obligations—even while holding diversified dividend-paying stocks and interest-bearing bonds:
Some of these companies…were so overcapitalized that they could not even pay preferred dividends from income generated by their securities, relying almost entirely on hopes of profit.
This created an unstable dependency: to pay bondholders and preferred shareholders, trusts either issued new shares (relying on mNAV premium) or counted on future portfolio appreciation. These mechanisms intertwined: portfolio gains drove up mNAV premium, encouraging further share issuance to fund portfolio expansion.
Fundamentally, they used new investor funds or anticipated price increases to repay existing obligations—a classic pyramid scheme structure—making them vulnerable when new capital dried up or portfolio returns evaporated, causing their mNAV premium to collapse in a self-reinforcing spiral.
Since Bitcoin treasury companies (currently) generate no cash flow, they tend to follow a similar strategy—raising funds from investors to service debt:
Like 1920s trusts, this pyramid-like strategy works as long as Bitcoin appreciates, companies maintain their mNAV, and capital markets remain open. But if all these conditions deteriorate simultaneously over an extended period—possibly due to excessive leveraged Bitcoin treasury companies themselves—these firms face the same structural vulnerabilities that devastated 1920s trusts.
In fact, a key difference between 1920s trusts and today’s Bitcoin treasury companies lies in the assets they actually hold. The trusts held (seemingly) diversified portfolios of dividend-paying stocks and interest-bearing bonds, whose cash flows funded payments to preferred shareholders and bondholders—at least until the Depression, when widespread credit bubbles interconnected their fates.
While “hyperbitcoinization” and “Bitcoin banking” may someday alter this dynamic, Bitcoin currently generates neither cash flow nor dividends nor interest. This creates a structural fragility that 1920s trusts, despite their flaws, never faced. Bitcoin treasury companies lack even the income sources available to 1920s trusts, making them more—not less—vulnerable to pyramid dynamics. Even amid a tenfold-long bull run, their survival depends entirely on path dependence: sustained appreciation, access to credit, and investor enthusiasm. Break this chain—possibly due to saturation of leveraged Bitcoin treasury companies—and the structure unravels, as we’ll discuss in Part IV.
Trust Collapse and the 1929 Financial Crash
Famous Yale economist Irving Fisher declared, just before the 1929 crash, that stock prices had reached “a permanently high plateau.” Fisher’s statement epitomizes the euphoric confidence typical at market tops. Even the most bullish Bitcoin advocates should, at least temporarily, beware similar sweeping claims:
Fisher’s famous “permanently high plateau” quote is now widely known, but its lesser-known context reveals a deeper story. He was actually defending investment trusts as vital supports for stock valuations—just as Bitcoin proponents today cite Bitcoin treasury companies as built-in demand for BTC. The New York Times reported at the time:
Professor Irving Fisher delivered a lecture on investment trusts and defended them against recent attacks accusing them of contributing to current problems.
Fisher defended trusts on grounds that they awakened public awareness of stocks’ advantages over bonds and offered superior structures for stock exposure—much as Bitcoin treasury advocates claim today that MicroStrategy offers greater “leverage effect” than direct Bitcoin ownership, and that Bitcoin itself holds advantages over traditional financial (TradFi) assets like fiat, stocks, bonds, and real estate:
I believe the principle of investment trusts is sound, and public participation in them is sound, provided proper regard is paid to the character and reputation of the managers. To a large extent, it is due to the influence of the investment trust movement that the public has gradually come to realize stocks are more attractive than bonds. And I believe, overall, the operation of investment trusts helps stabilize the stock market rather than exacerbate its fluctuations.
Reflexivity Goes Both Ways!
The market crash wasn’t just a price event—it amplified declines in both asset markets and the real economy as the reflexive cycle reversed. The very investment trusts Fisher championed just weeks earlier as guarantors of “permanently high” values now became primary accelerants of collapse:
It is now evident that investment trusts, once considered pillars supporting high valuations and intrinsic defenses against collapse, have become profound weaknesses. The leverage celebrated just weeks ago with enthusiasm has now completely reversed.
It wiped out the entire value of a trust’s common stock at astonishing speed. Consider a typical small trust: suppose its publicly held securities were worth $10 million in early October—half common stock, half bonds and preferred shares. These securities were fully covered by the current market value of the holdings. In other words, the trust’s portfolio had a market value of $10 million.
By early November, the representative portfolio might have halved in value. (By later standards, many securities still held considerable value; on Nov. 4, Tel & Tel hit a low of $233, GE $234, Steel $183.) The new portfolio value of $5 million barely covered losses on prior bonds and preferred shares. Common stock would be left with nothing. Beyond bleak expectations, it now had zero value. This geometric cruelty was not exceptional. On the contrary, it profoundly affected leveraged trust stocks. By early November, most such trusts’ stocks were nearly unsellable. Worse, many traded over-the-counter or regional exchanges with few buyers and thin markets.
Frederick Lewis Allen’s account again confirms Galbraith’s:
Yet fear did not delay long. As the price structure collapsed, people suddenly rushed en masse to escape. By 11 a.m., floor traders at the exchange were frantically scrambling to “sell, sell, sell.” Before delayed ticker machines could register developments, phone and telegraph lines already carried news of impending bottoming, doubling the volume of sell orders. Leading stocks dropped 2, 3, even 5 points between trades. Down, down, down…Where were the bargain hunters who should have stepped in? Where were the investment trusts supposed to buffer the market by buying new shares at low prices? Where were the big bulls who claimed optimism? Where were the powerful bankers believed capable of propping up prices? There seemed to be no support. Down, down, down. The noise from the exchange floor turned into a roar of panic.
Thus, we must never forget that reflexivity operates both ways—it affects not only market prices but also fundamentals:
The greatest weakness of business lay in the vast new architecture of holding companies and investment trusts. Holding companies controlled large segments of utilities, railroads, and entertainment. Like investment trusts, these too faced devastating risks from reverse leverage. Especially, dividends from operating companies were used to pay interest on upstream holding company bonds. Dividend interruptions meant bond defaults, bankruptcies, and structural collapse. Under such conditions, the temptation to cut investment in operating plants to continue dividends was clearly strong. This intensified deflationary pressures. Deflation, in turn, suppressed earnings and triggered the collapse of corporate pyramids. When this happened, further layoffs became inevitable. Revenues were dedicated solely to debt repayment. Borrowing for new investment became impossible. It’s hard to imagine a business system better suited to perpetuate and intensify a deflationary spiral…
The stock crash also proved extremely effective at exploiting structural weaknesses in corporate hierarchies. Operating companies at the end of holding company chains were forced to cut back due to the crash. Subsequently, the collapse of these systems and investment trusts destroyed borrowing capacity and willingness to extend investment loans. What long seemed purely a trust effect rapidly translated into falling orders and rising unemployment.
The crisis didn’t just destroy paper wealth—it exposed poor investments in the real economy masked by debt-driven asset price inflation and forced painful liquidations of unsustainable business models and debt structures.
Even within a structurally long-term bull market, Bitcoin treasury companies face similar risks. If Bitcoin drops sharply (possibly due to excessive leverage and speculation by treasury companies themselves) and trades below NAV for an extended period, common stock could be wiped out just like 1929 trust shares—even with “safe” leverage. Moreover, as we’ll explore in Part IV, the surge and subsequent collapse of Bitcoin treasury companies could even negatively impact Bitcoin adoption for a time.
Born on mNAV, Die on mNAV
If we’re an operating company and we trade below net asset value, we can monetize that—which is good for me.
Saylor’s confidence in monetizing NAV discounts (reasonable for MicroStrategy itself) reflects the same logic 1920s trust managers used to justify buybacks—but which later proved ineffective when ecosystem-wide liquidity vanished and selling pressure dominated.
Trusts discovered that buying back shares during investor sell-offs and credit crunches was fundamentally different from issuing shares during buying frenzies. To prop up prices, trusts began repurchasing shares below NAV—a strategy Bitcoin treasury companies may adopt, but with similarly disappointing results:
The stabilizing effect of investment trusts’ large cash reserves also proved illusory. In early autumn, investment trusts had ample cash and liquid resources…But now, as reverse leverage took hold, trust managers worried more about their own stock’s plunging value than broader market fluctuations…
Under these conditions, many trusts desperately used available cash to support their own shares. Yet buying stock when the public wants to sell differs vastly from buying last spring (as Goldman did) when the public wanted to buy—competition then pushed prices up. Now, cash flowed out, stock flowed in, and prices either remained unaffected or rebounded briefly. A financial tactic that seemed clever six months earlier now became fiscal suicide. Ultimately, buying one’s own stock is the exact opposite of selling it. Companies usually grow by selling stock.
As the crisis deepened, with mNAV persistently trading at discount, trusts burned through remaining cash reserves in a desperate (and ultimately counterproductive) attempt to prop up collapsing prices:
Yet none of this worked immediately. If one is a financial genius, faith in that genius doesn’t vanish overnight. For battered but unbowed geniuses, supporting their company’s stock still seemed bold, imaginative, and viable. Indeed, it appeared the only alternative to slow but certain death. So, within available funds, trust managers chose faster but equally certain death. They bought stock worthless to them. People have long been deceived by others. In autumn 1929, perhaps for the first time, people deceived themselves on a massive scale.
Conclusion
The 1920s investment trust mania offers a generalized blueprint for understanding financial bubbles built on leverage, reflexivity, and the magical growth of premiums/net asset values. Initial financial innovation quickly morphed into speculative tools promising easy riches via financial alchemy. When the music stopped, the very reflexive mechanisms that propelled prices to euphoric highs accelerated their catastrophic fall.
This bears striking resemblance to today’s Bitcoin treasury companies—from the surge of new entities to reliance on net asset value premiums and use of long-term debt to amplify returns. As we explored in Tower Of Babel, the 2008 crisis wasn’t primarily caused by subprime loans, CDOs, or mortgage fraud—nor were 1920s investment trusts brought down mainly by fraud, bad bets, lack of transparency, regulatory oversight, or entangled/pyramidal ownership. They fell because their success—built on “Alchemy Of Risk”—contained the seeds of their own destruction; Bitcoin treasury companies may be walking the same path toward the same cliff.
More troubling, just as 1920s trusts marked speculative excess of their era, Bitcoin treasury companies are symptoms of today’s “multi-inflation”—a deeper malady distorting the current economic order. The recent emergence of a gold treasury company suggests Saylor and Bitcoin treasuries’ speculative attack on fiat is expanding beyond Bitcoin:
This broader assault on monetary orthodoxy may herald an emerging “Flucht in die Sachwerte” (flight into real assets)—a wave that could escalate into a full-scale war against financial institutions. Indeed, the actual business model of gold treasury companies—tokenizing commodity markets—might accelerate this trend by channeling more capital and credit into the real economy. Rather than safely containing inflation within the virtual casino of the financial matrix, this could further fuel an inflationary supercycle.
Next: Can Bitcoin Break the Reflexivity Spell?
In Part IV, we will examine whether Bitcoin’s unique monetary properties—clashing with unprecedented central bank money printing—could enable leveraged treasury firms to use financial jujitsu to reverse historical patterns: triggering reflexive speculative attacks on fiat currencies and creating self-fulfilling bank-run-like prophecies. Or whether, like 1920s investment trusts, they instead embed systemic fragilities within the Bitcoin ecosystem from the start.
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