When Wall Street Giants Replace Early Believers, Bitcoin Seems to Enter a Golden Age
However, behind the financial power transition is a subtle qualitative change in its core values. In the context of financialization, how will the future give rise to a more scarce and purer asset—“Native Bitcoin”?
(Background Summary: Deloitte Survey: 99% of CFOs in Enterprises Will Long-Term Adopt Cryptocurrencies, Stablecoins and Bitcoin Are Under Attention)
(Additional Background: The $10 Billion Selling Pressure Did Not Shake Bitcoin; Is BTC’s Next Target Surging to $140,000?)
As the Market Cheers the Exit of Bitcoin’s Early Whales
When the market cheers the exit of early Bitcoin (BTC) whales, viewing it as a healthy signal of “market maturity,” I can’t help but see a familiar script of the past capital markets playing out again: a carefully packaged power transfer is quietly playing the old game under the name of “mainstreaming.”
Extended Reading: He Sold Out! The Ancient Whale with 80,000 Bitcoins “Fully Liquidated” Cashing Out $9 Billion; Galaxy Celebrates Its Largest Client in History
Seeing the headlines shouting “Guardians of the Old Era Are Being Replaced by Titans of the New Era,” Wall Street institutions and ETFs are like thirsty sharks, voraciously swallowing the chips thrown by early believers. Crypto users and Wall Street are engaged in various strange analyses claiming that this marks the arrival of a new era.
On the surface, this is a win-win feast, as OG Bitcoiners realize astonishing financial freedom while Bitcoin gains entry into the global financial system, seemingly acquiring more solid support for its price. However, as I peel back this layer of fog woven from liquidity and institutionalization, what I see is not a simple asset handover, but a profound value split—a conflict between the essence of the Bitcoin network and commercial packaging is unfolding.
This seemingly healthy rotation is, in fact, subtly giving rise to an asset that is scarcer and closer to its original ideal than Bitcoin itself—“Native Bitcoin.” Wall Street’s embrace may not be a coronation, but rather a sweet poison.
Bitcoin’s Dual Universe: “Financial Bitcoin” vs “Native Bitcoin”
Let us first establish a core understanding: the financialization of Bitcoin—the often repeated “$1 million in 20xx”—does not imply that all Bitcoins will share the same appreciation price in the future, but rather describes a vague vision, behind which the true value levels may diverge across different tiers:
The first split universe is “Institutional BTC.” These Bitcoins exist under Wall Street’s game rules; they are held in custodial wallets of ETFs, traded on compliant exchanges, and each movement is subject to strict KYC (Know Your Customer) and AML (Anti-Money Laundering) scrutiny. They are not only clearly traceable on-chain, like financial statements laid out in the sunlight, but within various institutions, they possess thorough knowledge of their customers’ data.
For institutional investors, this type of Bitcoin is perfect—it is secure, compliant, and highly liquid. Its value primarily manifests in its market price, a kind of domesticated digital commodity incorporated into regulatory frameworks.
However, in reality, institutional Bitcoin is increasingly being packaged through financial derivatives and is gradually being detached from the native network in trading. Institutional Bitcoin is heading towards the extreme of the centralization phenomenon that has occurred since Bitcoin was created, where a large volume of trades will be replaced by off-chain exchanges. The Bitcoin native network seems to have become a path limited to “whales and institutions,” and as centralized networks are progressively undermined, this may not represent a healthy indicator.
The second split universe is “Native Bitcoin,” which I believe represents true scarcity in the future. The term “native” refers to those Bitcoins freshly mined out of the miners’ hands, not having undergone multiple circulations—“Virgin Bitcoin”—or those with extremely simple transaction histories that have never been associated with any sanctioned addresses or high-risk platforms (such as anonymous mixers) or high-volume custodial cold/hot addresses—“Pure Bitcoin.” They are like new banknotes that have never been circulated, free from historical burdens. Their value is not merely their market price; more importantly, it lies in their “attribute value”—absolute privacy, strong resistance to censorship, and the potential to flow freely outside the global regulatory network, regardless of the regulations and audits of any exchange or country.
OTC Market Verification
This value stratification is not alarmist; it has already become a reality in the high-end Over-the-Counter (OTC) market. In fact, institutional buyers are willing to pay a “Purity Premium” to purchase Bitcoins with clear provenance to ensure compliance, which has already become an open fact. They hire on-chain analysis companies (such as Chainalysis) to conduct “asset due diligence,” ensuring that what they acquire is not “tainted assets” stemming from hacks or dark web markets, and clean Bitcoins can save this cost, which can then be used to stack premiums for buying pure Bitcoins. In terms of physical handling, exchanges are more likely to separately store these pure Bitcoins in cold wallets to avoid contamination.
This is akin to the logic of the art market. A Picasso painting with a clear lineage, once owned by the Rockefeller family, has a clear provenance; another one whose origins are unknown, even if it is authentic, will greatly diminish in market value and acceptance, as each subsequent holder has to bear a significant endorsement cost for its background. The value of “Native Bitcoin” is built on this “purity of provenance.”
When One Bitcoin No Longer Equals One Bitcoin: Fungibility is Crumbling
Behind the value stratification lies a deeper crisis that directly points to the most fundamental property of currency—the loss of fungibility. Fungibility means that every unit of currency should be identical and interchangeable. The one hundred dollars in your pocket is completely equal in value to the one hundred dollars in my pocket; you need not care who the previous owner of my bill was. This is the cornerstone for the smooth circulation of currency.
However, Bitcoin’s transparent ledger puts it at risk of a silent crumble in fungibility. Since every transaction is permanently recorded on the blockchain, and through increasingly advanced on-chain analysis technology, the “past lives” of any Bitcoin can be traced. This creates a dangerous precedent: Bitcoins are beginning to be tagged with “identities” by regulatory authorities using KYC.
When a Bitcoin has previously interacted with an address marked as illegal, it may be labeled as “tainted.” Compliant exchanges may refuse to accept this Bitcoin, and users holding it may find their accounts frozen. In this case, one Bitcoin clearly no longer equals another Bitcoin. A “clean” Bitcoin and a “tainted” Bitcoin have drastically different purchasing power and liquidity.
Some may argue that this only affects a very small number of funds involved in illegal activities. However, this line of thinking is overly naïve. As global regulation tightens, the definition of “taint” will only continue to expand. Today, addresses involved in dark web transactions are tainted; tomorrow, interaction with wallets that have not undergone KYC verification may become tainted; the day after, any Bitcoin that has undergone privacy mixing protocols may be considered a “high-risk asset.” The range of this “contamination” will ripple out, and ultimately, only those with clear provenance and simple histories—“Native Bitcoins”—will be deemed absolute safe havens.
The Greatest Cost of Bitcoin’s Acceptance by Mainstream Finance is the Sacrifice of Currency’s “Amnesiac Nature”
The greatest cost of Bitcoin being accepted by mainstream finance is the sacrifice of this currency’s “amnesiac nature.” As it increasingly resembles a tracked digital asset rather than a form of free currency, its long-term value ceiling may be limited by this very fact.
Market Maturity? Wall Street Abandons the Spirit of Bitcoin to Play “Asset Reserve Games”
Now, let us return to the initial argument—that the selling off by OGs and the takeover by institutions is a healthy dynamic of “market maturity.” I believe this is a highly misleading statement. The analysts in the article liken it to real estate transactions: “You sell a property that has appreciated significantly to invest elsewhere, and the new buyer buys your property; this does not change the value of the property.”
This analogy contains a fundamental fallacy; the value of a house depends on its location, condition, and market supply and demand, and does not change based on whether its previous owner was a banker or an artist. But Bitcoin is different; its value is closely related to its transaction history and liquidity path. The “new buyers” from Wall Street are not simply taking over; they come with their own set of rules. They demand custody, audits, and rigorous background checks on counterparties. They are formatting Bitcoin with their familiar financial order, and thus these records and transaction paths, along with the accumulated user personal data and financial toolification that these institutions have handled, as well as the complex documentation required to comply with various regulations, have already de-native Bitcoin.
Wall Street is Making Native Bitcoin Scarcer
In other words, Bitcoin is being plundered and reshaped by Wall Street. This massive machine is transforming Bitcoin from a decentralized, permissionless value transfer tool into a form of “digital gold” that is represented by centralized institutions and requires layers of permissions to access.
The emergence of ETFs, while lowering the barriers to investment, has also locked vast amounts of Bitcoin into custodial wallets, detaching them from the freely circulating market, further diminishing the decentralization and borderless value of the Bitcoin network. According to data, over 94.75% of Bitcoin has been mined, and ETFs and institutions are accelerating their accumulation, leading to an unprecedented contraction in the supply of “clean” Bitcoins available for free trade in the market.
Therefore, the recent sell-off by those OG Bitcoiners may not just be profit-taking. Can we boldly speculate that this is a well-considered strategic differentiation? Some whales see the decline of Bitcoin’s decentralization and take the opportunity to cash out, allowing institutions to take over and push the market price of Native Bitcoin higher. Meanwhile, early whales may still retain many of those most precious, unyielding “Native Bitcoins” that cannot be easily tamed by the financial system, but the vision of making Bitcoin a global payment network may be increasingly distant.
Two Futures: Tamed Gold or the Key to Freedom?
Ultimately, we will see a divided future. Beneath the price tags of Bitcoin will lie two entirely different assets. One is “Financial Bitcoin,” which is tethered to traditional finance, enjoying the dividends of institutionalization, but also inheriting all its constraints. Its value is determined by the capital flows of Wall Street and the whims of regulatory bodies.
The other is “Native Bitcoin,” which will return to Satoshi Nakamoto’s original vision—a peer-to-peer electronic cash system. As the issuance of new coins diminishes and a large number of Bitcoins are “locked” in the financial system, this untainted Bitcoin with absolute privacy and sovereignty will become the true “limited edition luxury item” in the crypto world. Its price may gradually decouple from “Financial Bitcoin,” forming a unique “Purity Premium.”
Wall Street’s embrace has brought unprecedented attention and liquidity to Bitcoin, but it may also be hollowing out its most revolutionary core. While everyone is celebrating soaring prices, perhaps we should take a step back and think calmly: what we originally wanted was a digital gold recognized by the financial system, or a key that can open the door to absolute freedom?
If the spirit of decentralization continues to decline, then perhaps in the not-so-distant future, the market will tell us that the prices of these two will show a staggering disparity.
