Power, STRC, Paul Tudor Jones, Credit Cards, and Credit Markets

Bitcoin was designed with a cyberpunk and libertarian ethos — but this comment misses a critical aspect of Bitcoin. Even if the US Government weighs in on the future of Bitcoin, it doesn’t stop any normal person from using it.

Bitcoin’s two most important attributes are: 1) there will only ever be 21 million Bitcoin and 2) anyone can send Bitcoin to anyone else without asking for permission.

Bringing government officials into Bitcoin does nothing to stop these qualities. Having the Chairman of the SEC speak at a Bitcoin conference does nothing to change the fact that 20k+ globally distributed nodes are enforcing Bitcoin’s consensus (21m hard cap, block size limits, etc.). In fact, having the US government sympathetic to Bitcoin removes one of the historic risks to Bitcoin — that the US government would act against its financial interest to stop Bitcoin.

Bitcoin is a technology. Like fire or guns or the wheel, people you might not like or don’t agree with will use it. But like any technology, if it’s powerful enough, everyone is going to want to use it to their advantage. Powerful technology attracts powerful people.

Strategy’s STRC purchased around 77k Bitcoin, while the Bitcoin ETFs have purchased about 8k BTC in 2026. (I wrote up a short explainer of STRC here, pointing out the significant risks and critiques, but its success is hard to ignore).

I think there are two takeaways:
1) Holding Bitcoin through big downturns is hard. Holding an asset that drops half its value hurts the human psyche — and a lot of people sell during these downturns. This is evident through the Bitcoin ETF flows for the first half of the year.

Bitcoin will continue to be volatile with big swings to the downside (and upside). Over time, more people will get comfortable with this volatility as Bitcoin continues to have lower lows and higher highs. BUT, not everyone will want to get direct exposure to Bitcoin. This is why Strategy’s STRC makes a lot of sense, if they can pull it off.

2) While people don’t like volatility, they love fixed income. People are willing to give away some upside for stripped volatility. This is clear from STRC’s success, especially in a bear market. Strategy has built a way to give the fixed-income market access to a Bitcoin-powered high-yield product, without taking on the volatility of Bitcoin.

If successful, Strategy could be a vehicle for stomaching and managing Bitcoin’s volatility, while delivering more consistent returns to fixed-income investors. STRC will likely continue to be a successful product — if it continues to deliver.

STRC is a fascinating development in Bitcoin. But I can’t help but continue to be cautious about it. As Nassim Taleb always says — antifragile systems look volatile in the short term but remain robust over time. But fragile systems look stable over long stretches of time, until there is a large blowup.

I’m interested to see how his BTC positions held up during this bear market when the Q1 2026 filings are released in mid-May. He mentions quantum and general cybersecurity threats as they relate to Bitcoin in the podcast, so he may have lost some conviction. We will see.

Overall though, I’m not reading too much into quarter-by-quarter positions. He’s a trader and is focused on market timing and macro trends. The fact that he’s willing to get exposure to hundreds of millions worth of IBIT is a great signal. He sees it as a macro instrument that he can use to make bets on big signals like global liquidity, conflicts, the Fed, and more.

The borrow rates are significant — at a 30% LTV, you’re paying 8% APR (so you have to deposit $100,000 in BTC to get a $30,000 credit line).

The interesting part about Aven — they’re a Series D Unicorn fintech company, not a Bitcoin-native company. Their focus is on credit cards for homeowners. But it’s the same mechanism — they enable homeowners to take out a line of credit against their home. Their move into Bitcoin is a natural extension (and it shows how Bitcoin functions as digital property).

For Bitcoin DeFi to compete with this product, it has to lean into the structural advantage of DeFi (lower borrowing costs), similar to EtherFi’s approach in the Ethereum ecosystem.

Credit is a fundamental building block of finance (and the modern world). As Bitcoin becomes bigger and more institutional, we’re going to see the credit markets around it grow. We’re already seeing this happen in CeFi with banks taking custody of BTC and offering loans against it.

But I think DeFi will continue to have its place as it offers qualities centralized players can’t/will struggle to replicate: permissionlessness, speed, and accessibility — which all lead to more efficient and cost-effective markets (lower rates).