Bitcoin's 'Referee' Status Between Crypto & U.S. Policy, Volatility Ticks Down

**SPEAKER_1** (0:00)
Joining me now in studio to discuss their recent resurgence in Bitcoin is Sam Callahan, Director of Bitcoin Strategy over at OranjeBTC. Sam, great to have you on, and what a day to have you on too. I mean, I was just looking at the technical chart on Bitcoin in the break. We are above the 50-week moving average for the first time since late 2025, with the current price of Bitcoin at $81,232 right now. What is driving this massive move? I mean, it feels like just days ago, and it was, in fact, just days ago, that we were at $62,000.

**Sam Callahan** (0:31)
Yeah. Well, I like to view Bitcoin as a reflection of the fiscal policy and monetary policy all around the world. And lately, currency debasement is back in the spotlight. Ever since Treasury bestseller came out, increased the Treasury buybacks, what he really showed is that they will intervene in the bond market to continue to run massive fiscal deficits. They will not allow the bond market to be a fiscal disciplinarian. And ultimately, what they're doing is masking the problem and moving the economic pressure into the currency.
And Bitcoin is a pure market disciplinarian. Even Kevin Warsh himself last year described Bitcoin as the policeman for policy, to let policymakers know if they're doing a good or bad job. Well, Bitcoin is flying upward right now in response to this because of the concerns of currency basement around these policy moves.

**SPEAKER_1** (1:19)
So we've got the policeman and we've got the safe haven, both rallying as the debasement trade comes back into focus. What exactly is the market betting on right now?

**Sam Callahan** (1:29)
Well, they're betting on the fact that both the Fed and the Treasury is going to continue to intervene and basically try to save the bond market, so to speak, and sacrifice the currency in the process. As well as politicians, they won't stop spending. They'll keep trying to run massive $2 trillion deficits. Ultimately, that results in currency debasement. Now, Kevin Morris made some comments at Jackson Hole. He talked about how the inflation target has been above the Fed's target for 65 straight months, but I think that's abstract. What we have to look at is the core PCE over that time has averaged 3.8%.
That means that the dollar has lost about 20% of its purchasing power in five years. That's why Americans feel like everything's getting more expensive, and that's why Bitcoin is not trading below 20,000 now. It's trading above 80,000, okay? So you have to really think about the currency dynamics here. When we talk about the intervention that's occurring at the bond market level.

**SPEAKER_1** (2:23)
So when we look at the bond market intervention, is this bond buyback program actually changing the fundamentals for Bitcoin, or is the bigger impact here the signal that it's sending about how concerned policy makers are about rising long-term yields?

**Sam Callahan** (2:41)
It's really the signal.
There's all different types of tools that they're using right now. I mean, you had the FEMA repo facility with Japan.
That was all about not allowing the long end to run either. You have treasury buybacks that we just talked about. We had changing bank capital rules. All of these things point to the same thing, which is they will not allow price discovery in the long end of the bond market. There's a consequence to that. There's no free lunch in economics. You're just moving the economic pressure to the currency.
It's harder for people to see that. Everyday life, life just feels more expensive. Why is this happening? Well, it starts with the policy. It's bad policy, and that's why the policeman, or the referee that is Bitcoin, is blowing the whistle on all of this. And same thing with gold. You're seeing hard assets. Those assets function outside the policy apparatus, and the price is dictated by the market. And so you can't interfere in Bitcoin's price. You can't stop the supply and demand function of Bitcoin. It's always gonna be a pure signal of currency debasement, which is why it's reflecting what's going on.

**SPEAKER_1** (3:44)
And so as we look at it, both gold and Bitcoin have rallied together, Bitcoin more volatile in its movements. Does that volatility make Bitcoin a worse hedge, or is it simply the price that you have to pay for greater potential upside?

**Sam Callahan** (4:00)
Well, I think it's both, right? There's asymmetric upside of Bitcoin that's a function of its size. It's emerging. It's a lot younger than gold. It's not as established. But that's also the benefit of owning Bitcoin. You're going to have that rare combination of a safe haven asset with the asymmetric upside of, say, like a tech stock with very different fundamentals. But gold has a very different value proposition.