HODL: A Must-Have for Success or a Gamble on the Future?

What you don’t use, you lose. Just ask the dodo.

For centuries, it had wings. But it hadn’t flown in ages. With no predators around and no reason to take off, why bother? And so the dodo evolved into a flightless bird. Evolutionarily, it made sense—until humans entered the picture. Without the ability to fly, it couldn’t escape its hunters. In just a few generations, the dodo was gone.

Use it or lose it. That’s a phrase you hear increasing often in the bitcoin world these days. It’s not about birds, but about transactions. Although bitcoin works well as a store of value, the number of transactions remains low. The block subsidy—the built-in reward for miners—halves every four years, but usage doesn’t rise in step. If this trend continues, miners’ revenue will evaporate. And without revenue, there’s no security. Without security, there’s no trust. And without trust? Bitcoin might not literally disappear, but it will lose its functionality.

This is a real concern. And viewed purely as a systemic issue, it’s natural for people to wonder: shouldn’t we be using bitcoin more? Maybe even to pay for your coffee. It’s a moral appeal in many discussions: use it, or lose it.

But there’s another perspective—a view that predates bitcoin itself. Back in 1871, Austrian economist Carl Menger explained the origin of money. Spoiler alert: it doesn’t happen overnight. It develops gradually.

Over 150 years ago, Carl Menger described how money comes into existence—not imposed from above through legislation or royal decree, but emerging organically from everyday use. People discovered, almost by accident, that some goods were more tradable than others. They held on to those goods, traded them, and eventually began to use them as a way of expressing the value of other items. According to Menger, money emerges in stages: first as a store of value, then as a medium of exchange, and finally as a unit of account.

In that light, it’s not surprising that for many, bitcoin still feels more like something to hold rather than a means of payment—a way to preserve value over time, much like savings, gold, or bonds. You might not fully agree with that perspective, but it does help explain why people predominantly hold bitcoin instead of spending it.

Later thinkers built on Menger’s ideas. Ludwig von Mises argued that money can only gain value if people already valued it before it was used as money; he called this the regression theorem. Friedrich Hayek emphasized that real money only comes into being when people choose it voluntarily. Money is chosen, not imposed.

This stands in stark contrast to how we handle money today. The euro isn’t a matter of choice—it’s mandatory. Taxes, pay slips, supermarket prices; everything is set up around it. Alternatives might exist, but in practice, they feel like exceptions. Bitcoin, on the other hand, has to carve out its own place without any central mandate—not because it must, but because people want to use it. This makes its path different—perhaps slower, but not necessarily weaker.

Menger probably wouldn’t have been overly troubled by the current low number of bitcoin transactions. For him, holding bitcoin wouldn’t be the ultimate goal, but rather a necessary step. If enough people hold onto it, its role as a medium of exchange will naturally follow.

Yet there’s still a nagging issue. As relevant as Menger's theory is to what we see today, there’s an undeniable difference between his era and ours. Menger lived in a world where money evolved slowly in relatively open markets, sometimes with several currencies coexisting. He never witnessed a monetary system having to prove itself in just a few decades, under the relentless countdown of halvings.

Although some might like to think otherwise, bitcoin is not gold. It is designed and launched in a hostile environment—without state backing, without a central bank, without taxes. There’s no mandated usage, only voluntary adoption. And that adoption must not only emerge but also grow rapidly enough to sustain the system as the block subsidy fades away. That isn’t how gold secured its place. It’s a leap into uncharted waters—a behavior Menger would recognize, but in a context he could never fully have imagined.

He would likely have watched it with fascination, recognizing the pattern of people holding bitcoin. Still, he would have questioned the sustainability of a monetary system that relies solely on voluntary transactions, without a safety net and without centuries of gradual evolution.

Perhaps he would admire the process, but fear its rapid pace.

And that brings us right to the crossroads where bitcoin currently finds itself: somewhere between time-tested principles and new uncertainties. Between economic logic and social experiments. Between holding and spending.

Use it or lose it? Maybe!

More Alpha

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1. Trump Media may purchase up to $2.5 billion in BTC
2. Trump Advisor: “Bitcoin was key to winning the 2024 election”
3. Is AmazonCoin coming?

1️⃣ Trump Media may purchase up to $2.5 billion in BTC

Contribution by Erik

Trump Media & Technology Group (TMTG), the media company behind Truth Social, has received approval from the U.S. Securities and Exchange Commission (SEC) to raise up to $2.5 billion in capital with the potential aim of buying BTC.

It’s possible, because while TMTG now has regulatory approval to purchase BTC, that doesn’t automatically mean the entire amount will be converted into bitcoin. The company notes in its prospectus that such purchases are discretionary and that the funds could also be used for general corporate purposes, leaving the specifics of its bitcoin strategy a bit unclear for now.

Trump Media & Technology Group plans to raise funds through a combination of share issuances and convertible bonds. This would allow it to quickly join the ranks of publicly traded companies holding cryptocurrencies on their balance sheets, following in the footsteps of companies like Strategy and Tesla. According to CEO Devin Nunes, the bitcoin investment is part of a broader strategy aimed at “financial freedom” and strengthening the so-called ‘Patriot Economy.’

The Trend of Bitcoin Treasuries

TMTG’s move does raise some questions. The Truth Social platform has very few users and reported a loss of $58 million in 2023. Since the purchase of bitcoin would be entirely financed with fresh capital, it would also dilute existing shareholders.

Compare this with Michael Saylor’s Strategy. Strategy has software development as its core business—although that has become less significant compared to its bitcoin holdings. Moreover, Strategy employs a well-thought-out method to gradually increase the amount of bitcoin per share over time. Trump Media, like some other recent companies, appears driven primarily by political branding and hype—simply putting some BTC on the balance sheet to garner publicity, and hopefully, some price gains as well.

Although the number of bitcoin treasury companies is growing rapidly, it remains to be seen whether this is a sustainable trend or just a passing hype. The key question is always: is there a clear strategy behind it, as with Strategy? And, perhaps more importantly, is the company implementing that strategy with true conviction and determination? Without those elements, this kind of ‘business’ growth could prove very volatile.

We’ll likely have to wait until the next bear market to find out!

2️⃣ Trump Advisor: “Bitcoin was key to winning the 2024 election”

Contribution by Erik

According to Chris LaCivita, a top advisor to Donald Trump and one of the chief strategists behind the successful re-election campaign, bitcoin played a decisive role in reaching voter groups that had traditionally shunned the Republican Party. During Coinbase’s State of Crypto Summit in New York, LaCivita explained that crypto served as a bridge to connect with younger voters, African Americans, and Asian Americans.

Trump Strategist Outlines How Bitcoin Helped Republicans Win the 2024 Election - Decrypt

Trump ally Chris LaCivita said at Coinbase’s Crypto Summit that the Republican Party recognized the importance of the crypto community.

DecryptLiz Napolitano

"The most important realization we had is that the crypto voter cuts across all socioeconomic strata," said LaCivita. "They were a group of voters ready to seize the moment."

The Republican Party saw crypto as a strategic opportunity to break into communities where they had previously struggled. For example, 83% of African Americans identify as Democrats and 60% of Asian American voters lean left. Yet crypto ownership among these groups is significantly higher than among white Americans—20% and 28% respectively, compared to 14%, according to Pew Research data.

The equation was simple. While Democrats took a hostile stance toward crypto—even going so far as to feature an ‘anti-crypto army’ created by Elizabeth Warren on their campaign posters—the Republicans embraced pro-crypto policies, such as supporting bitcoin miners and resisting digital central bank money.

It’s a clever positioning that future campaign leaders around the world are sure to take note of.

3️⃣ Is AmazonCoin Coming?

Contribution by Peter

On Tuesday, June 17, the U.S. Senate will vote on what at first sounds rather ordinary: the GENIUS Act, a bill that outlines rules for stablecoins—tokens pegged to the dollar but issued by companies rather than a central bank.

If you dig a little deeper, you realize what’s truly at stake: control over the payment system. That control is slipping away from banks and card networks, shifting toward tech giants like Amazon, Walmart, and their peers.

WalmartDollar

Last week, The Wall Street Journal reported that companies such as Amazon, Walmart, and Expedia are actively planning to issue their own stablecoins—not tokens for speculation, but a means of payment you might soon use at checkout or on an order page.

Why would they do that?

Because the current payment system is slow and expensive. Visa and Mastercard charge high fees for every transaction, and settlements can take days. For a multinational company paying suppliers around the world, these delays and costs are significant, representing frustrations that add up to billions.

Stablecoins offer an alternative—a stable digital dollar that works 24/7, can be transferred instantly, and doesn’t require permission from a traditional bank network. In the crypto world, this has long been the norm. And now, major retailers want a piece of the action.

Coin of the Realm

The idea of a proprietary coin isn’t new. Companies like Walmart have long had ambitions to expand their financial services. Back in the 2000s, the retailer even tried to secure a banking license, though political resistance ultimately halted that effort.

But technology has changed. Stablecoins don’t need a full banking license—only legal clarity. And that clarity now seems within reach.

The GENIUS Act establishes, for the first time, a legal framework for stablecoins by specifying requirements for reserves, oversight, and permits. Not every detail is crystal clear yet, but it’s a start—and sometimes a start is all you need to open the gates.

Tuesday, June 17 might not be the day your world is transformed. But it could very well be the day we later look back on and say: that’s when it all began, when the market received its mandate to start spending money.

🍟 Snacks

To wrap things up, here are a few brief snacks:

• Stripe acquires Privy, an infrastructure company for crypto wallets. Privy supplies embedded wallets to platforms like OpenSea and Hyperliquid. The acquisition fits into Stripe’s broader strategy to make blockchain technology more accessible to developers, following earlier moves with stablecoins. Stripe isn’t looking to reinvent Web 3, but to integrate it with existing payment networks.
• The U.S. SEC is considering an “innovation exemption” for DeFi. SEC Chair Paul Atkins hinted during a roundtable discussion at a potential exemption for innovative projects. This led to a surge in the prices of tokens like Aave and Uniswap. Such an exception would temporarily give DeFi projects some breathing room from strict regulations. Investors are seeing opportunity, but nothing is set in stone until it’s finalized.
• Bitcoin Core is dropping the controversial 80-byte limit on OP_RETURN data in October. Going forward, each output can contain up to 1 MB of data, a shift that’s sparking debate. Supporters call it a pragmatic update in line with what miners have already been doing, while critics fear it could lead to spam and undermine bitcoin’s role as a monetary network. The change captures the age-old struggle in bitcoin between innovation and preserving its original design.
• The SEC postpones its decision on new altcoin ETFs. Fund applications for Dogecoin, Avalanche, and Hedera remain on the back burner for now. There has been some progress on a Solana ETF application with additional discussions in progress. The regulator is seeking further input but doesn’t seem to be in a hurry. The takeaway: altcoin ETFs are coming, but not anytime soon.
• Approximately 31% of all bitcoin is now held by central entities. According to a report by Gemini and Glassnode, over 6 million BTC is managed by governments, exchanges, ETFs, and companies. This signals growing institutional maturity—and it has consequences. Since 2018, volatility has steadily declined, with fewer dramatic spikes and more gradual increases. Yet it also raises an important question: How decentralized is bitcoin if one out of every three coins is held by institutions?
• Paraguay briefly appeared to follow in El Salvador’s footsteps when President Santiago Peña announced that bitcoin would become legal tender. However, the announcement turned out to be the result of a hacked account. The government quickly clarified that the news was false—a classic case of something too good to be true.
• BlackRock: “The real growth of crypto is yet to come.” COO Rob Goldstein stated at Coinbase’s State of Crypto Summit that stablecoins have significant utility and that IBIT is meant as a bridge for those who don’t wish to buy bitcoin directly. According to him, the financial sector is ripe for disruption through tokenization. “There is so much potential. We’re only at the beginning.”

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