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Could The Government Use Tax Dollars To Bail Out Bitcoin?
Submitted by QTR's Fringe Finance
There was a time when Bitcoin’s biggest selling point was that it existed outside the financial system. No governments. No central banks. No bailouts. No “too big to fail.” It was supposed to be the antidote to everything that happened in 2008. In fact, I once argued that another 2008 is what could standardize bitcoin.
Fast forward fifteen years, and we’ve somehow reached the point where I’m asking myself whether the last remaining bailout for crypto might actually be...the U.S. government. Think about how unbelievably sickening that would be. It’s the terminus I kept arriving at yesterday while thinking about the only way Strategy would be able to survive if Bitcoin continued getting decimated from these prices. And sadly, the idea isn’t really unimaginable given our current administration’s ties with crypto.
Yesterday I wrote that Strategy’s new capital framework effectively buys the company time. And to be fair, it does. Management rolled out dedicated cash reserves, formal dividend policies, billions of dollars in buyback authorizations, and what at least appears to be a more disciplined approach to capital allocation.
But none of those changes alter the one variable that ultimately matters: Bitcoin’s price. Everything rests on the price of Bitcoin, from Strategy’s trajectory as a public company, to some of Bitcoin’s biggest and most well known advocates using it as a gauge as to when they would admit defeat on the long thesis.
Strategy has now openly acknowledged that Bitcoin is no longer untouchable. For years, Strategy built its identity around buying Bitcoin and never selling it. Now it has explicitly stated that those holdings can be monetized if necessary to fund dividends, replenish reserves, service obligations, or support buybacks. If Bitcoin keeps climbing, nobody will care. If Bitcoin starts falling hard, suddenly everyone will.
Selling Bitcoin to raise liquidity sounds perfectly prudent until you’re forced to sell into a declining market. At that point, the math starts working against you. Selling creates additional supply. Additional supply can pressure prices. Lower prices reduce the value of Strategy’s largest asset, potentially creating an even greater need for liquidity. That can lead to more selling, which creates more pressure, and before long you’ve got the financial equivalent of a dog chasing its own tail into a neighborhood wood chipper.
I’m not predicting that’s how this ends. Bitcoin is a massive global asset, and Strategy alone isn’t going to dictate where it trades. But the possibility now officially exists because management has crossed a line that investors once assumed would never be crossed. Bitcoin is no longer sacred. It’s now part of the liquidity toolkit.
That raises a much bigger question. What happens after every private-sector solution has been exhausted? What happens when the equity markets stop funding you, the preferred market dries up, convertible debt becomes too expensive, and you’ve already started selling Bitcoin? Who’s the buyer of last resort?
Historically, there’s almost always been one. Banks got one. Money market funds got one. The auto industry got one. Regional banks got one. The corporate bond market got one. During COVID we were buying damn near everything that wasn’t bolted to the floor. Whenever markets become sufficiently interconnected with the rest of the financial system, Washington inevitably starts talking about “systemic risk,” and once those two words enter the conversation, almost anything becomes possible. And remember, back in August of last year, I already asked whether or not Bitcoin was too deep in the fabric of the U.S. financial system: Is Bitcoin Too Deep In The Fabric Of The U.S. Financial System?
So why not a Bitcoin bailout from the government?
The Trump administration has developed some of the closest ties to the cryptocurrency industry of any U.S. administration in history. It has installed officials viewed as supportive of digital assets, pushed for clearer rules governing the industry, and repeatedly framed Bitcoin and blockchain innovation as strategic priorities for American competitiveness.
Trump himself has gone from skeptic to outspoken advocate, publicly backing Bitcoin mining, supporting the creation of a national strategic Bitcoin reserve, and cultivating close relationships with many of the industry’s largest executives and investors. The result is an administration that is no longer merely tolerant of crypto, but one that is increasingly politically invested in its success, making the industry’s fortunes more closely aligned with the White House than at any point since Bitcoin was created.
I can already imagine the press conference. “Today, in order to preserve financial stability, the United States government is announcing a Strategic Bitcoin Stabilization Facility.”
I honestly think I’d oscillate between laughing, crying and vomiting. The irony would be almost too perfect. The asset invented to escape governments...saved by the government. The people screaming “End the Fed”...saved by the Fed. The same crowd that spent fifteen years explaining why Bitcoin doesn’t need the traditional financial system suddenly hoping Washington becomes the biggest whale on Earth.
You couldn’t write satire this good.
Politically, I think it would be suicide. The government would be accused of bailing out crypto bros. Every taxpayer would ask why Washington is spending public money supporting digital assets while families are still struggling with the cost of living. It would probably become one of the most universally despised bailouts in modern American history. Democrats would run rampant in trying to regulate and suffocate crypto if they won in 2028. And yet...I can’t completely dismiss it.
We’ve spent the better part of two decades responding to every financial emergency with the same basic solution: print money, borrow money, guarantee money, or throw taxpayer money at the problem until everyone stops panicking. If crypto continues weaving itself into public companies, pension funds, ETFs, banks, retirement accounts, and increasingly complex financing structures, politicians will eventually start arguing that the consequences of doing nothing are worse than the consequences of stepping in.
The funny part is that, by Washington standards, Bitcoin wouldn’t even be that expensive to rescue. With a market capitalization hovering around a $1.2 trillion dollars, you’re talking about an amount of money that barely registers compared to the trillions we’ve borrowed, printed, guaranteed, and spent over the past twenty years.
I’m not saying the government would do it, but it’s amazing that we’re now living in a world where it’s no longer completely absurd to imagine the conversation taking place.
If Strategy’s increasingly elaborate financial engineering ultimately isn’t enough...if Bitcoin falls much faster and much farther than anyone expects...and if every private buyer finally disappears, the last remaining bailout may come from the very institution Bitcoin was created to replace.
And if that day ever comes, don’t tell me it’s impossible. The government has done a lot dumber sh*t with a lot more money.
--
QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.
This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions.
As of May 20, 2026 I personally no longer actively trade (read my story here). My investing/saving is done by recurring contributions mostly to sector ETFs and a few select equities, trusted third parties who oversee my accounts, and advisors. Such advisors or funds, through individual equities, options, index funds, mutual funds, ETFs, or other securities, may have positions in, exposure to, or holdings of names mentioned herein that I know nothing about. Basically, via index funds, ETFs and individual equities it is possible I could own, have exposure to, or not own anything at any point. As of the same date, May 20, 2026, in an attempt to lead a healthier lifestyle, I’ve also excluded myself from fantasy sports, sports betting, online and in-person casinos and prediction markets.
And all positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier.
The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.
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Chart Of The Day: Democrats' Patriotism Falls Off A Cliff. Here's One Reason Why
American pride remains high in absolute terms, but the trend is clear: the U.S. has shifted from being one of the world's most nationally proud countries to one that now resembles a typical Western nation.
There are multiple forces behind this decline, but the largest political signal comes from the transformation of the Democratic Party. What was once a center-left party has increasingly embraced socialism and Marxism, frequently expressing anti-American rhetoric while seeking to undermine capitalism and national identity with migrants who don't want to assimilate.
The new face of the Democratic Party is NYC Mayor Zohran Mamdani, whose team of unhinged Democratic Socialists apparently thought it was a good idea to use George Washington's desk as the centerpiece of a propaganda video attacking America just one day before the country's 250th anniversary. That was not a coincidence - it was a signal.
Communist NYC Mayor Zohran Mamdani, who just came to this country, chose to become an American, is deciding he is the foremost authority to tell Americans what it means to be American.
He has the AUDACITY, on America's 250th birthday, to call our great nation "an arena of… pic.twitter.com/sayf6IDu90
The larger message is that the DSA, their billionaire-funded NGO network, and many of their far-left thought leaders are fueling an anti-American sentiment campaign, while their base of migrants and white liberals, affected by nation-killing suicidal empathy, increasingly view everything about the U.S. as racist. That helps explain, in part, why national pride among the left has collapsed.
One X user points out a recent Nate Silver survey showing that American pride has tumbled. That person noted, "Paul @WomanDefiner: Funny things happen when 30% of people in America aren't American-born." And that's most likely correct, given that many of these migrants have little desire to assimilate...
Funny things happen when 30% of people in America aren't American born. https://t.co/Va84BVULjO
— Paul (@WomanDefiner) July 3, 2026Another survey by YouGov found that Democrats view the Black Lives Matter flag more favorably than the actual American flag.
YouGov poll | 6/30-7/2
Do you have a positive or negative view of the following flags?
(By party, net)
🟦Democrats
Black Lives Matter +69
American +62
Mexican +54
Ukrainian +54
Gay pride +48
Transgender pride +35
Palestinian +15
Israeli −8
Thin Blue Line −24
Gadsden… pic.twitter.com/rFWHQNN7j0
Last week, mainstream Democrats began to panic over what years of welcoming socialists and Marxists into their DEI-powered coalition may have unleashed. The concern now is that DSA activists are no longer just an activist flank, but are hijacking parts of the party, seizing institutional power, and dragging the broader Democratic brand into an increasingly anti-American posture.
This shift has been fueled by an ecosystem of far-left NGOs, activist networks, and what may be foreign influence operations that have helped normalize socialist and Marxist politics within the party's base. Read more here.
"Democrats legitimately need to calm down. I'm a traditional Democrat, but I can't support the party right now. America is a great country, and it's not hard to live a relatively comfortable life here," another X user said.
Another poll.
And another.
Chart of the Day: We'll leave you with this chart: U.S. National Pride vs. Foreign-Born Share...
Trump last night:
Trump:
You can be loyal to Karl Marx or you can be loyal to America.
You can be a communist or you can be a patriot. You cannot be both. pic.twitter.com/4HosNoBcjR
White House via X earlier today: "You can be a communist or you can be a patriot. You cannot be both."
Tyler Durden Sat, 07/04/2026 - 13:25