In a recent in-depth discussion with Brandon Gentile, Peter Dunworth outlines Bitcoin's trajectory...
Bitcoin: Pick your Trojan Horse
Bitcoin, has long been heralded as a revolutionary asset class, promising financial sovereignty and exponential growth. In a recent interview with Simply Bitcoin, Bitcoin strategist and investor Peter Dunworth delves into the current state of the market, offering nuanced perspectives on why Bitcoin's anticipated parabolic surge is being held back, the subtle mechanisms driving its mainstream adoption, and practical steps for everyday families to begin accumulating this "digital gold". Drawing from his experience in wealth management and deep understanding of macroeconomic trends, Dunworth paints a picture of a maturing asset that's navigating complex global forces. This article explores these themes, highlighting how political maneuvering, institutional tools like ETFs, and grassroots strategies could shape Bitcoin's trajectory.
Political and Economic Pressures Delaying Bitcoin's Parabolic Growth
Bitcoin's price cycles have historically followed a predictable pattern, often exploding into parabolic growth following halving events that reduce the rate of new coin issuance. However, as Dunworth explains in the interview, the 2024 halving has not triggered the expected rally, with the asset lingering in a consolidation phase. He attributes this delay primarily to a confluence of political and economic pressures that are reshaping global liquidity and capital flows.
At the heart of these pressures is the interplay between U.S. politics and monetary policy. Dunworth points to the current administration under President Trump as a key factor, emphasizing how electoral strategies are influencing economic decisions. With midterm elections looming in 2026, Trump is prioritizing a "resolute victory" to push through his agenda, which requires a booming economy. This has led to a deliberate delay in stimulating measures, such as interest rate cuts by the Federal Reserve, to peak economic performance closer to the polls. His number one priority is making sure that he has a resolute victory in the midterms next year," Dunworth states, underscoring the political calculus at play.
Economically, Dunworth describes a "tug-of-war" between the White House and the Fed. Trump has publicly advocated for lower rates to fuel growth, but the Fed's independence means it resists overt political pressure. This tension is exacerbated by broader global issues, including trade wars, tariffs, and a potential economic reset. Dunworth notes that these exogenous factors weigh more heavily on this cycle than previous ones, where halvings directly impacted supply dynamics more profoundly. Today, with Bitcoin's inflation rate dropping to negligible levels post-halving, supply shocks are muted, allowing macroeconomic headwinds to dominate. Furthermore, Dunworth warns of regulatory oversight and government endorsements - or the lack thereof - as additional brakes on momentum. He reflects on how past cycles, like the 2021 bull run disrupted by the FTX collapse, were shorter and more volatile. In contrast, the current elongated cycle could stretch over years, delaying the parabolic phase until political uncertainties resolve. "We're still going to have a bull cycle, it's just going to be an elongated cycle where this is stretched over a much longer period of time that we're not familiar with," he predicts.
This perspective suggests that investors must temper expectations for quick 20x gains, as seen in 2017, and prepare for a more protracted ascent influenced by election outcomes and policy shifts. These pressures aren't just U.S.-centric; Dunworth touches on global liquidity constraints, where central banks' actions in response to inflation and debt levels indirectly suppress risk assets like Bitcoin. The delay, while frustrating for short-term traders, could ultimately lead to a more sustainable rally once these barriers lift.
ETFs, Treasury Companies, and Trojan Horse Adoption
As Bitcoin matures, its path to widespread adoption is increasingly paved by institutional vehicles rather than retail fervor. Dunworth introduces the concept of "Trojan horse" adoption, where seemingly indirect mechanisms sneak Bitcoin into mainstream portfolios, bypassing skepticism and regulatory hurdles.
Central to this are Bitcoin ETFs and treasury companies. ETFs, approved by the SEC in early 2024, have funnelled billions into Bitcoin exposure without requiring direct ownership. Dunworth views them as a gateway, allowing traditional investors to dip their toes via familiar stock-like products. However, he argues they fall short of true adoption, as they often involve derivatives or custodial risks, not self-sovereign holding. In contrast, treasury companies like Strategy, led by Michael Saylor, represent a more potent Trojan horse. These firms allocate corporate treasuries to Bitcoin, treating it as a superior store of value over cash or bonds. Dunworth envisions a scenario where such companies gain inclusion in major indices like the S&P 500, forcing pension funds and index trackers to gain Bitcoin exposure passively. "This is not going to be popular with the Bitcoiners, but I think we are going to have a Trojan horse with Bitcoin adoption and it will come through the treasury companies," he asserts.
This indirect entry point educates investors; once "in the game," they learn about Bitcoin's fundamentals, often transitioning to spot holdings. Dunworth contrasts the two: ETFs provide liquidity and accessibility but carry counterparty risks, such as those from issuers like BlackRock. Treasury companies, however, embody conviction, with executives like Saylor hodling vast amounts, signalling long-term commitment. This strategy could accelerate adoption among the masses, as Dunworth estimates only 10 million of the world's 8 billion people currently see Bitcoin as a necessity. "There are 8 billion people in the world and there are only 10 million people who understand that Bitcoin is a need. 8 billion people need this," he emphasizes.
The Trojan horse effect extends to regulatory evolution. As more corporations adopt Bitcoin treasuries, governments may endorse it to remain competitive, potentially leading to nation-state accumulation. Dunworth warns of risks, including regulatory crackdowns or market manipulations, but sees this as inevitable for scaling adoption. Ultimately, these vehicles bridge the gap between Wall Street and Main Street, normalizing Bitcoin as an asset class.
How Average Families Should Start Stacking Bitcoin
For average families, entering the Bitcoin space can seem daunting amid volatility and complexity. Dunworth offers grounded advice, emphasizing education, simplicity, and long-term thinking over speculative trading.
First, he stresses self-custody as the gold standard. Families should start by acquiring spot Bitcoin directly, using reputable exchanges, then learn to withdraw their Bitcoin to their own custody - be that through single-sig hardware wallets or with multi-sig collaborative security providers. "I advise clients to buy spot Bitcoin for financial independence," Dunworth says, highlighting risks with intermediaries.
NB: This video is for information and entertainment purposes only and should not be considered investment advice.
