Top-Heavy Markets, Stablecoins, and Bitcoin’s Next Move

Briefing Notes contain: (1) a summary of podcast content; (2) potential information gaps; and (3) some speculative views on wider implications for Bitcoin. Most summaries are for Bitcoin-centered YouTube episodes but I also do some on AI and technological advance that spill over to affect Bitcoin.

Summary

The November 23, 2025 episode of the Green Candle podcast features James Check explaining why the current drawdown looks more like a compressed bear market than a routine correction. Check argues that an unusually top-heavy cost basis above roughly 95K, combined with unprecedented long-term holder distribution, has handed supply to large, mostly hidden spot buyers. He links these flows to AI-driven equity fragility, stablecoin-fueled dollar dominance, and a prospective Bitcoin–gold–dollar architecture that could reshape future market cycles.

Take-Home Messages

1. Top-heavy market structure: An unusually large share of Bitcoin’s cost basis clustered above roughly 95K created a fragile setup that made sharp, cascading drawdowns more likely.
2. Massive but opaque accumulation: Sustained multi-billion-dollar spot selling from long-term holders and whales has been absorbed by large, largely invisible buyers, signaling a structural shift in ownership.
3. Treasury vehicle fragility: Many listed Bitcoin treasuries outside MSTR appear overlevered and business-model weak, with MNAV compression exposing investors to equity and solvency risk.
4. Bitcoin as a liquidity barometer: Check frames Bitcoin’s recent weakness as part of a broader environment of overstretched AI equities, bond-market stress, and deteriorating liquidity rather than an isolated sell-off.
5. Stablecoins and monetary power: Stablecoin expansion backed by short-term US paper reinforces dollar dominance while extending collateral chains that can amplify volatility across Bitcoin and global markets.

Overview

James Check opens by arguing that recent Bitcoin price action cannot be understood through simple four-year cycle heuristics and instead reflects a “one-of-one” environment. He introduces the idea of a “Hodler’s Wall,” describing how roughly 65% of invested wealth sat above about 95K and left the market top-heavy and vulnerable. This configuration, he contends, explains why the subsequent breakdown felt like a bear market compressed into a shorter time frame rather than a standard correction.

He then uses on-chain data to quantify unprecedented long-term holder selling, citing tens of billions of dollars per week in spot distribution from whales and OGs over multiple months. Despite that magnitude of sell-side pressure, price did not collapse to prior-cycle levels, which Check interprets as evidence of exceptionally deep spot demand. He emphasizes that ETF flows do not fully explain the absorption and suggests that sovereigns, large institutions, or “forever allocators” are quietly accumulating through over-the-counter and off-exchange channels.

The conversation shifts to listed Bitcoin treasury companies, where Check draws a sharp distinction between MicroStrategy and most other publicly traded vehicles. He contends that many smaller treasuries barely bought any Bitcoin, relied on equity premiums, and now face compressed MNAVs and weak operating businesses as price retraces. By contrast, he presents MicroStrategy as a structurally different entity, combining a very large stack, bond and preferred issuance, and access to capital that smaller firms cannot match in a prolonged drawdown.

From there, Check widens the lens to the macro backdrop, focusing on an AI-led equity boom that he characterizes as a bubble fueled by trillions in capex and opex chasing tens of billions in revenue. He suggests portfolio managers are trapped in crowded AI trades and reluctant to de-risk until market behavior forces their hand, heightening the odds of a sharp, correlated unwind. Within this environment, he argues that Bitcoin has been “screaming” about deteriorating liquidity and bond-market stress for months, acting more as a forward-looking liquidity barometer than a standalone speculative outlier.

Stakeholder Perspectives

1. Long-term Bitcoin holders: Weighing the psychological strain of sharp drawdowns against the potential benefits of transferring coins to stronger long-horizon hands.
2. Institutional allocators and sovereigns: Evaluating how to use episodic weakness and off-exchange channels to build strategic positions without telegraphing intentions.
3. Treasury-focused public companies: Confronting leverage, MNAV compression, and business-model fragility that could undermine investor trust and access to capital in a sustained bear phase.
4. Regulators and central banks: Monitoring how stablecoin-backed dollar flows, AI-equity valuations, and bond-market stress interact with Bitcoin as a possible early warning signal.
5. Macro investors and risk managers: Integrating Bitcoin’s behavior, AI-bubble risk, and collateral dynamics into portfolio construction, hedging strategies, and recession diagnostics.

Implications and Future Outlook

Check’s base case is for further downside into the 80K range over the coming months, followed by a relatively swift bottoming process rather than a multi-year winter. If the Hodler’s Wall continues to unwind while deep-pocketed buyers maintain their absorption, a large tranche of supply is likely to migrate from older cohorts to concentrated, long-horizon allocators. In that scenario, investors who capitulate during waterfall sell-offs may find it difficult to re-enter once macro conditions stabilize and a new upside phase begins.

The episode suggests that stablecoin growth and US fiscal dynamics will increasingly shape the backdrop in which Bitcoin trades. Stablecoins backed by short-term Treasuries channel global savings into dollar funding while lengthening collateral chains that can amplify both booms and busts. As those structures grow, Bitcoin’s sensitivity to liquidity cycles may strengthen, making it both a beneficiary of reflation and an early casualty when funding tightens.

Check envisions a possible configuration where the dollar remains the primary reserve currency while Bitcoin and gold act as reserve assets and high-grade settlement media. That arrangement would affect how states, corporations, and large investors manage balance sheets, collateral, and cross-border flows. If such a trifecta materializes, current episodes of top-heavy positioning, hidden accumulation, and treasury-vehicle stress may be remembered as part of a broader transition toward more structurally embedded Bitcoin exposure.

Some Key Information Gaps

1. How does the concentration of Bitcoin’s cost basis above 95K affect the likelihood and depth of drawdowns relative to previous cycles? Clarifying this relationship would improve cycle modeling, stress testing, and risk management for both institutional and retail investors.
2. Who are the primary large spot buyers absorbing multi-billion-dollar weekly sell-side, and through which channels are they accumulating? Understanding these actors and pathways is essential for assessing market resilience, ownership concentration, and potential regulatory responses.
3. What balance sheet characteristics and capital-raising strategies differentiate resilient Bitcoin treasury companies from those likely to fail in a drawdown? Identifying those traits would support better disclosure standards, investor due diligence, and oversight of listed Bitcoin-exposed firms.
4. How does large-scale stablecoin adoption in emerging markets alter local monetary sovereignty, inflation dynamics, and informal dollarization patterns? Analyzing these effects is crucial for designing macroprudential policy and safeguarding vulnerable currencies.
5. How are sovereigns and large corporates likely to allocate between Bitcoin and gold when using them as reserve assets and settlement media? Mapping these allocation choices would inform long-term scenarios for reserve management, international payments, and geopolitical leverage.

Broader Implications for Bitcoin

Consolidation of Bitcoin Ownership and Governance

As supply migrates from dispersed long-term holders to large, opaque allocators, ownership and influence over Bitcoin’s economic layer may become more concentrated. This consolidation could alter how large entities lobby on regulatory issues, sponsor infrastructure, or shape market microstructure through lending and derivatives. Over the next 3–5 years, governance debates around protocol changes, transaction censorship resistance, and market integrity will increasingly need to account for the incentives of these heavyweight holders.

Stablecoins and Asymmetric Dollar Power

The framing of stablecoins as a “dollar dominance bill” points to a world where digital dollars penetrate jurisdictions without formal dollarization. In such an environment, Bitcoin will coexist with instruments that both strengthen the dollar’s reach and inject new forms of liquidity and collateral into global markets. Policymakers and analysts will need to consider how Bitcoin adoption interacts with stablecoin-driven dollarization, potentially creating feedback loops that reshape capital controls, local banking systems, and cross-border payment rails.

Repricing Risk in an AI-Driven, Collateral-Rich World

If AI equities represent a crowded, overfunded trade while short-term bills and stablecoins expand collateral capacity, risk may be mispriced across multiple asset classes at once. Bitcoin’s role as a fast-moving liquidity barometer could make it an early casualty when funding tightens, but also a prime beneficiary when central banks and treasuries reflate. Over a 3–5 year horizon, using Bitcoin alongside bond spreads, volatility indices, and credit markets as a composite stress gauge could become standard practice in institutional risk frameworks.

Redefining Corporate Bitcoin Exposure

The divergence between robust and fragile treasury vehicles implies that corporate Bitcoin strategies will increasingly be judged on balance sheet discipline rather than marketing narratives. Firms that treat Bitcoin as a core reserve asset with transparent leverage and funding structures may gain cheaper access to capital and more durable investor bases. As this differentiation plays out, regulators and exchanges may move toward clearer categories and listing standards for Bitcoin-exposed companies, with spillover effects on accounting norms and disclosure practices across sectors.

Toward a Multi-Asset Reserve and Settlement Regime

The envisioned Bitcoin–gold–dollar trifecta anticipates a monetary landscape where different assets specialize in liquidity, savings, and settlement functions. Bitcoin’s potential role as a high-grade settlement rail for large-value transfers could influence how regional blocs, commodity exporters, and multinational firms design payment networks and resolve disputes. Over time, the interplay between these roles may pressure existing institutions—from SWIFT to multilateral lenders—to adapt their infrastructure and governance to accommodate Bitcoin-linked reserves and transactions.