Wall Street Degens & GDP on BTC?!?

Well friends, it’s been a little bit since my last missive. As the last days of August took hold and summer wound down I took a small breather. Of course, the world of blockchain and crypto didn’t stop at all, and what with record inflows to Ethereum ETFs, rate cuts, and adoption happening in the most unusual of places, it’s been a busy period. And, surprise surprise, there were a few things that went largely unnoticed. To that end, I’m going to start this month with something that seemed to fly beneath the radar of most, and that is the U.S. Government actually using blockchain technology for something other than stacking assets. Let’s jump in.

Economic Data, Distributed!

At the end of August we had a surprising move. As the dark horse in the “who will use blockchain technology for something other than financial gain” race, the U.S. government announced that it is now publishing economic data on-chain to boost transparency for government spending. Wow. While the world continues to look at price action we’re seeing an actual use case… from the U. S. Government no less.

Getting into a little more detail, the Department of Commerce began publishing Gross Domestic Product (GDP) data sourced from the Bureau of Economic Analysis (BEA) to nine different public blockchains. The data, which starts with July 2025, was published via two oracles (data providers to blockchains) to the Bitcoin, Ethereum, Solana, TRON, Stellar, Avalanche, Arbitrum, Polygon and Optimism chains. Now, publishing to nine chains is probably a little overkill, but as this technology is still so new I suspect this was to provide redundancy since, with the exception of Bitcoin, it’s really not clear which of these technologies will persist in the future. These chains also have different core target audiences. Some like Ethereum and Solana, have smart contract capabilities and being used to pilot decentralized finance (DeFi) protocols, while others like Bitcoin are focused on being financial instruments (but still have the ability to store limited amounts of data). I suppose it may also may demonstrate some level of neutrality and not wanting to do chain-favoritism? Possibly?. In any case, this is all proof of concept… but what a concept! Verifiable economic data available for all to see. Now, what was published to each chain did vary. On some chains it’s simply a verification to guarantee authenticity of the actual PDF that contained the data, while others received a more sophisticated feed and included this verification as well as the %GDP headline number published in a smart contract (with the ability for additional and updated data to be provided in the future). For those that want to geek a little, you can see the actual addresses here.

Now, if you wondering what the heck this means and why this matters, this next part is for you. The blockchains each store a very specific calculated stream of numbers which in turn corresponds to the actual file containing the economic data. It’s called a SHA-256 Hash  but it’s easier to think of it as a cryptographic fingerprint. This fingerprint can be compared to the actual fingerprint (hash) of the file that contains the published economic data to ensure authenticity. Is this simple to verify? No, not for most users, but the point is it can be done. In addition, let’s recall that public blockchains are immutable, which means that when data is written it is permanent. This is really important, because it’s not just a fingerprint, it is a permanent fingerprint that that allows us to ensure that the data we are looking at is always accurate. It is technology guaranteeing authenticity, and it’s one of the great use cases for blockchain technology, which is critical in an age of increasing fakes.

Of course, it’s still crude. It’s not super user friendly. It’s a pilot. But it is using a blockchain for a purpose other than money. Going forward, this whole process a will improve. More actual data will be stored on chain and be available. User confirmation interfaces will get better and it will be easier to verify. But even this is a start, and what blows my mind is that this happened with hardly a whisper, but is groundbreaking, and a hint of the things to come.  

BlockchAIn

I’m going to expand this concept a bit because blockchains that validate data integrity is something that in my opinion will be mandatory as we enter the age of AI. In a world of deepfakes, which include videos, music, celebrity representations, documents, deeds, etc., we are going to need to be able to distinguish what is authentic from what is not. For example, lets imagine that you’re sent a very compelling video of a prominent politician who is calling for war. Or a celebrity that is uncharacteristically spouting slurs. Social media has become a hotbed of “news” where we are force-fed algorithm driven media constantly but with no way to tell if it’s factual. In fact, people and even foreign governments have been known to use these channels as disinformation drivers. AI is just going to accelerate this. So, then, how do we know what is real? Well, let’s go to our politician example. If authenticity is tied to a blockchain we could, just like the GDP data noted above, simply check the fingerprint of what we are looking at to determine if it’s a deepfake or if it’s real. Will we? Well, this is going to take something from ourselves as humans because we love to believe what we want to believe. (We all have that friend who forwards “news” that’s just nonsense, but instead of fact-checking it’s just blasted out as truth). It’s going to get worse. But, with authenticated data, we will at least have something that will give us a fighting chance to determine what is fake and what is not and, from my purview, I think that blockchain ultimately become the ONLY way we’ll be able to separate fact from fiction.

Wall Street Degens

Ok let’s shift gears. As you all know from following this blog, Wall Street has been leading the crypto charge quite publicly since the Bitcoin ETFs launched in early 2024 (and it sure looks like they are making a killing.) You also know that these markets are cyclical, and that there’s a certain point in time historically in past cycles when we see “alt-season”, which is where money generally rotates out of Bitcoin and into other crypto asses such as Ethereum and other “non-bitcoin” assets  (or at the very least more money flows into  non-bitcon assets preferentially). This phenomenon has happened consistently in the final year of the past three crypto cycles, and it was really a phenomenon of the early adopters who surfed the crypto waves before the masses (and Wall Street) and rode them to riches. These are affectionately known as crypto “degens” (degenerates), and they are always looking to cash in on the next big thing. This has led to alt-cycles, where even if bitcoin still had some upside, alternative assets simply outperformed.

What we did not know is if this cycle of rotation would continue given Wall Street and big corporate taking such prominent positions in the markets. Well, not to worry because over the last few months, as if on queue, we saw a huge surge in the price of ETH, Etherum’s native token, and ETH has previously been the leading indicator in the pivot to alt-season. What we found when looking a little deeper is that this was largely driven by institutional capital inflows. In true “degen”, fashion and seemingly following the lead of those who have gone before, institutional money bypassed the Bitcoin ETFs and flowed with vigor into the Ethereum ETFs, growing from roughly $8.6B at the beginning of the quarter to $23.4B at the end. This is an almost 200% move in AUM. It seems that the big boys jumped into what they hope is “the next big thing” which, if so, is another confirmation that alt-season is upon us. Should this prove accurate this means that over the latter stages of this cycle – which to me looks like it’s going to extend through Q2 2026 – we would expect (certain) alternative crypto assets to outperform bitcoin. This is saying something since I still expect a doubling in bitcoin from its current price, which is nothing to sneeze at. Of course, these markets are volatile and none of this is a guarantee, but what we can confidently say is that we’ve seen these kinds of price movements in the prior three cycles. And with Wall Street on board now, it sure seems they are using the same playbook that we’ve seen in the past.

One other thing to note is that it’s not just the ETFs. Unless you’ve been asleep at the trading desk you’ve likely heard of Michael Saylor’s Strategy, which over the past 5 years has amassed a massive treasury consisting of roughly 3% of all bitcoin. Many other companies have followed suit including Japan’s Meta Planet. Well, seemingly on cue, we now have companies that are actively and aggressively stacking… Ethereum! Bitmine Immersion Technologies holds a whopping ~1.5 million ETH, valued at about $6.6 billion. Sharplink Gaming, a Nasdaq-listed company has acquired roughly 740,800 ETH, worth around $3.2 billion, largely via a round led by Joe Lubin an original founder of Ethereum. There are others including the Ethereum Machine and of course the Ethereum Foundation itself, but what this points to is that treasuries are looking beyond bitcoin and into other crypto asses.

What is fascinating about this is that while bitcoin was designed to represent money, and really now is considered by many as the new gold, other crypto assets like Ethereum are not intended to be money in any way. They are technologies used to do things such as build DeFi platforms, empower supply chains, tokenize real world assets and so much more. They have value, sure, but that value lies in the fact that they enable the technology to be used, not because they are trying to be money. Regardless, it's happening. I suspect this wave isn’t over and we’ll see companies beginning to hold a host of other crypto assets over time and that this will become more common. And, let’s not forget, the US Government has a digital asset stockpile as well. Will they all succeed? I doubt it. But it does show the level of conviction that we are seeing for crypto assets beyond bitcoin, and that is something that definitely should be on your radar.

In Closing

In a world where it’s hard to tell what is real, we have another step in using blockchains to validate data, and by the U.S. Government no less. While a ginger effort, it is forward progress, and in an age where AI is advancing at an alarming rate it’s a sample of what’s to come in the world of data authenticity.

Meanwhile, our cycle marches on, alt-season seems to be endorsed by Wall Street, and I still suspect we have the big market moves still to come – particularly if institutional capital continues to pour in. I’m sure you’ve heard one of my credos which is “ride the horse in the direction it’s going.” In this case, I think the direction of this horse is pretty clear.

That’s all for now. Until next time be well, stay safe, and I’ll keep Decrypting Crypto for you!