E02 - Bitcoin Isn’t Broken. It’s Graduating.

Bitcoin’s daily price can rise or fall by tens of thousands of rand, yet the network keeps ticking along - one new block roughly every ten minutes, exactly as programmed. It doesn’t care about excitement or fear. It doesn’t know who is buying or selling. It simply follows math.

That indifference is what makes Bitcoin different. Stocks rely on profits. Bonds rely on issuers. Currencies rely on central banks. Crypto relies on the founding team. Bitcoin relies on open-source code, mathematical scarcity and global consensus.

1 | Why Bitcoin Is Different

Every form of money is judged by a few core properties: scarcity, portability, divisibility, durability, verifiability and recognisability. Gold scores high on scarcity and durability but is heavy, slow and difficult to verify. Fiat currencies move easily but lose value over time because supply can be changed at will.

Bitcoin combines the best of both and adds something new - verifiable scarcity.

• Portable: It can be moved anywhere, even stored in memory or written on paper.

• Divisible: Each coin can be split into one hundred million satoshis.

• Verifiable: Every node validates authenticity instantly.

• Scarce: The total supply will never exceed 21 million.

Because the supply is perfectly fixed, demand changes must be expressed only through price. Economists call this a vertical supply curve. It’s the reason Bitcoin’s purchasing power swings so widely and the reason it trends upward over time.

2 | Volatility as the Price of Admission

Volatility is the natural result of Bitcoin’s design, not a defect. With no authority to expand supply, every surge in demand lifts the price, and every pause corrects it. That movement is how the market digests new information.

In financial terms, Bitcoin is still an emerging asset with “venture-like” characteristics - global, continuous trading and constant discovery of fair value. Yet despite dramatic drawdowns, anyone who has held for four years or more has historically achieved a positive return.

This asymmetry - limited downside, unlimited upside - is what us long-term investors call the price of admission. The market demands patience in exchange for exposure to the only verifiably scarce digital asset on earth.

Volatility is also what redistributes coins. Each cycle transfers Bitcoin from traders seeking quick profit to holders seeking long-term security. That rotation strengthens the base of investors and reduces speculative pressure.

3 | The Great Rotation in Motion

Today we’re seeing that process on a historic scale. Early miners and long-term believers are realising gains or moving into new positions through ETFs. Some are using the United States in-kind redemption model, swapping coins from cold storage for ETF shares without triggering immediate tax events. Others are selling portions of their holdings simply to live their lives.

At least one from South Africa has decided that Wall Street entry into the market goes against why he came into this technology and has liquidated everything to live his “best life now”.

Institutions - pension funds, asset managers, corporate treasuries - are stepping in to absorb that supply. The market is broadening from retail speculation to professional accumulation. Like it or not - this is what the beginning of maturity looks like: wealth spreading across a wider, more regulated and sophisticated ownership base.

It’s important to note that Bitcoin itself doesn’t change through any of this. The protocol continues, producing a block every ten minutes, verifying transactions and enforcing the same 21-million-coin limit. Human ownership changes; the math stays constant. And demand fluctuates as it has always done.

4 | The Energy Question

Every system of value has a cost to maintain its security. For traditional finance, it’s compliance, settlement layers and armies of intermediaries. For fiat money, it’s trust in central banks and the debt they issue. For Bitcoin, it’s energy.

Proof-of-Work is the mechanism that makes Bitcoin incorruptible. Mining uses electricity to convert physical energy into digital security. The cost to attack the network is so high that no single entity can overpower it. That energy use is not waste. It’s the very thing that protects the ledger and gives it immutability.

Over time, Bitcoin mining has become one of the most efficient large-scale computing industries in the world. Roughly 60 percent of mining now uses renewable or recovered energy, and much of the remaining capacity runs on power that would otherwise be wasted - curtailed hydro, stranded gas, flare mitigation and off-peak generation.

In many regions, miners stabilise grids by acting as flexible consumers. They absorb excess electricity when supply is high and shut down when it’s low. In this way, Bitcoin doesn’t compete with the grid; it supports it. The Proof-of-Work system incentivises finding the cheapest, cleanest energy available, driving innovation in renewables and energy balancing.

Energy is Bitcoin’s foundation, not its flaw. It’s the non-negotiable cost of permanence.

5 | The Graduation of Functionality

The Bitcoin base layer itself is intentionally conservative. Its block size and transaction throughput are limited to keep every node globally synchronised. That slowness is a feature. It prevents inflation of data and preserves decentralisation.

To scale globally, developers have built new layers:

• The Lightning Network allows near-instant, low-cost payments by moving most transactions off-chain and settling them later on the base layer. This transforms Bitcoin from a settlement network into a payment network capable of handling millions of small transactions per second. This is what is enabling South Africa as the largest region where Bitcoin is used as a currency.

• Taproot upgrades privacy and efficiency, enabling more complex transactions and smart contracts without revealing details publicly. It lays the groundwork for institutional tools, escrow arrangements and multi-signature flexibility which we use every day at Simple Bitcoin.

• Sidechains and Layer-2 systems such as Liquid and Fedimint extend functionality for corporate settlement, tokenised assets and community-based custody models while maintaining Bitcoin’s base-layer security.

This layered approach mirrors the early internet: a simple, stable protocol forming the foundation for new services above it. Bitcoin doesn’t need to change at its core to evolve. It graduates by building safely outward.

Every improvement respects the original purpose - sound money that can move freely, securely and globally.

6 | The Governance Model

Bitcoin’s governance structure also reflects this maturity. It has no CEO, board or political oversight. Upgrades occur only through consensus, expressed in Bitcoin Improvement Proposals (BIPs). For any change to take effect, it must be adopted voluntarily by miners, node operators and developers around the world.

This process is slow by design. It prevents capture by special interests and ensures that every alteration aligns with user consensus. While these debates rage on there is a lot of uncertainty in the market - but the fact that the debates exist at all is actually evidence of Bitcoin working as it should. In a world of constant financial policy shifts, Bitcoin’s conservatism is its greatest strength.

This “slowness as a feature” gives investors confidence that their holdings can’t be inflated away or arbitrarily altered. For treasuries and fiduciaries, predictability over the long term is incredibly valuable. Bitcoin delivers that in maths and code.

7 | Ownership and Custody: The Core of the Bitcoin Thesis

With Bitcoin, ownership is a key tenet that I am now well known for. The technology’s value lies in removing the need to trust third parties. If you don’t hold the private keys, you don’t control the asset.

Many investors still store Bitcoin on exchanges or in custodial accounts. These platforms are convenient but introduce risk. Exchanges can freeze accounts, get hacked, or become insolvent. The failures of Mt. Gox, Celsius, and FTX are reminders that custody risk hasn’t disappeared - it has simply moved into the digital age.

Owning Bitcoin properly means holding it yourself. For individuals, that might mean a hardware wallet (backed up properly please!). For families, trusts, or companies, it means structured custody - a system that balances control, recoverability, and compliance.

8 | Why Multi-Signature is the Standard

For institutional and generational wealth, multi-signature (multisig) custody is the standard. In a 2-of-3 setup, three separate keys exist, and any two are required to move funds. This removes the single point of failure that plagues traditional custody.

At SimplB, we help clients set up exactly this system. You hold two keys. SimplB holds one key for backup and verification. No single party, including SimplB, can move your Bitcoin. All holdings remain offline, verifiable, and audit-ready.

This structure delivers:

• Security: No single device or person can compromise the funds.

• Resilience: Keys can be recovered if lost or damaged.

• Compliance: The model aligns with FSCA standards for safekeeping and control, JSE guidelines and even SARB rules for custody as a local asset.

This is how institutions and top families protect bearer assets, and it’s now available to individual investors who value true self-sovereignty.

9 | In South Africa

South Africa’s regulatory landscape has matured rapidly. With the FSCA recognising crypto assets as financial products, Bitcoin now sits within a clear framework of legal and fiduciary responsibility. This means family offices, corporates, and independent financial advisers can hold or advise on Bitcoin with full compliance - provided it’s done correctly.

My firm, SimplB, operates as a Juristic Representative of CAEP Asset Managers (FSP 33933). Every client account is opened under their compliance structure, ensuring transparent record-keeping, verified onboarding, named accounts and lawful custody design.

For investors, this bridges two worlds - the freedom of Bitcoin self-custody and the assurance of a regulated financial framework. For companies, our zero trust model eliminates external risk - so the only variable to navigate is price volatility.

10 | The Long Game

The price volatility is real though. Bitcoin’s story has unfolded in four-year halving cycles. Each halving reinforces scarcity by cutting the new supply of coins in half. Over time, that limited issuance meets growing global demand and drives long-term appreciation.

Between these halvings, volatility fills the gaps - a constant reminder that we are still early in the adoption curve. Yet the fundamentals remain unchanged. Every ten minutes, the network adds another block. Every four years, new Bitcoin becomes twice as scarce. Every cycle, it reaches a broader base of holders.

That is what “graduating” looks like.

This year, OGs have been passing the torch to institutions. We may not like it - but at least the vast majority of Bitcoin is still in self-custody and in private hands. Each phase of adoption strengthens the system. Each additional participant adds depth. Bitcoin doesn’t need belief to function. It only needs time, in 10 minute intervals with energy dedicated to keeping it alive.

11 | Why SimplB Exists

Owning Bitcoin is simple in theory but complex in practice. It demands education, structure, and discipline. SimplB was built to provide exactly that - a safe, compliant, and transparent pathway for investors who want to own Bitcoin without unnecessary risk.

We’ve navigated this space for a decade and are aware of the risks and pitfalls. Our clients are able to buy Bitcoin through verified channels, move it into self-custody, and structure it for long-term preservation. Whether you are building a family reserve, managing a corporate treasury, or diversifying personal wealth, our goal is the same: to keep your Bitcoin safe, accessible, and under your control.

Bitcoin’s volatility will come and go. Its fundamentals won’t. The next halving will arrive soon enough, and with it, another reminder that scarcity is the ultimate store of value.

If you’re ready to explore how Bitcoin can serve your long-term strategy - or if you simply want to understand how to hold it safely - let’s talk. This newsletter has been fairly heavy in fundamentals - I’d love to hear your feedback and top questions. Let me know by replying or reaching out on whatsapp.

Finally - I got a bit of feedback last week that the newsletter went to some people who can’t remember subscribing. Apologies - please simply click the opt out link if you are not interested. My goal is never to offend, but to grow bitcoin knowledge and education for my community.

Have a brilliant week. As for me, I’m excited to see Bitcoin under $100,000 again. Where to next? I wish I knew, but on a long term view - I don’t really mind - I still consider Bitcoin under $1mil as a buying opportunity.

Keep learning.

James Caw

Founder and Bitcoin Strategist | SimplB www.simplb.co.za

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SimplB (Pty) Ltd is a Juristic Representative and James Caw is a supervised Representative of CAEP Asset Managers (Pty) Ltd FSP No: 33933 - an Authorised Financial Services Provider. Nothing in this newsletter should be construed as financial advice. Before taking any action speak to your financial advisor.