Bitcoin Explodes at Settlement: Wilde-Style Revelation

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  • According to the scandalmongers on X, Bitcoin‘s price erupts by forced settlement rather than any sober adoption curve.
  • The market has split into Spot Bitcoin and Paper Bitcoin, a sartorial divorce that creates a most delicious supply imbalance.
  • A settlement squeeze can hurl prices in a non-linear jig as exchanges rush to cover their short positions.

Most crypto enthusiasts suppose prices rise as more souls flock to the network, inflating the token with the perfume of virtue and market buzz.

But this view treats the asset as a tame tech stock rather than a capricious coin with a heart of iron and a will of its own.

According to the sage David in a post on X, Bitcoin’s price action does not drift upward with gradual use; instead, it performs a dramatic overture called a settlement squeeze.

Bitcoin Price Action and the Paper Supply Trap

Settlement squeezes occur when the market shifts from trusting to verifying, as one moves from wooing a debutante to demanding her proofs.

Normally, when users demand their actual coins, the system must reconcile the chasm between counterfeit claims and real assets. The result is a sudden explosion of price, as if the orchestra suddenly found the conductor’s baton hidden in a cake.

According to David, the market presently trades two versions of the same asset, and every investor must distinguish between them as one would between actors in a salon play.

Why Bitcoin Explodes at Settlement and Not Adoption (Paper vs Spot)

Given this structure, a 5 to 10X Bitcoin settlement squeeze is not just possible, it’s the likely outcome.

Most people think Bitcoin rallies on adoption. That’s wrong.

Bitcoin reprices when claims are forced…

– David 🇺🇸 (@david_eng_mba)

Spot Bitcoin is the true bearer asset, residing on the blockchain with a strict limit of 21 million units. This is the hard money that many investors swear by.

Then there is Paper Bitcoin-a tapestry of claims on the asset held by exchanges, ETFs and lending platforms (database money, if you insist on a modern parable).

When institutions issue more claims than coins, they swell the supply. This synthetic abundance keeps price action tame and makes liquidity seem prodigiously deep.

The Game of “Trust and Verify”

Every holder of coins on an exchange plays a game, choosing between trusting the platform or proving ownership by withdrawing to a private wallet.

As long as trust remains unshaken, the paper supply can grow, and the market enjoys a calm, if somewhat damp, sea with prices all too polite.

But if a few dauntless souls withdraw, the exchange uses its meager real reserves to fill orders, and the little pool of honesty begins to shrink.

Why Bitcoin Explodes at Settlement and Not Adoption (Paper vs Spot)

Given this structure, a 5 to 10X Bitcoin settlement squeeze is not just possible, it’s the likely outcome.

Most people think Bitcoin rallies on adoption.That’s wrong.

Bitcoin reprices when claims are forced…

– David 🇺🇸 (@david_eng_mba)

Yet trouble lurks when a large chorus of users demands their funds all at once. When claims exceed the number of coins, equilibrium falters and the stage sours.

In the midst of that crisis, the exchange is often compelled to buy the missing coins in the open market, turning it into a buyer who cares only about escape from the cage of law, not about bargain-hunting.

This urgency becomes the next act of Bitcoin’s price drama.

The Non-Linear Settlement Squeeze

When the plot thickens, it thickens all at once.

Prices spike within hours, and withdrawals may drain reserves. For the public, the eyes stay calm-apparently enjoying the performance from the gallery.

Once reserves are exhausted, the exchange must clear the entire sell side of the order book, which is when the pageant truly begins.

If the order book is thin, a single euphoric purchase can move the market by 50% or more-proof that even a coin in a box can be a tyrant when properly demanded.

David conjured this scenario of thousands of missing coins, and with a twinkle explained why Bitcoin’s price can become a tyrant: it explodes when it is compelled to settle.

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2026-01-28 15:43