Bitcoin and the Financial System: The Ultimate Fate of Scarce Resources

History repeatedly proves: any rare resource deemed “sufficiently important” by the financial system will ultimately be incorporated into the regulatory framework of power. From gold to oil, from central banks to modern cryptocurrencies, this pattern continues to repeat. Although Bitcoin was born out of decentralized ideals, it is walking down the same old path as its predecessors.

The Fall of Gold: From Circulating Currency to a Prison of the Financial System

When gold was still a symbol of the free world, it was the most direct store of wealth. But everything changed in 1933 when the Roosevelt administration enforced a compulsory gold purchase. The U.S. government ordered citizens to surrender their gold through an executive order, with violators facing fines or imprisonment. This was the largest legal transfer of assets in modern history, marking the complete deprivation of individual ownership of gold.

Subsequently, the Bretton Woods system further expelled gold from the function of private currency. Ordinary people lost the right to exchange gold for value—this privilege was monopolized by central banks. Gold did not disappear, but it was fully imprisoned in vaults like the Federal Reserve Bank of New York.

Today’s reality is even more ruthless: gold is locked in the vaults of the financial system, and ordinary people can only “own” it through ETFs or digital accounts. What you see is a digital representation, not the metal itself; what you own is an accounting record, not the right to withdraw. Gold has lost liquidity, sovereignty, and any possibility of resistance within the framework of the financial system.

The Dilemma of Oil: Permanent Hostage in Geopolitics

Oil has never enjoyed true freedom. It is inherently a war resource, a tool in geopolitical games, and a weapon for sanctions and settlements. Venezuela’s experience is the most representative: it has the world’s largest oil reserves but has long been mired in economic crisis.

The problem is not the lack of oil itself, but the comprehensive control of oil exports, settlements, and revenue distribution by the financial system. Even when Venezuela explores cryptocurrencies, the digital assets of its regime elites are often frozen or locked within compliant financial frameworks. Oil remains, Bitcoin remains, but real control has slipped out of the hands of individuals and nations. Through compliance mechanisms, every economic activity is brought into a traceable, disable-able scope.

The Fork in the Road for Bitcoin: Liquidity Traps and Protocol Layer Risks

Bitcoin was once portrayed as a promise: digital cash, true decentralization, a store of value free from financial system domination. But reality is rewriting this script.

First Path: The Silent Strangulation of Liquidity

To render Bitcoin ineffective, the U.S. and its financial system do not need to shut down the Bitcoin network itself. They only need to implement the following:

Require all exchanges to comply with regulations; require stablecoin issuers to cooperate with oversight; require payment gateways to implement blacklists. Through regulatory mechanisms, certain addresses are prohibited from exchanging into USD and are isolated outside the mainstream financial system.

Bitcoin’s purchasing power depends entirely on the fact that it can be exchanged for USD. Once liquidity channels are cut off, Bitcoin will not disappear, but it will lose its practical meaning as “money.” You still hold BTC tokens, but the world no longer recognizes its purchasing power. This is the invisible imprisonment of Bitcoin by the financial system—not through banning the technology, but by disabling liquidity.

Second Path: Hidden Control at the Protocol Layer

A deeper, more deadly threat comes from regulation at the protocol level. Governments do not need to alter Bitcoin’s protocol itself; they only need to enforce through regulation and administrative measures that:

Miners, node operators, and infrastructure providers upgrade to a so-called “regulated client version.” This version may include features like address blacklists; UTXO source verification; transaction origin review; and any transactions involving blacklisted addresses are deemed invalid on the regulatory chain.

In theory, the original fully decentralized Bitcoin chain still exists. But it will face a fatal dilemma: no major miners, no exchanges, no stablecoin channels, no ecosystem liquidity. Pure “technological correctness” cannot translate into “economic value.” The compliant chain and the original chain will effectively split.

The Final Victory of the Financial System

This is the coldest truth: a compliant chain ≠ the original chain, a financially liquid system ≠ a decentralized network.

When Bitcoin is incorporated into the regulatory framework of the financial system, it will repeat the fate of gold and oil. Not through technological extinction, but through economic downfall—being legalized, integrated, and gently tamed into a part of the financial system. Bitcoin’s promise of decentralization will gradually evolve, under the dual strangulation of liquidity and protocol regulation, into another asset controlled by the financial system.