" Special Report!" "Bitcoin’s Thin-Float Fragility: Part One — How Price Really Gets Made..."Part 1 and 2 and of 7"
What if everything you thought you knew about Bitcoin was wrong?
KR Opinion
INTRODUCTION
What if everything you thought you knew about Bitcoin was wrong? What if the story you were sold—the decentralization, the scarcity, the immunity from Wall Street, the belief that long-term holders controlled the future—was never true in the first place?
I’ve been warning since the very first day talk began about “legitimizing” Bitcoin that the entire push was a trap. The foundation of cryptocurrency was built on decentralization—getting away from governments, intermediaries, and Wall Street’s influence. But the crypto evangelists insisted that legitimacy required the exact opposite: government oversight, regulatory blessing, and institutional adoption that would supposedly draw in trillions of new dollars. They convinced themselves that scarcity alone guaranteed higher prices. They told themselves that once the SEC approved ETFs, Bitcoin would become safer, more stable, and on its way to six figures.
And from day one on The Kendall Report, I said the opposite. I said that once Bitcoin became a Wall Street instrument, the game was over. I said that the moment the ETF structure plugged into Bitcoin’s plumbing, the people who would ultimately control the price would be the same professionals who dominate every other market—arbitrage desks, high-frequency traders, ETF market makers, and proprietary shops that live and breathe microstructure. These are the “bad guys,” as I’ve called them, not because they’re unethical but because they’re ruthlessly efficient. They exploit every inefficiency, exploit every thin order book, and exploit every edge. Their job isn’t to believe in Bitcoin. Their job is to extract profit from it.
Now we’re living in that reality. And the strange part is, the crypto community still doesn’t understand what happened.
This series exposes the uncomfortable reality that once Bitcoin entered the ETF era, the market structure shifted forever. Price is no longer determined by ideology or adoption; it is determined by the tiny fraction of the float controlled by custodians, arbitrage desks, ETF market makers, and the institutional machinery that now owns Bitcoin’s price discovery. In seven parts, we walk through how Bitcoin was integrated into the global liquidity grid, how professionals dominated the float, how the narrative diverged from reality, and how the asset intended to replace the system quietly became a product of it.To fully understand why Bitcoin now behaves the way it does—and why the float matters more than the total supply—we need to talk about something most people fundamentally misunderstand: price discovery. People think volume moves price. It doesn’t. Aggression moves the price. The willingness to cross the spread, to lift offers, to hit bids—those are the forces that drive markets. And in a thin market, they can drive them violently.
Tom Lee will never tell you what you are about to read! Here is what Tom Lee is telling you.
“Michael Saylor is changing the reality of the stock market and the reason is is that he probably will end up being the largest potentially the largest company in the stock market OK especially if Bitcoin goes to 1,000,000 yet he doesn’t generate gap net income to justify it he’s based solely on the value of his balance sheet and but that that’s not new to history because when I graduated college the biggest stock in the S&P a top five name was ExxonMobil umm and it was top five for 28 years 30 years like an entire generation graduated worked on Wall Street the top five name was a company that was only valued on the value of its oil not on its net income so like MicroStrategy is like replacing Exxon in lower cause you know for a whole generation people said Exxon is based company but you don’t value on earnings well Mike strategy could be one of the biggest companies in the world and it’s valued on its Bitcoin If I look at everything since October 10th because that was the biggest liquidation in the history of crypto like bigger than FTR yeah it was like a almost a miniature rupture like tsunami we’re only a couple weeks from that so I think the market is consolidating but if I look at fundamentals like let’s like etherium stable coin volumes have been exploding application revenues at all time highs so right now fundamentals are leading price in crypto so I think eventually we consolidate and then we rally into your end? Ohh yeah, I think we can still get to 150 for Bitcoin.”
Price discovery…
Back in the floor-trading days, when you could look another trader in the eyes, you learned very quickly that volume by itself meant nothing. What mattered was whether buyers or sellers were pressing the issue. A million shares could trade in a tight four-cent range if both sides were patient. But a hundred thousand shares could move a stock two points if one side were determined. Aggression, not volume, is what makes prices jump.
I’ll provide an example I’ve used for decades, as it illustrates the principle clearly. Imagine I’ve got a million shares to buy. The trader across from me has a million to sell. If I bid a half and he offers at five-eighths, nothing happens until someone becomes the aggressor. If I decide I want them badly enough, I’ll pay his five-eighths and take his entire offer. Just like that, the price moves—not because a million shares traded, but because I took the initiative.
Now imagine a scenario where neither of us shows our full size. I bid for a hundred thousand at a half. He offers a hundred thousand at five-eighths. Once again, it’s about aggression. If I keep lifting him, he starts raising his offer. He wants to sell at the highest price possible. I want to buy regardless. So we dance the spread. He goes to three-quarters, I take it. He goes to a dollar, I take it. In just a few trades—one hundred thousand shares, two hundred thousand, four hundred thousand—the price has moved dramatically higher. Not because of the total volume, but because one side is pushing relentlessly.
Before long, the whole crowd sees what’s happening. On a trading floor, you could literally feel the energy shift. Today, in digital markets, you see it on Level II screens as the bids start chasing the offers. When multiple aggressive buyers enter the market simultaneously, the price can surge upward in a matter of seconds. And on the downside, it’s even worse. Buyers disappear, bids evaporate, and the first aggressive seller can trigger a cascade that feeds on itself. This is how panic moves begin—not from volume, but from an imbalance of aggression.
This is the essence of price discovery…
And this is why Bitcoin is now so vulnerable.
Because the people who control the aggression in Bitcoin today are not the long-term holders. They’re not the retail investors who “believe in the future of money.” They’re not the podcasts, influencers, or crypto Twitter personas who’ve built entire brands around the mythology of decentralization. The aggressors are the ETF market makers, the arbitrage desks, the derivatives quants, and the high-frequency firms who now dominate the float.
The total Bitcoin supply—about twenty million coins—is meaningless in this context. The price is determined by the float, which is only a fraction of the total supply. And when that float gets concentrated in the hands of professionals who know how to move thin markets, price becomes a function of their aggression, not the ideology of long-term holders.
Most Bitcoin is locked away—lost coins, deep cold storage, untouchable long-term holdings, and permanent hoards that never hit an order book. Only about twenty-five to thirty percent of supply actually trades. That tiny float is the entire market. And now, thanks to ETFs, that float is even more centralized.
This creates a situation where Bitcoin’s price is now steered by a tiny professional community that:
1 removes liquidity at will and forces the market to cross wide spreads
2 targets weak hands
3 sweeps order books
4 pins the price where they want it
5 engineers rallies and collapses
6 controls the exact moments when aggression flips from buy-side to sell-side. This is why the large sidewise ranges exist!
This is normal behavior in equities and futures. But Bitcoin was never built to handle this level of professionalization. It was built on the belief that decentralization insulated it from such tactics. That delusion is now being shattered.
And this leads us to the critical level of seventy-four thousand. That price has become the structural hinge point. If Bitcoin breaks decisively below it, the aggression will flip violently. ETF redemptions will hit the market. Derivatives positions will unwind. Margin calls will trigger forced selling. Systematic strategies will fire off sell orders. The thin float will become thinner. Liquidity will vanish. And the same professionals who drove the market up will drive it down, accelerating every move.
The long-term holders—who think they determine Bitcoin’s future—will experience their first true psychological stress test. It’s easy to “never sell” when the price is rising or gently correcting. It’s another thing entirely when cascading liquidations slam through the chart and no bids appear for hundreds or even thousands of dollars below the last print. Professional players will remove liquidity, step out of the way, let gravity work, and then re-enter at the bottom with size. That’s how they’ve operated in every market I’ve ever seen.
I’ve lived through these cycles for forty-five years. I’ve seen institutions bid markets up to sell them higher. I’ve seen them sell markets to buy them at a lower price. I’ve seen panic crashes, engineered squeezes, flash events, and liquidity holes that made no sense to the public but were obvious to anyone on the inside. I watched crude oil go negative during the pandemic—something no one thought was possible. I’ve seen soybean markets lock limit for days. I’ve watched S&P futures drop faster than anyone could type an order. Nothing surprises me anymore.
However, what surprises me is how few people in the cryptocurrency world understand that these forces now govern Bitcoin. They still cling to the myth that scarcity protects them. They still believe long-term holders control the narrative. They still believe decentralization is intact. None of that is true. The float is what matters. The aggression within the float is what moves price. And the float is now controlled by the smallest, most professionalized group of traders Bitcoin has ever seen.
This is why I’ve been warning about the ETFs since the moment the first application hit the SEC’s desk. The professionalization of price discovery is the real threat—not regulation, not governments, not bans. The danger is that Bitcoin now trades like every other financial instrument, dominated by professionals. And when seventy-four thousand breaks, the market will discover very quickly who is actually in control.
It won’t be the long-term holders. It won’t be the influencers. It won’t be the believers.
It will be the AP professionals!
CONCLUSION & TEASER FOR WHAT COMES NEXT
Bitcoin’s story was never going to end the way its early believers imagined. It didn’t crumble under government attack. It didn’t fail because the code broke. It didn’t collapse because the world rejected it. Instead, it evolved—quietly, inevitably—into the exact thing it once claimed to oppose. In the ETF era, the mythology that carried Bitcoin through its first decade meets the cold mechanics of professional markets, and the market does what markets always do: it rewards those who control the float, not those who hold the faith. The decentralized dream becomes a centralized reality. Price becomes a function of institutional aggression, not ideological conviction. And the people who once thought they were the revolution discover that the revolution was absorbed into the machine long before they realized it.
But this seven-part series was only the beginning.
Because the real story isn’t just how Bitcoin lost its ideological footing—it’s what happens after that collapse of belief. The following three parts will explore the psychological fractures inside the community, the cultural shift that follows the loss of narrative control, and the more profound implications of a world where the asset lives on but the ideology dies. We will examine how the faithful respond when the market stops responding to them, how institutions shape Bitcoin’s long-term destiny, and what emerges in the vacuum after the myth finally breaks.
If you thought this series was blunt, the following chapters cut even deeper.
The rebellion didn’t fail.
It maturring…
And the aftermath is where the real story begins.
Robert Kendall
Chief Analyst
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