Eight Days After ‘Bitcoin’s Original Sin’: Tracking the Hypothesis in Price

🪙 Eight Days After ‘Bitcoin’s Original Sin’: Tracking the Hypothesis in Price

🌐 English Version: Click here for the X (Twitter) Thread

Eight days have passed since our February 5 report, Bitcoin’s Original Sin: Epstein Files Prompt a Reassessment of Its Origins. We held back from unnecessary commentary and waited for the data. The price action over those eight days has aligned fairly well with the hypothesis we put forward.

1️⃣ Doubts About Neutrality and Market Decoupling

The controversy over MIT DCI’s funding sources, highlighted in our first report, raised a fundamental question about Bitcoin’s technical integrity, one of its core values.

What we are seeing: As the Nasdaq and gold continue to rally to new highs, Bitcoin alone is trading roughly 30% below its previous high.

How the analysis fits: Capital has not dried up across the market. Liquidity is moving away from moral and legal uncertainty and toward assets with clearer fundamentals and relatively lower regulatory risk, including the AI sector. The shift in capital described in our first report appears to be unfolding in real time.

2️⃣ A ‘Forced Exodus’ and Institutional Whitelisting

Our prediction that compliance teams at major asset managers would take action on ESG and AML concerns is showing up in the numbers.

The data: Bitcoin spot ETFs saw approximately $816 million in net outflows in early February, equivalent to roughly 1 trillion won. Source: Farside Investors.

Interpretation: These unusual outflows following the release of the Epstein documents support the view that institutions are prioritizing asset whitelisting for legal survival over returns. It is highly possible that Epstein-related risk has become a practical reason for institutions to deem Bitcoin ineligible for holding, rather than simply a matter of gossip. This is speculation.

3️⃣ The ‘80,000 Ghosts’ and the Supply Overhang

The 80,000 BTC we identified as potentially subject to U.S. government seizure and sale has now become the heaviest resistance weighing on the market.

Current situation: The holdings from early wallets that became active after 13 years remain near exchange custody accounts, fueling market fears. Source: The Block.

Market reaction: As noted in the first report, until ownership and the legal status of these holdings are determined, the market regards them as a potential wave of selling that could hit at any time, holding back a rebound.

🎯 Conclusion: From the Myth of Anonymity to the Age of Data

As our first report concluded, the decline is part of a difficult process in which Bitcoin’s once-unblemished myth is being reassessed against real-world regulatory risks. This suggests the market’s standard of evaluation is shifting from the “myth of anonymity” to legal transparency.

Indicator to track: Whether a congressional report expected in mid-February provides details on an investigation into funding for the Core development community. The date is undetermined and the report is not certain.

What to watch: Whether ownership of the 80,000 BTC is ultimately traced to government-related accounts.

We will continue to follow the data behind the charts.

Funkyonchain, research you can use as a reference. 👍

🔍 Verification and Sources

• MIT DCI and Joi Ito donations: These were confirmed in reporting by the NYT in 2019, but a direct causal relationship with the current price decline is uncertain and remains a hypothesis.
• ETF outflows: Based on data from Farside Investors.
• Movement of 80,000 BTC: Confirmed by onchain data from July 2025 and January 2026. Any U.S. government plans to sell are unknown.

For informational purposes only. This report represents a market hypothesis and does not constitute financial or legal advice. Invest at your own risk.