Bitcoin's Protocol Sovereignty Trap: How BIP-361 Could Invalidate 1.5 Million Coins

Bitcoin’s market capitalization sits around $1.5 trillion as of April 16, 2026, but its price has fallen by roughly 41% from its October 2025 peak. The asset has not yet produced the MVRV Z-score capitulation print that historically marked the end of prior bear cycles. Strategy Incorporated, which disclosed purchasing 13,927 BTC at an average price of $71,902 between April 6 and April 12, now holds a total of 780,897 BTC at a blended cost basis of $75,577. Tether added 951 BTC to its reserve on April 15, bringing its corporate treasury to 97,141 BTC. The Czech National Bank became the first central bank to disclose a direct Bitcoin purchase on November 13, 2025. Amid these developments, a coalition of Bitcoin developers has published a draft improvement proposal (BIP-361) that, if adopted, would establish for the first time in Bitcoin’s 17-year history a consensus-level capacity to render a class of legitimately held coins unspendable. BIP-361 would invalidate approximately 1.5 million of Bitcoin’s oldest coins.