Welcome in to This Week in Bitcoin, episode 94.
My name is Chris, ChrisLAS.com, JupyterBroadcasting.com.
Whenever the price of Bitcoin has been down for a bit,
Bitcoiners always start whispering about price suppression.
And frankly, I think most of it's narrative, most of it's cope, so I don't even touch on it on the show.
This week, though, we're going to prove something that, to me at least, is a little uncomfortable.
Two things can be true at the same time.
If you're paying attention to the news, you might see the name Jane Street going around,
and I want to give you a complete picture of the implication here.
And hopefully you walk away with a practical understanding of the situation.
So Jane Street is a large privately held quantitative trading firm and global liquidity provider
based out of New York City.
They have offices around the world, of course.
And not so long ago, they got into the Bitcoin market
in a very big, very important way with a very special client.
But I'll come back to that in just a moment,
because first, you should fully understand who we're dealing with here.
Jane Street is like hiring an assassin or a ninja
when you need somebody to go work in the markets for you, right?
They're a special ops investor.
They've got a bunch of proprietary in-house tech that they brag about and they have access to money that nobody else has access to.
And we've been getting little glimpses of this just over the last few months.
And starting about nine months ago, Bloomberg ran a piece about dark money pools of which Jane Street most likely very heavily trades out of.
Wall Street's infamous dark pools, they are getting even darker.
It's today's big take.
These are private rooms booming by taking off exchange trading platforms and adding another layer of exclusivity to talk about what's happening under the surface.
Bloomberg Finance reporter Catherine Dougherty.
You know, I was stunned by the data that you presented in this story.
How have these dark pools gotten so big?
These are not brand names.
This is not the Goldman Sachs of J.P.
Morgan's of the world, although Morgan Stanley is up there.
These are companies that are kind of off the books.
Jane Street is an example of this.
They trade heavily in off-exchange venues, alternative trading systems, over-the-counter
systems.
They're cited often when you do any kind of research on them as what's called a systematic
internalizer.
In other words, they are part of a big dark pool of money that these larger companies
like a Goldman Sachs could tap and get access to.
And then the firm executes orders on behalf of their clients.
off the exchanges, on their own order books,
with their own buyers and sellers that they've set up privately with special deals.
And they almost certainly route money in these dark pools
because that's how they would move the funds around.
All right, now why do I bring all this up?
Because in July of 2025, Jane Street went from a quiet company
that maybe you'd never heard of, who was just silently making billions of dollars,
to an international name and brand when they were barred entirely
from the markets in India.
And not only were they barred,
but the regulators there froze $566 million from Jane Street.
India's market regulator is barring Jane Street
from access to its local securities market.
SEBI also plans to seize $570 million
of what it calls unlawful gains from the U.S. trading firm
after an investigation into derivatives traits
that generated billions of dollars.
Jane Street, in a statement, says they're disputing these findings.
They always do.
Let's get the details with senior reporter Abhishek Vishnoy.
Abhishek, it's really about SEBI clamping down, having greater scrutiny over these foreign
institutional investors.
All right, so stick with this for a second, because I want you to understand there's a
pattern of behavior.
That's right.
And this may possibly be the biggest, you know, fine that SEBI has employed on a foreign
entity like Jane Street.
It may actually be the biggest fine if it materializes ever, you know, for such kind of market manipulation, alleged market manipulation.
Now, the ramifications are strong, especially for the derivatives market.
I mean, if you look at India's derivatives to cash volume, it's more than 400 times.
That kind of figure does not exist in the U.S., Germany, and, you know, many of the developed markets.
They got greedy, they got greedy, and they got caught messing around.
Now, the reason why this comes back to Bitcoin is because of the news from earlier this week.
And Jane Street is facing a massive lawsuit that accuses the trading giant of using insider information to accelerate the 2022 collapse of Terra Luna.
Todd Snyder, the administrator winding down Do Kwon's bankrupt Terraform Labs,
alleges Jane Street front-ran the market panic.
The lawsuit claims that just 10 minutes after Terraform quietly withdrew 150 million TerraUSD from a liquidity pool,
a wallet linked to Jane Street withdrew 85 million TerraUSD before the public was informed.
Snyder accuses the firm of rigging the market to pocket massive profits while everyday investors lost billions.
Jane Street has fired back, calling the lawsuit a desperate and opportunistic attempt to extract money for a collapse that was ultimately caused by Terraform Labs' own multi-billion dollar fraud.
It's a nice dig at the end.
And probably technically accurate.
They always are.
It's always always.
It's never their fault.
Yeah.
The ghost of Terra Luna, the crash from 2022.
This week, we find out that Jane Street was possibly doing insider trading around that collapse.
It's pretty serious accusation.
And some of the things in there seem to be kind of plausible.
So here's the rundown, just so you know.
The suit claims that a Jane Street trader, a former Terraform intern, which I think that was the company,
shared insider information in a private group chat named Bryce's Secret.
That's what the name of the group chat was, like a signal chat named Bryce's Secret.
and the suit alleges that they shared insider trading information in this secret chat and that
by doing so, Jane Street avoided more than $200 million in losses and was able to profit from the
meltdown. And the order operation is like this. Less than 10 minutes after Terraform folks did
their own withdrawal, which had not been made public to anyone, they didn't announce it to
anyone on the market, a crypto wallet that analysts have, although it hasn't been exactly
confirmed, I believe, but analysts have linked to Jane Street.
Ten minutes after Terraform made their move, that wallet linked to Jane Street withdrew
$85 million worth of TerraUSD, which that was from the same liquidity pool that Terraform
had just pulled from.
And it just completely collapsed that liquidity pool.
And it really accelerated the DPEG process that Terraform was already trying to patch.
It already begun.
But the implosion was just wild after that.
And it led to a massive $20 billion wipeout across the crypto industry and sent Bitcoin below $20,000.
Now, it was always going to blow up.
But I think Jane Street probably tossed some fuel on that fire.
And that is that history lesson and their history lesson in India is worth keeping in mind.
Let's talk about that special Bitcoin client of Jane Street, because this is the other reason why you've heard the name a lot.
Because one of their clients, where they deal in Bitcoin orders and trades, is for a little company called BlackRock.
And Jane Street is the major market maker and authorized participant for the BlackRock Ibit ETF.
Now, in this role, they help facilitate trading, they provide liquidity, and they also handle the share creation and redemption process.
BlackRock doesn't even manage that aspect of it.
And they're often dealing in cash.
They're buying and selling Bitcoin, and then they're settling in cash.
Sometimes they do in-kind transactions for Bitcoin as well, and other types of agreements.
Now, I mention all of this because what is notable is the day this suit against Jane Street was made public...
from the bankruptcy administrators for Terraform,
the 10 a.m. slam against Bitcoin stopped.
Of course, it's 10 a.m. for me.
It might be a different time for you,
but we've commented before.
People have been talking about it online.
Since October, since that Binance stablecoin DPEG,
there has essentially been a 10 a.m. slam
just about every day,
especially when the market is thin in liquidity.
And then the day that the Jane Street information
with public, the 10 a.m. slam stopped for two days so far. Could resume. But no slam. And it seems
odd that it would stop just because the suit went public. Because one, it's not like they're the only
people out there playing market games. Let's not kid ourselves. Two, there's nothing illegal about
a seller finding a buyer and a buyer finding a seller. There has to be a market for this trade
to work. I'm not sure anything illegal is happening here. So I'm not sure why they would have to stop
just because the suit went public.
So it just doesn't make sense.
But yet, here we are, right?
The slam stops just after the suit goes public.
So explain that one to me, people out there.
Give me your best take on that,
because I can't explain it.
We're up like 7% since the suit went public.
Riddle me that one, Batman.
I just, I find that to be absolutely fascinating.
But the Jane Street stuff seems to be a history
of basically getting in there and manipulating the market
in a way that's probably legal, I imagine.
I mean, maybe not entirely.
I suppose the insider trading part isn't.
That's probably where they have them.
If that little secret chat can be proven,
and if they can get access to that secret chat,
if that stuff goes out,
that could be a real bad look for Jane Street, couldn't it?
Because that's documented insider trading right there.
So we'll see what happens.
But they are very much involved with Bitcoin
because they are facilitating all of the back-end
buying, selling, and trading for BlackRock
who's one of the largest Bitcoin purchasers in the entire world right now.
Well, if you've been listening to the show since probably, I don't know, a little bit before the end of last year,
you might recall that I've been saying if the AI pump fades, so will Bitcoin's price, at least for a little bit.
Of course, I thought this might happen via like open AI blowing up or another version of DeepSeek coming out that just really reminds the market that the open source models will eventually eat everything.
But it seems it's been agentic AI. Even simple things like Claude Cowork have completely spooked the market and have caused the AI monster to start eating its own funding tail. But what's wild about these supposedly professional, lifelong investors who speak with such authority and honestly with kind of a tone that speaks down to all of us who don't get it, right? They're so smart.
Well, it turns out in the last three weeks, they've kind of been in a panic and have done one of the most 180 investment hedges in my lifetime.
I just absolutely can't believe it.
And we start with a piece from Bloomberg.
Wall Street is suddenly waking up to the fact that AI might impact a larger number of industries and faster than they had expected.
What this story is about is how AI disruption fear is leading to sell-offs in parts of the market outside technology.
All right, so they say stocks outside of technology.
Chapter one, the situation.
On Wall Street, rising fears about artificial intelligence and specifically where it will disrupt certain companies are sending shares of those companies tumbling.
Wall Street has done an about-face. Investors were concerned that AI was costing too much and might lead to a big bubble with untold harms. Now investors are concerned that AI is going to be so disruptive that it renders countless businesses obsolete. There's definitely been a spillover, starting with concerns about leaps.
Did you catch that?
That's the important part there.
That's why I want to let that go.
Did you catch it?
They've gone from hedging.
They're hedging that the whole AI bubble was going to blow up in everyone's face.
Of course, Tom Lee and, you know, Cathie Wood and those types aren't.
But if you're not Tom Lee and you're not Cathie Wood, you've been hedging that this thing was going to blow up.
And it kind of makes sense.
It's crazy kind of spending.
And now, since agentic work has come out, I'm not making this up, guys.
It really is.
This is it.
This is how these people are buying and selling their long investments Since Claude Cowork came out and OpenClaw and all that they decided that every industry is in trouble
And then to add a little bit of additional accelerant to all of this, Anthropic released a piece recently saying, yeah, Cobalt, we got that.
We can reproduce Cobalt now.
So you can fire all those old high-paid engineers.
And of course, IBM stock dropped like it was the dot-com bubble again because of a press release from an AI company that has every incentive to make that claim.
It might lead to a big bubble with untold harms.
Now investors are concerned that AI is going to be so disruptive that it renders countless businesses obsolete.
There's definitely been a spillover, starting with concerns about legal services, SaaS companies,
adding into insurance firms, tax preparation services, financial services,
each of these in reaction to incremental AI products.
The market sell-off really started in early February when Anthropic introduced a plug-in to an existing product,
one that they did not even really do a formal announcement for.
So what we saw on February 10th, for example, was shares of wealth management companies sell off after Altruist, which is a little known AI startup, came out with a new tax strategy tool.
This is really something.
I mean, just again, I'm just I know I keep harping on this, but these supposed big time investors, right?
Supposed smart investors that are dumping on all of this.
I just find that to be incredible.
So here they are.
It's coming for all our businesses, your accountants, your tax professionals.
they're absolutely screwed. So Wall Street is hedging that software is doomed and tech stocks
are doomed and AI is coming for everything. Not only is it not a bubble, but it's the biggest,
I guess, revolution of all time. And it's going to cost, I guess, jobs. I guess your accountant's
going to lose their job and your tax professional is going to lose their job. And it's going to be
absolutely devastating. So they're de-investing in anything that's technology related.
And this is the lump of labor fallacy. We do it all the time in all different kinds of aspects of the labor market. It assumes there's a fixed number of jobs. But history shows us that automation doesn't shrink the pie. It bakes a bigger pie. Demand for labor grows the economy. Or I should say, as the economy grows, it increases demand for labor, which then increases the size of the economy. Do you follow what I mean?
So if when you hire people, they do more work, which makes your company more productive, which makes you hire more people. Do you understand what I'm saying? So the fallacy here is that when we get automation and we can do things that people lose their jobs. But the reality is probably going to be a lot more in the middle. The accountant is now going to have a team of agents working for it. And why do I say that? Because it's already happening to the podcaster.
This episode has a couple of clips that were collected by an agent that uses the perplexity model specifically to monitor trendy news on Bitcoin in different types of outlets on the Internet from different news outlets.
And then it monitors all of that and issues me a report.
If there's one I like, it downloads the clips and saves them automatically to a sync service for me.
saves me some time, which eventually will mean that when I am on the road, I will be able to
maintain production of the show because it's the research and the clip production that takes hours,
right? As long as I can keep reading and as long as this thing can keep clipping,
then I can sit down and I can do a show. And if it can organize the show notes for me to some
degree, and that's the other thing it does, is it creates a history with sources of everything that
it's collected in a markdown document in that same directory. So all of the links, the sources,
how it found it, the logic it used.
And then additionally, if it had any errors
or anything like that, it also documents in there.
I set this up yesterday.
I set it up in the afternoon
after I got done recording the launch.
And I don't even think it took me that long.
I think I was done by like 4 or 5 p.m.
You understand what I'm saying.
It doesn't take my job away.
It makes me better at my job
because now I wish I had done this.
I wish I could have done this six months ago
because I'm leaving next week.
I'm going to be gone for two weeks.
I hope to have a show, but this show is a massive amount of work and I have to drive to Pasadena and back.
That takes hours of time.
That time I'm going to spend driving is usually the time I spend preparing this show.
So like in the future, it's going to be really beneficial if I can automate more of that.
And I'm not there yet, but I can see a path to where that's actually possible now.
It doesn't take away my job.
So you look it up.
I think it'd be if you're interested in this at all, I think you'd really enjoy this read.
Go look up the lump of labor fallacy.
Go give it a little googs.
You can find some talks on YouTube.
They're usually in the context of boomers staying in the marketplace for longer, but it's a similar theory.
And that's what's that's what at the core of all of the A.I. fear.
And I just don't think it really holds up.
I think you do have some.
Right.
We used to have how they used to call them like tapper uppers or something like this.
Maybe somebody can boost in if you remember the name.
But before the Industrial Revolution, at a job site, when it was time to start working,
there was actually an individual whose job it was to go around with a really big stick
and tap people's windows.
And when the alarm clock came out, they all lost their jobs.
It's a real thing.
I'm not even, there was actually, I'm not sure if I'm getting the name right, but that
is a real thing.
And these things, they happen and we transition to other jobs.
But the idea that all these are lost forever, it just doesn't really seem to be how history has played out. Because how could we have survived the industrial revolution and the invention of electricity and ended up with more net jobs?
You're telling me AI is more disruptive to business than the industrial revolution?
You're telling me AI is more disruptive to manufacturing and to accounting firms than
electricity?
I don't know about that.
I don't think so, chief.
And somehow all of those things created more jobs and more economic opportunity.
So to me, this seems like a buyer's market right now because it's clearly an overreaction.
Everybody's freaking out.
And they're also selling their Bitcoin, which is ridiculous because, you know, what would be great right now is a hedge with no counterparty risk.
Seems like a great time to consider that.
But these morons, they're still trading Bitcoin like it's a tech stock.
I don't know when they're going to figure it out.
Bitcoin doesn't have these kinds of risks inherently that they're scared about right now.
Bitcoin doesn't have a board.
Bitcoin doesn't have a CEO.
Bitcoin doesn't have a market capture via complexity that allows them to milk customers.
It's not how it works.
There's no counter party risk with Bitcoin.
Unless you hold it in a dumb exchange.
But they haven't gotten there yet.
I don't think they have felt enough pain to get there yet.
And so the idiots out there continue to just trade Bitcoin like a tech stock.
Bitcoin is off to a brutal start to the year and is now on track for its worst month since the crypto collapsed back in June of 2022.
This would be Bitcoin's fifth straight monthly decline, the longest losing streak in eight years.
So big question, is this a healthy reset for crypto or the start of a deeper downturn?
And I've been wanting to talk with you about this for a long time.
Because you're a bull about Bitcoin.
Who's the expert?
Do you have a guess?
Before I let it go, who's the expert that the big money show, the big money show brings on to talk about Bitcoin?
What do you make of the slide here?
Is this reset, just a nice reset?
Or is there something more fundamental going on?
Well, I think if you just zoom out for a second, right?
If it's not going to zero, Bitcoin is going to a million dollars at some point in the future.
And I don't think that most people think Bitcoin is going to zero.
And maybe a decade ago, that was a question.
Now people may say it could go down a lot, but ain't going to go to zero.
So I think that's first.
The second thing is, I think Bitcoin really has two things that people look at.
One is expected, is there's this kind of four-year cycle that people have gotten used to.
And so there's a halving.
Bitcoin runs up for about 18 months.
It peaks.
And then it has these really nasty drawdowns.
And the drawdowns in the past have been 85%.
Wall Street is not used to that.
Wall Street, remember, the global financial crisis was a 50% drawdown.
And I always remind people, Bitcoin has had a 50% drawdown approximately every 18 months for the last decade.
So these people are used to the volatility.
But when you see these numbers compared to stocks, you're like, oh, it's down 50%.
That's a lot.
The bigger thing, though, is Bitcoin, more so than any market in the world, is a forward-looking market.
And so if you go back to why did Bitcoin run all summer long in 2025?
I believe it's because a lot of people thought inflation was coming because of the tariffs.
And so they said, well, if inflation is coming, just like I thought in 2020 inflation was coming, I'm going to go in and buy Bitcoin.
So Bitcoin ran up.
In Q3 and Q4, we realized that inflation is not coming.
And so now the two biggest risks in the US economy, in my opinion, are deflation and
the contracting liquidity globally.
Those two things are a major headwind for asset prices.
Bitcoin has been selling off for five months.
Guess what's also been happening?
Truflation's inflation metric has been selling off aggressively.
So Truflation is a real-time alternative inflation metric.
It uses 14 million data points from 40 different independent providers.
it has in my opinion more accuracy than the bls's cpi metric and it went from three percent down to
point six percent now what's interesting is truflation has a 97 correlation with a one
month lag to bls and so my expectation is the cpi number is going to fall off a cliff here over the
next 90 days or so and you're actually going to see inflation come down under two percent okay
bitcoin was the alarm system so i think that's an interesting observation that's why i let it play
I think what he's saying there is that the Bitcoin price decline has matched the true inflation decline for the most part.
I think that is mostly true.
I don't think it's 100 percent true.
And it's an interesting idea.
And he says there's a 90 day lag.
So if his theory is correct, we should see it show up in the official Cook numbers from the federal government.
I don't know about that, but I think it's, you know, it's something I hadn't heard.
That clip, though, is a little brutal, right, because Bitcoin's up like seven percent.
So he says it's a brutal sell off.
Well, here we are.
It's up 7%. It's up 7%. There's been a lot going on in this space. And I don't want to over-index on this, but I think I have to really demonstrate to you how much pressure, how much psychological warfare is almost going on right now.
And there was the Citrini AI report. I'll just play a little bit of this clip that went out that really spooked people because it proposed a near future.
Like I think it was the year 2028, if I recall, where we are essentially essentially in total economic collapse because of the AI industrial revolution.
It was a hypothetical piece based on research, but it landed in the market, I guess, because their future forward looking.
It landed in the market like a total bomb.
Well, tell us a bit more about that timeline here. And what's the probability that this could actually come into fruition?
The timeline we were seeking to just find a time period that is far enough away that ultimately we can start driving a conversation on what needs to be done to avoid such a timeline.
The great thing is, unfortunately, it's in the video, the absolute masterclass in shoulder shrugging he's doing when he's talking about this, because I don't know if it comes across in his voice, but it's clear. It's like arbitrary day.
I mean, like, if when I say that, so if you say, oh, I don't know, arbitrary date and you shrug like the most emote kind of IDK kind of shrug.
He's doing that multiple times during his answer.
Oh, IDK.
You know, we just kind of picked a date that was sexy.
Is far enough away that ultimately we can start start driving a conversation on what needs to be done to avoid such a timeline.
But near enough that, you know, would would kind of shake people a little bit.
And oh, they literally were trying to shake people.
So they warn people about a ghost GDP scenario of an absolute economic wipeout.
And ultimately, we do think it's going to take a while for this to diffuse through the entire economy.
But it's more a question of, you know, what happens at the leading edge.
I think especially in the U.S., the job market is just very weak for white collar jobs already.
And so the thinking and the ultimate fear is that it's not going to take that much to sort of push things over when we haven't really generated any white collar jobs in the U.S. over the last three years.
when you take out things like health care and education
that are primarily driven by government spending.
Is that the fear?
Or is the fear that we have spent 30 years creating BS, do-nothing jobs
that are basically adult daycare programs
that have resulted in a bunch of entitled adults going around acting like grown-up children
because they don't have serious jobs and serious responsibilities
that could be replaced with an LLM?
That's the only scenario in which I can accept this as a true statement.
Right. That's the only scenario in which literally millions of jobs are at risk. If you if your job can be replaced by a large language model, then it was you were getting paid for daycare. I'm sorry, but that's how it goes. I just don't understand this. Sure, it's going to help people, but I just boy this. So this guy, this is a Trini folks. This is one of the authors here. He's the CIO.
O.
And so that's kind of the underlying thesis here is that there's going to be significant
replacement of jobs with AI, specifically AI agents.
Those things only really came into fruition in the last few months.
And so as it comes through and shows up in the productivity of different corporations that when things are going to get a little more interesting and where we got to pay real attention All vague all hypothetical could be maybe And that why the sell has happened right
But it's these vagaries and this uncertainty that is just exhausting. It's, oh, the tariffs are off.
Oh, the tariffs are back on. Now it's 10%. Nope, it's going to be 15%. Oh, China's going to fight
it again. We're going to fight it all over again. This on and off crap with the tariffs or this on
off crap with every PR announcement from any AI company or even a dude who goes on social media
and tells people that something big is happening, but they don't realize it yet, can actually move
the largest financial market in the world right now. A viral post on Twitter can move the entire
financial market or anthropic releasing a PR that their tool does something that they say that can do
can devastate one of the oldest tech companies in the world in one day.
So that's one reason why you don't need any kind of weird price suppression
or price manipulation to have the Bitcoin price down again,
because that's literally the environment in which it has to survive right now.
Now, two things can be true at the same time.
There can be natural market forces that we might not like that are suppressing the Bitcoin price.
Last week, I floated the idea others have as well, that perhaps all of the excitement around digital asset treasury companies like Strategy and others may have diverted retail from Bitcoin into these stocks.
And the case seems kind of solid.
If you ask me, they could just open up the Robinhood or whatever their app is that they use to buy stocks.
They don't have to have a weird Coinbase account or anything like that that was weird and skeevy.
They can just use the app they already have.
They can use the damn cash app if they want.
And they essentially get exposure to the Bitcoin price action.
And if they're doing that, they probably would never bought into the Bitcoin thesis to begin with.
So it seemed possible that digital asset companies, like Strategy, could have diverted retail attention from Bitcoin into Bitcoin derivative products.
Sure, OK, that's one theory.
Natalie Brunel sat down with Saylor on CoinStories this week.
I'll link it in the show notes.
And he suggested perhaps something else is pushing the price of Bitcoin down.
And it ain't digital asset treasury companies, of course, he would say, since he has the largest.
And it's not necessarily a shadow group that are meeting in a secret signal chat to front run the market,
but something much more ordinary and much more common and much more disappointing.
and that is re-hypothecated Bitcoin.
Now, there's a third place you can get credit.
And the third place is you go to a crypto exchange
or an OTC exchange
and they'll oftentimes give you a loan at 4%
or 3% or 5% or 2%.
I've had people offer me Bitcoin-backed credit
at 1% or 0%.
What's the catch, Natalie?
Right. That's the question.
There's always the catch is they want me to transfer the Bitcoin to them so they can rehypothecate it.
Right.
So if you have $10 million, you either cannot get a loan from a legitimate bank or you can get a small loan at a 10 percent interest rate or you can get a three or four percent loan.
but then it gets rehypothecated.
So your $10 million of Bitcoin gets sold once,
gets sold twice, gets sold three times.
You might actually create 30 or $40 million worth of selling
because the Bitcoin that you posted
that you transferred to the shadow bank
or the crypto exchange rehypothecated it three times.
Okay, so what's holding down the price?
I think what holds down the price of the asset
is the lack of a fully formed non-rehypothecating credit system, right? And there's a limit to how
much you can rehypothecate certain other assets, right? When you post your home as collateral for
a mortgage, the bank doesn't turn around and sell the house on your street 10 times. If they did,
the price of houses on your street would be lower, right?
So I think that the lack of a fully formed banking system
holds the price back.
The existence of rehypothecation
and the crypto economy damps the vol.
It works to both sides, right?
When people want to get short,
they might get short 50X leverage.
When they want to get long,
they might get long 50X leverage.
So right now we're in that bear market where you've got the rehypothecation holding back the price.
And I think at some point it reverses itself.
We'll just have to wait.
The reason why I play this clip is because the theme of this episode could be kind of probably summed up pretty simply.
There can be things that pull and hold the price down that we might hate to see that are actual just natural functions of the market mixed with supply and demand dynamics.
And of course, secret signal chats.
But you know what I mean, right?
If the supply side dynamics are such that there's not enough people buying the supply, then these things have a dampening suppressive effect.
if there are more buyers than the market can accommodate, these things don't tend to really
have much of a suppressive effect. And we don't seem to really dig around looking for price
suppression. It'd be nice. And I think what Saylor is saying is if there was a more formal
structure, different types of loan products, perhaps, perhaps, perhaps one that strategy
could offer, who knows? Although I do have some strike news coming up for you. But I think that's
where Saylor sees things going, is if you have a more robust banking system, then perhaps
you reduce the rehypothecation, where when you go and you put your Bitcoin on a lender,
they are lending it out on the back end.
And it's always worth checking to see if your lender does that or not.
And he says it's rehypothecation.
But I say, what say you?
I want to get this down because I feel like this AI stuff is stupid and getting out of
hand.
There's so much noise that we need to create a little signal here.
So I want you to boost into the show.
Is AI impacting your job right now?
Your job.
And be honest, is AI actually changing your job today?
Or is it hype?
Is it not even hitting your workplace?
I want to compare what you're saying to what all the media reports are saying.
And see what our community is seeing in the real world.
Is AI impacting your job right now?
If so, how?
Or not at all.
Boost in and tell me, let's just get this done with.
Because I'm not sure where reality really is anymore with this topic.
So boost in and tell me if it's impacting you right now.
And I will read that on the next episode.
Well, you can support the show just by doing what you do.
If you want to buy Sats on River, one of the best places in the U.S.,
use the link in the show notes.
If you're all about self-custody and you want to go to and from your own wallets
where it's never on their system, that's the Bitcoin Well.
They're available in the U.S. and Canada.
The Bitcoin company goes from Sats to gift card in just seconds.
Probably going to be using that on the road trip soon.
The Fold Card lets you stack Sats while you're paying bills and buying stuff day to day.
and then Salt Lending, they let you get access to your Bitcoin value without having to sell it.
Links to all of those are in the show notes.
You use those if you want to get started.
You support the show just by doing what you're doing.
Of course, we've also got the membership and the boosts and a lot more show coming up.
and now it is time for le boost oh let's do it the fun shall now commence fun will now commence
let's get into our first boost lili lili lili came in with a row of mcducks that's 22 222 sets
Things are looking up for old McDuck.
Your timeframes are right in what is landing news-wise, but probably not right in terms of money-wise, is my estimation.
The net effect is asset owners often still end up paying their Bitcoin or selling their Bitcoin to help pay their taxes.
Maybe different this year.
I'd like to see that change, especially with the strike product I'm about to talk about.
But that does tend to be an issue around tax time, as Bitcoin has tended to be a little soft.
because people are cashing out of a scarce digital asset of generational wealth
so that way they can pay their yearly tax bill.
And it sucks, man. It sucks real bad.
As far as the Fed stuff, I think that's more likely to cause volatility at first than it is PAMP.
And the first rate decision isn't, I believe, until a month after he's been in there.
However, that said, if Warsh were to get out ahead of that and start talking very dovish
and start signaling to the market what he intends to do,
I think that would dampen the volatility.
However, I think that'd probably be looked at
as stepping on JPOW and considered,
you know, probably uncouth, but I'm not sure.
Also, Clarity.
I think we'll know by April.
I wish Clarity didn't have an impact on Bitcoin.
It really pisses me off that it does
because the bill itself really has nothing to do with Bitcoin.
But for the investment class, they're waiting on that.
And I think that will be a beginning of an unrolling of funding.
I don't think it'll be like a floodgate.
That's just from my experience.
That's just my gut feeling there.
Thanks, Lee, Lee, Lee, Lee, Lee.
Appreciate that, McBoost.
This old duck still got it.
And thanks for supporting the show.
User 303 came in with 21,420 sats.
Now, user, if you want to update your name and your profile
and come back in with a boost to tell me who you are,
Totally, totally love that.
You don't even have to do the above 2000 if you don't want.
Rock and roll.
Hi, Chris.
On your last episode, you mentioned being open to attending a Bitcoin meetup, if it's relatively close.
So I want to invite you to Bitcoin is for everyone in Portland, Oregon.
It's on May 22nd to the 23rd.
I'm a volunteer at the event, which features workshops on day one and a main stage with talks on day two.
Tickets are available at BitcoinIsForEveryone.com with an early bird special until February 28th, plus a 21% discount with the code NosterInsider.
I'd love to see you there.
Hey, this is really cool.
Man, I think I could try to make that work.
I have to see how if I can if I can link it in with my plans to go to Texas, which maybe I can.
I'm not sure.
And depending on when Red Hat Summit is, I might be able to make that work.
User 30.
Thank you for boosting that in.
Bitcoin for everyone.
Bitcoin is for everyone.com.
And again, the early bird special to get 21% discount is Noster Insider.
That's pretty cool.
May 22nd to the 23rd.
Thank you for boosting that in.
Blanket invitation.
Anybody let me know about Bitcoin events.
Use this space to promote your event.
I think that's a great little exchange of value.
OB is here with 21,420 sats.
Thanks for the BIP 110 rundown.
It's funny.
The bankless guys are responsible for me selling my ETH and going Bitcoin only.
I was trying to understand the industry and their promotions of garbage taught me a valuable lesson.
Taught me a valuable lesson, too.
Watching from afar.
Don't ever do that.
Thanks, OB.
Appreciate the boost.
Marist February comes in with 21,021 sats.
Oh, I think he's going for it.
21 gigawatts!
There you go.
Agree with your take on BIP 110.
Enjoy the compilation of clips and, oh, I enjoy them,
and I particularly enjoy your comments.
Well, thank you.
I am here to serve, and I hope you do enjoy.
You're doing very well.
Muy Frio comes in with 12,000 sats.
That's, okay, oh, across two booths.
All right, all right, I got you.
And cheap food and Doritos and Coke decreasing in prices
seem to be evidence of government subsidizing illegal benefits
were causing prices to go up.
Interesting observation.
Thank you very much, Miro.
Appreciate that.
One doll geeks here with 10,110 sats.
It over 9 I am running BIP and you made an argument against it that made me reconsider The argument was that BIP changes Bitcoin because it allows the minority to force their opinion on the majority
After thinking about it, I don't come to the same conclusion.
I don't think BIP-110 changes anything with respect to this risk, and opposing BIP-110 doesn't mitigate that risk.
This is a feature of the Nakamoto consensus that exists today.
Okay, so your message got cut off at part here, but I'm curious what you mean if, say, 10% to 12% of the hash rates only required,
to enforce the fork.
If you wouldn't mind following up on that one,
dull geek, I like that line of conversation.
It's at least it's an alternative opinion
that I appreciate somebody being willing to send in.
So I'd love to hear follow up on that.
Thank you very much.
Nakamoto 6102 is here with 3,500 cents.
The majority of money will not leave banks
for 3% yield on stable coins.
Wouldn't they just be giving up FDIC insurance too?
I don't think 3% is worth that risk.
Thanks for the value.
Nakamoto right there with your brother.
I mean, especially, I don't know.
Yeah.
Unless they can have FDIC insurance, I don't think a lot of typical consumers are going to want to move.
Especially for what is essentially a tech company that could have a run on the bank.
Very possibly.
Right.
It's like the very thing FDIC insurance is there to protect for.
That's a great point.
Thank you for the boost.
I appreciate that.
You make me want to be a better man.
Sloppy Joe's here with 4,600 sats.
I always thought people in the Bitcoin space were really interesting because to really understand it, you need adequate knowledge of economics, history, game theory, computer science and networking.
So, Chris, can you tell us a bit about your background?
I'm guessing you're a software engineer by trade, but you have a solid grasp on macroeconomics, too.
How did you get to where you are?
Not a software engineer, per se, but I guess I would call myself a systems engineer for sure.
I spent over 10 years heads down working very, very hard in the tech industry and kind of getting a fundamental understanding of all of that.
Then after the 2008 financial collapse, I almost lost everything.
And it was rough because of a house situation I was in the middle of where we were attempting to sell the studio that I'm sitting in right now, which, by the way, we didn't sell.
Spoiler.
And building a new home.
And the credit market was collapsing.
And it became really, really scary there for a little bit.
And he realized at that moment that my blissful ignorance had cost me greatly.
And that if I had been paying even just a little bit of attention to the news and the macroeconomic news, I would have realized what was going on in the mortgage market and would not have put myself in that position.
But I hadn't been.
I had just decided to not pay attention to that because I had plenty of things to care about.
And I realized that that isn't how it works, especially when it comes to protecting your future and your investments.
And then, you know, Bitcoin is a fantastic teacher. Through the lens of Bitcoin, you learn so much. I don't know if I ever could have understood the money creation process in the United States if I didn't have something to view it from outside the system with.
And Bitcoin gave me that lens to understand, to look back at the thing that I'd always existed in and actually understand for the first time how it operates.
And once I understood how the financial system operates and how the markets work, so much of what goes on in our day-to-day life started to make sense.
So much of what people contribute to wild smoke room filled conspiracies can actually be attributed to market dynamics and pressures.
and the macroeconomic situation.
And it is the unlock to understanding
what is really going on
in so many aspects of our day-to-day lives
and the incentives and things that motivate
the Congress critters and even our local politicians,
and I mean all around the world.
And once I understood that unlock,
it became a passion of mine to follow it pretty heavily.
Then I had the opportunity to meet the Bitcoin dad,
who is an economic genius,
and I learned a bunch from him
and was able to view the world through his lens
and continue to study Bitcoin more
and just appreciate it more as a macroeconomic instrument.
And that's really when my passion for Bitcoin went from,
it's a cool technology
and I really like the distributed P2P network,
which is originally what got me into Bitcoin,
was mining and the network
and the way, just the technical aspects of Bitcoin
and just the elegant simplicity and beauty of the white paper.
And then after that, that sustained me for many years,
But my interest faded because it was a technology and a lot of other altcoins came out and it just got really frustrating.
But then when I began to understand macroeconomics again later on and then re-picked up Bitcoin, you know, many years ago from that perspective.
Well, it just became to me obvious math where this this one's going.
And then it's just a matter of how much patience do I have to write it out.
And I don't know if I just I really got on a tangent there, Sloppy Joe.
I hope I answered your question.
10 gold blooms out of a possible 10 gold blooms.
But there you go.
I hope that helps a little bit.
And if I didn't, feel free to send a follow.
PJ's here with 4,444 sats.
Great show as always, but I have an ask.
Could you add your questions to the audience, to the show notes?
By the time I boost, the show's over.
and by the time I want to boost,
the show's over and I've forgotten.
Oh, and he also sent a row of ducks
to our song artist.
Thank you, PJ.
That's great.
That's a good question.
I hadn't thought about that.
Hmm.
It's really, now it's a process
of me trying to remember after the show.
Who remembers first?
I will try to remember
to add that to the show notes.
Not a big deal at all, actually.
It's more of, you know,
I've been doing this for 94 episodes
and now I have a habit
of how I do the show notes.
But I will try to remember.
I like that idea
because I would like more people
to boost in and answer,
especially this week's question.
I deeply want people to answer this week's question.
Is AI impacting your job?
Yes, no, how?
Please help me understand what's going on out there.
And I will try to remember to put that in the show notes.
Thank you, PJ.
It's always good to hear from you.
I hope to see you very soon on the way down to scale.
HODL HODL is coming in with 12,345 sets.
That's a Spaceballs boost.
So the combination is one, two, three, four, five.
Yes.
That's amazing.
I've got the same combination on my luggage.
Great show as always. I think you should start using a soundbite from Fleetwood Mac's The Chain whenever you play a highly regarded clip from Mr. Wonderful. I enjoy laughing at his far left curve takes and it's a great song. It might help these institutions learn that you would never break the chain. Oh, never break the chain. I got you. Yeah, I got you. Of course, it's going to get me in trouble.
You know, I'm not allowed to play that.
So I like the idea, but, you know, we'll have to come up with maybe a karaoke version or something.
Thanks, Hot Hala.
Appreciate the Spaceballs boost.
The hell was that?
Spaceball 1.
They've gone to plaid.
All right, we got Gene Bean.
He's back with 2,267 sats.
Oh, my God, this drawer is filled with fruit loops.
The BIP 110 stuff makes me sick, and it's why I returned to CORE a while back.
Here's a question.
Where are Jack Maulers, Jack Dorsey, and Michael Saylor on this?
Can they not help counter this stupidity with their reach and influence?
What about other treasury companies?
Don't they have a vested interest?
Don't they have big microphones?
Good questions, Gene.
So we did see Saylor kind of address it in his interview with Natalie Brunel.
He talked about a little bit more broadly about people that are all gung-ho to make these changes.
But it seemed pretty clear he was talking about some of this.
I think the better question, I would love to hear Jack's opinion on it, but I don't know how much of this, although Jack's company gets screwed. If BIP-110 were actually going to full effect and we had the fork, Lightning would just be so wrecked. So many Lightning transactions would get rugged. So it would probably really screw up Strike's business.
But the one I would like to hear from is Jack Dorsey because he's funded Ocean.
And Ocean, unfortunately, who I have had a lot of respect for until this, would be some of the top beneficiaries from this.
Luke, Dasher, and Mechanic, they work for Ocean.
And where do you think the mining centralization, where do you think they're going to get enough mining hash power to actually implement this?
It's going to be from Ocean.
There's no coincidence here.
And then who runs Knott's?
Oh, right. It's Luke. So Knotts is the way they enforce BIP-110 and implement it. And Ocean will be the way they have the hash power. And in both scenarios, you essentially end up with Luke running the Bitcoin network now. Huh. Wonder how that works.
So, yeah, I would love to hear Dorsey's take on that because he's funding this.
So be good to hear what he has to think about it.
And I would love to hear a few more people come out because the people that do come out have been brutally attacked, brutally attacked.
Why do you hate Bitcoin?
Why do you like child pornography?
And then and then also criticize for not technically understanding what's going on, which is particularly ironic.
So it's I hope they do, Gene.
And I think maybe a September approaches.
A few more folks might wake up.
Good question.
It's always good to hear from you, too.
Wish we were going to see it scale.
Ace Ackerman's here with a row of ducks.
BIP-110 is unnecessary and could lead to censorship.
Yep.
Agreed.
The market should be allowed to determine what Bitcoin is best and suitable for which is a store of value and money.
Crater has gone off the deep end.
Stop running knots as well.
You did, huh?
Well, the market already has, Ace.
It's clear in the Core 30 adoption.
It's clear in the prediction markets.
It's clear by the miners.
None of them are doing any of it.
So the market has already decided.
So that's why it's extremely clever that they've come up a way where they don't really need the market.
They just need part of the market.
And you can always find a few radicals.
Or you can always scare people with talks of child porn and find people that want to cover their own ass and have a lawyer breathing down their neck.
So I think that's the strategy, Ace.
And I don't like it.
My opinion, though.
Kiwi Bitcoin guide comes in.
He's back 6,543 sats.
Let's hear it, good buddy.
Bear Mark, you getting you down?
Bip110, doing your head in?
Well, here's just what you need.
All of you.
A Bitcoin meetup in New Zealand.
We run these really relaxed and friendly meetups.
We call them Bitkiwikis.
Bitkiwikis.
Three times a year, all the Bitcoiners are welcome.
We often have overseas Bitcoiners come along, too.
The next one's real soon.
We'll let you off, Chris, because I know you're at Planet Nix.
But maybe next time.
Everyone is welcome.
Check out KiwiBitcoinGuide.org.
And they've got the BitKiwi meetups.
And they're the BitKiwi, BitKiwi, BitKiwi, of course, BitKiwi, of course.
So check out KiwiBitcoinGuide.org.
Thank you, KiwiBitcoinGuide.
That's a great heads up.
Two really awesome Bitcoin meetups.
I'm glad I brought that conversation up.
Boy, oh boy, I need a database of these.
I need like an overlay when I'm route planning or going on a trip.
and I just plug in my destination
and it just tells me all the Bitcoin meetups around.
Could somebody make that tool?
You know, like a route planner
that puts Bitcoin meetups on there?
Appreciate it, Kiwi.
Massey 01, 35, MSI?
Probably MSI.
Came in with 4,096 sats.
This is a tasty burger.
Do you think it's reasonable to use Bitcoin
as a more long-term savings account?
Like the things maybe for five years
to longer in the future.
I'm a college student
And I'm currently and currently every time I put money in savings, I put half of it in a standard savings account, stable with very little interest and half into Bitcoin.
I use the short term savings account for things like new to new toys or a computer part or other big purchases that might be coming up in a few months.
Yeah, that makes sense. Right. Even he says even something may be coming up in a year or two.
And in case I suddenly need money and then I need. Oh, and then more Bitcoin gets stored.
but that got cut off.
Oh man, another one got cut off.
But I get your jest.
You're saying that you save half your money in fiat
and half your money in Bitcoin.
And you're asking if that seems smart.
Yeah, I think especially at your age too.
It's really smart.
You know, when you get to my age
and you want to collect, you want to stack more,
you start thinking,
well, can I just put everything in Bitcoin?
What can I do?
But at your age,
I think one of the biggest mistakes you could make
is actually going to all in.
And the reason why I say that is
if you go too deep, you get tapped out.
And when you're tapped out,
your only option is to sell your Bitcoin. There are other products. We're going to talk about that
in a little bit, but that's something you need to be aware of. Bitcoiners tend to be so passionate
that they go so deeply in that they kind of run out of dry powder. And when a life event comes up,
they sometimes have to sell off. And if you can avoid that by having a little bit of a, you know,
piggy bank there, if you're thinking one, two years, if you're, man, I really like your time
preference too, dude. If you're thinking two years is short term, I think you're really in the sweet
spot. And for your Bitcoin, I think five years is a really, really reasonable spot. And for some
reason, you know, in my head, I've just been kind of mentally saying, don't even think about that
stack until 2031, 2032, for some reason. That's just where I'm at. I don't know if that's where
it'll stay, but that's how I think about it mentally. It's like, dude, don't even think
about the stack that much until 2030.
Right.
And just let it sit because you look at all this panic we're seeing in the market.
Is AI going to take this job?
Is this industry about?
to be devastated. Bitcoin doesn't care about any of that. None of that changes the Bitcoin
fundamentals. And it's truly one of the genuine benefits is you can just stack sats and not pay
attention and let it go to work over time. You don't have to worry about what the CEO is doing.
You don't have to worry about the quarterly report for NVIDIA taking out a stock that's nearby,
you know, like collateral damage on the stock market because NVIDIA had a bad day.
I mean, you do in the short term, you do in the short term, but the fundamental thesis doesn't change. And so in the long term, it plays out. And so while maybe some companies come and go, this one's leader today, that one's leader today. Oh, this one's gone bust. This one's been acquired. None of that matters in Bitcoin.
And so it's the type of money that I like to just think about way off in the future.
I keep a little hot stash just because I like to dabble in the community because I've been doing this forever, you know, like 16 years.
So I like I've, you know, I've built up routines.
I like to dabble in the economy.
But I think you're doing a really good job.
Thank you.
Appreciate the boost to Bobby pins here with 10,000 stats.
Woo.
I got answers and I want some questions.
I'm still running knots, but I'm deliberately not signaling for BIP 110.
I also have a BIDAC solo mining with the Datum Gateway, but won't be moving a large amount of my hash rate to Ocean.
At least until all of this settles down.
If my spam, if spam is as much of an issue as Luke and Mechanic State, why does the majority of the network not agree with them?
Either fix the spam issue permanently or let it be.
A temporary soft fork is just unnecessary way for them to feel like they got a win after they lost the node war.
I think that's what you said because I got cut off.
I completely agree, too, is they pivoted to this after they were unsuccessful at campaigning core to change version 30.
This just sort of feels like, well, we built a movement and now we need cope.
And so we're going to take over Bitcoin with this movement, with this momentum.
But something you said there, it struck me.
And it seems to me this argument would be a lot stronger if we had more than one sat per V byte right now for a transaction fee.
if we were looking at real money,
if we were looking at real expenses
to transact on the Bitcoin network,
I think they'd maybe have a stronger argument.
But the spam isn't a problem.
In fact, pretty much everybody
that is using quote-unquote spam,
if you even want to call it that,
some of it seems like spam to me,
but you know, whatever.
They're still doing it the old way,
the pre-version 30 way.
And it would make sense
because a lot of the majority of the nodes
are still pre-version 30.
so literally nothing has changed
and nothing would change
there you go
genius came in with a row of ducks
thank you for the boost though
appreciate it
boost
well boost to you
and you wrap us up
thank you very much sir
appreciate that
in fact thank you everybody
who supported the show
either through a jupiter.party membership
a fountain.fm membership
which after the travel season
you'll see some life there
or those of you who boosted
We really do, really do appreciate it.
And it's no advertisers, just me sitting here doing the show with you.
It's a tight little community.
It's a value for value circle.
And we had some of you, 41 actually.
That's not a bad number at all.
Stream sats as you listened.
Collectively, you sat streamers, had the largest boost, 85,905 sats.
When you combine that with those of you who sent a message, our grand total for episode 94 is 278,152 sats.
Now, just a little PSA.
I'm going to be on the road for two weeks.
I don't really know what the recording schedule is or what the release schedule will be or if there will be episodes.
But if by the force of the road and nature, I can get to an Airbnb and find a spot to record, I hope to sit down with Mr. Westpain and do a node special.
We'll see. I don't know if it's the full node episode we want to do, but we do have a lot on our minds right now when it comes to Bitcoin nodes and what we're doing these days differently than even just five months ago.
So I hope we have an opportunity to do that.
it's not locked in, but if you have no questions, one way to motivate us to really make it happen
would be a bunch of boosts coming in. You know what I mean? Like, Hey man, if we got a bunch of
boosts, we got to sit down and work. You know what I'm saying? We got a job to do, but don't
be worried if you don't see me coming out on the regular time and day. It's going to be a little
inflex. Let's just say that. And of course, meetup.com slash Jupiter broadcasting. If you're
going to be in the Pasadena area, say March 5th to like the 7th, meetup.com slash Jupiter broadcasting,
Love to see you there.
I think it's going to be a great event, and I am looking forward to nice weather and an open road.
Let me tell you, you know work has been rough and a lot when you're looking forward to 11 and 12-hour drive days as a relief.
You know what I'm talking about, right?
Ah, here's one that hits me right in the feels even 12 years later.
12 years ago today, Mt. Gox collapsed.
850,000 Bitcoin were initially lost.
Not too long afterwards, they recovered around 200,000.
But there we were.
It was early February, 2014, and Mt. Gox users noticed that tens of thousands of Bitcoin were stuck as bad transactions.
And the only way we knew this was you could query it via the Mt. Gox public API.
And there were websites that were monitoring this because Mt. Gox was the exchange for Bitcoin.
They were extremely critical to the entire economy.
And withdrawals on February, I guess that would be 25th, were paused.
And this actually began, it was, now that I'm thinking about it, it was a multi-day process.
I'm now replaying it a little bit.
And it initially started earlier and people are asking Mt. Gox what was going on.
And they started giving us bullcrap answers that didn't technically check out.
And this was pre-Sigwit era.
So they were trying to make some claims that were maybe technically possible.
But anybody that really understood what was going on knew they were full of crap.
And so over on the Bitcoin talk forums we started to panic because like the explanation didn make any sense And so we knew something was bad and trust got flushed really fast and it started to get bad And Mt Gox came into the
Bitcoin talk forum and started making statements and trying to assure us everything was just fine.
Inevitably, we just we discovered that the Bitcoin was lost. And as soon as the BS technical
explanations came out, my heart started to sink. I had a lot of Bitcoin. I had I had I had a lot
of Bitcoin on the exchange.
And because it was really one of the ways to transact.
Oh man, it was rough.
It still sucks today.
And I was so devastated at the time.
I mean, I literally mourned the loss because I'd lost Bitcoin before that, about the same
amount actually.
And I didn't understand and appreciate that it was valuable at the time because I was
just interested in mining.
I wasn't even really interested in the Bitcoin it was producing.
It was fun to build a pie stuff with it on Newegg or whatever, but actually that time
you couldn't even do that.
You couldn't do much with it.
And so I didn't really mourn the loss of my initial batch of Bitcoin when an online wallet got hacked that I was reviewing for TechSnap.
But by the time I think I lost my Mt. Gox money, I think I knew what I was losing.
And that hurt.
And I mourned the loss.
I didn't even want to engage in the legal process.
I didn't even want to interface with it.
Now, some people did get their money back.
In fact, some people are still getting their money back today.
In frickin' 2026, the payments are still happening.
this thing went down 12 years ago which i think it tells you how long this process can drag on
but it's just so funny that here we are 12 years later and it still feels like i don't know
nothing's changed in a way like we had ftx happen we had the tara luna stuff happen now we see the
jane street shenanigans it's not an equivalent it's not the same but there's always some idiot
out there that's screwing stuff up. And that's why the key takeaway from all of this is you've
got to at least self-custody some of your stack or do it in a way where you're really, really sure
that if somebody else is watching it for you, that they're not going to get taken out by some sort of
collateral risk, by some sort of third party, counterparty risk that maybe you didn't know about.
You didn't even know they're affiliated with that kind of company. That's how this space works,
is when one company goes, it's a blast radius.
And so self-custody is your insurance policy against that.
Now, every setup is unique
and everybody has their own individual requirements.
So if you can't do self-custody,
it's just something you have to really take very seriously.
And I'm not saying even you need to self-custody everything.
I think the more you can, the better.
But there may be a reason why maybe you want to set
a little bit of your stash aside.
And that's because the Strike line of credit appears to be very close.
Strike has been working on this for a bit.
It's an open-term loan with no origination fee and no repayment fee.
And you only accure interest for what you're actually using.
Now, no affiliation here, no particular interest in this outside of, I think this is a compelling
product idea.
I think you should think about this from a Bitcoin miner standpoint, or you should think
about it from a large expense comes up that you would have had to maybe put on a credit card
that you could now charge against a line of credit. And Jack explains some of the use cases
in a recent episode of his podcast. Right now, the only credit product in Bitcoin are these 12-month
loans, okay, which are fine and they serve their purpose. If you have a large tax bill, I had one
of those and I got a 12-month loan on strike. If you are getting married and you need to finance a
wedding, you're buying a new house, you're starting a new business, you take out a large
chunk of capital, you lock in the term for 12 months, so it's not a variable rate or anything,
and you deploy that capital, you're able to plan ahead, you're going to say, hey,
I want to finance my wedding collateralized by Bitcoin, I'm going to pay it back over this
duration, because I'm calculating my salary, and I'm calculating what my bonus is going to be.
And that works. But what it doesn't really do is it's not the best way to live on Bitcoin.
The dream for me is I get my paycheck, I convert it into Bitcoin, I am able to live on Bitcoin
without selling it and pay my bills.
And so what the line of credit is, is instead of taking out a large lump sum of capital at
once and needing to use it for 12 months, you are just drawing the capital that you
need when you need it.
So let me give you guys a concrete example.
Let's say I'm keeping 10 to 20% of my Bitcoin stack on strike and I want to do live on that by borrowing against a little bit of it.
But if I do 50% LTV loan and then Bitcoin goes through a bear market like it is and I got to go post more collateral, I risk a margin call.
I'm borrowing a large lump sum of cash all at once.
And that's what ends up stressing people out and getting people in trouble is they're like, what if the price goes down?
There's going to be a margin call.
There's a chance I'm going to get liquidated.
That's really it really makes me lose sleep doing math.
I'm doing numbers.
I feel uncomfortable.
The other thing he's not really saying here, probably because it's particularly bad on strike.
A lot of these Bitcoin backed loans that you get that have like a 12 month term, they have minimums that are pretty high in some states, $10,000, $15,000.
And outside the United States, they can be even significantly higher than that.
SALT, I think, is $5,000. But OK, let's just use this. Let's go with $5,000. I think strikes
$10,000 minimum loan in Washington, I think is. I'm not sure, but I think that's what it is.
Last time I looked it up, which was towards the end of last year, it looked like it was a $10,000
minimum loan in Washington state. Depends on the state. And I believe SALT was $5,000.
and but let's say you just you needed to get a new transmission and you only needed two thousand or
three thousand dollars well you have to if you wanted if you wanted to get access to that via
your bitcoin liquidity you have to take out a five thousand dollar loan and now your loan is
at five thousand dollars that means you you have to have an ltv ratio that supports five thousand
dollars during a bear market instead of just the two thousand or three thousand dollars that you're
actually using So the strike line of credit you can get approved to whatever your Bitcoin is supporting So if you got you know of Bitcoin in your strike account then you could take out in theory a line of credit But they will only charge you
and you'll only have to cover the LTV for the actual amount of the line of credit you're using.
So if you get a $10,000 line of credit, but you only use $2,000, you only have to cover that $2,000
with the LTV. I hope that makes sense, because that's massive in terms of dynamic management
there and it is truly a unique product. It's not necessarily for everybody, but Bitcoin miners or,
I don't know, podcast shops that primarily are operating off of Bitcoin at this point,
it's a pretty nice tool. Ice goes down. There's going to be a margin call. There's a chance I'm
going to get liquidated. It really makes me lose sleep. Doing math, I'm doing numbers. I feel
uncomfortable. And I understand that. I genuinely understand that. And I'm not trying to put anyone
in that position. And so I came up with this idea for the line of credit because it actually suits
my use case, my predominant use case. I do have large tax bills and one-off expenses every now
and then, but my predominant use case is what I want is I have, you know, like I said, let's say
some small fraction of my Bitcoin stack on strike and I have bill pay hooked up on strike and the
line of credit is just a payment method. So when a bill comes in that Strike is going to pay,
because I have it all hooked up, Strike has an account and a routing number. When a bill comes
in, I say, I want my line of credit to pay that bill. And so what Strike does is it takes, it
borrows a little bit of credit against my stack of Bitcoin and pays the bill for me. So let's say
I'm making numbers up. Let's say my credit card is $5,000 a month. My mortgage is $2,500 a month.
and my ComEd bill is $50 a month
and my HOA is $100 a month.
So I'm looking at around $8,000 of monthly expenses.
Okay, let's say that.
So Strike would pay those for me against my line of credit.
So then at the end of the month when I've paid all the bills,
I don't have 50% LTV in this giant loan that I need to manage.
And if Bitcoin's price goes down, I'm risk of margin call.
I got to add more collateral.
I'm sweating about liquidation.
instead my LTV is like 1% because my LTV is only big as my monthly expenses and I mean hopefully
you guys aren't spending 50% of your net worth every month right so I think it is a particularly
compelling product for some folks I don't think you'd want to put your entire stack in any
particular service and it's probably not something everybody needs but I hope they're successful with
this no word if he's going to put a credit card in front of it or something like that don't know
if it's really necessary to tell you the truth,
but I can just, I can look back,
you know, around the Mt. Gox era,
just think of a product like this
that you have access to via an app on your phone.
It's actually kind of mental that we're this far.
This type of product, while not for everyone,
is mental from an old timer's perspective.
And for somebody who's been stacking,
you know, through proof of work,
it may one day be the thing that, you know,
keeps the business going on a lean month.
Like it's been a lean month for the other shows
that have advertising.
It's been not a month.
It's been a lean year
that they don't have advertising on them.
And so if a product like this was available,
I could see JB leaning on that
until a couple of advertisers came on board
for Linux Unplugged or something like that.
And you could see how that could apply
to your personal life too.
So I hope it's successful
because if it is,
we'll see other competitors enter the market.
I don't think Lava is a serious one at this time
unless they can prove they're doing it legally.
and we'll see more and more options for consumers.
All right, it's time for the final clip of the week.
And I love these types of clips.
There's been a bit of a theme recently, I think.
And I want to play Eric B.
He's from Bloomberg.
I think he's a great ETF analyst
because he was calling the Bitcoin stuff early on.
And truth be told, he was a Bitcoin skeptic initially.
And over time, he began to change his mind.
And I love it when these guys that are pretty deep in the financial system, pretty deep into all of it, begin to have a new understanding through Bitcoin.
Two things about Bitcoin caught my interest before I cared.
One is it just seemed to piss all the right people off.
I shouldn't name names, but like someone like Paul Krugman.
Just the fact that he was so upset about it, I was like, something must be good about it.
You know, I like that he's upset about it, just being honest.
Like if you're uptight, it just bothers you for some reason.
And that's a good thing.
The second thing is it came back from these basically near-death experiences over and over.
There was multiple times where I was like, oh, okay, fine, it's gone now.
And it came back and back.
And then when you study other things that have come back from like 50% drawdowns multiple times,
you realize it's all the best stocks on planet Earth.
It's Amazon.
It's Microsoft. It's Berkshire.
Only stud things come back three or four times.
And that's why I was like, I gave it respect.
Let's check in on the state of the network.
I'm wrapping up the block height 938,342.
One Bitcoin to the US dollar?
69,220 US dollars to get that one Bitcoin.
That puts our sats per dollar at 1,445,000.
Just 1,444,000 is just a little bit fewer sats to get that dollar since last week's episode.
Just a little bit.
In fact, our 24-hour price change right now is sitting at 7.9% upwards adjustment.
Over the last seven days, we're up 4.8%.
Not too shabby.
That makes our 30-day price decline now at 20%.
20%, and our overall decline from the all-time high, 45.1%. There are 25,113 reachable nodes
on the network right now. Not too bad. I wonder if we could get that to 25.5. I'm going to be on
the road. You should be deploying nodes, obviously, obviously. The Bitcoin network did adjust upwards
in difficulty by 14 14 That a massive difficulty upwards adjustment I guess the Winterminers are getting back online now It good to see Things are humming right along Fee estimates are still really low One sat to a V right now
Great time to rebalance those lightning channels.
The state of the network is strong.
This Week in Bitcoin.show, that's the website.
Get the show notes, the past episodes, the RSS feed, all that over there.
My goal is to create something here that doesn't get too distracted by the emotions around what's happening,
but focuses on the signal.
So you can plan for yourself, your family, your business, whatever it might be.
So let me know how I did there with a boost.
And don't forget meetup.com slash Jupiter Broadcasting.
While I'm gone, I'm going to be in Pasadena.
I'd love to see you.
It'll be one of a few events this year.
So it's not the only event, but it is going to be one of the largest open source events in North America.
So I'd love to see you there.
And of course, if you use if you're going to be at scale and use my promo code unplugged, that's U N P L G.
You get like 40 percent off your registration.
That's not too bad.
And if you miss me, go listen to a back episode.
See how I did.
Maybe clip it, send it in if it's embarrassing or if it's good.
And of course, as a reminder, I want you to boost.
is AI impacting your job
right now today
or is it just not at all?
I'd like to know.
So boost in and tell me if it is
even in a small way, I guess.
And then if you're seeing people
get laid off and things like that,
tell me about that.
All right, we're going to get out of here,
but I'm going to leave you
with a value for value track.
Justin Landrip is just rocking it
over on the Fountain FM charts.
And today I am leaving you
with his track,
All's Well That Ends.
Swings through the night, search for you
Just to be no better to
Don't lie for me
You drove me to the field that day
The smell of oil in my glow
told me I couldn't lose
was the world a cool and good
in love of the only answer
in love and only night stole
Shoot, I'll wait for a call to end
I'll wait for a light to descend, please
Control this world, it ends well
All is well
And how does it end
All is well
Don't lose your life
All is well
It ends well
All is well
And how will it end
All is well
Just don't lose your heart
Don't kiss the mountain river
My phone at bounty comes, I'll know where to find you
Hold me like you used to
I'm a cascade of ideas, we dance ceaselessly
No progress couldn't cure you
Into the light without you
In love, the only answer
In love, an only knife stone
Sure, I'll wait for a cough to end
I'll wait for light to descend, please
Come true, all is well
It ends well, all is well
And how does it end, all is well
All is well, all is well
Don't lose your mind
Oh, this world, it ends well
Oh, this world, how will it end?
Oh, this world, it ends
Don't lose your mind
I'm a casket of ideas we dance ceaselessly
And I know where to find you
Aheading Amanah