Over the last two weeks, Andrew, we've generated $5.4 billion in BTC gains.
We're making $500 million a day.
I'm staring at my screen and we're selling dollar bills for $3,
sometimes a million times a minute.
And so it's not impossible. I mean, we may very well be the most profitable
company in the United States growing the fastest right now. Because there's
not many companies that are making $500 million a day doing what they're doing.
If you don't like Bitcoin, you don't want any piece of it. But if you like Bitcoin,
then this is a monster for you.
Music.
Welcome in to episode 37 of This Week in Bitcoin. My name is Chris.
Nice to have you here. That intro clip, of course, was Michael Saylor taking a bit of a victory lap.
I don't really have much to say on MSTR this week, but I do think there's a
lot to get into. And we should probably start with a macro snapshot.
We just got fresh government inflation data.
And we've also had some chopping price action with Bitcoin. We flirted with
100,000, chopped all the way down to 90.
Now we're kind of moving back and forth. A lot of people have asked why.
Pretty simple, really. Lettuce hands. People sold.
In fact, there was more panic selling in this last week than ever in Bitcoin.
Massive volumes. Billions of dollars of volume.
And you'll see a lot of quote-unquote analysts contributing to long-term hodlers profit-taking.
But that's just simply not true. You see, they're getting that because Glassnode,
which is famous for their on-chain data, well, they classify any wallet that's
like six months to a year old as a long-term hodler.
That's not true. That's not how this works. So if you look at the actual on-chain
data, the vast majority of people that are selling were people that bought around
50-58 earlier this year and then profit took.
They're not long-term holdings. Get out of here with that.
This is a natural process.
It flushes out the weak hands and it transfers Bitcoin to the stronger hands,
to newer hands. It's how new people can get in the market.
And to be honest with you, a little price consolidation on the way up, it's a good thing.
It firms up the pump. You see, because you build a new price floor.
And while we're doing this chop, our perceptions, they just change.
It's the weirdest human psychology.
I'll give you an example that's probably true for most of us.
If I came on the air right now and said, oh, Bitcoin's crashing,
it's a bloodbath, and it's down to $70,000, that'd be kind of shocking.
That would feel like a massive price drop.
Meanwhile, that was the price just 30 days ago on October 28th.
So it's kind of funny because on October 28th, we were celebrating that Bitcoin
finally broke through, easy for me to say, broke through $70,000 for the first time in four months.
Because for four months, for a lot of the year, our all-time high was 73,700 US dollars.
And then we finally broke through that on October 28th. And oh my God, it was incredible.
But now if we were to go back to that price point, it would feel like Bitcoin
was cheap, like the price had dropped.
That's just the human psychology of it. And this sort of sideways chop helps
build these psychological floors.
The realities are the Bitcoin fundamentals remain unchanged.
But the macro world around Bitcoin is very, very dynamic.
Like I said, we just got a snapshot of inflation.
And the data confirms all three inflation metrics are on the rise.
Yes, well, first, let's go through the three income and spending numbers.
This is a seven-parter for October.
On the income side, double expectations.
Instead of up three-tenths, we're getting up six-tenths. Up six-tenths equals
where we were in March to find a higher one.
You have to go to very beginning of the year in January up 1.4.
Yeah, not bad. Income's up back to where it was in January. That's good to see.
So this is a solid number. If we look at spending, also, as expected,
but solid, up four-tenths of a percent.
That follows up five-tenths of a percent.
Of course, a lot of that spending is on credit cards, but they're spending again.
Numbers have been strong.
Now, if we adjust for inflation and look at the real spending,
it's up one-tenth, up one-tenth, and that follows up four-tenths.
Up four-tenths was the second best of the year. Woo!
We are up one-tenth. Yeah! Yeah, we're the king of the world.
Now, the inflation numbers, we have four of them.
The first one, of course, is the price index month over month.
And we're expecting up 0.2.
It is up 0.2. But remember, for the last several months prior,
we've had lower numbers. If you look at where we were in May,
we were zero, then one-tenth, two-tenths, one-tenth in August.
So you can see that's been a bit of an uptick. Yep, it's sneaking back up again.
Now, let's take that same headline and go year over year, expect it up 2.3.
It comes in at 2.3, but that's not necessarily good news. And the rearview mirror was 2.1.
2.1 was the best going back to February of 21.
2.3 equals August to find a higher one. You go to the July when it was 2.5.
All right, so you see kind of the way the game works here is as long as the
inflation isn't above expectations, the market doesn't seem to freak out.
If they expect inflation to go up,
And it goes up, they're okay with that, as long as it doesn't go up more than they expected.
But the reality is, for the first time since February of 2022,
core CPI, PCE, and PPI, they're all rising at the same time right now.
And they've been doing so for several months. So it's not just one month of
data now, but several months of data.
Core PC inflation jumped to 2.8% in October.
This is the Fed's preferred inflation number. And that's, well,
that's going to impact rates. That's going to impact a lot of the decisions they make.
I think the obvious elephant in the room here is that inflation is not getting
down to the Fed's 2% target rate.
In fact, it's trickling up. Their preferred metric is at 2.8%.
Let's be real.
I need to say it. The actual inflation number is probably much worse,
especially because that number that I'm quoting there doesn't include fuel,
doesn't include housing, doesn't include electricity.
Certain aspects about food and medical and the auto industry. So, and coffee.
So it's not exactly an accurate number, but it's one they follow and it's been
ticking its way, its way back up.
So I think that's something just to kind of keep an eye on because the Fed's really stuck here.
They can't really keep interest rates high just simply because it means that
the debt service just becomes exponentially more expensive for the United States.
And they need some leverage. So we'll see. I'm going to keep an eye on this.
But inflation ticking up now, all three, the CPI, the PCE, and the PPI, that's bad news.
That is not great news. And we'll see where it goes.
Because I think it could have a direct impact on the Fed's willingness to raise rates.
Or lower rates, I should say. Perhaps both. Wouldn't that be a trick?
If the Fed lowered rates, that would be expected. But if they raise rates,
it would shock the market.
Music.
All right, well, I'm going to play some clips from a show I've never played
clips for on this podcast.
And that's the Joe Rogan podcast, because Mark Andreessen stopped by the Joe Rogan podcast.
It's, as always, it's a long conversation. I'll link to the entire thing.
Of course, Mark Andreessen is well known for being the co-founder of Netscape.
He's also just extremely active in Silicon Valley. His Anderson Horwitz Capital
Venture Firm backs a lot of different crypto projects, many of which I think are junk.
But he's an intelligent man. He follows the market pretty closely.
And he sat down with Joe to explain to the layman what's happened with the banking
system and Operation Chokepoint 2.0.
So before we get to Operation Chokepoint 2.0, which is this is just a great,
great explainer that just got blasted out to millions of people.
Let's start with Mark's explanation of how we got to all these banks that are
too big to fail and how we consolidated the banking industry in the United States and most of the West.
So pre-2008, pre-the financial crisis, there were many different banks in the
country, big, medium, small, and lots of new bank startups every year.
People would just start banks, entrepreneurial banks of many different kinds.
After the financial crisis, we had this problem called the too-big-to-fail banks, right?
The banks were too big. And so there was this legislation called Dodd-Frank,
which was regulatory reform for banking, which was going to fix the too-big-to-fail
banking problem. They implemented that in 2011.
I call that the Big Bank Protection Act of 2011. It was marketed as it was going
to solve the problem of the too-big-to-fail banks. What it actually did was
it made them much larger.
So those too-big-to-fail banks, the same ones we bailed out,
are now much larger than they were before.
The banking industry has concentrated into those banks.
All the mid-sized banks are being shaken out. And, you know,
periodically they'll go under.
Like the bank in Silicon Valley, it's called Silicon Valley Bank,
right? And, you know, it went under.
And this has been happening all across the economy. And then since Dodd-Frank,
the number of new banks created in the United States has dropped to zero.
Whoa. And so the banking system is being centralized basically into 10 big banks.
They actually have a term.
They have a great term called GSIB, globally significant something-something bank.
And so there's like 10 GSIBs. And then basically what's going to happen is those
are going to consolidate basically into the three big banks.
And if you get debanked by one of the big three. You're done.
You're absolutely done. But think about it from the other side.
If you're the treasury secretary and you want your political enemy debanked,
it's just a phone call, right?
Which is what has been happening, which was happening under the prior regime. Wow.
Right. And again, like at that... Zero. Zero new banks. Yeah, zero.
Literally, it was like cardiac arrest. It was like, that's it for new bank charters.
And we've had companies that have tried to start new banks.
And it's essentially impossible because you have to comply with the wall of regulation.
You need to go hire your 10,000 compliance people and your lawyers.
But you can't afford to do that because you're not big enough yet.
So you can't function. Like, you can't exist.
Wow. Like, it's ruled out. By definition, it's ruled out. You can't do it.
It's not financially viable.
Wow. Right. So that happened in banking. That's what they've been doing in social media.
It's been the same. And by the way, this has happened in many other industries.
By the way, this happened in the food industry. It's greatly consolidated.
That that's a lot of what's happened in that industry as well.
And it's the intertwining of government and the company, right?
Because at that point, it's like, okay, is this a private company? Yes.
Like, it's still a private company. It has a stock price. It has a CEO.
Does the CEO have to do everything that the relevant cabinet secretary tells him to do? Yes, he does.
Why does he have to do that? Because if not, it's going to be investigations
and subpoenas and prosecutions and prontological examinations for the rest of his life.
Wow. So that is the important context to understand and how these bureaucratic
agencies can work with the banks, even though they're private companies, to get to their means.
So that's the context you need to be aware of. Now let's get into Operation Chokepoint 2.0.
Mark talks about debanking that happened to some of the tech founders that he
knows. And when you listen to this clip.
At least for me, I can't help but think, man, if it can happen to these guys,
it can literally happen to anybody because these guys are well-known,
well-positioned, well-financed, and it's happening to them.
Elon explained that there's more agencies than there have been years of the
United States. Yeah, 450 federal agencies and two new ones a year.
And then my favorite twist is we have this thing called independent federal agencies.
So, for example, we have this thing called the Consumer Finance Protection Bureau,
CFPB, which is sort of Elizabeth Warren's personal agency that she gets to control.
And it's an independent agency that just gets to run and do whatever it wants,
right? And if you read the Constitution, like, there is no such thing as an independent agency.
And yet, there it is. What does her agency do? Whatever she wants. What does it do, though?
Basically, terrorize financial institutions, prevent new competition,
new startups that want to compete with the big banks. Oh, yeah. How so?
Just by terrorizing anybody who tries to do anything new in financial services.
Can you give me an example? Well, you know, debanking.
This is where a lot of the debanking comes from, is these agencies.
So debanking is when you as either a person or your company are literally kicked
out of the banking system. Like they did to Kanye.
Exactly. Like they did to Kanye. My partner Ben's father has been debanked.
Really? We had an employee. For what?
For having the wrong politics. For saying unacceptable things.
Under current banking regulations, okay, here's a great thing.
Under current banking regulations, after all the reforms of the last 20 years,
there's now a category called a politically exposed person.
PEP. And if you are a pep, you are required by financial regulators to kick them out of your bank.
What? You're not allowed to have them. What if you're politically on the left? That's fine.
All right. So Mark goes on to explain why any of this works in a country with
free speech, in a country where you're supposed to be able to start a legal
business and operate that local business.
This is where the government and the companies get intertwined.
Back to your fascism point, which is there's a constitutional amendment that
says the government can't restrict your speech. But there's no constitutional
amendment that says the government can't debank you, right?
And so if they can't do the one thing, they do the other thing.
And then they don't have to debank you. They just have to put pressure on the
private company banks to do it.
And then the private company banks do it because they're expected to.
But the government gets to say, we didn't do it.
It was the private company that did it. And of course, JP Morgan can decide
who they want to have as customers. Of course, right? It's their private company.
And so it's this sleight of hand that happens.
So it's basically, it's a privatized sanctions regime that lets bureaucrats
do to American citizens the same thing that we do to Iran.
Whoa. Kick you out of the financial system. And so this has been happening to
all the crypto entrepreneurs in the last four years.
This has been happening to a lot of the fintech entrepreneurs.
Is anybody trying to start any kind of new banking service because they're trying
to protect the big banks.
And then this has been happening, by the way, also in legal fields of economic
activity that they don't like.
So this is Operation Chokepoint 2.0. And you kind of have to understand how
1.0 came along to understand why this is 2.0.
So a lot of this started about 15 years ago with this thing called Operation
Chokepoint, where they decided to, as marijuana started to become legal,
as prostitution started to become legal, and then guns, which there's always a fight about.
Under the Obama administration, They started to debank legal marijuana businesses.
Escort businesses, and then gun shops, just like your gun manufacturers.
And just like you're done, you're out of the banking system.
And so if you're running a medical marijuana dispensary in 2012, like you, guess what?
You're doing your business all in cash because you literally can't get a bank
account. You can't get a visa terminal.
You can't process transactions. You can't do payroll. You can't do direct deposit.
You can't get insurance.
Like none of that stuff is, you've been sanctioned, right? None of that stuff
is available. And then this administration extended that concept to apply it
to tech founders, crypto founders, and then just generally political opponents.
God. Yeah. So that's been, like, super pernicious. I wasn't aware of that. Oh, 100%.
So it was Operation Shortpoint 1.0 was 15 years ago against the pot and the guns.
Shortpoint 2.0 is primarily against their political enemies and then to their
disfavored tech startups.
And it's hit the tech world. Like, we've had, like, 30 founders debanked in
the last four years. Real? Yeah, yeah, yeah. Yeah, it's been a big recurring pattern.
30. This is one of the reasons why we ended up supporting Trump.
It's like we just can't live in this world. We can't live in a world where somebody
starts a company that's a completely legal thing, and then they literally get
sanctioned and embargoed by the United States government through a completely
unaccountable... By the way, no due process. None of this is written down.
There's no rules. There's no court.
There's no decision process. There's no appeal. Who do you appeal to?
Right. Like, who do you go to to get your bank account back?
So this is why the crypto industry became such a huge lobbying force.
They had to push back against this. It was existential for them.
And this kind of stuff impacted Bitcoiners every single day.
Even right now today, it's impacting Bitcoiners. Look at Albie.
Albie had a wonderful custodial service going. And then they got spooked by
all of the enforcement via legal action. and decided to hard pivot.
Before they got in trouble because they just didn't know.
They're a U.S. company and they just didn't know. And so they pivoted to Albi
Hub, which is a great product.
It's very strong, but it doesn't offer the ease and convenience that a custodian service did.
I think for the long term, people are better off being self-hosting.
But there is a space in the market for users that just want to boost a podcast
to have something a little simpler.
And Albi had to run away from that market because they just didn't know what
was going to happen. If somebody was going to come for them,
if they, as Mark puts it, would end up in the eye of Sauron.
Now, I'm not a big Mark fan. You know, I think their company has backed a lot of crap.
But he definitely was boots on the ground for Operation Chokepoint 2.0.
So the man has standing in the space.
So I wanted to capture that on the show so we have that.
Now, let's talk about one of the potentially most bullish things for Bitcoin in 2025.
And that is the Bitcoin Strategic Reserve. And as you'll no doubt recall from
previous coverage, Senator Lummis is the one that's really heading this up.
She swung by Fox Business to talk about how she feels things are going.
And it sounds like she thinks they're going pretty well.
She talks a little bit about Trump's cabinet coming together,
which she believes is going to bring to fruition this Bitcoin reserve bill.
Things that President Trump raised during his campaign. And he seems to be assembling
a very pro-Bitcoin cabinet.
His leadership understand the assets, not only just Bitcoin,
but other digital assets and the opportunities for blockchain.
And it then moves into the whole AI culture as well.
So I see these things as being part and parcel of creating a 21st century economy
that has its anchor in the United States.
I think it's interesting that they're wrapping in AI, you know,
I guess ride that hype train, baby.
Right? I don't know. I don't know. But she also stopped by, that was Fox Business,
she also stopped by CNBC to keep the momentum going the same day, I believe, too.
We got off the gold standard a long time ago. My question is how much you would
spend tax dollars at a time when we're talking about trying to reduce costs,
how much would you spend on Bitcoin as part of this reserve?
We wouldn't have to spend any new dollars. We have reserves at our 12 federal
reserve banks, including gold certificates that could be converted to current fair market value.
They're held at their 1970s value on the books and then sell them into Bitcoin.
That way, we wouldn't have to use any new dollars in order to establish this reserve.
The United States already holds over 200,000 Bitcoin in the asset forfeiture
funds. So that would be the initial source of Bitcoin.
So no new money spent on this reserve.
All right. All right. There you go. Sell the gold. Buy the Bitcoin.
I bet the gold bugs just love that. I bet they just love that.
Brazilian lawmakers have proposed an $18 billion Bitcoin reserve in Brazil,
which would be about 180,000 Bitcoin.
So it seems like they're hungry over there as well.
The city of Vancouver just announced a proposal for a Bitcoin reserve.
States, up to three, are rumored in the next few weeks in the United States
to announce proposals for Bitcoin reserves.
Are you understanding how bullish this is? Are you getting this?
And then you combine all of this now with we've gone from the Chokepoint 2.0
administration to an extremely crypto friendly administration,
in part because they're pumping their own bags. I admit it.
They're pumping their own bags. And it seems that they are really considering
how to best set up the crypto industry to perform well.
And there is rumor that they may move all crypto administration under the commodities
and exchange group, the CFTC.
Which is very, very, very light touch compared to the SEC.
CFTC is much more kind of like do something and ask for forgiveness later,
where the SEC is very much an active enforcement agency with a much larger legal branch.
And that, to me, would be very, very good for all of crypto.
I don't know if it really affects Bitcoin much, but here's the quote from Fox Business.
Trump's may shift Bitcoin regulation to the CFTC.
According to Fox Business, again, I don't have any other source than this,
the Commodity Futures Trading Commission may expand its role to regulate cryptocurrency
exchanges and spot market handling for digital assets, even those classified
as securities right now, and move all of them over as commodities.
That's possible. The former CFTC head has also been floated as becoming a new
position in Trump's cabinet called the Crypto Czar. So it could happen.
And again like i said last week i think it's i think mostly that's good news
for all of the shit coins but it does also bear well for bitcoin as well so
this all seems like it's setting up pretty well so what are you going to do
pleb would bitcoin reaches three hundred thousand dollars,
are you going to sell are you going to profit take like everybody who bought around 50 just did,
You know, they held on to it for a few months and then they sold,
but they doubled in some of their profits.
So what are you going to do? I'm asking you, where do you start taking profits?
And I would like you to consider an alternative option. I've got no skin in this game.
But mark my words, there is a category in Bitcoin that is about to explode over the next year.
And it may mean you don't have to sell your stack to get access to its value.
Now, this is a very interesting interview. Andrew Hahn stopped by CNBC and just
listened to them fall over themselves,
trying to just wrap their old, ossified brains around what this company is doing.
They are integrating Bitcoin into commercial real estate loans,
and they just don't get it.
And it's brilliant. And I'm really excited to announce today on Squawk Box this
loan that we've just completed.
We combined a seasoned multifamily asset in Philadelphia, about 50 meters away
from the first bank of the United States, the one that Alexander Hamilton started.
We combine that asset with around 20 Bitcoin, and we provide it alone to refinance
the existing mortgage on the property to provide the asset sponsor some funding
for capital improvements and with the remainder to buy the 20 Bitcoin.
OK, we got to go backwards. Go ahead. You got to go backwards.
We're just going to slow the whole thing down. Everybody understands what happened.
OK, so there's a property. Yep. Physical property. Multifamily. Multifamily.
63 units. It's a multifamily property. the sponsor, effectively the owner of
that property needs a loan that's right okay, they come to you that's right
okay, you say we'll provide you the loan.
In the form of? A loan. A classic loan. That's right. Okay.
So you're going to give them cash. That's right. Term financing. Term financing.
And how long is the loan? Ten years. Ten year loan. Okay. That's right.
Above market rate or below?
No market rate interest rate. I'm just trying to slow the whole thing.
Okay. Now let's introduce the Bitcoin piece into it. That's right. So no, no.
Explain how the Bitcoin piece then relates.
So the loan has been provided. The use of proceeds is to pay off the existing financing.
The use of the proceeds. Of the loan. Of the loan. Just to retire the existing mortgage.
Right. So it's an old mortgage. Gone. They're going to pay the old mortgage
off. It's been paid off. Okay.
Now they have a little bit extra money to make some improvements in the property.
Right. So a little bit extra cash. So the amount of money you've lent pays off
the old loan. That's right.
It's also, you have a little bit extra to fix stuff up. Improve the property,
fix stuff up. Yep. And then with the remainder, which is a little bit more.
A little extra, an extra turn. And that, instead of cash out,
it's Bitcoin in. and we use it
to purchase some Bitcoin and add it to the collateral package of the loan.
So now our loan is supported by both the traditional asset, the 63-unit apartment
building, and the Bitcoin.
So this is why, and they don't get it, they will roll right over it.
This is why it's so great for the lender.
It's also, it's kind of great for the lendee as well.
If something goes wrong and you can't make your mortgage payment,
let's just call it a mortgage payment.
They don't have to go through, they, the lender, don't have to go through all
the rigmarole of going out, assessing the property, repairing damage,
deciding if they want to try to put it on the market, what they're going to
do, if they're going to re-underwrite it.
That is, if you've ever been involved in this process or watched anybody involved
in the process, that can be a six to nine month process.
Just that part before they even begin to reclaim their money.
But with Bitcoin, they can do a margin call. They have a provable scarce asset
that they have the wallet address to.
They can always verify its existence, and they can margin call it whenever the terms decree.
So if the terms say you have 48 hours to make good on your loan,
then you don't do it. They just pull the value out of the Bitcoin.
The Bitcoin was bought with the loan, so as a consumer, you're not out anything
directly, and your loan's balanced out. It reduces risk for the lender,
and it covers gaps for the lendee when they can't pay.
It's brilliant, especially on a four-year timescale where no one has ever lost
money on Bitcoin in the history of Bitcoin.
It's actually really clever, and CNBC will miss it. Bitcoin and add it to the
collateral package of the loan.
So now our loan is supported by both the traditional asset, the 63-unit apartment
building, and the Bitcoin. Okay.
The loan, it was maybe $2 million more. So that's how you get the Bitcoin out.
Exactly. Exactly right. On the assumption that the Bitcoin is going to rise
faster and that will become an asset. Over the life of the loan, for sure.
Yeah. Do you think maybe? Do you think maybe the Bitcoin might rise faster?
Maybe over the life of that loan? Yeah. So we think on the downside,
this provides us with much better protection compared to a traditional lender.
Because a traditional lender, if something goes wrong, they have to recover
against that particular building, which is idiosyncratic risk.
Something might happen with the maintenance or what have you.
You see, they just miss it right there.
That was the brilliance of it.
Commercial real estate is a shitcoin. Bitcoin is superior. Bitcoin doesn't require maintenance.
Bitcoin doesn't have property taxes. Bitcoin doesn't have tenants that flood a floor.
Bitcoin doesn't accidentally have the house burned down.
It is a safer, superior asset. It's once banks realize this, it is game on.
And the CNBC panel here, right over their head. Better protection compared to a traditional lender.
Because a traditional lender, if something goes wrong, they have to recover
against that particular building, which is idiosyncratic risk.
Something might happen with the maintenance or what have you.
Because Bitcoin is so low risk, it is verifiable.
There could be a multi-sig setup like Unchain does where you have a key,
the lender has a key, and a third party has a key.
And if you can't make your loan, they can margin call you.
That makes their risk very low, which means once all of this is normalized,
the interest rates will be low.
Because the interest rates are a part, in fact, a factor of the interest rate
is the risk that the lender is taking on.
But when you have a provable scarce asset that they have digital access to programmatically.
That could be margin called with just, you know, a click of a button.
That makes their risk a lot, lot less, which means the interest rates can be lower.
And what that means for you is you can get access to more credit,
to more lending, without having to have the credit, without having to have a
great credit score, without having to have gold or a house, but just Bitcoin,
just by stacking sats.
You have a good asset that they could use as collateral. It requires conviction
on your end that Bitcoin is not a volatile asset over time. Over time.
And that is either going to go up or at least stay where it is.
Well, that's by fusing the Bitcoin with credit and by fusing it with traditionally
financeable assets, it gives us the luxury of expressing that medium term view on Bitcoin.
And that's what's key. It's volatile in the short run.
You know, I mean, minute by minute today, who knows? it could cross $100,000.
That would be exciting. How long is the loan?
Ten years. Ten years. And the minimum hold period for the Bitcoin is four years.
So what we say to the borrower is we say, look, you can repay the loan at any
time for any reason with no penalty, which is a really valuable feature compared
to a traditional loan. Yeah, that's like a home mortgage.
Like a home mortgage almost. That's very unusual for commercial financing.
But what we do say is that to the extent that the loan is repaid at year four
or earlier, will release the property, but the minimum length of time that the
Bitcoin has to stay in escrow is four years.
Mark my words, this is going to be a massive industry.
And here's my question to you. At what point are you going to take profits?
Boost in and tell me. And if you're going to sell some Bitcoin.
Why wouldn't you just take out a Bitcoin-backed loan? There's no credit check.
Worst case, Bitcoin dips hard, and you get margin called, and then you sell
the Bitcoin that you were already prepared to sell in the first place.
And if the market doesn't take a dramatic dip, you don't have to sell that Bitcoin,
but yet you still get access to some of the value.
And if the market rips while you have the loan, say you took out a loan at $58,000
and now Bitcoin's worth $98,000, well, the gains of your collateral just paid
off the loan or you pay off the loan with fiat and you keep the gains.
So you might not even end up having to sell your Bitcoin in the first place,
but you still get access to the capital.
And a lot of these, you over-collateralize. So you do like, say you want a $5,000 loan.
Well, then you put in $10,000 worth of Bitcoin.
You're over-collateralized, so that way you can absorb some of the price fluctuation.
And you can always add more collateral.
So why wouldn't you just take out a Bitcoin-backed loan.
Over selling your Bitcoin. Because selling your Bitcoin is a taxable event.
But you take a Bitcoin-backed loan, you might not ever have to sell.
You might not get margin called.
So I don't understand why the Bitcoin community is so anti-Bitcoin-backed loans,
because I think it's going to be one of the most incredible financial tools
available to Bitcoiners.
And as you stack your sats, you are giving yourself access to more capital in the future.
And some, like Unchained, you don't have to put all of it in their hands.
Some of them you do, obviously.
But I think this is going to be a market where almost every popular Bitcoin
app just has a lending feature in there.
And you'll send your sats, maybe Unchained or over Lightning,
into the app or into their custodial service, which we'll all advise you is
a bad idea, but that's how it's probably going to work.
They're going to hold your keys for a while, which is probably a bad idea.
But again, why don't you get off your high horse?
You were just about to sell those coins so don't go on and lecture me about
somebody else holding your keys because you were just about to sell your sats
so it's not so bad if you transfer them to the cash app or the strike app or
whatever unchained capital or salt lending whatever it might be because you
were just about to sell them anyways,
I don't recommend it and I think as this goes on this market will become more
competitive and more options that don't require custody will become available.
But we're going to start to see a lot of popular Bitcoin apps offer this functionality.
And I just happened to catch Strike CEO Jack Maulers on a live stream yesterday
or the day before, I can't remember.
And he was asked by the live stream, what do you think about Bitcoin-backed loans?
And he doesn't come right out and say Strike's about to offer this.
But tell me if his answer isn't basically Strike's about to offer this.
What do you think of these collateralized loans with Bitcoin?
I think collateralized loans in Bitcoin are a huge deal. huge deal.
Why do I think that they're so cool? Because listen, Bitcoin is close to $2 trillion market cap.
That is $2 trillion of new wealth, new capital that's been created for people, right?
15 years ago, Bitcoin owners and holders have made $0.
15 years later today, Bitcoin Bitcoin investors, holders, owners have made $2 trillion.
That's a lot of money that people have made that they want access to,
but they don't want to sell the Bitcoin.
How do you get access to the wealth without selling the Bitcoin?
You get a loan. And that's the same thing in other assets too.
How do you get access to the wealth of your home without selling your house?
Let's say, for example, I wanted access to this house and its wealth,
but I also need to sleep in it. What would I do?
I would get a mortgage. I would get a loan.
So I think Bitcoin backed lending is huge. Now it's volatile.
So you have to be responsible.
You have to be an adult. You have to do math.
Do not do it irresponsibly. Make sure that it's with an institution that you
trust. Let's not be hypothecating all of those normal checks and balances.
But I think Bitcoin lending is massive because everyone wants to hold Bitcoin.
The number one rule, Saylor said, never sell your Bitcoin.
But you got to get access to the wealth because there's a lot of new wealth
created and people want access to it.
So I'll ask you this. Why would you not get a Bitcoin backed loan over selling your sats?
I just don't understand it. Like I cannot conceive of the scenario where selling
your sats is outright better than getting a Bitcoin backed loan.
And I'll take this a step further. I actually put some skin in the game here.
I have a couple of different repairs across a couple of different vehicles that
I need to get done. And so when Bitcoin was $57,000, I took out a $5,000 loan
against my Bitcoin, just a small portion of my Bitcoin.
And now Bitcoin's worth $98,000 or around 95 as I record.
I could basically pay off that entire loan with my collateral.
Now, I don't sell my SATs, so I'll pay it off with fiat.
But I'm using the SALT lending platform simply because they have a feature that I think is kind of nice.
And I don't think they're the end all yet, but there's just not a lot of options
for Bitcoiners because things like Unchained Capital, they have a minimum of
like $100,000 loan for a small business.
And I'm not sure if they even offer something for personal anymore,
where salt lending is like $5,000, I think is the minimum, maybe $1,000.
And they have a feature in there where if the Bitcoin price does start to crash,
they can swap your Bitcoin over to Stablecoin, hold it in Stablecoin during
the price dip, and then move it back into Bitcoin when the price starts to go
up again, preventing a margin call.
That's a brilliant idea. You also can load some Stablecoins into your wallet over there.
And if there is a need to top off, it can pull from the Stablecoins instead
of pulling from your Bitcoin collateral. That's also pretty brilliant.
And they have a nice app that helps you manage where you're at with everything.
So I'm experimenting with this so that way I can put my money where my mouth
is because I needed access to some of that capital.
I had cars to fix and I'm not going to sell my Bitcoin to fix a depreciating
asset. That's ridiculous.
But I might take a little bit of a tiny loan against my overall stash to get that stuff done.
Now, had I taken that loan out at $57,000 and the price crashed,
well, I would have had to put more collateral down.
But following the trends like I do and this is one of the, I think,
I hope one of the benefits you get from this show is the analysis,
following the analysis that I do for this show my analysis was quite simply
that Bitcoin was about to rip and that if I took out a loan around $57,000, $58,000,
I would very likely end up doubling the value of that Bitcoin before I needed
to pay off the loan and I already have I'm only a couple of months into it because you can do the math,
And I've already, essentially, with collateral, paid off the loan.
I have not cashed out that collateral.
But to me, that was just a no-brainer as opposed to cashing out at $58,000.
How much would that suck right now if I had cashed out at $58,000?
And I'm sitting here looking at $95,000 Bitcoin.
I still have that Bitcoin. And I have access to a little bit of cash.
So again, why would you sell sats when you could take out a loan?
Boost it and tell me your thoughts on this. I'm looking for somebody to kind
of, I don't know, check me on this and see what I'm missing because it just
seems like this is going to be a massive product offering in the future when
you have a pristine asset like Bitcoin.
And even with the services that are available today, like salt lending, it's pretty nice.
I can get an ACH transfer into a bank account or I can get it in Stablecoin,
whichever I prefer to work with.
And then you pay it off with Stablecoin or your collateral.
That just like and you can you imagine when strike when
you open up the strike app and one of just the buttons one of the tiles is just
get a loan and the loan isn't based on your credit score but it's based on your
bitcoin balance there's nothing more fair than that that's as fair as a market
gets tell me what you think what am i getting wrong or maybe i'm getting it
right boost it and let me know.
Music.
All right, coming up on the show, your boosts, of course, a important legal
fight update, massive win, some project updates that you definitely need to
know about, and a final clip of the week that's just a little bit of a victory lap.
So before we go any further, I'd like you to know that I have some affiliate
links in the show notes. I have no official relationship with these companies.
They're just companies I use. I think they have the best services.
And if you use my links, you support the show.
Number one, if you're in the U.S. and you want to stack sats with no drama, no risk, use River.
They've got proof of reserves. You can check yourself. They've got a brilliant interface.
They are a Bitcoin-only company that manages their own reserve.
And they let you withdraw over Lightning.
Great interface, too, for DCA. That's River. I'll have a link in the show notes.
If you want to spend your sats thebitcoincompany.com this
is a great way to get like an amazon gift card for christmas purchases and
you get sats back and the show gets sats back use the
promo code jupiter or use the link in the show notes that's thebitcoincompany.com
i also pay all my bills with fold the fold card gives you sats back when you
pay your bills it's like a bank account that gives you sats instead of points
i got a link to fold and you may check i may put a link to salt lending in there
too i've been liking what they offer so check out the affiliate links at the top of the show.
It's a great way to support the show. Of course, you can also boost.
Music.
And we do have some great boosts this week, and our first baller boost is from
Indigo Eagle, 85,333 sats. Hey, rich lobster!
Oh! He says, this is the first MSTR breakdown that makes sense.
Thank you very much for that signal.
Well, Mr. Eagle, thank you very much for that boost. I really appreciate it,
and I'm glad that the MSTR breakdown makes sense. I wasn't totally sure, to tell you the truth.
SatSquatch is back with 65,000 sats. All systems are functional.
Another thought-provoking adventure in Bitcoin land. Great clips and insights.
Thanks for the great inside track into Sailor.
Well, SatSquatch, thank you very much for supporting the show.
Banks are Ponzi schemes run by morons. It's nice to hear from you.
We got 50,000 sats from user 3833.
You gotta set your profile in Fountain. Oh, my God, this drawer is filled with
fruit loops. And he sends us a big old row of ducks.
Music.
Thank you very much, user 38. I don't know who you are, but I appreciate the value.
Bobby Pin comes in with 10,000 sats. It's over 9,000!
He sent some value to our artist. Thank you very much. And then he says,
I'm realizing I might need to listen to these episodes twice to get all the information.
So enjoy the double sat stream.
Hey, that's a perk. Hey, maybe there you go, podcasters.
It's a business model. Sometimes my genius is, it's almost frightening.
Make the show so complicated they gotta listen twice and get double the sat
stream. Should have thought of it sooner.
Thank you for the boost. Really appreciate it, Bobby Penn. Ace Ackerman's back
with a row of ducks. And he just says, boost!
Thank you, Ace. Nice to hear from you. Northland HODL is here with 2,121 sats.
You know what? I think somebody put some weird odds on this one.
Never tell me the odds. Yeah. You got to be careful because you'll end up with
Froot Loops in your drawer.
Oh my God, this drawer is filled with Froot Loops. And Northern Hoddle says,
Moscow time, 9.99 incoming.
Thanks for the work. What does that mean?
Are you from Moscow? That would be awesome. I don't think I've ever heard from
a listener in Russia. If you're listening in Russia, please let me know.
But thank you, Hoddle. It's great to hear from you. If you are,
even if you aren't in Russia, I mean, if you are, I'm going to be like extra
impressed. But even if you're not, I still like you.
Chatty Mike comes in with 6,000 sats.
I love the idea of the Bitcoin reserve. We squandered our oil reserve in the
UK, and it seems sensible.
A long-term policy to invest and keep debt down for future generations.
I hope you guys get it, but I worry about vested interest spiking it.
I'm stacking and cracking, but looking for alternatives. I wish the UK was as pro-Bitcoin as the US.
Maybe we will catch up. I'm a big fan of the show and appreciate you trying
to keep things apolitical and focused on the Bitcoin.
Oh, thanks, Chatty Mike. Yeah, I was just looking. It looks like there is some
crypto regulation coming your way.
And I don't have a complete grasp on it, but it does seem like there is some
draft crypto regulation and that they kind of have a goal to figure it all out by 2025.
I'm wondering what that will lead to, obviously. I'm a little nervous,
but I'd love it if you shared any thoughts as you hear about it.
I do think it's exceedingly unfortunate that the UK has had such a bad version
of Bitcoin painted for them.
I talked before about the BBC's coverage being extremely negative.
And they have been so ravaged by inflation that people could have really used
the tool and instead they were robbed of that opportunity because of bad information.
And so, Chatty Mike, pat yourself on the back because you're one of the rare
ones that saw through that.
And I don't know, man, I am proud to have you as a listener.
If you saw through that and you're listening to this show and you're coming
from the UK, that's pretty awesome. Thank you, man. Appreciate the boost.
Open Source Accountant is here with 10,000 sats. Put some macaroni and cheese on there, too.
Just checking in after that bomb cyclone. Hope you and the family are well.
Thank you, open source accountant. That's really kind and considerate of you.
I prepared, man. I, like, was, because, you know, they were telling me where
my rig is at, where I have my RV parked.
They were telling me 70 mile per hour winds, and they were telling me here at
the studio, 60, 65 mile per hour winds, and we have a mesh-tastic node,
like, mounted to the roof, and, you know, The RV doesn't really like those kinds
of winds when you have the slides out.
So I prepped the whole yard. You know, I even took my smoker down and like put it away.
I wrapped all the barbecues up real tight and made sure I had like zip ties
around the covers and all that so they wouldn't blow off. I took my Starlink down, dude.
I took my Starlink down. I brought my slides in on the RV so the wife and I
were like living in tiny bus land for a night.
And it ended up not being bad at all in my area. We did lose power at the studio
for a little bit. And the further south you went, the worst I got.
It was really bad in some areas. And some areas were out of power for like a week.
But up where we're at, it was like one of the more minor windstorms of the year.
The windstorms that came the next couple of days afterwards,
like nobody even talked about, were worse.
So the preparation was somewhat worth it. But thank you for thinking about us,
open source accountant.
I appreciate that and the value. Now, how about this?
Nakamoto 6102 comes in with 3,000 sats.
And they're giving me the hang loose sign. To that, I say to you,
live long and prosper, sir. Live long and prosper.
Now, Bitcoiny97 is here with the Jar Jar boost. That's 5,000 sats. You suppose.
And he says, Bitcoiny. I agree. We need a Bitcoiny sound, you know?
We need something kind of just for you.
Security authorization accepted. Yeah, all right. Well, you heard the board accepted.
That rounds us out. Thank you, everybody who boosts in above 2,000 sats.
We got a few under 2,000, but I cut off there just for time on the show.
We had a nice showing with the streaming, too. 44 of you out there just stream
sats as you listen to the pod. What an incredible way to give value back.
Collectively, you stacked 58,473 sats for the show.
Now, you combine that with those of you who decided to boost into and give me
a message to read and chat with me, which I always appreciate.
We stacked collectively for the show 297,582 sats.
Music.
Not bad at all. If you'd like to boost the show, get a new podcast app like
Fountain FM or any of the other ones listed at podcastapps.com.
You could go all the way from they'll host it for you to you host it all.
Just depends on what you like.
Then you send your message and your stats into the show.
And I'll read it on the air. And I stack to help support the show.
Thank you, everybody. Appreciate that very much. And I hope to hear from you.
This week as well. Let's move right along because I have so much more to get
into and the show is already running too long.
How did this happen? Where did I go wrong?
Music.
Okay. I have some good news for you.
The U.S. Appeals Court overturned sanctions against tornado cash.
The Fifth Circuit Court of Appeals determined that the Office of Foreign Asset
Control exceeded its authority by adding Tornado Cash to the specially designated
nationals and blocked persons list.
You don't want to be on the SDN list, boys.
They said, quote, We hold that Tornado Cash is an immutable smart contract.
The lines of privacy-enabling software code, they're not property of a foreign
national entity, meaning, one, they cannot be blocked.
Two, OFAC overstepped its congressionally defined authority when it ruled.
The decision overturns a district court of Texas ruling that previously upheld
OFAC's actions under the International Emergency Economic Powers Act. Yes.
The court then determined that Tornado Cash smart contracts are merely just lines of code.
They don't actually qualify as services or property. It also concluded that
Tornado Cash does not own or control these contracts because the developers,
they've relinquished any role in their operation, and yet it continues to run.
They say, quote, the immutable smart contract at issue in this appeal are not
property because they are not capable of being owned.
More than 1,000 volunteers participated in the, quote, trusted setup ceremony
to, quote, irrevocably remove the option for anyone to update,
remove, or otherwise control those lines of code.
And as a result, no one can, quote, exclude anyone from using the TornadoCache pool smart contracts.
So, essentially, look, you dummies, it's still running, and 1,000 people participated
in a ceremony to remove any one person's ability to control it.
This is pretty good news for two of the developers.
But there's a third developer who is facing legal troubles in the Netherlands.
Earlier this year, Dutch judges convicted him of money laundering and sentenced
him to five years and four months in prison.
This does not necessarily change that situation for him.
But it is massive for contracts as code, I suppose.
Now, we do have some project updates you need to know about.
And one is for those of you that are stacking sats with Swan.
Swan customers are being charged up to $125 admin fee because the company that
Swan uses to custode your Bitcoin have decided to do that.
And Swan is giving you credits in the form of fee covers.
So they're going to withdraw the fee, Fortress is, from your Bitcoin stash.
And SWAN is going to cover that
by covering fees for future purchases of Bitcoin you might do with SWAN.
I like Swan. Well, I mean, I used to. This is why I recommend River.
We're like on the fifth issue with Swan in the last year and a half.
And River's gone from strength to strength.
And I hate to be this guy, but this is so embarrassing.
Could you imagine just having $125 a month of your hard-earned sats just taken from you as a fee?
And then, oh, by the way, if you want to buy more to replace it,
well, we'll cover your fees.
Get the hell out of here with that come on so I'll have links in the show notes,
so you have more information and then you know as a little holiday treat I'm
going to stock your stuffing with a curated list of liquid network resources,
liquid network just doesn't get enough love you know I look at all of the trouble
podcasting 2.0 is having with Albie and I think you know there was another way
boys and then of course you know bolt 12 comes along, but we're going to build everything on Bolt 11.
But in the show notes, I have a list of curated Liquid network resources just
to help explain what Liquid is if you're kind of still not really fully on board,
and some of the cool apps you can use to get insights into how the Liquid network works.
And then check out in there, I'm not going to play it on the show because it's
pretty long, a fantastic video
by Koss' CEO who catches a Bitcoin scammer posing as Coinbase support.
And I've, I actually got this call. I didn't fall for it, but I got a call saying
that somebody was trying to reset my Coinbase password and they wanted to help me.
That scam is meant to steal your Bitcoin.
And somehow the Casa CEO, he got this guy to admit everything.
The guy just admitted everything, how it all works. And it gives you massive
insight into how these scams work. I'll have a link to that in the show notes.
Music.
The week. I'm going to play this for you.
Not because I love dunking on politicians, but that is part of why.
But because I think there is actually a fundamental lesson to learn from this clip.
This is from the heat of the political season up in Canada.
And this is Prime Minister Justin Trudeau, warning everyone listening to stay away from Bitcoin.
So beyond having a plan to make people mad and amplify and reflect back that
anger, we haven't really seen a lot of concrete proposals from Mr. Paul yet.
I mean, he did make one. That's not fair. You're right. He had one great opportunity
for people to opt out of inflation. He recommended this last spring.
You can opt out of inflation if you invest your money in Bitcoin.
Yeah. No, no, no, no, no, no. He stayed up late, watched all sorts of YouTube
videos, and came to that conclusion. He said that himself.
Buy Bitcoin, opt out of inflation.
Well, any Canadian who actually listened to him, maybe that's why those guys
with the flags are so mad at me, any Canadian who listened to him would have
lost more than half their life savings since last March. Ooh.
That's not responsible leadership. No.
No, and you can hear the crowd. Oh, yeah, the crowd. Because they're all a bunch
of idiots. They're all with them.
So Bitcoin is up 450% since Justin Trudeau said anyone who bought Bitcoin would
lose more than half their life savings.
On November 19th of this year, Bitcoin flipped the Canadian dollar.
Bitcoin is now worth nearly $135,000, $250,000 in Canada, in Canuker dollars.
Between the start of the year and mid-November, the Canadian dollar has depreciated
64% against Bitcoin just between the beginning of this year and the middle of November.
The Bitcoin market cap in Canadian Canucks is currently worth $2.68 trillion.
The Canadian Canuck itself is only worth $1.3 trillion.
So anyone who bought Bitcoin when Justin Trudeau said that and held it has made a 450% profit.
So that means as time goes on, because anyone who holds Bitcoin for a period
of four years is in profit, But as time goes on, as we reach that four-year
mark, this gets even more embarrassing for Justin Trudeau.
But worse than that, Justin Trudeau laughed and mocked something that could
have been a tool for the very middle class he was stumping to get the votes for,
all in the service of just dunking pathetically on a political opponent.
He robbed everyone listening to his words, which I would think a lot of people,
being the prime minister takes seriously, the opportunity to protect them from
the ravages of the government's own policies. You understand?
It's insidious. And then when you consider the fact that he probably did it,
it's because the internal polling just told him Bitcoin wasn't very popular,
as you could hear from the reaction of the crowd. So what a great thing to dunk him on.
It was probably as cynical as that calculus.
He didn't give a shit what happens to your family wealth. He doesn't give a shit.
As long as he got to dunk on his political opponent, he doesn't care if you
just missed out on 450% gains.
That's awful. Do not let these politicians scare you away from protecting your family wealth.
Music.
That wealth-preserving technology. As I record, Bitcoin is at $96,530.
Shows you how bad the Canadian dollar is doing.
Sats per dollar are 1,036 sats to one USD greenback.
We are up 2.3% since the last episode, down 3.2% from the all-time high.
The network is doing quite strong. I'd like to see some more nodes on there.
I see people didn't take my advice.
There are 19,687 reachable nodes. Maybe you all spun up some Tor nodes.
I'll give you some credit for that.
The all-time high price, as we sit here right now and say to the network,
is 99,740 USD greenbacks.
That was set on November 22, 2004. So we're down 3.2% from the all-time high.
But I'll tell you, it feels pretty great where I'm sitting at.
96,000, 100,000, 101,000. It all feels pretty great, baby.
The state of the Bitcoin network is very strong.
Music.
If you made it this far, links at thisweekinbitcoin.show. This was episode 37.
Of course, I'd love it if you recommended it to somebody who just might be a
little curious about the orange coin.
Maybe it'll help them get on the right and narrow and get away from all those meme coins.
I'd love it if you boosted it with something that I missed. Maybe I got a bad
take, something I should have talked about.
And of course, your thoughts on a Bitcoin loan versus selling your Bitcoin.
I would love for this to be the number one Bitcoin podcast for the Jupiter Broadcasting
community and the podcasting 2.0 community.
For that, you got to share it with somebody. And of course, it means I love
to play a Valueverse song.
And I'm playing a brand new song just came out. It's Be the Wheel from Theo.
Music.