Welcome in to This Week in Bitcoin, episode 96.
My name is Chris, chrislas.com, jupiterbroadcasting.com.
The system is under stress.
Everywhere you look, the legacy system looks fragile, expensive, political, and definitely narrative-driven.
No doubt about it, more than ever, they're trying to keep a breaking system propped up with more debt, spin, and promises.
And Bitcoin just looks better than ever.
Just sitting there, clean alternative, TikTok, next block.
But instead of just telling you all of this, I'm going to try to make the case today.
Well, there's a lot of tailwinds, as they like to say right now.
And we'll start with what seems to be the big one.
And that would be the Iran War, which may be developing into a bit of an energy war.
So before we get into the Bitcoin, we need to talk about the Iran, as they like to say, the Iran.
What, would you run a marathon?
Because this war is really going to be very, very, it already is.
I'll get you the numbers here in just a moment.
But it's going to be very expensive and it could make energy even more expensive, which, of course, they're going to have to, you know, borrow to cover.
We'll get into all of it.
I have the numbers for you, but we start with today's news.
It appears that we've now entered a new phase of the U.S.-Israeli assault on Iran,
an operation, a campaign that's almost three weeks old,
with an attack claimed so far by Israel on a major gas field in Iran.
This has incensed the Iranians, whose official media are now publishing lists
of energy sites in neighboring Gulf Arab countries
in what appears to be a clear telegraphing of a threat to strike those in retaliation.
This has had the makings of an energy war for several days now with Iranian attacks
on energy facilities in some of its neighboring Gulf Arab countries.
It appears now that this is officially a back and forth energy war
and the Iranians are prepared to escalate further.
Of course, it's not just the infrastructure itself, but it's also shipping.
And I'm starting with this because this obviously has the biggest day-to-day impact on just Western society in general and possibly long-term inflation.
How long? I'm going to ask you to pull out your geopolitical crystal ball.
How long can we expect these higher prices?
You should bet on Kalshi, right?
I'm going to take what you say and go straight to my phone.
So this is really all about the Strait of Hormuz, right?
That very important choke point that has been essentially blocked.
It doesn't mean that oil is not getting there, right?
Saudi Arabia is able to send it via pipeline, the UAE as well, but not as much as traditionally goes through the strait.
And so every oil analyst that I have talked to says you are not going to see oil come down and therefore gas and diesel until it is safe or shipping companies feel like it is safe to pass through that.
You know, it does sometimes come down to feels.
But we have perhaps, depending on the length of this, a bit of a awful brew stew kind of thing here.
So you have energy prices. Obviously, that makes everything more expensive, including the military operation. But on March 11th, the Pentagon briefed Congress and said the first six days of the war so far have cost $11.3 billion. This is described primarily as munitions replacement costs. It understates the total, officials noted, because munitions alone in the first two days were $5.6 billion.
man so if you give the daily rate some of the numbers they gave us get ready for this the total
cost as of today march 18th as i record for this war so far is estimated to be between 25 and 30
billion dollars now longer term projections are murky it really depends on the length but it could
range anywhere easily between 40 and 95 billion dollars not including broader economic impacts
And amongst this, the Department of Defense is expected to ask Congress for an additional $50 billion in funding to be approved immediately.
That's on top of their record-breaking $925 billion year 2026 defense budget.
They're like, well, you want war? We didn't have this war in our budget, so we need another – even though they supposedly have been planning this for years, they didn't have this in the budget.
So they need another 50 bill on top of the 925, which is already historically high.
What's wild about this is President Trump has proposed a record breaking one point five trillion dollar military budget for next year.
Yeah, you heard me right. One point five trillion dollar budget.
He's called it his dream military. So let's work with this for him for just a moment.
Currently, today, the U.S. is spending about a dollar forty eight for every one dollar it takes in.
If you set aside the tariff revenue, which so far has been $144 billion,
so it's kind of a drop in the bucket, but it's there.
But we're setting it aside with all the Supreme Court stuff going on.
Without tariff revenue, the U.S. is currently on pace to collect roughly $4.8 trillion
to $5 trillion from traditional taxes.
That's really good.
So best case scenario in 2026, they're going to make about $5 trillion from taxes.
But projected spending, including the war and domestic programs, is estimated to be $7.4 trillion.
So they're going to at best take in five.
And with current budget spending, they're going to spend $7.4.
Now, if the military gets their $50 billion bump for the war in Iran, that puts the total yearly budget for the military at $975 billion.
dollars. But friends, that ain't it. Because there's hidden military spending in the one big
beautiful bill passed last year. It front loads this year an additional $152 billion of military
spending. So the base budget plus the Iran war puts their budget for this year at $975 billion.
The U.S. defense budget for 2026, I repeat, will be $975 billion.
Are you with me so far?
So we're almost at a trillion dollars just this year.
And Trump's asking for $1.5 trillion for next year.
That's a ludicrous amount of money.
And the actual amount of money being spent by the Department of War, once you factor it all in,
is basically at a trillion dollars right now.
And if the Congress critters just accept the current spending
and just add a little bit,
you could see them coming to some sort of compromise in 2027
of a military budget of $1.2 trillion.
It's not that unreasonable.
I mean, it is.
But if they're spending a trillion dollars this year
and Trump's asking for $1.5,
what do you suppose the chances are they land somewhere in the middle?
Right?
some kind of compromise, like a $1.2 trillion compromise.
Could be more, could be less.
Probably more.
If they officially pass that budget, around a $1.2 trillion budget,
I cannot stress to you the change just that alone would make
in the fiscal situation in the United States.
We would go from severe strain to a unbelievably unprecedented
historical deficit.
I cannot. You would go in just that one move alone. The annual deficit would grow by nearly nine percent overnight.
Instead of borrowing approximately six point five billion per day to keep the government running, the U.S. government would need to borrow around seven point four, seven point five billion dollars every single day.
if they pass even less than what Trump's asking for,
they will have to borrow $7.5 billion every single day
to keep the lights on and the military funded.
Well, well, I had to get out of my seat for that.
I mean, I literally had to get out of my seat for that.
We're talking about trillions and billions here.
And what happens is they just get further and deeper
into the interest trap.
Because as the debt grows, you know this,
if you have a credit card, so do your interest payments.
If the interest rates remain elevated to combat inflation, which could be caused by an energy war, well, then the U.S. could soon be spending more on interest payments than the military itself.
Yes, even at the $1.2 trillion level, if they bump it for 2027 to $1.2 trillion, we'll still end up spending more on interest payments alone, not going to principal for our debt.
There is really no choice between rapidly devaluating the dollar, inflation, or some sort of aggressive austerity measures that would get everybody out of office.
They're just not going to do it.
So if they even throw a few more billion at the military, we're going to have to borrow $3 trillion a year just to keep the lights on.
And without the tariff revenue, the U.S. will add to the national debt at a rate of roughly $8.2 billion per day.
Now, if you add the tariff revenue and there's a little bit better, like a couple billion, you know, like it goes down to like seven or six.
But without the tariff revenue, if they don't get that, it's 8.2 billion per day if they up the military budget at all anymore.
The only way to fund this dream military is to dream up the money.
It's baked in.
It's absolutely nobody's talking about this, but it is absolutely outrageous.
There is no stopping this train.
The lever you have pulled breaks.
He's not in service.
Please make a note of it.
The other thing that everybody's crying Black Swan about,
which I think is not nearly as bad as what I just talked about, but it is something to mention,
is this private credit situation. I brought this up, you know, mid, late summer, fall last year.
Private credit is building into a black swan. We're not there yet, but the Clear Value Tax
YouTube channel gave a great setup for this topic. And I just want to reintroduce us to this because
it is something we need to keep an eye on and it will in the short run have an impact on Bitcoin.
I want you to be aware that there are problems building in the private credit markets.
And this is just another warning sign of how weak our economic situation really is.
I want to shed some light on the situation.
Before we get into the details, I want to explain to you what private credit is.
Traditionally, when companies needed to borrow money, they went to the banks,
and banks would provide loans to businesses.
But after the financial crisis in 2008, regulators placed stricter rules on the banks,
and banks were required to hold more capital, and they became more cautious about lending.
Consequently, instead of banks making the loans, investment funds started to do it.
So some examples are Blackstone, Apollo Global Management, Ares Management, Blue Owl Capital, KKR, BlackRock, etc.
So these funds raise money from investors, and then they lend that money directly to the companies.
So that's what's called private credits.
It's an interesting example of the market finds a way.
You know, the regulators, they reacted after the 2008 crash and they created these new rules.
And it did stop some of this crazy lending.
But, you know, like water, it finds a way.
And this market has grown incredibly fast, one of the fastest growing parts of the financial system.
It's now a $3 trillion market, which includes direct lending to companies, asset-backed lending,
real estate credit, infrastructure debts, and distressed credit funds.
Now, the reason why investors have been attracted to private credit is straightforward, simple.
It's because these loans typically offer higher yields than traditional bonds.
So investors might earn 8%, 10%, or sometimes even higher returns.
And during the years when interest rates were extremely low, they looked very attractive.
But the environment has changed dramatically.
Interest rates are now much higher than they were just a few years ago.
And that's where some of the stress in the system is beginning to appear.
Before he goes on, this might be why you hear Trump so often banging for JPOW to lower the rates, even though he keeps going on about how great the economy is, because the two things sort of seem at conflict.
It would be reasonable to presume that the Trump White House is concerned about the private credit market, but they don't want to come out and say they're concerned about the private credit market because it will create a cascade effect, obviously.
So they just say we need to get the rates down.
We need to get the rates down.
We should have the lowest rates.
They're now much higher than they were just a few years ago.
And that's where some of the stress in the system is beginning to appear.
And let me explain why.
So the first thing I want to point out is that most private credit loans are floating rate loans This means that the interest rate paid by the borrower is going to go up when the interest rate rises
So during the years when the interest rates were near zero, this wasn't a big problem.
But over the past few years, the Federal Reserve raised interest rates aggressively to fight inflation.
And as a result, borrowing costs for many companies have surged.
So some companies that were paying maybe 4% or 5% interest in their debts are now paying 10% or even more.
And that's a huge increase in their interest expense.
And for companies that already have a lot of debts, that, I mean, as you can imagine, that can become a very serious problem.
And several indicators suggest that financial stress among borrowers is increasing.
So here's something that I want to point out.
credit rating agencies have been reporting more downgrades than upgrades for companies that rely
on private credits. In other words, more companies are being viewed as financially weaker, and we're
also starting to see higher delinquency and default rates among borrowers. So right now, estimates
suggest that private credit default rates are around 5 to 6%, which is somewhat higher than
historical averages. However, I just want you to know that these levels are still well below what
you typically see during a major financial crisis. And that's why you'll hear the term,
it's currently containable. It's a problem, but it's currently containable. So great information
there. I have a link to the full YouTube video. He has visuals and the video continues on with
more information. But I think that's enough background that now I want you to listen to
Chris Wayland. You got to let him cook because he's a bit of a financial walk and wonk and it
And it doesn't start out super strong, but the information and insights he gives you, well, it lets us kind of have a better understanding of why this could be a serious problem.
Hold down the sell off in AI and private equity and private credit is hurting the banks.
You saw Blue Owl, which is another one.
Yes.
And what's interesting is all of these companies, Daniela, something will break here as kind of a scoop, have access to insurance companies.
And guess what they've been doing?
They've been putting all this mortgage-related crapola inside the insurance companies.
And guess what?
They turn around and borrow from the federal home loan banks because the insurance companies are allowed to be members.
So there's another story that we're going to be unraveling here in the next few months of how Wall Street has done another AIG.
They put alpha, they put risk inside of a sector which really isn't supposed to have risk.
Uh-oh.
where have we heard this before? 2008 is calling. So remember this clip because I have a sense
this is probably going to be a bigger topic later. They put alpha, they put risk inside of a sector
which really isn't supposed to have risk. And these insurance companies provide annuities to
retirees. So this is going to be quite a mess when it really unfolds. Are they using the insurance
companies as a loophole and they're all into it? Oh, yeah, absolutely. They studied Warren Buffett.
Warren was the first to buy an insurer and use that as his balance sheet. And then Apollo did
this when they acquired a company called Athene. Athene was public for a while and then they brought
it in-house. They actually merged their manager with the insurance company and they provide
annuities to retirees, much of which they domicile offshore. Oh, what a tidy little system they have.
Oh, it's so gross.
So, you know, at its current levels, it's not a concern.
But if it begins to grow, it could impact the insurance market, the retirement market.
It could be huge.
And they're doing that thing where they take a risky thing and they bundle it into a safe thing, essentially making the safe thing risky, which is what happened in 2008.
Now, like I say, though, I actually think the economic second order effects from the global conflict is more of a current and immediate issue than probably the private credit situation.
Could be wrong, but that's my general sense.
And I think Lynn Alden agrees with me.
She was on Fox Business yesterday, and her concern is more around those second order effects than it is private credit like myself.
And she probably will put it in better words than I could.
I wanted to go through this with you, right?
Get your thoughts on these particular big tail risks.
We can lump the geopolitical conflict and inflation together.
How high do you rank these right now?
I think at the current time, the inflation geopolitical one is the biggest one.
And not that it's necessarily inflation, but it replaces consumer spending.
Because we don't have a situation of more money chasing the amount of goods, but we
have energy price increases.
If they stay prolonged, the consumer has, they're spending more there, they're spending
less elsewhere.
and we already have some stall speed aspect to the economy.
And so I think that's top of mind currently, number one.
Probably the one that I fade the most compared to consensus
is the private credit contagion.
Yeah, yeah.
And I think we may have another chart to share with this topic.
You know, this format doesn't really do Lynn justice
because they're staring at a large screen
and it kind of distracts them.
They're not looking at each other.
They're not looking at the camera.
Lynn did great, but, you know, Charles sets the pace here.
And they're just staring at a chart.
And the chart just shows you what do you consider the biggest tail risk to the market.
Of course, that would just be risk.
And global political conflict is number one, followed by inflation, followed by private
credit at number three.
Number four is the AI bubble, which we'll come back to in a moment.
Private credit, 16%.
You don't think there's much to do about nothing, but we don't really grasp the size of this
space.
Yeah, I would separate two things.
I think private credit can very much be an issue for private credit investors.
The bigger question, of course, is can it cascade in the banking system and cause issues?
Right now, I mean, the numbers are very containable.
The banks have something like $1.9 trillion in total loans outstanding to non-deposit financial institutions.
A section of that is private credit.
That's a very big number, but that's roughly 7% of bank assets.
So even if they were to have some losses on their books from that, they have multiple safeguards.
I don't view it as a contagion risk outside of, obviously, the key areas where people are investing.
The next part of their conversation centers around this ironic aspect.
It's just so funny about the AI trade.
And we're going to get to that because these geniuses who would confidently mock you for your Bitcoin's lack of revenue stream.
It's not a value trade.
They would not give that a moment's thought, and they would say it like they're absolutely confident.
They are constantly jerked around by counterparty risk, and they don't get it.
They're emotionally jumping in and out of the AI trade based on social media hype.
And NVIDIA's CEO tried to pump some air back into the bubble and settle everybody down and say, no, there's more money to be made here.
When he went on stage during his keynote and said that NVIDIA is on track to make a trillion dollars.
I'm here to tell you that right now where I stand, a few short months after GTCDC, one year after last GTC, right here where I stand, I see through 2027 at least $1 trillion.
dollars. When I was a kid, I swear I heard the word trillion once. Now it's like we've said it
18 times in this episode. So NVIDIA is trying to tell the market, hey, there's a lot of money to be
made here. What's wild about this is this is a massive increase from what they said they'd be
making just back in October. Now, does it make any sense? And that's what I'm going to spend the
rest of the time talking about. In fact, we are going to be short. I am certain computing demand
will be much higher than that. And there's a reason for that. So the first thing is,
we did a lot of work in the last year. Of course, as you know, 2025 was NVIDIA's year of inference.
We wanted to make sure that not only were we good at training and post-training,
that we were incredibly good at every single phase of AI
so that the investments that were made,
investments made in our infrastructure,
could scale out for as long as they would like to use it.
And the useful life of NVIDIA's infrastructure would be long,
and therefore the cost would be incredibly low.
The longer you could use it, the lower the cost.
There's no question in my mind.
NVIDIA systems are the lowest cost infrastructure
you could get for AI infrastructure in the world.
And so the first part was last year was all about AI for inference,
and it drove this inflection point.
Simultaneously, we were very pleased last year
that Anthropic has come to NVIDIA,
that MSL, Meta SL has chosen NVIDIA.
And meanwhile, meanwhile, and as a collection, as a group,
This represents one third of the world's AI compute, open source models.
Open source models have reached near the frontier, and it is literally everywhere.
So he was hoping this would make the market excited and start pumping again.
But there is this duality of problems they seem to find themselves in over there, these genius traders.
And Lynn explains it.
All right, the AI bubble, it's interesting.
of February, it was really like, looks like double where it is now. All of a sudden, the AI bubble
pulling back. Obviously, we know valuations have come in a little bit. I mean, yesterday, maybe even
today, all the MAG-7 names were negative for the year. Yeah, it's almost like with AI, investors
can't win because they're worried about the bubble, but then they're also worried about it being so
effective that it disrupts all the software stocks and everything. Right. And so I think that, you
know, between the two, there's risk, obviously, but there's opportunity. I've been generally more
bullish than average on the software companies, for example. I don't think they'll be as disrupted
as quickly as some of the bears think. And I don't think, again, that the numbers are large enough
to be a major concern around bubbles. I do think that the RAM pricing is going to remain elevated
for quite a while. I do think that while those stocks have gone up quickly, it's already kind
of priced that in. I don't view that as a bubble. Well, let me ask then, because this is a bubble
of people who are really worried about the financing, the incestuous financing that's going
on the numbers, return on investment, how can you get back $600, $700 billion. Just yesterday,
we learned that just two chips alone, or chip systems, are going to be a trillion dollars.
So that seems like it would maybe fan even more AI bubble anxiety, at least with respect to where
does the money come from? How do you get a return on this? Yeah, these things tend to go on longer
than people think. I think that primarily, obviously, the chip makers are going to be big
returners. I'm not very bullish on the middle stack. Those that are making AI available,
I think they're going to continue to be loss leaders. And then I think actually one of the
biggest beneficiaries will be the end users. So whether it's individuals, but also various
companies that are going to be able to cut expenses pretty dramatically. So unlike the 2010s,
where most of the social media stocks, all those network effects that concentrated trillions of
market cap into the MAG7 and other big mega caps, I think this is actually, apart from a couple of
really big chip makers, it's going to be more diffused out in the economy, all the productivity.
What about dollar debasement? Are you surprised it's only 1%?
I think so. I mean, I think 1%, by the way, isn't 1% debasement. It's 1% of the people
polled said that was one of their top concerns, their top concern. But, you know, when you have
a war in Iran, you have potential inflation impacts, you have a private credit, credit
black swan building, you have an AI bubble that seems to be scaring people one way or the other
constantly, it makes sense that dollar debasement isn't their number one concern at this exact
moment, especially when they keep being told inflation is only 2.2 percent.
Right now, obviously, when you have a flight to safety, they tend to be into the dollar.
And then even when it's not a choice, just because there's so much dollar-dominated debt
out in the world, cross-border lending. And so when cash flows dry up, either because of memory
or either because of energy or elsewhere, there's all this scramble to get dollars to service
existing debts. That's one of the things I always love about Lynn's perspective is she brings in the
systemic ways that these events feed or risk the dollar. And sometimes it can actually
help the dollar in a way you might not expect.
Well, if you can't get clarity through Congress, maybe you can force it?
The SEC is very carefully trying to bring clarity to the market.
And I just want you to pay attention to the language that is being used here, both in the links I have in the show notes, but also in this interview.
So the SEC chair, Paul Atkins, has announced this week that the digital commodities, digital collectibles and digital tools, those types of technologies and stable coins will not be considered securities by the SEC.
But what I think is more interesting is the way they talk about it.
Take a listen to his interview on CNBC.
The SEC clarifying its position on crypto assets interpreting digital commodities digital collectibles digital tools and stable coins not to be securities Did you catch it He does it right away and they going to do it multiple times But they being very intentional I don know if you caught it
because it took me once.
I'll play it one more time.
The SEC clarifying its position on crypto assets.
Did you get it that time?
The SEC is clarifying.
In fact, they use the word clarity
and making it clear
multiple times in the announcements
and in the news coverage.
It's essentially them saying,
look, you're not getting it from Congress, but the SEC and the CFTC, we're working together
to basically give you legal clarity. The SEC clarifying its position on crypto assets,
interpreting digital commodities, digital collectibles, digital tools and stable coins,
not to be securities. SEC Chairman Paul Atkins joins us live from Washington this morning.
This is a pivot of sorts. Help us understand, and we'll probably get into the weeds of it all
in terms of just the mechanism for all of this,
but how you landed on this decision and what it means.
Well, thank you, Andrew.
It's great to see you again.
And this follows up on some of our prior conversations
about this and other topics
when you've been gracious enough to have me on your show.
So thank you very much.
But first of all, yes, yesterday was a real break
with the past, a formal break.
The commission came out for the first time
with an interpretative release
that really sets a line between what are commodities in the digital asset space and what are securities.
And the significance also about this particular release that we did is that the CFTC participated with us in it.
And so they had some guidance that's included in that release along with our interpretation.
So basically, as you said, and that tripped off your tongue very well, so it's very good,
We are outlining four types of assets that are not securities, and those are digital commodities, digital tools, digital collectibles, and stable coins, and stable coins per the Genius Act that was enacted last year.
Now, they continue to work the word clarity and making it clear in there, but I thought I would just skip all that and tell you how this impacts Bitcoin because who cares about the other things?
And it actually is pretty positive. The biggest one is for miners. Proof of work mining. There was some debate if the rewards would be considered a security. And that has been, quote unquote, clarified that they are not a security.
Miners, solo, or in pools contribute their own computational resources to validate transactions and secure the network.
Rewards are issued automatically by the protocol's code as payment for those services, not from reliance on anyone else's essential marginal efforts under Howey.
Pool operators perform only administrative or administrative tasks.
No registration will be required.
That's huge.
They will not have to register.
And on that same day, when the SEC made this clarification, the CFTC, the Commodities Futures and Trading Commission, made their own clarification.
And this one is actually really big.
They issued a no-action letter to the phantom wallet developers, along with a press release, which I talked last week about how those work.
And they posted the announcement on their website, as well as a PDF of the letter itself.
Links in the show notes.
And the letter states that the CFTC will not pursue enforcements against self-custodial wallet developers who connect users to regulated trading venues as long as they don't custody user funds.
So if the wallet isn't hosting your funds, they will not have to register with the CFTC or the SEC.
And the community and the media is taking this as a signal, also because of the way they put this on blast, that self-custodial wallet software providers generally will not have to register as brokers, which was one of the concerns that I believe kicked off AlbiHub.
I could be wrong there.
But Albi was originally a hosted service.
And they may be now positioned very well for this new clarification, as it were.
and that's pretty interesting.
The rest of the stuff is more about NFTs
and stable coins and stuff like that,
some of which I think is kind of BS
and I don't agree with, but whatever.
I think what matters is Bitcoin miners
came out exactly where they needed to
and now we have clarification
for developers of wallets
where the developer themselves
is not custodying your funds.
If they create like a free software wallet
where you can self-custody your funds,
totally fine, totally legal,
which is actually going to encourage more self-custody, which I think ultimately is going to be a good thing.
All right, enough with all of that. Stuff's all kind of heavy. Let's lighten the mood for a moment.
Let's have some fun. I got to play what is maybe the worst take on Bitcoin I've ever heard,
and I've certainly ever played on this show.
And I just thought this would be a lot of fun for those of us that, you know,
maybe are slightly informed on the topic.
Bitcoin is going to die. I don't mess with it.
This is Terrence Howard, and he's on the PBD podcast,
where despite having Michael Saylor and many others educate PBD over and over again about Bitcoin,
he still doesn't get it. I believe he's launched an altcoin.
And he continues to have other people on that just spread absolute propaganda
and nonsense about Bitcoin.
So let's start over.
Here's Terrence, and Bitcoin's going to die.
Bitcoin is going to die.
I don't mess with it.
You think Bitcoin's going to die?
Oh.
You're touching nothing with crypto.
I don't touch it.
Tell me why you think it's going to die.
Well, I just got a call from somebody a couple days ago
and said, hey, if you got $25 million,
you can make $75,000.
I just want to put it inside of an account
to do some stuff.
And this is a friend of mine.
And I was like, do you realize that Bitcoin
is still based on fiat?
And because the dollar is decreasing in its value, because the uncertainty of war around, nobody wants their money in something that can be wiped out with a push of a button somewhere.
I've just stayed free and clear of it because it's been dropping a great deal.
You know, bless his heart.
He's clearly struggling to understand.
But he did get one thing right.
Nobody wants their money in something that can be wiped out with a push of a button.
Where I think he gets tripped up is he sees the fiat price of Bitcoin going down and conflates that with Bitcoin having problems and going down.
He doesn't realize the protocol doesn't rely on any fiat supply.
That's the great thing.
Central banks control the fiat supply.
Bitcoin is capped at 21 million.
It's enforced by open source code, not any particular bureaucrats or bankers.
the dollar is just the most liquid quoting currency right now.
It's the most common.
But, you know, if you live in Canada,
you're often looking at Bitcoin to CAD and so on.
It's just the same way with gold and stocks and even real estate.
Often just the market prices them in USD
doesn't mean that gold is based on fiat.
It doesn't mean real estate is based on fiat.
This poor guy, you know, he wants to understand,
but he just, I don't know.
It's like an LLM that hallucinates.
And in a weird way, he actually inverts reality.
But the dollar's problems are why hard assets like Bitcoin gain traction and not why they fail.
So I have to ask you, Boost, and what is your worst Bitcoin take that you've ever heard?
You can just give me a summary of it.
You can send me a link or just capture it for me.
What is the worst Bitcoin take and from who?
I think we could have some fun with this.
Not like mean, but just, you know, kind of I think it's nice to kind of have a good laugh with your buddies.
You know, I notice this too sometimes at Linux events.
You're not poking fun at Windows users or Mac users.
You're just hanging out with people that they're in the know.
You know, they really are in the know.
So, Boostin, tell me the worst Bitcoin take you've ever come across, and we'll have some fun in the next episode.
I ask you, what other show do you know that gives you 36 minutes of pure Bitcoin signal with no distractions, no interruption?
Support the show by doing what you do.
When you buy sats on River, use the link in my notes.
If you want to use the Bitcoin well and amazing automatic self-custody platform, boom, link in the notes.
The Bitcoin Company, when it's time to take your sats and put them in a gift card over lightning in seconds, Bitcoin Company, link in the notes.
You want to stack sats while you pay your bills?
Fold card.
Link in the notes.
If you want to get access to your Bitcoin value without selling it,
with some protection on the downside, salt lending.
You guessed it.
Link in the notes.
Yeah, that's right.
You can support the show just by doing what you do.
And of course, by becoming a member either on Fountain or at Jupiter.Party
or sending the show a boost.
And now, as the French say, it is time for le boost.
Well, we start off with a bit of a sad note.
We have no baller booster this week.
It's all right.
That happens sometimes.
But Gene Bean comes in chronologically with a row of McDucks, 4,444 sats.
Things are looking up for old McDuck.
In your scale recap, you mentioned a business that took Bitcoin.
Can you give it a shout out?
I'm curious because I'd like to support them the next time I go to attend.
I think the most I can say is it's a real estate company, but they're not publicly doing it yet.
So I don't know if I didn't, you know, it was kind of off the record.
You know what I mean?
Like when you're having conversations with people.
But when I get the word, I will tell you.
He says, for people that want privacy with regards to transactions and Bitcoin, is this not already solved by liquid Bitcoin?
Is that because there's still some kind of province to the Bitcoin put in your wallet when pegging back into liquid?
Or is there something else?
It's something else.
They don't understand liquid and or lightning.
When the conversation around Bitcoin transactions come up, especially by people like Chamath, it's purely within the context of on-chain using traditional transactions.
and even those are pseudo anonymous, right?
It still takes work to identify those,
but it can be done.
Lightning and liquid's a whole other ballgame
and it's one of those things
I almost don't even want to talk about
because I don't really want it to be that well known
because I don't want it to go away.
At the same time, I want to shake these people
and be like, wake up, right?
First of all, the fiat system
has all these problems turned up to 11
with industries that are making money off of it.
It's so bad, right?
So let's reset on the baseline.
here. And then we have technologies in place today that help with privacy. And there's others
besides liquid, obviously, and lightning as well. So if we have that today, well, then what's it
going to look like in 10, 15, 20 years when central banks are actually holding Bitcoin at scale?
It's going to be a non-conversation. It just, it makes me want to slap them sometimes. You know
what I mean, Gene? Thank you. Appreciate the boost, Bean. Nice to hear from you.
Cardboard Warriors here with 2,001 sat. Coming in hot with the boost.
It just says nice.
Yeah, it was nice.
Thank you, sir.
My Frio comes in with 11,111 sats.
Hmm.
Oh!
Chamath definitely coming in with a shitcoin promotion soon.
I know, right?
Oh, it's so obnoxious.
Thank you, Mufrio.
Appreciate you.
Loomer comes in with 5,000 sats.
Danger zone.
Appreciate the description of how PR articles become news.
Danger zone.
You're welcome, Loomer. Thank you for the value.
OB comes in with 10,000 sats.
It's over 9,000!
No message, just value.
Thank you, OB. Appreciate that.
Outdoor Geek, he's back with 5,000 sats.
The traders love the vol.
I just used OpenCode with their free model to unpin,
then remove a bunch of pinned but unsupported flatpacks.
At work, I've been using GitHub Copilot for over a year or so.
So far, it's just making me slightly more productive.
However, more important is I will often try things I'm less familiar with because the cost of trying them is a couple minutes of running a prompt.
For example, I added dark mode to an internal JavaScript site on a Friday afternoon.
It took hours overall, but it was my first time using JavaScript.
You know, I think this is exactly it, Outdoor Geek.
It's an accelerator, and OpenCode is so awesome.
It's a free software project.
It's, you know, people out there that are using Cursor or you're using Claude, give it a try.
Or Codex.
I mean, those are all really good too.
But OpenCode is a free software project that can plug in with any model and can authenticate to a lot of your accounts.
Has a lot of great features and they've got good momentum.
And one of the things that can be really powerful, besides it's built in, you know, build and plan mode and MCP server support and stuff like that.
What can be really powerful about OpenCode is you can get stuck and then it's just a command away to switch to a different model.
Try it on a different model and switch back,
keeping track of all your costs and everything like that.
But I think the thing that I meant to say
that I got distracted with is
not only is open code free software,
but like Outdoor Geek saying,
it comes out of the box with free models.
And some of them are quite good.
Some of them are in deep training,
so you don't want to share anything private with them.
But if you're just working through code,
working through a Nix config or something like that,
a comp file there nothing proprietary and private there So it such a huge powerful combo that if you are not experimenting with this right now it kind of like missing out on the early
days of Bitcoin. I don't think it's at that scale in terms of like how important it is for protecting
your work today and your energy today for future, but it's an amplifier of your time. And your time
might be even more, well, your time is more precious than Bitcoin. And I know a lot of you
out there have resisted this, but open code and the free models, and then eventually if you want
models that you can sign up for that are even more powerful, it's such an opportunity. It's there,
it's free, it's ready for you to use. Thank you, Outdoor Geek. Appreciate you. Got me going there.
Sats over bits comes in with a row of ducks. That's 2,222 sats. I like that name. Thank you
again for another breakdown of how ludicrous BIP110 is. I used to be in the knots camp,
But once they moved from a node implementation to attempting to change consensus, they lost me completely.
Plus the lynch mob tactics, rushed nature of the BIP, and how it could stain the Bitcoin brand and even damage parts of the network, I'll pass on joining this cult.
Great work as always, Chris.
Thank you, Sats, and I have a one more small BIP 110 update coming up in the show.
Appreciate that signal.
Nakamoto 6102 is here with 3,500 Sats.
This is a tasty burger.
Thanks for the value.
Well, thank you for the value.
Appreciate that very much.
Boy, they are doing a lot with mayo these days.
Chance of Dizzy Spells comes in with 3,500 sats.
I don't understand what the heck is going on here.
I like that one, too.
He says, you deserve more value for value, but I'm facing some personal liquidity challenges at the moment.
I feel you, brother.
Where I work, they stopped hiring software graduates a few years ago.
I don't think they planned to switch to AI.
It was just a desperate measure.
Now they're pivoting hard to agentic coding.
Yeah, I can kind of understand that because I think one of the reasons I have pivoted into some magentic workflows is because I am so stretched on time and barely treading water, both as a business but as my time too.
And the accumulated effect of that going on now really since COVID, really since J-POW initially raised the rates and destroyed the advertising market and then inflation took off.
So, you know, I haven't raised advertising rates since then.
So it's been four years.
While my income is devalued by 30%, sponsors are declining because they want to sponsor YouTube.
And so, you know, any kind of efficiencies that I can lean into are, you know, kind of lifesavers really.
So I can understand where they're coming from.
I don't like it.
I would hope my intention would be for at least JB is that the efficiencies that are gained back give me the headspace to get the business right, to focus on those types of things that increase revenue in a way that doesn't impact content, which would be, you know, advertising like Linux unplugged swag that I should have been selling for every event we go to working with sponsors to make going to events, not just cost money or break even, but actually profitable.
small things we could do if I just had the headspace.
And then that would lead to expanding the team.
And I hope that's maybe where they get to as well, Chance.
Thank you very much for that boost.
Appreciate you, sir.
Kiwi Bitcoin guide.
Yeah, he's back.
He's coming in with 6,543 sets.
I like you.
You're a hot ticket.
Thanks for the signal.
Can you help us understand the game theory for BIP-110 in relation to mining?
If they have very low hash rate, can this still cause disruption and potential chain split?
It can definitely still cause disruption.
My initial thoughts were that they won't get a significant amount of hash, so they'll just die on the vine.
But proponents of 110 are talking like they can still force a counter fork if they have a minority hash.
Yeah, so we did dig into that a few weeks ago.
But a follow-up to that also is I think there is sort of a pressure campaign that sort of clicks in.
And yeah, I'll talk about it in my BIP 110 follow-up coming up a little bit in the show.
Thank you for the boost, Kiwi. Nice to hear from you.
Ace Ackerman's here with a row of ducks.
Good call on the Dalio privacy coin take.
I think you might be onto something.
Yeah, him and Shamath, right?
And there's another billionaire chirping in now, too.
We'll get to that in just a moment.
But first, I want to say thank you to everybody who boosted the show.
And thank you to our streamers.
Actually, our sat streamers, collectively, you are the baller this week.
Shout out to our sat streamers.
Collectively, you streamed 84,194 sats to the show.
So that was a big lift.
And that brings our grand total for episode 96 to 195,139 sats.
Not fantastic.
Really, it's nice.
And I really am thankful and grateful, actually.
If you break it down into an hourly wage for two to three days of work, realistically three, it's pretty devastating.
So I think I'm going to break from format next week.
I think we need to change things up a little bit.
I need to change things up a little bit.
I can't keep running at 100% and, you know, end up at 195,000 sets.
So what I'm going to do, I think, is I'm going to try to come up with something we can do to change things up a little bit,
just to bring some energy back into myself and the show and see where that goes.
Because I think, you know, when you see a low amount like this, clearly we need to do some adjustment.
And I do appreciate everyone who does support the show.
and you know really I'm grateful too that we have as many people supporting during
kind of a bear market as we do it really just comes down to the economics of it for me
so I'm going to think about it I haven't really made a decision yet because I'm just getting that
information but I think that's maybe somewhere we'll go and hopefully it'll be fun you know
it won't necessarily be a bummer it'll just be different thank you everybody who supports the
show you can also put your support on autopilot with a jupiter.party membership or a fountain
fm membership as well
Well, there's no doubt that Bitcoin's price has been doing better.
I think we're still probably in for a bit of a ride.
But it's been better since the lawsuit against Jane Street went public
and the 10 a.m. market slam just coincidentally stopped.
Of course, correlation does not equal causation.
And Bitwise's Matt Hogan says there's no 10 a.m. slam manipulation.
It's much simpler than that.
The reason crypto is down is because people who held Bitcoin at the start of 2025 sold it.
That's it. That's the reason crypto is down.
The problem is actually in the mirror.
It's not someone outside.
It's us looking at each other and saying, like, we crypto sold Bitcoin and the price went down.
I think the Jane Street story has to be fractured into multiple different parts if you want to dig into it.
So there's the Terra Luna question, right?
Terra Luna was doomed from the start.
There's a reason Bitwise never put it in our index, right?
It was doomed from the start.
And the question of whether Jane Street used insider information to profit on it is something
that we'll find out in court.
I have no particular view.
The question of whether there is some weird magical arbitrage between Jane Street and
how ETFs are created and a 10 a.m. dump just has no actual logical path if you know how
ETFs function.
Now, the one thing here is maybe some people were, but I never got the impression that was quite the argument.
The impression I had is that maybe Jane Street was doing some leverage shenanigans to manipulate price to get great deals for OTC trades or to score them a big bag so then they could make it available to other institutions outside of any particular dynamics around the ETF.
But that's where Matt takes this, which I thought was kind of interesting because that at least wasn't my suggestion, but it seems to be of some.
But he does continue here.
And I think maybe he kind of dances around the core issue here.
There's literally no way for Jane Street to profit in the ETF market because they're dumping.
I've seen so many terrible takes that are just not backed by how ETFs work.
I come from CEO of ETF.com.
So that story is untrue.
The question in the middle is, did Jane Street ever look at leverage markets and create a cascade of liquidations to put the price?
That's a broader question in crypto, right?
A lot of people have said forever that the fact that you can see the leverage liquidation levels in the market causes some people to create cascades in those markets.
I don't know.
But the latest iteration that there is this weird nexus between Jane Street ETFs and a 10 a.m. dump that we only found out about after the fact, that one is just false.
So, you know, these other two, I don't know, but that one is just false.
Damn.
Of course.
I was hoping that was true.
You know, Bitwise does work with Jane Street, but I believe Matt there on that part.
So, all right.
Just thought I'd touch on that because, you know, sort of following up, closing the loop, as they say.
Now, we have another billionaire singing a tune that sounds awfully familiar.
billionaire drunken miller stanley drunken miller you guys probably heard it's drunk who else has a
name like that druck it's druck miller not drunk or whatever drunken miller it's got a ck in there
i don't care anyways this guy he's doing the same same playbook his billionaire buddies like chamoth
and ray dalio also he was a public early bitcoin adopter talking about the issues of debasement
and how bitcoin solved it and he just like the other two used a recent interview to say that
well, he's rather sad people ever use crypto as a store of value,
and then goes on to say why he's bullish about crypto.
But to a point, I think they're fine.
Crypto?
I said this a long time ago, and I'm going to say it again.
It's a solution looking for a problem.
I'm very sad that it ever happened as a store of value
because it wasn't needed.
But it's a brand, and these people love it,
so it's going to be a store of value.
On the other hand, blockchain and the use of stable coins, if you want to throw crypto into that, tokens, incredibly useful in terms of productivity.
I assume our whole payment systems will be stable coins in 10 or 15 years.
Efficient, quicker, cheaper.
Okay, so what I always have to say here is there's a few tells.
When he said it was unnecessary, well, I guess it's unnecessary to someone who has what is essentially effectively infinite money.
Storing the value of your hard-earned day-to-day grind seems unnecessary to him.
And yet he's bullish on tokenizing the existing system because that existing system has served him extremely supremely well.
And what these guys are doing, I think, is they're looking at Bitcoin and they're looking at gold.
They're looking at the last five years and they say, oh, it said Bitcoin.
It's done. It's done. It's over.
and and you know i think this is i think this is i don't in miller's case i don't think it's him
leading to another shit coin i think it's just they see something pumping they see some sort of
shift they assume the moment has passed and they're back on the gold train and then why not
tokenize everything and make a bunch of money and extract rent from the system it's cynical but i
think that's really where their incentives and point of view come from all right let's talk about
one of the lesser discussed aspects of BIP-110. And, you know, with the major changes that BIP-110
is proposing, most of the focus has been on those changes, understandably. But I think it's worth a
moment of our time to remember that there are elements of the BIP-110 proposal that are unusual
and concerning outside of just the technical changes. And when you think of this, I think
it's fair to say that BIP-110 would be a change at the scale of the block size war,
at the size of the big blockers.
And so we really need to consider everything.
BIP-110 was proposed by a pseudo-anonymous developer
known as Dathom Om,
and I'm not quite sure where that name comes from.
It could be a nod to the biblical Dathom.
Dathom and his brother Abraham,
they led a major rebellion against Moses
and Aaron's authority during Exodus.
And it's notable because Luke Dasher himself
is extremely public about his religious faith, and he's known to have been involved with the
drafting of BIP-110. But the identity behind the person proposing the largest change to Bitcoin
in Bitcoin's history remains unknown. There have been unverified claims linking their identity to
ocean mining. But with that context, with that just wild aspect of this, I want to play this clip.
I assume these people are idiots who like to just use Bitcoin for things besides money. Let's put
that aside for a moment because what they reveal in this podcast interview is that luke has been
planning something like bip 10 for a very long time the thing that like really caught my eye this
week is that somehow you guys managed to incur the wrath and ire of the bitcoin filter camp the people
behind the 110 filter proposal like what in the world happened okay so first of all i was sorry i
I'll just say real quickly that we have talked back and forth with Luke
Dasher from ocean mining,
the guy who maintains knots multiple times over the past two years.
Okay.
We've had probably three,
four multiple hour calls with him.
We've had two IRL meetups where he came to our house and hung out here.
And we talked about off net with him.
Right.
So he's acting like totally,
Oh,
I have no idea this was coming.
No,
this guy's known about this since basically day one.
Luke has been planning BIP-110 for a long time.
and he seems to be at least involved with the drafting of BIP-110.
Dathamolm seems to at least have connections to ocean mining,
which Luke also has connections to, so does Bitcoin Mechanic.
The way BIP-110 consolidates political power with Luke and ocean mining
and any miners that they can pressure into this with threats of CSAM,
it's wild that we would even be considering this.
It's taking Bitcoin and it's centralizing political power
with just a small group of people
that have been orchestrating this entire thing
from the beginning.
This alone is a disqualifier for BIP-110.
And honestly, somebody should put a real name on this thing.
I'm generally all for Bitcoin developers
remaining totally anonymous,
but if you want to re-architect things,
I think you should put your name on it.
You should be in the history books for this.
BIP-110 has been murky and mysterious from the beginning,
and it proposes changes that would have a bigger impact
than the block-size changes would have had.
And it ultimately consolidates political power with Luke and ocean mining.
This alone, right there, is a disqualifier for any of this.
Let's check in on the state of the network.
The block item wrapping up at is the price to us dollar right now for one Bitcoin is That puts our sats per dollar at 1 sats to one U dollar
We're down a hearty 43.7% from our all-time high,
which was 163 days ago on October 6, 2025.
Our difficulty retarget date is March 20, 2026,
with an estimated difficulty change downwards of 7.8%.
The Bitcoin nodes on the network continues to decline slightly as well,
with reachable nodes currently at 23,647 nodes.
We've got to node up.
We've got to node up, people.
However, the Bitcoin network continues to adjust, adapt, and run smoothly.
The state of the network remains strong.
You can find source material and links for what I talked about at thisweekinbitcoin.show.
This was episode 96.
My goal is to create something that doesn't get distracted by the emotions around what's happening, focuses on the signal for you.
So let me know how I did with a boost.
Trying to help you out with your decisions for your future, your family, your business, your friends, yourself, all of that.
And a boost always helps the show.
Also, don't forget that if you boost during the track
that I about to play 95 of your sats will go to that artist It pretty great and they love it It really makes their day So I going to leave you with a track from I think it Rizek is how you say it
and the track is Moment of Clarity.
We'll be right back.
I'm not deaf to go hungry.
I have everything you need.
Oh, I'm just losing my mind, that's all.
I understand.
We be right back
I understand my everything.
Bye-bye.
Phil Is Sacřed