Welcome in to This Week in Bitcoin, episode 110.
My name is Chris.
Chris LAS.com.
JupyterBroadcasting.com.
May we live in interesting times, they said.
Well, you know what?
I wish they never said it.
BIP-110 soft fork is about 45 days away from activating.
We'll get more into that later in the show.
But I want to start with macro.
Because the price action we are seeing right now in Bitcoin, it's going to be analyzed for decades by the chart boys.
They're going to be zooming in and out of this section on their chart for a very long time.
Because since 2013, which is really when this has been tracked, Bitcoin's only spent 10% of its time below the 200-week moving average.
10%.
And that's where we're at right now.
Historically, these dips, they're rare, and they've often turned into major buying opportunities within a year or so, which is a pretty short turnaround for Bitcoin.
And what's changing right now, we're going to get into this, is for most of the year, Bitcoin's had its own set of catalysts.
The Iran war and the Fed, will the Fed cut, won't they cut, what are the dot plots, what's going on with energy in the strait?
And that stuff, it still matters, it's still out there, it's still a risk factor.
But there's this second calendar running along Bitcoin.
is this is how they call it out there.
It's a second calendar now.
That is driven by AI earnings and bond yields
and also the Fed rate path
because it impacts all of those things.
What that really means, the translation is,
is Bitcoin not only is getting jerked around
by these large events happening in the Middle East
in the energy market,
but now also getting jerked around like a tech stock,
which is going to get exhausting and painful.
In fact, I suspect it's going to get a lot more painful.
but having said that, it will absolutely be worth it.
Now, here's what I'm talking about.
There was a mood shift this week.
I'm telling you, man, I watch so many clips
and it's like, it just starts happening.
One person says it, the next person says it
and within two days, they're all saying it.
And the vibe is this. They realize that maybe there's edges to this AI bubble. In fact, they're just straight up now referring to it. It's not is there or not an AI bubble. Yes, there's an AI bubble. How long will it last? And what about this debt problem? Because, you know, we were getting a lot of easy money, but now you got Meta, you got Google, you got SpaceX. They're all raising debt. Even SpaceX just launched their IPO. They're raising debt.
And so the market's starting to wonder if these frontier AI labs that are raising all of this debt, that have these massive CapEx expenditures, and now we're discovering they're setting incredible money aside just for payroll, for competitive payroll, which there's a little bit of question on return of investment there as far as the market's concerned.
There are more and more risks to the downside starting to stack up in the AI trade.
And it means even permables, people that are always, oh, to the moon, my Ethereum stack's going to get big, my Bitcoin, blah, blah.
I'm talking about Tom Lee, obviously.
Tom Lee, he's always to the moon.
And even Tom Lee's like, let's tap the brakes.
I think things are going to get a little bumpy later this year.
um scott we still believe uh later this year there is going to be an abrupt change of market
conditions one that feels very much like a bear market um but we don't want to stand and uh call
a top i think conditions are still favorable for stocks you know the spacex ipo was very successful
and as you know there's been a cadence of pretty good news coming out of that company and it is a
very small float company with only 90 billion of float. And I think Kevin Warsh, his view,
this was actually kind of a market reaction to his first press conference. But I think that the
real challenge is going to come later this year. So I think, yes, very much there is going to be
a change in market tone, but I think it's too early for people to expect that to happen now.
Now, that's not very useful. So let's make this more useful. And I need to make it clear,
In my opinion, Bitcoin doesn't need every single AI stock out there to crash.
That's a little ridiculous.
It needs the market to remember that debt financed growth and monetary dilution, they're not
the same thing as a genuine, scarce, hard asset or collateral.
Right?
They're just two different things.
Goldman Sachs wrote in their recent investor research letter that came out at the beginning
of the week, quote, the first hyperscaler to signal that it can slow the pace of spending
will likely see its share price rewarded. If that happens, others will take notice.
That is the reflexivity that ultimately stalls the CapEx cycle. What Goldman is saying here is
the first hyperscaler that says we can slow our spending and still achieve some of our goals,
maybe not all of them, but we can slow our spending and achieve some of these great goals,
the first hyperscaler that signals that, the market's going to move to them.
And all the ones that are spending like crazy are going to be punished.
And what Goldman is saying is that reflexive move is ultimately what is going to stall
the CapEx cycle, the capital expenditure cycle. And honestly, right now, it kind of feels like
they all know it. And that's why they're racing to the exits to raise debt as fast as they can.
Some fears about AI debt taking a toll on some of the mega cap names.
Let's get more this morning from our Kay Rooney.
Morning, Kate.
Hey, Carl.
Good morning.
So, yeah, a big part of this tech sell-off is sentiment right now.
There is some renewed anxiety around AI spending by tech giants and this growing role of debt in that entire build-out.
Reminder, these companies are expected to plow $750 billion into this AI build-out.
Just this year, it's up about 80% from a year ago, and they are depleting cash at record levels.
Goldman recently noting, CapEx.
If you look at it as a percentage of free cash flow, that is at its highest level since the dot-com bubble.
The dollar amounts are not necessarily new, but in recent weeks, we've seen more fear around debt in this entire build-out.
That has been the big headline in recent weeks.
SpaceX yesterday turning to the bond market.
That was the latest example.
Google with one of the largest debt financing rounds in this cycle.
I should say Alphabet, parent company of Google.
Oracle also raising debt is expected to see negative free cash flow this year.
This is fascinating. So Amazon, $68 billion year to date. Alphabet, $32 billion in February of 26. Meta, $25 billion in April of 26. NVIDIA, $25 billion this month. And Oracle, $25 billion in debt on February 26. It's really starting to stack up. And I think it's making them nervous. Like, all of a sudden, they're like, well, what about this debt? Like, all of a sudden, they care. Like, how are we going to pay this debt back?
I don't know why it's being asked now.
I think because the more it gets asked, the more they don't like the answer, perhaps.
And SpaceX, you know, that's a big, hot IPO, big, hot stock.
People sold their Bitcoin to buy SpaceX.
And in the last three trading sessions, it's, what, down about 22, 23 percent.
We are seeing this share price come back down to Earth.
This was the most hotly anticipated IPO of the year so far.
And we're seeing just yesterday that share price slumping some 16% in a single day.
Now, why is this happening?
This was so hotly anticipated.
Debt has a lot to do with it because the company yesterday said that they are seeking to raise
investment grade debt for the very first time.
Bloomberg News has reported that they are seeking some $20 billion in debt.
Now, this is an unusual move.
This is early in the lifespan of a company to be seeking that sort of debt.
Again, the company is not profitable yet.
They have been burning through cash and some of the language that they have used to talk to debt investors.
Let's take a look at that because it's very similar to what we saw in their IPO perspectives.
It is very grandiose.
This company is talking about how our mission is to build the systems and technologies necessary to make life multi-planetary.
I mean, that's a pretty big mission.
So they recovered a bit since then I sure they be OK and all of that But I think it just interesting There is a real fear building here Like the edges of the cracker there
the edges of the bubble are there. And SpaceX, I think, sees it. That's why they pushed for this
IPO when they did. That's why then they kept the cursor merger quiet. So that way they didn't slow
anything down. So that way the IPO will get through on time. Get that IPO through, then announce the
cursor merger. Then once that's all settled, raise some debt while everything's sort of at
its peak momentum because they know this is such a momentum market. And Bitcoin's problem here
isn't just price action, right? I just touched on it.
You could call it momentum. You could call it a narrative vacuum. I think we all know the
strongest long-term pro-Bitcoin argument is the debasement trade, and it eventually will return
When the Fed and Treasury start working together to inject money into the market for whatever reason they will have to, that's, of course, going to be Bitcoin's moment to shine.
I think we all know that.
But of all the characters in the world talking about the narrative issue and the energy around Bitcoin right now, I was surprised that the Mooch and Novigratz seem to have, I guess, maybe the most clear-headed analysis.
The price for Bitcoin is now at an all-time low.
Google searches for Bitcoin are way down.
And we have now drawn through the 50% peak to trow.
Long-term holders now control a record 79% of circulating supply.
And reactivation of old coins is at its lowest level since 2012.
Is that a sign of weak selling pressure that we are at a bottom?
Michael, you've been doing this for almost 40 years.
Or is that a sign that this is a dead asset?
Yeah, it's a painful question.
I think you got to give Bitcoin the benefit of the doubt, at least until this time next year.
And what I'm saying about that is, like, could we go a little lower?
Do we go through 60?
Of course we could.
You know, some context here.
I think the reason why the mooch here is asking this question, because maybe perhaps to you and I, this may just sound like a ridiculous question.
That is the question he is getting asked every time he goes on Bloomberg, Fox Business, CNBC, or he's getting interviewed by the Wall Street Journal. I see him asked that all the time. So he's just basically asking it to Novigrad.
What to say about that is, could we go a little lower if we go through 60? Of course we could.
People are so vested in this over the last 15 years. It's a life for people that most of those
long-term holders aren't selling. And it will get its narrative back. The narrative is the Fed will
be cutting rates at one point. With the populism we're talking about, there's very small chance
that we actually get ourselves out of the financial mess we're in and that we don't
have to inflate our data away. So the narrative comes back and it's really a good brand. It just
has no energy right now. There are no new buyers. And Michael Saylor's in a pickle. He's got this
preferred instrument that's now trading way below par. And now he doesn't have to do anything,
but there's all this pressure for him to do something. And we'll see how that plays out.
That's weighing a lot on Bitcoin, right?
He's the biggest salesman of Bitcoin.
He's the biggest holder of Bitcoin.
He's the biggest advocate.
And so, again, maybe not in our space necessarily, but in the new markets they're trying to reach, you know, the people that have some wealth of Bitcoin.
He's the biggest holder of Bitcoin.
He's the biggest advocate.
And so I don't think it's in a great space right now.
I don't advocate selling at 60 if you're a long-term holder.
because, you know, that four-year cycle
kicks back in in October,
maybe right when the economy's slowing enough
that Worsh can cut rates,
you know, end of the year, beginning of next year.
And so I think if you're a long-term holder of Bitcoin,
you got to give it to March of next year.
If it hasn't come back by then,
maybe you scratch your head and say,
did I miss something?
Oh, March.
I'm glad he said it though, so I don't have to.
That's kind of how I get through bear markets, though, is I kind of worst case scenario in my mind.
I kind of have, well, I guess I have, I kind of have like three possible paths that I see.
Like there's a best case path, and that would be some sort of surprise to the upside where the market starts buying Bitcoin again.
The likely path is we leg down until October, and then we sort of bottom and start to kind of slowly climb up before people really realize it.
And then it's recognized by March.
and assuming that the Fed does maybe lower rates around that time,
the money may start trickling into the wider economy by January, March.
So that's sort of a likely October, March range, I think.
Maybe the worst case would be March, May.
I hope not.
But these things, they happen.
I mean, this is, what I think is crazy is,
to me, this would be an indication that Bitcoin isn't captured by institutions.
because I don't think this would be their plan.
In fact, I think you could argue the marketplace for Bitcoin
in terms of legal and economic structures and administration
has never been more friendly to Bitcoin.
Yet, here we are.
I don't know what to think about Bitcoin anymore.
The one thing I was wondering with Bitcoin
is there was a time when there were very few ITOs.
Part of it is I think the public markets are a little bit broken
with so many index funds and stuff.
Everybody thinks the same.
Thus, nobody really wants, you know, new IPOs.
I wonder if Bitcoin was a little bit sort of the off-ramp
for everybody that wants to have something
a little bit more speculative.
Yeah, now that we have these big IPOs on one side
and then we have stablecoin on the other.
And stablecoin involves the word stable.
So if you really want to just put your money offshore,
or put your money in a new system,
you can go through stablecoins.
Frankly, stablecoins more or less
are already paying interest.
I don't think they really are,
but there's schemes where you get these rewards
and stuff like that.
So if you want just a stablecoin, you can.
I don't know if I buy this right now.
I mean, he's saying that people want big rewards,
but then they're willing to put it in stablecoins
where they're going to get probably
less return than average inflation
for the goods they buy day to day.
Okay.
all right well we'll let him continue we'll let him continue these like rewards and stuff like that
so if you want the just a stable coin you can there's fabulous IPOs coming out there's SpaceX
there's gonna be some AI and I just wonder like well where is Bitcoin now and the purpose of
Bitcoin and a little bit what you need to believe is almost this maximal maximalist view about
Bitcoin like when I speak to people about Bitcoin it's a bit like a cult you're either in or you're
not so that's just my new thoughts on bitcoin i'm a little bit more worried and i would rather bet
on is space gonna quadruple over the next 20 years oh yeah okay well play fiat games win fiat
prices of course back in january he said he was waking up at like 3 a.m wishing he'd bought more
bitcoin things change it's just you sell your hard asset bitcoin right for a stock that can be
printed and sold for fiat that can be printed. Like, so he knows this. So then I guess the
cynical bet is that it's going to perform so hard, whatever this IPO stock is, it's going to perform
so hard that none of that risk I just mentioned matters. But the elephant in the room that I
can't unsee is the ruthless evolutionary growth of open source. How many times have we seen this,
guys. The history shows us it's our teacher. It knows the way this plays out. Open source tech
tends to win out over time just due to market forces. It's just it's an organic evolutionary
thing and people just follow their own incentives. And I think the free models are going are going to
be the elephant in the room that has to get acknowledged. Here's Arthur Hayes. He was on
the Bankless podcast recently Just a warning This clip does have a little bit of swearing But he kind of put these thoughts that I have I think into words To amortize a loan based on that you saying that this CapEx will continue indefinitely even though you have Chinese competitors with models that are good enough charging 1 of the price
and so I think
this a lot of investors
have sort of bought into the
the America
you know is it the baddest
biggest baddest country
best tech
da da da da da
it's the same fallacy
you thought about cars right
do you give a fuck
if you were to drive a Ford
or a BYD
give me the BYD
it's cheaper
right it's just as good
if not better
so I think
people have bought into
the brand of the USA
but they forget that like
the brand value erodes
when a customer is faced
for the product that's good enough and 1% of the price,
which is what a DeepSeek or Kimi model can deliver.
And so I think these are some of the things
that eventually the market will recognize.
I don't know when that is.
And then they'll say, okay, I don't believe
that I should be paying this multiple for this company
or the executives at these hyperscalers say,
I don't believe I'm earning the return I need to earn.
I need to scale back my CapEx projections.
And that's when the whole edifice starts to break.
Now, this could be a bigger problem than it seems on the surface, because as they say, the market is forward looking.
And like I laid out two weeks ago, these companies have until late 2027, early 2028, around that time frame, to show that they can make as much money as Apple's iPhone division and in some cases all of Microsoft in just a few years.
They have to get to that level of profit.
That timing, 28 or so, 27, 28,
also might line up with when it's time
to swap out some of those Blackwell and H100s
so that way the frontier models can stay competitive
against open source models
and their other frontier competitors.
And so as these hotshot rides to space right now
are just so unbelievably great
that he's going to sell his Bitcoin,
you have to wonder if once the market
starts forward looking at these issues,
if they're not going to look at these beloved rockets to space
and just start dumping them.
The greatest part for crypto is that if we do get an AI credit event,
number one, it'll be bigger than 2008
because the whole world is on this delusion that AI is the biggest technology ever.
We're going to build more CapEx per percentage of GDP than we did with the railroads,
much bigger than subprime.
And the Fed can't print Moore's Law.
I don't care how much money that you throw at this thing.
You can't change the fact that a chip gets better every two years if you pump $10 trillion into the economy.
So what's the first response going to be by the financial authorities to try to save the banks?
Oh, we just need to shovel fiat money in.
And at that point, investors are going to say, I do not want to put any new capital, whether it's free or not, into AI because it does not meet its cost of capital.
So therefore, this capital goes straight to crypto.
And this is the implosion of the AI bubble and the follow on money printing that's going to happen, especially in the United States, to try to stick shave the system from this gross capital misallocation that's happened over the last, let's call it six to seven years.
by that point is going to dwarf subprime
and is going to take us to Bitcoin a million
or whatever, right?
This is the big print.
If you get this, if this thesis is correct
and you time this well, you'll never work again.
This is the John Paulson subprime trade.
This is the big short Michael Burry trade
of this particular epoch.
And that's kind of how I'm thinking about this.
I don't know when this is going to happen,
but I know I got to get this right.
All right, so let me know what you think.
Two questions.
Do you think this thesis that's being developed here,
that once the AI bubble kind of pops,
and that we're acknowledging there's an AI bubble,
that that money may flow into something like a hard asset again?
But also, I'm curious, March comes around, October comes around,
and nothing's changing, and Bitcoin's still sliding.
Just as a thought experiment, right?
Just as a thought experiment.
what would actually make you change your bitcoin strategy like what would it take would it take
five years of a bear market would it take two years what's your line boost in and tell me i
thought so these are two things what do you think about this ai thesis when the bubble pops the
money comes back to bitcoin and number two when would you change your strategy what would be
the threshold boost in and let me know
well i'll take a moment to say you can support the show just by doing what you do if you want
to stack sats on river and you haven't made an account yet use my link in the show notes
Best way to stack sats in the U.S.
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No official relation, but those are companies I like and use.
And the links in the notes let you support the show by doing what you do.
And now it is time for Le Boost.
Hey, there's another way to support the show is you can send a boost.
And Paul S. did just that.
And Paul is our baller booster this week with 100,001 Satoshis.
You're the best around
Nothing's gonna ever keep you down
You're the best around
Fun will now commence
All right, Paul, thank you, Sizz.
The longer clip featuring Saifedean a few weeks ago was just insightful.
I got a lot of value from the deeper discussion around Austrian economics and monetary sovereignty.
Occasional clips from Pierre Rochard, Michael Goldstein, Nick Sasbo, Stephen Liviera, Nick Bahita, etc.
are all appreciated. Well, stay tuned, Paul. We have a little bit of a longer clip segment coming
up in the update segment after the boost. And thank you very much for being the baller booster.
That is a very much like that right there almost makes the whole episode, buddy.
Did you buy that from a certified vendor? I hope not. Thank you very, very much.
That's a spicy meatball. I do appreciate it, Paul. And keep on listening. And Paul used the
new web boost, too. That's pretty cool. That might you know what? That might just be one of
the smarter things I did recently.
Anonymous comes in with 59,999 sats.
I heard that, but you're kind of...
Coming in hot with the booze.
Anonymous, huh?
Anonymous, did you mean for that?
Let me know.
Curious if you have any new or revised recommendations
for physical blockchain wallet
and how many sats should someone consider
offloading from exchanges like River or Fold?
You know, not really.
I still kind of think it matters to you.
I'd say rough guidance would be somewhere
between a million to more than that.
Physical blockchain wallet.
I still think, you know, the cold card's really good.
I think that's probably one of the best out there.
I've talked to the Bitbox folks for a bit.
I like theirs too.
There's also the Jade.
I mean, these are sort of the ones
that come to top of mind.
I always appreciate hardware wallet recommendations.
The things, here's what I'll tell you what I look for.
I want something that going to work for me five 10 years down the road So hopefully it doesn have a battery that going to explode Hopefully it doesn need like internet connectivity necessarily directly
Things like that.
It can maybe work in an air gap way.
So those are sort of the requirements that I sort of build from there.
Thank you, Anonymous.
Appreciate that big old boost.
Hey, OB's back with 21,000 sats.
21 gigawatts!
No message, just value.
Thank you, sir.
Oppie 1984 is here with 4,080 sats.
Oh, I was pro-Bitcoin prior to this,
but Operation Chokepoint is what turned me into a Bitcoin hardliner.
Also, first boost from my Start9 Albie Hub connected to Fountain.
It took several sessions with ChatGPT to figure it out,
but if you're reading this, then it worked.
It did work.
Well done, Oppie.
Well done.
B-O-O-S-T.
Well done.
That's great.
Love it when it's coming in from your self-hosted node.
Stay tuned for the BIP 110 update, Abhi.
Tomato comes in with 9,000.
What's that?
It's over 9,000!
I got to try this web boost option.
I can buy coffee and pints at a few places using Lightning.
I would definitely use it more if places accepted it.
If I can keep my walking around sats in one place
rather than split across fountain in my normal spending wallet,
it will be great.
Well, Tomato, it worked.
Thank you very much.
I agree.
If I go to a place that's got a square terminal,
I've got a little bit of spending sats
like I use for boosts and other things.
I'm going to use it for that.
It's not a lot.
You know, quickly in, quickly out kind of a thing.
You know what I'm saying, Tomato.
You know what I'm saying.
Thank you for the boost.
Code 27 is here with a row of ducks, 2,222 satoshis.
The people that don't boost sats
because they're afraid of the tax implications make me sad.
If the government outlaws holding Bitcoin,
these are the people that will sell, apparently.
At what point does your moral duty
supersede your fear of legal consequences.
Yeah, I think it's also just,
it's a matter of, you know,
how you do your accounting too
and all that kind of stuff.
Everybody has their different approaches.
I don't do tax advice,
but I certainly boost podcasts.
But I, yeah, there's a, you know,
also these things change over time too.
And if you're holding for 20 years,
these policies will change in that time period.
All right.
Thank you, Code 27.
Gene Bean's back with 5,781 sets.
seen as the fiat is converted to sats and honor splits i think uh i think i just report sats as
total yeah it's totally appropriate uh i'm not necessarily well so the fiat isn't necessarily
being converted to sats yet i haven't decided what the path is for that because the network
needs to spend fiat and i'd rather spend the fiat than spend the sats because we haven't had
any sponsors in some of the other shows for what are we on like six seven months now uh with some
minimal sponsoring.
So, yeah.
But I do foresee a future
where that is the case.
I hear noises.
I hear noises in the background.
Watching for subtle hints
at the show's episode art
is oddly entertaining.
Oh, Greg, I'm glad you like it.
I love, I can now connect
Cast-O-Matic directly
to my Albi Hub
with Noster Wallet Connect.
That is awesome.
Man, Cast-O-Matic.
Good job, folks.
Thanks for the updates, Gene.
Always love hearing from you.
Ace Ackerman's here
with a row of ducks.
I don't know about
these BTC Sessions guys.
They seem a bit out there.
Break out some clips
from the Bitcoin community's
version of Alex Jones,
Simon Dixon.
Now that guy can tell
a good story.
Oh yeah? Okay.
I don't remember
what the clip was about last week.
I do not remember.
But there's so much Bitcoin,
I watched so much Bitcoin media
in one week
that I don't even necessarily remember
what made it into the show or not.
It's unbelievable.
I was just wondering
what it does to my nervous system.
Probably makes it sharper,
more attuned,
and makes me a better Bitcoiner, right?
I mean, some people flex, they watch or listen to 40 hours of podcasts.
Rookie numbers.
Thank you for the boost, Ace.
Nice to hear from you.
J-Cube comes in with one, two, three, four, five Satoshis.
So the combination is one, two, three, four, five.
And it's a web boost.
This is awesome.
Thanks for building it.
So far, I've called it the Stay Humble Summer.
Nice.
Stacks, the Summer of Stack and Stay Humble of Summer.
Stay humble summer.
My favorite.
That's really good.
J cube.
Thank you.
Orange mark comes in with 5,000 Satoshers.
Tough little ship.
Little.
No message.
Just value.
Thank you very much.
Appreciate that.
Malrix.
Sorry, Mal.
Mal Styrix.
15,000.
I'm sorry.
You make me want to be a better man.
50,000.
15,000 stats.
Hey, Chris, sending some love in these crazy times.
Bitcoin is more important now than ever.
And using it for value is the best way to demonstrate its worth.
Completely agree.
Sorry, I butchered your name because I, you and I, same page.
Thank you for that.
Kiwi Bitcoin guides here with 5,678 satoshs.
You're doing a good job.
In 2020, I was trying to buy a house.
And when the global economy shut down and everyone went into lockdown,
I thought the house prices would fall.
But they didn't.
They went higher than I could have ever imagined.
And I didn't understand why.
So I took it upon myself to find out why.
and I learned about how money really works
and what quantitative easing and money printing were.
A couple of friends told me about Bitcoin,
so I decided to find out for myself and how it works.
And that took me down the rabbit hole.
That is a good story, Kiwi, and one I can relate to.
Thank you very much for sending that in.
Nice to hear from you.
All right, Cypher Citizens here with $10 in fiat.
The traders love the vol.
Love the web boost option.
I use it occasionally to zap your Nostra notification,
but I don't think you ever added those zaps to your totals.
Yeah, I don't know how to do that.
But I do look forward to your shows every week.
Perhaps maybe I will one day.
Maybe the machine could figure it out.
This is the way.
I don't know.
Your inner child's here with a member boost,
the hard bet membership boost as the market forced piece
isn't on the boost.jupiterbroadcasting.com site,
even though I'm listening on Fountain.
Hmm.
Did it not update?
It does take a bit for all the feeds to update.
There is a delay.
Yeah, I see market forced piece right now.
Yeah, there is a bit of a delay.
So it'll show up on Fountain first.
and then it'll generate on jupiterbroadcasting.com,
and then it'll show up on the boost page.
So there's a bit of an automated processing sequence,
and if you're really Johnny on the spot, inner child,
you won't see it.
But it doesn't matter really if you boost.
I think I still capture it if you boosted.
So you boosted the hard bet,
and I still captured it in this episode.
So it still works, you know what I mean?
But I will keep an eye out
just to make sure that doesn't get too weird.
Thanks for letting me know.
Thank you, everybody, who boosted the show,
and thank you, everybody, who streamsats.
24 of you streamed those sats
and you stacked 31,958 satoshis.
Not too bad at all.
Thank you.
That's pretty nice.
Bringing it all together
when you convert the fiat to sats
and all of that,
which we converted at a 1,681 sats
to USD rate,
this episode stacked 314,753 satoshis.
that's not too bad at all
thank you everybody who supports the show with a boost or a membership either through fountain or
jupiter.party i really love the interaction but also like i was just thinking about it again this
morning like there is just no conflict of interest here uh if i if i mess up and give you bad
information the boosts go down and if i do a good job and continue to try to mine good information
and do my proof of work,
the boosts go up
and you guys return the value to the show.
And it is a cycle that just,
it really would be so, so much better
if even 10% of our media adopted it.
You know what I mean?
Like if just 10% adopted this model,
think about just the change in trust
and information quality that would be out there.
So thank you everybody who supports the show.
Boost.JupiterBroadcasting.com
or a podcasting 2.0 app.
that'll do it for you as well. And I really do appreciate the support.
All right, a quick FUD corner in the updates. No actual hard FUD yet.
But I like to tell you what's coming before it hits you in the face.
And this week, I think yesterday, actually, President Trump signed an executive order to spend more printed money on quantum research.
to stay ahead of the pack.
We're way ahead right now.
We'll keep it that way.
The second order I'm signing
directs federal agency
to transition to what is called
quantum cryptography.
Does anybody know what that is?
You're going to hear very soon.
Yeah, I think you will.
I think as money starts to spill
into this kind of research,
the FUD machine will probably ramp up.
So brace yourself.
More quantum FUD is coming.
Sticking with Trump for a moment,
And this I was I was complaining about this to friends and family all week, you guys.
So I have to do I have to do it right here on the show.
Last week, I laid out my thesis that economic conditions forced the United States into a bad deal with Iran and that they were essentially capitulating because they couldn't push it any further with the energy markets and the bond market.
And it's not totally radical, but it's kind of me putting myself out there as far as an opinion goes and an analysis.
Right. It's kind of I am putting myself out there.
is that is not a mainstream analysis.
I'm not the only one who thinks it, probably.
But I was really chuffed because, I don't know,
two hours after I published the show,
President Trump held a press conference,
and he just kind of came out and admitted
to what my thesis was laying out.
I'm going to get bad press. I know that.
Now, if I did the opposite,
if I went out and continued to bomb them for another four,
just bomb the hell out of them,
I get bad press on that. No, there's nothing I can do. But what this does is it allows the ships to go.
If we keep bombing, those ships won't be going. And you're talking about 500, 600, 700 million
dollars a day. It's a lot of money, a lot of money. That's why the world is okay. It's liquid.
It's fine. Also, we run out of reserves in about four weeks. You know, there are reserves all over
the world and we would really run out. And there'll be a time when you wouldn't be able to get it.
And you want to see Bedlam?
So for all those so-called geniuses that want to show me how smart they are,
ask them why didn't they blow up General Soleimani.
Ask that of the general and a couple of other people that I like very much,
but boy, are they wrong.
Go ahead.
He's saying that we would have had economic disaster.
In another four weeks, we would have had total economic disaster.
I don't know.
That just strikes me as noteworthy, as worth observing.
All right, let's talk about BIP-110, the reduced data temporary soft fork, which is a consensus change proposal that aims to temporarily restrict several data carrying constructs for 52,416 blocks, which is roughly one year after activation.
All right.
And mandatory signaling starts at block 961,632.
Then the reduced data rules are activated for one year period of time after that.
And they come active no later than, I believe, 965, 664 block.
These are not the details we care about.
What we care about is that we are very close because it's going to be about 45 days, depending on difficulty adjustments.
And we are getting to the point where I think people that are running BIP 110 and NOTs should probably start considering a backup plan.
because it doesn't look like this thing's going to go the way they want.
I'm not sure. Things can always change.
But I'm going to play a couple of clips, and then we're going to talk about this.
Super Testnet was on Isabel Duke's YouTube channel,
and they had about an hour and a half chat about BIP-110.
But for our focus this week, Super gets into how BIP-110 plans to activate.
I want us to kind of understand this for the rest of the conversation.
Activated soft work work. What does that mean?
yeah um in this case the way it's working or proposed to work is uh what they want before
august before the user activated part starts is they want to get at least 55 percent of miners
signaling that they are ready for this software and once 55 percent of miners have signaled that
by creating blocks with this little message in them that says we're ready
then they start enforcing the rules and they say now all blocks have to do it and if you're not
if you're not ready, if you're mining and you're not ready for it, we start rejecting your blocks.
So they're kind of doing like a combo plan, which is basically they're reducing that threshold of
consensus of miners for a miner activated software down from 95, 85 percent, all the way down to 55,
which is, you know, the lowest one that I think has ever been proposed. It might be the lowest
that's like really conceivably possible, right? Because you need 50 percent at least to like
make anything work. Theoretically, you need 50 percent plus one. Otherwise, it's not Bitcoin.
Right, right, right, right. So they basically went on to the lowest possible target of consensus that you could have, which is like very close to the lowest possible controversial move. But is there kind of is again, the idea here is like, OK, we don't really care if it's like contentious, because then at that point, as long as we get that much, then we'll just do a user activated soft work on top. And then that will hopefully, in their opinion, maybe seal the deal or that's the hope.
What they want to do is get 55% of miners on board, and their hope is that the other 45% will at least begrudgingly comply so that they don't end up on a minority fork of Bitcoin.
If they don't reach 55% by August, then what they plan to do is start just on the BIP-110 nodes, just those ones, start rejecting miners' blocks, the majority of miners' blocks, and say, you need to start signaling.
I think they say 100% of blocks in the August signaling period have to signal for BIP-110.
Okay, so I see. I misunderstood before.
So basically, there's the miner-activated software. They're going to try to get to 55% and basically hope that that creates enough pressure on the other miners who don't signal to cave, essentially.
And we'll talk about what happens if they don't cave and what happens if you just have half the miners, you know, mining on one software client and the other on another.
Let's hold that for now. But then they're, you know, kind of additionally, if they don't get to 55%, then they will go by user-activated software.
The people running the BIP nodes will start rejecting blocks and they will hope that more nodes start following along following suit and basically kick out the miners who aren complying So Start9 was one of the node solutions pretty popular in our community
that made it pretty front and center to switch to knots and then automatically signal for BIP-110.
So Start9 was asked on X, what if BIP-110 fails? What will they do with all their users that they
sort of guided to knots in BIP-110, are they going to give those users a path back to core?
And Start9's response I found to be a little concerning. They said,
quote, while it's more likely that people running core will need to quickly switch over to,
well, sorry, I'll bring it up. I'll bring up the actual tweet.
While it's more likely that people running core will need to quickly switch over to avoid forking
themselves off the network, the inverse is also possible. So they're saying it's more likely that
people running core are going to be the ones that get stranded and need to switch. We'll do our best
to message to the options and risk the best we can, especially the activation height approaches.
But I suspect there will be no shortage of information. We made it extremely easy to
switch between Bitcoin implementations on StartOS 0.40 without needing to re-sync or reconfigure
anything. It's just a button and its dependents like LND and CLN are satisfied either way.
Okay, so I like that they're going to make it easy either way. What I don't like is that Start9
thinks it's more likely that people running core are going to need to likely switch over to avoid
forking themselves off the network. To me, that's delusional thinking. And I don't know, we're 45
days out. I just don't see a lot of support for this thing, not from the miners or nodes. I see
about 3,384 nodes. So about 12.6% of the nodes. That's a pretty good. Most of those are on tour.
I'm not sure how trustworthy all those numbers are. The situation is a little more bleak when
it comes to the mining side of things, I would bet a lot of the nodes we are seeing online
are probably start nine nodes.
Super Testnet gets into the mining side of things.
And like he says, the amount of support we're seeing there probably isn't enough at this
point.
Epoch of the last 2016 blocks, every 2016 block is called a signaling period where miners
can signal for softworks and nodes are expecting them to do this.
In the current epoch, I think 14 blocks total have signaled out of 2016.
Of course, we still have about 100 left to go.
What does that math turn out to be?
About one block per day.
Okay.
Out of 144 blocks per day.
Oh, so that's less than a percent.
That's quite a bit less than 1%.
Okay, so quite a bit less than 1% of miners are signaling for this.
In order for this to be miner activated, we would need at least 55.
That's pretty rough odds.
it's pretty risky and it's not going to be a good look for start 9 regardless of the fate of
BIP 10 at this point as a platform they took a political position they helped users implement a
risky default I think it'd be one thing if start 9 made an easy transition after BIP 110 was
activated and if it was looking successful and it was needed but instead they attempted to use
the start 9 user base to impact the outcome of all of this and that's just not what I want to
see from a node OS. I don't like that. If it's, if it might be even an issue I agree with today,
it might not be an issue I agree with in the future. And once BIP-110 becomes active in August,
nodes enforcing it will start rejecting blocks that don't comply. So that means blocks that
either don't signal support or don't follow the opportun limit are going to be rejected by BIP-110
nodes. So unless there's a major increase in miner signaling, those nodes are going to have to wait
for BIP-110 compliant blocks to be mined. They're going to wait around. And most miners so far seem
like they're going to keep building on the regular chain. So the likely outcome is that the fork
fails and BIP-110 ends up with a bunch of stranded nodes out there. And I think that the issue is
where the miscalculation with BIP-110 is, is that it's not that most Bitcoiners want
spam.
We don't like spam.
The core issue was always core.
It was how they communicate and how they riled up the community.
We're not seeing high fee rates.
We're not seeing a massive spam issue.
What we had is a problem with how core communicates and what features they focus on.
we didn't ask for this massive, massive change.
And it's frankly, if it ends up failing,
in my estimation,
it will have been nothing but a massive distraction
from the core problem.
Because while we're all debating BIP-110
and if people are going to get stranded
and yada, yada, yada,
we're not actually addressing the very original issue
that started all of this.
luke in a weird way is actually preventing the core problem from being addressed
which is probably actually an achievable problem we could probably address it at least to some degree
that's the irony of all of this the bip 110 proponents they think they're the majority but
they're the minority they have no hash power and they're trying to force a consensus change on
bitcoin that if it were successful would prove that bitcoin can be radically changed by small
groups, which would really mess up the whole thesis in a big way.
I asked you earlier, what would make you change your Bitcoin analysis, your Bitcoin thesis?
Well, I'd have to ask if BIP 110 passes, does that make you reconsider Bitcoin's long-term
viability as a hard asset?
I'll link to some good visuals and more information in the show notes for all of this.
like i don't want to see weird arbitrary data stored on the blockchain i i would prefer only
monetary use cases but there are legitimate uses that bip 110 will mess with wallets that are on
the market today that create addresses for users that they don't even know are using certain
features that bip 110 is going to break there are lightning nodes that are going to get messed up by
this i know they don't like to admit it but it is real it could happen so the fork risks are high
and instead of actually addressing the core issue we're debating this thing that's likely not going
to go anywhere because these lunatics are in an information bubble on youtube and on x and they think they have they think they have the winning strategy here But the numbers so far don bear it out
So I just don't see how BIP-110 becomes successful
unless they change the rules around it.
I could see some things getting addressed
that would make BIP-110 a little more appealing to people,
but I don't know if that's where they're at right now.
I'd like to know your thoughts
and if you're still sticking with it,
if you're still running knots,
and if you have any concerns with how political start nine has gotten in all of this.
Okay, let's talk about something positive.
This episode might have seemed like I was pretty negative on AI.
And while I think the fiat games around it are getting riskier and stupider long term,
I think Bitcoiners could be the ones that benefit some of the most from AI.
I do.
And Strike CEO Jack, he had a BTC prog talk that was finally posted online this week.
It's a bit of a banger.
It's nearly 50 minutes long.
So I'll link to the whole thing.
But I want to complete the loop on the AI topic for today.
And why I think it's good news long term for Bitcoiners.
So I'll play a couple of clips from Jack's talk.
And then you can watch the rest of the whole gosh darn thing in the show notes if you want.
So Bitcoin saves the time that we spent.
But the question is, what about the time that we have left to spend?
And this for me is the AI part.
People are all doomsday about AI.
I'm not.
I truly believe it's going to usher in
a new art renaissance for us.
Of all the AI stories I could have done,
whatever, Claude Bott, whatever, Sam Altman,
this is my favorite.
A dude and his dog.
A man's best friend.
This guy's dog was dying of cancer
and he used AI to design a cancer treatment
that was previously conceived to be impossible.
How cool is that?
Previously, you needed to be thousands of hours of research
and dozens of doctors and hospital machinery.
This took a civilization to do before.
And this guy did it
with like a couple hundred bucks of Claude tokens or whatever.
That's unbelievable.
and so AI does the other part of what we were promised.
It multiplies what we can do with the time ahead.
No, it's hard because I don't,
I'm not trying to like pick out a certain profession
and say they're bad.
No one's bad.
I love everybody.
But like, I don't know if any kid grew up
not wanting to be a professional athlete or a philosopher or an astronaut and land on the mood,
but instead wanted to be in compliance and wanted to KYC people.
And so my point is that AI does not replace human creativity.
Human creativity is why we're here, guys.
That's why I brought us to Florence 500 years ago.
We're the creatives.
Machines aren't creative.
Machines don't have taste.
Everything that ChatGBT creates for me that's art looks like shit.
We make it beautiful.
But what AI does do is it replaces the cognitive drudge, the slog.
Ugh, I got to get up to work and go KYC people.
Okay, so I'll save the end for you to watch, but my last clip, Jack brings it together. With AI, we have a new kind of abundance in some ways, if you will. And with Bitcoin, we have a way to capture that abundance.
money we all had to try and survive so now that we have the tools i believe that humanity is about
engineering a better world we engineered the better money we engineered intelligence accessible to
everyone now what i think that's why i think this talk is going to be hopefully a little bit more
hopeful and positive at the end, is I think the renaissance isn't coming. It's already here.
I truly, genuinely believe that. I know it's a bear market. I know the vibes are low. I know
times are tough, but I think a very terrifying chapter is ending. When Satoshi released that
white paper, that was the end of the beginning and the beginning of what's now.
just a few more AI examples you know a 23 year old kid used his AI to solve a 60 year old math
problem this is remarkable to me truly like genuinely awe-staggering
or open claw I mean listen everyone in the world now has a personal assistant
does anyone know this is my friend Roya does anyone know Roya
Roya is one of the most incredible women I've ever met she used bitcoin years ago to pay Afghan
women who were not allowed to have a bank account totally debanked people complained about the
volatility oh bitcoin's so volatile you don't care about volatility when your government's
depressing you and removing your ability to use any money at all. And after the Taliban took over,
reporters said that those same woman used Bitcoin to save, earn value, transfer with each other,
and actually start businesses and sustain a life. See, the revolution is here, in my opinion. It's
already starting. It's not something we're hopeful about. It's not something we're waiting for.
It's right now. What about El Salvador? This was the most dangerous country in the world.
Civil wars, destruction of currency, mayhem, chaos, gangs.
They found hope in this thing.
Would you look a Salvadoran in the eye
and say, we're waiting on the revolution?
They are safe in their streets.
Their country is growing.
Their money is hard.
Their life is good.
The revolution is here.
AI and Bitcoin are real.
And my message to you guys is really do not get slogged down by what going on in the world today I truly believe that harmony in society will be restored when personal responsibility is valuable again
Don't let these people get you down.
We all now have access to intelligence.
We have access to a computer that can do all white collar work for us.
We have access to the hardest money ever conceived in mankind.
We can engineer our way out of this.
We can do it.
Let's check in on the state of the network.
I'm wrapping up at block height 955,210.
Our price right now in U.S. dollars is $59,390 for one Bitcoin.
That puts our sats per dollar at 1,684 sats to $1.
We are now in a 52.9% decline from our all-time high 260 days ago right on the money.
Retarget date for difficulty is June 26, 2026, with an estimated difficulty upwards adjustment of 5.9%.
There are 26,765 reachable nodes on the network, and we are down 9.9% since our last episode.
I don't care.
Just don't go any lower.
We'll see.
We'll see if we can defend that 200-week moving average.
But, next block, all on that.
I think the state of the network is quite strong.
All right. Well, if you made it this far, get the links this week in Bitcoin.show or they'll be right there in your podcast app.
Let me know how I did. My goal is to not get distracted by the emotions or the politics around what's happening, but focus on the signal.
So you can plan for yourself, your friends, your family, your business, your future, whatever it might be.
So let me know how I did with a boost. Of course, I want to know what would make you change your market position on Bitcoin and what you think about the AI bubble stuff and anything else you want to comment on.
Please do boost in.
It's really my favorite part of the show.
It's how we really stay connected.
All right, so I'm going to leave you with a value for value track, as I always do.
This one's for the summer of stack, or I guess the stay humble summer, right?
It's Through the Fire by Nope.
This one's for you Bitcoiners.
I'll see you back here next week.
The child looks like a funeral today.
Half my friends already walked away
My mom called twice, she saw it on the news
Another talking head with nothing left to lose
Telling everybody this is it, it's done
Like they ain't said that since 2001
I'm sitting in the dark, refreshing on my phone
Watching everything I build just melts alone
The doubt is getting louder, timeline full of jokes
I'd be lying if I said it didn't sting a little, folks
But I remember last time
And the time before that
So call me crazy, I done heard it all
I've been through the fire
I ain't gonna fall
The dip don't scare me
Now I know this road
I've seen the other side
And what it holds
I'm still stacking
See, everybody's smart
When the line goes up
But when it bleeds
They turn and tell you
That's enough.
They never read the white paper, never ran a note.
They just watched the ticker like that's all there is to know.
But I fell in love with something they can't see.
Ten minute blocks still ticking perfectly.
So call me crazy.
I done heard it all.
I've been through the fire.
I ain't gonna fall.
The dip don't scare me.
Now I know this road.
I seen the other side.
And what it holds, I'm still standing.
I'm still stacking.
Proof of work don't need your opinion.
Difficulty just, it just keeps on spinning.
21 million and they can't print more.
That's a thing they never had an answer for.
No president, no banker, no CEO.
Can change a single line of what I already know
They wrote the obituary 400 times
Said it's tulip, said it's beanie, baby, said it's crime
But every winter ends and something starts to grow
And every cycle takes it somewhere
They said it wouldn't go
So when you see me buying
While the whole world screams
Just know I bet on math
I don't bet on dreams
So call me crazy
Yeah, I heard it all
I've been through the fire
I ain't gonna fall
The price one day
It's gonna be unreal
And all this pain
Is how I know it's real
I'm still stacking
Still stacking
Through the fire
Still stacking
I've seen this before
you