Welcome in to This Week in Bitcoin, episode 113.
My name is Chris, ChrisLAS.com, JupiterBroadcasting.com.
Things are moving fast this summer.
The situation is sometimes changing multiple times in a single week, and this was one of those.
I'm going to try to keep it as focused and tight as possible, get you back to your summer as fast as possible.
So let's just start with the news that I think none of us were surprised by.
Early this week, things were looking rough for Bitcoin.
At least in the short term, of course.
As I feared, the U.S.'s memo of understanding with Iran has fallen apart.
I don't think any of us were too surprised by this particular news.
Overnight, the U.S. launching a new round of strikes against Iran as the war is now clearly back on.
For five hours, the U.S. striking Iranian military targets, including coastal defense systems and missile and drone sites.
Iran responding, striking two tankers in the Strait of Hormuz.
Bahrain and Jordan also confirming they intercepted a number of Iranian missiles overnight.
Iran and the U.S. now battling for control of the Strait of Hormuz.
After Iran announced it's closing down the critical waterway,
the president now reinstating the U.S. blockade of Iranian ports.
Going even further, Trump declaring the U.S. will soon become, quote,
the guardian of the Hormuz Strait and announcing plans to charge a 20 percent fee on all cargo that passes through it.
We're spending money. And so what we've done is we are going to be reimbursed for protection.
That plan directly contradicts what his own secretary of state, Marco Rubio, said just days ago.
The charging a fee would violate international law.
No country is allowed to charge tolls or fees on an international waterway.
That's existing international law. That's the way it is in international waterways all over the world.
And that's the way we expect it'll be here.
Before Trump launched this war, the strait was an international waterway, ships able to pass through freely.
Now, if Trump's fee goes into effect, a massive oil tanker transporting two million barrels could have to pay the U.S. upwards of $32 million.
I just doubt that's going to happen. Seems like a negotiation tactic to me.
But either way, as they always say, the market just hates uncertainty.
Goodness, you know, I thought the traders love the vol, but I guess not this kind of vol.
We just have this nagging sort of energy issue just as things were starting to turn around, which we'll have more on that in a moment.
We have this news. And, you know, what's been on my mind are the oil reserves, because we all know that the Western nations, like the U.S., drew down supply in order to support the market.
America's emergency stockpile of oil needs a refill.
The Strategic Petroleum Reserve has dropped to 331 million barrels.
That is the lowest point since 1983 when it was first being filled.
In tonight's Good Question, Jeff Wagner explains how the reserve works and why it has fallen so far.
There's a chance the gas you're pumping into your car was made with oil from America's emergency stockpile.
Not because the country is suddenly low on fuel, but to slow the eye-popping ascent of prices due to the war with Iran.
What is the Strategic Petroleum Reserve? Good question.
The Strategic Reserve was created after the Arab oil embargo back in the late 70s,
and it's been the source that America has turned to during times of disruption.
The oil is stored at several sites along the Gulf Coast between Texas and Louisiana.
GasBuddy analyst Patrick DeHaan says it's basically a backup.
Presidents have leaned on it in case of global emergencies.
11 million barrels were released in 2005 after Hurricane Katrina damaged pipelines and refineries.
When Russia invaded Ukraine in 2022, President Biden authorized 180 million barrels be released.
Then this March, President Trump ordered 172 million barrels to be released.
He took that action after Iran retaliated by choking off the Strait of Hormuz.
172 million, 180 million kind of gives you the numbers when there's an emergency.
So right now, the U.S. Reserve is around 331 million barrels of oil.
I know we all have short memories these days, but does anyone remember just three weeks ago,
episode 110, where I played a clip of Trump saying at the G7 summit, just shortly after
the memo of understanding had been signed, he said the quiet part out loud.
I couldn't believe it.
I had to play it in the updates.
He said we had four weeks of oil left, and if they hadn't stopped the fighting, there was going to be bedlam.
If we keep bombing, those ships won't be going.
And you're talking about $500, $600, $700 million 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?
Yeah, well, I don't want to see bedlam,
which I guess means chaos.
But it's not just the nation reserves.
Its commercial reserves are down too.
So just looking at the U.S. in this month, July,
as of the 10th, they've decreased by 1.7 million barrels.
So commercial reserves are around 409 million barrels
sitting in their inventory.
So national stockpiles and commercial inventories
are lower than they normally would be right now.
The United States, for example, consumes an average of 19.5 to 20.6 million barrels of oil a day.
Tends to be a little higher in the summer.
So let's go with 20 million.
The U.S. consumes 20 million barrels a day, just the U.S.
So right now, we have about 20 days of commercial inventory.
So less than a month of oil usage is currently on hand in the commercial inventories.
China consumes 16.4 million barrels a day.
The EU consumes about 10.5 million barrels a day.
Canada consumes roughly 2.38 million barrels a day.
And the UK consumes approximately 1.4 million barrels a day.
Just a little bit of itty bitty.
Overall, the world consumes approximately 102 to 105 million barrels of oil a day.
And there's some other petroleum products in there as well.
So we had a pause with the fighting, but that wasn't enough to restock supply.
We just we have we have a lot of things to get production levels back up to normal.
We're not there yet.
So I'm going to play a clip here from Bob McNally.
He's from Rapid and Energy Group.
They follow this stuff.
That's where they that's the whole sector.
It's just energy and trades on energy.
And this is his take.
Is we won't know for many months, many months.
First, we have to flush the barrels that are in boats.
It's, you know, 47 crude tankers, 71 product tankers, 153 crude product LNG.
They have to leave.
And then the empty ones have to fill up storage.
Then we have to see our Saudi Arabia, Kuwait, UAE willing to restart their fields.
How much damage has been done to their production capacity, particularly Iraq?
And so we won't know really for many months if the Gulf producers can get back to their
old production levels.
Some may try to go higher, like the UAE, which has left OPEC.
So great mysteries, great uncertainty on this.
The only thing to know for sure, we're not going to know next month.
We're not going to know in August.
Here's what we are going to know in the next couple of months.
And this is what makes this so fascinating, Kaylee, is that while we're starting up Hormuz, if that works well, we are going to dig deeper into inventories.
We are already 11-year seasonal lows in gasoline in the United States, 29-year seasonal low in distillate.
And 43 years just was announced on the SPR.
Yeah, the strategic reserve.
So he's saying while they're trying to get the, even if things go well, even if they go well while they're trying to get the straight open, we're still going to have to dig into the reserves.
To say nothing I guess if the straight doesn go well And 43 years just was announced on the SPR and we going lower still That just the math of this whole working its way through So we have the Hormuz good news
but it's going to take a while, months, to really filter into meaningful volumes.
Meanwhile, we have to reckon with these stock draws. Well, so to that point, Bob, if it's going
to take months for the volumes to return, as you're saying. Is that volume just going to meet
the daily demand? How much of that will be able to contribute to the rebuilding of the stockpiles,
not just here in the U.S., but in every other country that has had to rely on its reserves and
draw those down to get through this period? Well, if over the coming many months we can get back to
15, 20 million barrels a day, there will be demand for that crude, even more demand than before
in some ways. China, I understand, is going to want to build even bigger reserves than it had
before. Every country in Asia, and I would think some here, perhaps in the United States and Europe,
are alarmed by the prolonged nature of this historic disruption, and they're going to be
building or increasing their strategic reserves. That means more crude. Asia has been on a crash
diet since late February. They have just held their breath and are not eating and not drinking
any crude. Well, you can't do that forever. So that demand is going to soar back. And there is
a risk, Kayleigh, that the demand, this pent-up demand that has been suppressed in Asia, combined
with this eagerness to top off and refill and increase strategic reserves, that could get ahead
of the pace at which the oil supply from the Arabian Gulf returns to the market. So I think
we're getting close to a bottom here in prices. I'll be surprised if we can sustainably go much
lower. And there's a lot of reason why prices will go up from here. So I think the number to watch
is somewhere around 15 to 20 million barrels a day. If we can get that to that level of production,
that's where inventories could probably start to rebuild. But there's going to be a lot of
uncertainties and there could be that Asia surprise as he puts it in there. So I feel like right now
the narrative around energy seems to be shrugging off the situation with Iran.
And they're assuming, well, we all expected to dust up.
So they're assuming this is probably going to just be a little dust up and it'll pass.
If that doesn't turn out to be the case, I think we should expect and brace ourselves
for a narrative shift around energy to get pretty negative at some point in August.
And that would be my expectation.
And that's generally going to be, you know, doom and gloom about rates and the way they
just the way they jump around.
They'll completely forget this week.
Just watch. Just watch.
Well, speaking of inflation, you know, we had this mixed energy news, which was sort of bad for Bitcoin short term price action.
But then some good news came along.
And, you know, I feel like the market acts like a dog in a cage.
And then its owner, the Fed, comes along with a leash from time to time and gives it some relief.
And it just is so happy and it completely forgives the Fed for everything.
Whatever.
This week's CPI came in at 3.5%, which was cooler than expected.
And it revived the whole, oh, the rate cuts are on hold bet.
Everybody figured, OK, this is good news.
Rates are on hold.
That helped push Bitcoin up a little bit as that bet went into effect.
To be clear, though, this is just the expectations on what the Fed might do.
Right.
All this is happening on the expectations of what they might do.
And 3.5% CPI, I don't know if you know this, it's not 2%.
So this is what's so crazy about our current world.
That means inflation has come in above the 2% target 64 times in a row.
And the market, the market is bullish.
All right, let's turn back to last month's consumer price index.
Prices actually down 0.4%.
It's the largest negative reading since 2020 and the pandemic.
John Lonsky is with me.
that's a dip in consumer prices.
Surely we're not talking now about a rate increase, are we?
You're exactly right.
There's not going to be a rate hike anytime soon.
I don't think there's going to be a rate hike into the foreseeable future.
That being said, in response to this good report on the CPI,
this disinflationary report,
the futures market still has an implied probability,
I think of 59% to a rate hike at the September meeting of the FOMC and an 81% chance of Fed
funds having been raised by the end of this year.
I don't buy the markets.
We'll get back to that.
But I just I love just how I don't know, confident he is and just how, oh, man, it's so great.
It's so great.
It's only three point five percent.
Woo, baby.
We licked it.
Yeah, but I think he might actually be right about the rate hikes getting canceled.
But we'll come back to that later.
What's going on here, and you probably guessed it, CPI data, it's always a little behind, right?
It's reflecting a brief ceasefire with Iran.
And oil prices immediately, energy prices immediately came down when that memo of understanding was signed.
But, you know, regardless, lower than expected.
If you get a print lower than expected with a negative handle on it, that generates buzz.
And all of this buzz was happening right before the new Fed chair, your buddy, Kevin Warsh, had his first congressional testimony.
These are a big deal. And the Congress critters try to get everything they can out of them.
And you can bet your bottom sat that the topic of inflation came up.
Now, Warsh, it's a kind of a dramatic opening he makes in his statement this morning.
But again, no guidance. He says the U.S. is at a hinge point in history.
and their task is to ensure that the economy excels into the future.
In the text of the testimony, Walsh says the key to that is bringing inflation down.
Quote, while monthly price fluctuations are inevitable, especially in an unsettled world,
underlying inflation over long time horizons is determined largely by monetary policy.
The members of our committee have no tolerance for persistently elevated inflation,
and we share a resolute commitment to restoring price stability.
Now, what's missing from that statement is any mention of how they plan to do that,
whether they plan to raise or lower interest rates or hold them.
Nothing on that in the text.
Yeah, well, we couldn't tell you about our future plans.
Now, Kevin's preferred way to measure inflation, i.e. trimmed PCE, that came up
because he's mentioned this before and he's tried to distance himself from it a bit.
And while he doesn't completely disavow trimmed PCE, he seems to instead just kind of say all our ways of measuring inflation are bogus.
while trim mean PCE stood at only 3.6%, a divergence of nearly two percentage points.
And so here's my question. If trim mean PCE detected the inflation shock later,
understated its severity, and diverged from core PCE by nearly two percentage points,
why should the Fed place greater weight on it when setting monetary policy? And to put a final
point on it, your core criticism of the Fed is that it was behind the curve on inflation.
that same criticism can be leveled against your preferred measure on inflation. So why the
disconnect? So none of those are very good measures of underlying inflation. That Wall Street Journal
story that you referenced is incorrect, that I have a preferred measure from one of the reserve
banks. If I had a preferred measure, I wouldn't have called for a task force to go back to first
principles, and the data task force will be looking importantly at inflation measures.
My view is that we need new measures to understand the underlying changes in inflation.
Am I interested in what's the mean or median price of a good in a big box retailer?
You bet I am.
And none of these measures capture that.
I am super interested in finding new measures to do a better job to help us inform our decisions
so that the inflation of the last five years don't continue.
Sounds like Kevin needs to get himself a subscription to Truflation.
Now Congressman Brad Sherman from the 32nd Congressional District of the brave and proud California he held his seat for nearly 30 years and he has worked hard for the people of
the banks. And at every single one of these hearings, and you'll have to excuse me for
getting a little worked up here because I've watched a lot of clips of this guy,
and I've watched a lot of testimony, and I've had to put up with this guy now for years.
And I find him to be so obnoxious because his intentions are so obvious,
and his loyalties are not with the 32nd Congressional District of California.
Let me tell you that.
And so he has to sit there and ask Warsh some of the really dumb questions.
And he's asking the Federal Reserve Chair of the United States
if he plans to bail out, quote unquote, crypto.
I still have the scars from the 2008 financial crisis.
Oh, my God.
You know, oh, this stuff, too.
There's a lot of this.
I cut just the tail of this, but a lot of this, I'm such a hero.
You know, we have the scars from the 2008 financial crisis that inevitably made me one of the most filthy rich people you know.
And my entire family has generational wealth now.
And the scars from that, they stay with us.
Oh, yes.
Yes, they stay with us all.
Yes.
I still have the scars from the 2008 financial crisis.
We all do.
I still have the scars from the extraordinary.
The extraordinary efforts that my colleagues and I under Chairman Bernanke's leadership had to do.
That is not something we want to repeat.
No, it takes a lot of work to print that much money.
You assure us that we need that you will not be bailing out stablecoin and cryptocurrency.
So I don't want to.
I can't even say it right.
After all these years of trolling these stablecoin and cryptocurrency, bailing out stablecoin and cryptocurrency.
So I don't want to.
I can be more broadly than that.
We do not want to be in the bailout business full stop.
But your predecessor did provide a liquidity function for money market funds.
If, God forbid, we faced a similar circumstance in the crypto world, would you bail them out?
So I want to be very clear.
We're going to do everything we can to mitigate those sorts of extraordinary risks.
if and when they were to come in the next four years.
We want to be in a position
we're not bailing out anybody, including crypto.
Does anybody know what scenario
Brad might be talking about there, right?
Because the stable coins are backed by treasuries.
So wouldn't you have to have some sort of collapse
in the treasury market to have stable coins collapse?
Or am I missing something there?
Boost in, if you know.
As always, the topic of artificial intelligence
and the impact on jobs and the economy,
It comes up. And like before, I think I am hearing the beginning of a theory, a basis, perhaps even an economic philosophy, if you will, from which the Fed could derive future policy.
If this cycle, Congressman, is like the previous positive technology shocks, the U.S. will be richer, will be more productive, there'll be more labor, there'll be more wages, there'll be more compensation.
That is, if this follows prior trends, this technology shock is likely more significant.
This is probably the biggest change in my adult lifetime because it's not just the creation of a new widget.
What it is, it's changing the method of innovation and the speed of innovation.
And I can't think of a country on earth as well positioned to take advantage of it.
So that's on the one hand.
But on the other hand, it can lead to disruption.
My own best guess is that the advent of the technology will be augmenting existing work,
that employees that were there will be more productive.
and ultimately at the end of the day,
I don't believe in the lump of labor fallacy.
All the jobs that are there have already been created
and the technology will remove some.
Well, it might be disruptive in the near term.
It'll create a lot of other jobs.
Just to give one example from history.
You know, I think before I let him continue,
what's hard to appreciate is
this is a strong opinion from a Fed chair.
They don't typically articulate a position this thoroughly.
And what he's essentially laying out here
is that he thinks there's going to be a productivity boom,
i.e. justification possibly,
for rate decreases, maybe?
I don't know.
Because what he's saying is
we may have a temporary productivity boom
that is in the short-term inflationary,
but I don't think it's going to lead to an employment loss,
so it may justify cutting rates at a certain point,
even when it wouldn't be necessarily obvious at the time.
Listen to what he's saying.
That is essentially the setup here.
already been created and the technology will remove some. Well, it might be disruptive in
the near term. It'll create a lot of other jobs. Just to give one example from history,
and then I'll close. Who knew at the creation of the internet that the internet would create
a million and a half Uber and Lyft drivers? I certainly didn't. So I want to be very open-minded
about the job producing elements of it. But we have a day job and it's to deliver on price
stability and full employment. Sounds to me like if they can find any data saying they see some
productivity boom associated with AI, they might have a playbook of new rules they get to follow
through this new economic theory. I mean, it's not locked in yet, but what is locked in is they're
going to have to come up with something. They're going to have to come up with something. And what
I noticed watching the testimony in full is the Fed chair and many in Congress seem to be very aware
of the impact on asset owners and non-asset owners when the Fed prints money or when the
Fed adjust rates up or down, i.e. when they take those actions that lead to asset inflation
and lead to non-asset owners getting smashed in the economy.
They are 100% aware of the second order effects because it came up multiple times.
There wasn't any one particular section that was worth clipping.
It was just sort of quick off hands.
Yes, of course, we know this.
Yes, of course, this is just accepted.
This is obvious, which you go back a couple of years.
These things were not just accepted.
These things were not just obvious.
There's even still a little bit of debate in this testimony around it.
So I think we now have a good indication of why Warsh and so many like him own a little bit of Bitcoin.
Let's do a quick BIP 110 update this week.
We're about 23 days out from the big transition.
Pretty exciting.
As the clock goes right now, it looks like we are set for August 8th, and it's at 1044 a.m.
Of course, that changes depending on how fast the blocks are clearing.
But we have, as of this recording, 3,456 blocks remaining until the switch.
So I wanted to just do a couple of quick things.
There's not a lot to dig into this week because it's sort of we're just moving through this process.
August 8th right now is the estimated time of arrival.
That's when the network enters mandatory signaling period, meaning that any block that doesn't signal bit four gets rejected as invalid on the BIP 110 chain.
It's not necessarily a deadline, though.
That's just the vote process.
And as of right now, the vote's at 0.99% in favor of BIP-110 signaling via mining.
100% of that signaling is coming from ocean, as we expected last week.
I would not be surprised if they even reach the 2% threshold temporarily, but they're just
about to crack 1% via ocean in favor.
The threshold is 55%.
They have until August 22nd, block height 963,648 to reach that 55% signaling.
If that happens, then the one-year rules will go into effect on September 5th at block height 965,664.
If it happens.
Bitcoin long-timer and CEO of Jan3, Samson Mao,
he's known for consensus and protocol views and commentary on that for a long time now.
In this clip he responding to a common argument made by the pro filter chain BIP110 group that argue well Segwit didn really have a lot of support initially just like BIP doesn but it was eventually adopted I don want to put words in your mouth
but you said something along the lines of like,
you feel like BIP-110 is doomed to fail, basically,
or like you don't think it's going to actually work.
Why is that?
Well, it doesn't have consensus.
So there are a lot of comparisons to the block size wars
and activation of Segwit,
But there was major consensus that Segwit was the path forward for the network to fix the malleability bug and to enable lightning.
And it was just a few people blocking it for financial gain, personal gain, ASIC boost.
And it was really more about the activation mechanism and activation timeline over the change itself.
whereas 110 and everything it does not have consensus especially amongst technical
development experts you know people that actually work on the software and even outside of that
there are a lot of ordinary people using bitcoin that don't agree with it either so it's a very
small group of people that really want to push this forward and they can be very aggressive and
nasty so it's not a good combination for building consensus and that is exactly what you need to do
to get change in Bitcoin.
But all of the technical arguments aside,
I go back to,
you should not be forced to need to worry
about something urgently for Bitcoin.
Like, that's just not the case.
Right now, 110 is popular,
it's fashionable,
people are rallying,
a small group of people are rallying behind it.
And I'll get blasted for everything I've said here
because, you know,
if you're not on their side,
you're their enemy.
But I don't view it that way.
Like, I empathize with them
and why they're upset with Bitcoin development in general.
But that's not really the path forward.
But my point is, if you take away,
if you replaced all the figureheads of the 110 movement
and you pick something else,
like who in your view are the major ringleaders for 110?
Luke?
i think luke um matt matthew cratter and probably bitcoin mechanic are the people i've heard the most
firm on it so people agree with them they they like them and you have to kind of take a higher
level view of this and think from a more macro perspective so let's replace uh those three people
with, I don't know,
three other people for something.
Like, what was the last thing
that was urgent for Bitcoin?
Making Bitcoin quantum resistant.
So you replace that with Nick Carter,
who invested in the Project 11 thing
to help blockchain secure themselves
against quantum attacks.
You put a podcaster in there
to replace Matt, like, I don't know,
Mark Moss, right?
And then, I don't know,
pick someone else that goes in there
is a...
A Bitcoin mechanic equivalent?
I don't know, someone, whatever.
But you get the idea, right?
Sure.
Just because they make a big fuss,
there are some nodes running it,
there's like 1% of hash rate signaling,
that's not consensus.
And you as a 110 supporter
would absolutely be against that, right?
I would think so.
Well, yeah, yeah, yeah.
And the argument that they're saying
is that there's like,
there would be reason for miners to wait to the last minute to signal or something like that like
from this game theory perspective i mean you can say that but uh i don't see that as the case at
all if you look what do you think of knots like the fact that you know i think knots has gone from
zero to to 20 percent you can't just look at node signaling that's a easy sybil attack right anybody
can spin up a node i'm not saying that they're fake there are definitely real people running
knots nodes i know them right but if you look at some of the like i i read my feed like um i i see
people like they're saying i'm running knots but i'm switching back to core because now knots is
saying i have to signal for 110 right so now you're being forced to do a change yeah funny that
adam back and michael saylor publicly opposed bip 110 over the weekend of course adam back has been
for quite a while but saylor continues to post about it as of even later today so i think the
question for August 8th probably isn't if BIP 110 passes and probably won't. It's whether the
network stalls a hash rate minority into a chain split and if the proposal just quietly fails or,
which I doubt it, or what they do after that. So I don't know. I don't know where they go after
that. I can't say I'm not a mind reader, but that, there you go. There's your BIP 110 update.
Okay, so I have a question for you.
One topic next week, what do you want it to be?
Boost in, and the idea I like the most,
I'll dedicate next week's episode to.
Why, why you ask?
Well, I'm traveling,
and I'm gonna be recording a bit earlier
so the news won't really have all the time to play out.
I mean, if something obvious happens,
I'm gonna cover that.
But I still want you to have an episode
while I'm on the road, doing a little road trip.
So I figure, why not have a little fun,
and one topic next week, you get to pick it.
Boost and tell me what you want me to talk about, what story you want me to cover,
or topic you want me to cover, and I might just pick your idea.
Boost.JupiterBroadcasting.com.
yeah you could support the show just by doing what you do you can head on over to the best place to
stack sats that's river we got a link in the show notes now a link for strike two also a great option
The Bitcoin well is the way to go if you're all about self-custody.
They don't even have a wallet.
They don't even have it.
All self-custody.
Great for Lightning, too.
If you want to spend your SATs speaking to Lightning, the Bitcoin company.
Hundreds of gift cards from Lightning to gift card.
In just seconds, you can even log in with the Lightning Network.
You don't have to create an account.
The Fold card lets you passively stack SATs.
It's a debit card now with also a Visa option.
Bill pay and all that kind of stuff.
SALT Lending also has some fantastic lending options with some liquidation protection options,
some competitive rates, and lower minimums as well. SALT Lending has some really aggressive stuff.
So we have a link to all of that, including a new one to strike in the show notes. You use those
links. You can just support the show by doing what you do.
Ask not what your podcast can boost for you, but what you can boost for your podcast.
Halleck kicks off the support this week with 54,321 Satoshis.
That is 5, 4, 3, 2, 1.
Coming in with a web boost to say BIP 110 scares me more than the BCH situation, mainly because it feels like a viable minority attack.
The minority attack aspect of it is very concerning, but we just see how it plays out.
I'm becoming less concerned as time goes on, but more concerned with the obvious tactics and coordination involved and how people that were trusted, Start9, Ocean, others, have taken advantage and are now doing things that were much worse than anything Core ever did.
It just doesn't make sense.
It just doesn't make sense to me.
It doesn't mean if it makes sense to you, you're wrong.
It just doesn't make sense to me.
But I'm in agreement with you, Halleck.
It's one of the scarier things in a while.
And I appreciate that, Bollerboost.
Thank you, sir.
Techison's here with 32,112 satoshis
been listening to it for a while now
this is the best bitcoin podcast out there
all signal no noise
the new video feed is cool as well
hey
keep up the great work he says
oh you like the idea of the 2k plus episode number
ah thank you
so he sent in also 2,112 sats
give you a little bit of a boosty boo for that too
Coming in hot with the boost.
Thank you very much.
Gene Bean's back.
with 4,444 Satoshis.
I don't understand what the heck is going on here.
I still think the four cycle is no more.
It's all about the liquidity
and the stuff you described a while back.
By the way, I want this space heater.
Maybe you are interested too.
The Avalon Mini 3.
So Gene, I have already bought a space heater.
Although this is cool.
So this is like one of those like board heaters
which Gene has linked me to.
That we like an electric baseboard heater almost
that you put down against a wall,
and it's sort of long and wide.
It looks really cool.
And of course, while it's generating heat,
it is mining Bitcoin.
The Avalon Mini 3.
And it comes in at just about $1,000 in the US.
That's cool.
And I like that.
I think it's called the Heat,
but I'll tell you more once I get it, Gene.
I'm planning to review it on the show eventually.
But it looks more like an air purifier.
And it's about the size of a HomePod,
maybe a little bit bigger.
and it generates heat and mines Bitcoin as well, supposedly pretty quiet.
We'll see.
I'm going to give it a shot in the home over the winter.
They've charged me for it, so I'm hoping by fall, you know,
they're still building them and all of that.
I'm hoping by fall I'll have a review, but we'll see.
This kind of depends.
But I like that idea too, Gene.
I also really like the idea of taking used mining equipment off of the internet bay
and then repurposing that as heating with ducting
or putting it outside somewhere and then bringing that in, you know, that kind of stuff.
Thanks, Gene.
Nice to hear from you.
Sleekstats, I never get that right.
Sleetsats is, nope, still not right,
is here with 10,101 Satoshis.
It's over 9,000!
Ah, I see.
Sleekstack is the lizard people in Land of the Lost.
See, I just never watched Land of the Lost.
My failed attempt at being witty
by referencing the 70s kiddie show, kids show.
Considering the 650-watt S9 Space Eater,
I use the purpose-built Brains OS in the controller.
With that, you can adjust the wattage and the fan speed.
I swapped out the old loud stock fans with the Noctua fans using a 3D printed adapter.
The Noctua fans at 55 speed are quiet and push out a comfortable, chicken-safe level of heat.
That's great.
Crypto Cloaks has all the adapters and a great DIY guide.
Man, that's a high-quality, high-value boost right there.
Thank you, Slee. I really appreciate that.
So, um, sounds like Brains OS.
Yes, I'm familiar with it.
Never actually ran it.
Sounds like I need to spend some time learning more.
Appreciate that.
Thanks for the value, too.
Now, Strix comes in.
That's probably not right with 15,000 Satushers.
I like you.
You're a hot ticket.
They write, sailor selling doesn't scare me.
If it was a business decision, which I get, but the media just wants to take their cheap shots because he's an easy target right now.
when they struggle to comprehend what Bitcoin even is,
much less the importance it will have in the future.
Their sensationalism is just noise.
The reality is, in order for a currency to be healthy and have worth,
it has to be exchanged and not hoarded,
which means both buying and selling must happen, right?
It's healthy selling.
It's healthy market activity.
Also, the market seems to be up,
even though he hasn't bought for about a month,
which I think is a good sign.
I think that's a good sign.
And I would bet you're right about sensationalism.
In a year, we probably won't even be talking about this.
Most people don't realize that a while ago, Sailor sold too.
Like a lot.
And we just sort of forget about it.
We just sort of move on, don't we?
Thank you for the boost.
Appreciate you.
Brewgators here with 2,112 Satoshis.
Put some macaroni and cheese on there too.
Ah, I love the idea of the minimum shout out to boost the last episode being 2,000 plus the episode number.
Keep it up.
So that was 2,112.
So this week would be 2,113.
Thank you very much.
Ten gold blooms out of a possible ten gold blooms.
Ace Ackerman's back with a row of ducks.
2,222 sats.
The four-year cycle's a sire!
Thanks, Ace.
Tell me how you really feel.
Orange Mart's here with 5,000 sats.
I am programmed in multiple techniques.
Sailors sold 260 million in Bitcoin and the market shrugged.
But the real fireworks are over BIP 110.
That's right.
Everything's under control.
Check out episode 112.
He's giving it a plug!
Thank you very much.
Appreciate you, Onge.
Hope you have a great rest of your week.
Thank you for the boost.
OB's back with 13,800 Satoshis.
I don't understand what the heck is going on here.
I don't think I've ever heard you so convicted on a topic such as BIP 110, like it or not,
because I agree with you, which I do.
But I think it makes the show better.
Spicy.
You know, it's not that I try to, like, take a strong position, but there is just somebody
who's been watching this.
You know, what's crazy to me is Bitcoin is about as old as my oldest kid.
So like the two things happened around the same time in my life.
And I care about both.
Obviously, I'm not equating the two.
But what I'm saying is like you just have this sort of innate understanding, right?
And when you see a threat, you recognize a threat.
I don't know.
It's hard to explain because I know there's other long-termers in here.
But I just, I think it's crazy.
I think it's just, it's absolutely, BIP 110 stuff is absolutely bonkers.
when you boil down what the second order effects are.
I can totally sympathize with being frustrated with core.
I can sympathize and being concerned,
although I don't see it being an issue
with spam on the blockchain.
And the reason why I don't say I see it
is because I still think, yes, spam happens, obviously.
I think there's some debate about what spam could be,
but we'll put that aside.
I mean, Luke himself used to inscribe things into the chain,
but we'll put that aside.
And I'll just say, I still believe
that you cannot really solve spam in an open network fully.
I mean, look at the internet.
If it could be solved, people would not have spam in their email today.
And there massive trillion dollar corporations that try to solve it I think it sort of inherently just part of an open system unfortunately But what proof of work does and what Adam Back came up with is a way to make it economically non
So when the network is really up against the wall and it needs the capacity, it needs that space for transmission of actual monetary uses, the spam will get priced out.
And I believe that is to be true.
And I think if people don't believe that, then they don't believe in Bitcoin.
It's as simple as that.
It's just the nature of the network.
And the people that don't think that's going to be what happens are just how they've simply lost faith in Bitcoin and they think they need to save it.
And I think that's a fundamental misunderstanding of the situation, in my opinion.
Thank you, OB.
Appreciate you.
Mere Mortals podcast is back with a row of ducks.
What?
Boost!
Whoa.
Oh, hey, Chris, long time no chat.
Really appreciate all your hard work putting these together day in and day out.
My Bitcoin knowledge and general news and technical details would be significantly worse without you and your show.
You're the best.
Well, thank you for the value, I assume, Kyron.
Nice to hear from you, Mirror Mortals Podcast.
Glad you're still out there.
Appreciate you.
That was fun.
Gonna guess I'm gonna get this one wrong, but D.H. Karura comes in with 2,395 satoshis and just says, boost!
B-O-O-S-T.
Thank you very much. Appreciate you.
Hey, Philippa's back.
Live long and prosper.
3,456 Satoshis.
Rock and roll.
Maybe it's in wider cycles in the economy and beyond that creating the four-year cycle, right?
After all, zoom in or zoom out and everything seems to have cycles.
That's true, right?
Everything is in flux according to Marcus Alias, A.D., in 121 and lived to 180.
Wow.
You're telling me there's an economist in the year 121 that was saying that?
No, he was right.
Yeah.
I mean, what if it's the election cycle?
And I don't want it to be that because I don't want the U.S. election cycle to be driving a global monetary asset.
But, I mean, it is a very large market.
I hope it's not that.
Thank you, Philip.
That was great to hear from you.
Kiwi Bitcoin Guide's back with 4,567 satushers.
He's a good guy.
He's a real good guy.
No, he's a great guy.
Yep, yep, yep.
in the clarity act i've heard there are clauses which offer protections for open source developers
they seem to be in one version and then out of the next amendment do you know anything about this
it sounds like those are in the ominous bill tricks where the act is about something else
yeah stable coins for example and that includes a nasty surprise in other areas i.e removing
protections for false developers yeah so i've heard the same exact thing i have heard the same
exact thing and the best of my knowledge those protections are not in the most recent but i don't
know if that's true or not because there's been a couple versions that have been released.
Clarity Act stuff drives me crazy. I think they're right up against the wire. I just saw
Senator Lumma saying in an interview that they've been working on it every day.
It's amazing to work on something for every day and not get it done.
Ooh, it sucks. Thank you, Kiwi. Nice to hear from you. And King Arthur's here with a member. Boost.
i'll be your benevolent bitcoin dictator my divine providence bestowed upon me by lady of the lake
member boost or fiat boost coming in at a dollar 33 for monthly members and less than unless for
annual hey there you go you did the math huh that is a great boost you're getting below the 2000
threshold well actually let's see are you right now or is that right at the 2000s because if you
don't mind i'm gonna go look it up so sats to the u.s want uh so sats to u.s dollar right now are
uh one dollar is 1540 satoshis so if you're getting it yeah you're getting the deal you're
getting a deal that's nice that's nice king arthur that's nice and the deal only gets better
as bitcoin goes up in value so the membership continues to get more valuable how about that
That's one way to think of it, right, King?
Thank you, everybody who boosted the show,
including the 24 of you who stream sats as you listened.
Appreciate you.
Collectively, you sat streamers stacked 53,163 satoshis.
A nice boost.
Yep.
Bring it all together.
And our grand total this week is 246,626 satoshis.
Not too bad at all.
Thank you, everybody who supported the show.
this is a value for value podcast.
I put it out there for free.
There's no advertiser,
but there are memberships
and there are boosts.
Jupiter.party and in Fountain
and of course,
boost.jupiterbroadcasting.com.
Yes, you can go over there,
support the show
and keep the show going.
And don't forget,
I want your boost
on what next week's singular topic,
the singular topic,
should be about.
Boost in at boost.jupiterbroadcasting.com
and support the show.
All right, time to pick up the pace and get you out of here.
Just a couple of updates for you before I go.
Strategies CEO Fong Li was on Bloomberg,
and I want you to pay attention to how he describes
what Strategies Businesses is no longer a buy Bitcoin and hold Bitcoin company.
and listen to his answer about the question around selling more Bitcoin in the future.
This week, you issued that stock sale. Your cash reserves are up at $3 billion. My understanding is
that this allows you to pause Bitcoin sales for the time being. But talk us through what the next
several months look like. Do you plan to sell more Bitcoin? And if so, how much?
Katie thanks for having me We have really evolved from being a Bitcoin treasury company to a full digital capital platform We the world largest largest identified holder of Bitcoin in the world
We have over 840,000 Bitcoin.
Digital credit has been launched in the last year in the form of stretch just $10.5 billion.
So we have a responsibility to our common shareholders, our preferred shareholders, and to Bitcoin, of course.
we issued now or we've accumulated three billion dollars in cash because we listened to our
preferred shareholders and they said having liquid cash in our balance sheet and their short term is
important i should probably translate just really briefly there what he's saying is that they saw a
massive sell-off when they brought their reserve down to under a month and their holders panicked
And so they realize they have to stack cash, not sats for a while.
And we also sold Bitcoin to be able to show liquidity with our Bitcoin.
Yes, we will continue to issue capital.
It could be in the form of MSTR.
It could be in the form of Bitcoin.
And we're going to make the decisions that are best for our shareholders over time.
All right.
So it sounds like to me they're going to keep selling Bitcoin for a little bit, which.
All right.
So be it.
Let's shift to some good news around mining for just a moment.
Bitdeer's seal miner product, some of which are rack mount units that can, you know, like one to three U that can go into big old server racks.
They are about to start manufacturing some of those right here in the U.S. of A in Reno.
And it looks like they're going to bring a sum total of 20 million dollars of investment into the area.
A warehouse in Sparks is now home to Bitdeer.
Bitdeer. While the company operates some large data centers in the United States,
this facility is not a data center. Here, workers will manufacture Bitcoin mining servers.
It's an empty warehouse now. We are building a brand new precision electronics manufacturing
facility in Sparks. But by the end of the year, Bitdeer's seal miner product should be coming off
the production line, eventually 10,000 per month. There are powerful servers built specifically to
run the Bitcoin network by processing and securing Bitcoin transactions. While much of the production
line will be automated, it's expected to create 70 high-paying jobs. It's the Singapore-based
company's first manufacturing facility in America. We asked why they picked Sparks. The warehouse is
off pyramid way near the library. Accessible, skilled workforce. And Reno also has very robust
logistic infrastructure and the business climate is extremely friendly.
It is scheduled to get up to $488,000 in state tax abatements over the next decade.
So you may see some criticism around this, the fact that they're going to get $488,000
in tax abatements. And this will likely play into the whole AI data center narrative,
even though this isn't an AI data center. And I think it's important to keep that in context.
Yes, they're going to get nearly $500,000 in tax cuts.
I would love that too.
But they're going to bring $20 million into the area.
To get up to $488,000 in state tax abatements over the next decade,
the total investment in Reno Sparks is about $20 million.
Unlike data centers, the company's chairman says this facility doesn't use quite that much water.
We will use less than 1,000 gallons of water a day or approximately in that.
And when you talk about household homes, you're talking about three household homes worth of water consumption on a daily basis.
Construction is now underway.
They hope to start shipping out their products in January 2027.
BitDeer executives say they've invested more than $600 million in the U.S. since 2017,
as they aim to help boost domestic manufacturing here.
They have other facilities already in Washington, Texas, Ohio, and Tennessee.
In studio, Ben Marjot reporting.
How do I get into those Washington facilities?
How?
For so many years, listeners,
I have tried to get a tour
of a Washington Bitcoin mine facility.
You know, a guy just wants to see it.
He used to mine on a small scale, you know,
maybe at my peak, I had like five rigs.
I'd like to see a large scale one.
So let's wrap it up with our final clip.
This sort of brings it all together, I think,
and connects the beginning to the end here.
and I'm going to play Jordy Visser.
He has his weekly sit down on the Pomp Pod
and Jordy thinks that we might be near a price bottom
or in the range of a price bottom for Bitcoin
because we now have on the table
a possibility of no rate hikes.
And that is going to be seen as a green light
for guys like Jordy who want to get in
before it starts turning around.
So as a trader, I go,
well, now I can buy something when we get back above 60
and I'll just stop myself back out below the lows.
That's the way a trader trades.
And that's the way that I've always thought.
It's the way I was brought up.
And I'm an Elliott Wave guy.
And I still believe we're entering a very, very big thing.
My belief is that over the course of the next year,
we are near the bottom end of the range of Bitcoin.
And see how I said that near?
Could we go to 50?
Yeah.
Could we go to 45?
Yeah.
Do I think we'll be over 100 a year from now?
Yeah.
So what do I care whether I buy something at 60 or whatever?
Yes, my percentage gain will be better.
but if we're above 100, I don't care. So that's the first thing. The second thing is I've
highlighted that we probably all underestimated, I know I did, the impact that the AI capital suck
would have from the rest of everything. It's not just Bitcoin people, it's the hyperscalers as well.
Basically, my benchmark arbitrage of money rotating into the space that's going the fastest,
Micron went up 20 times a 20 bagger 20 bagger You don get that in big companies and this is a big company So for that to happen you didn need to buy Bitcoin You didn need to buy crypto You didn
need to buy any of this stuff. Every single person in Silicon Valley talked about how startups,
if you had AI attached to it, nobody wanted crypto. At the end of the day, people want to
invest in things that are working. And so once it started to move lower, which coincided in October
with the release of Opus 4.5,
but it also coincided with another strong secular trend
that has still been in place until last week,
which was rate cuts.
We had 150 basis points of rate cuts
still in the market as of October
or late September of last year.
That peak there,
some of it came out because of the actual cut,
but then a lot of it came out
because we started to build in hikes.
And we have about,
Now, we have a full cut plus percent of, sorry, hike, plus a hot probability of another one
before the end of the year.
So here's what I'm telling you is going to happen in my mind.
That's all going to change, or at least the rate of change is going to be there.
And I'm a rate of change, guys.
I do not think they want to hike.
I did a piece on the Fed this week and made sure that everyone was highlighted that, hey,
the Fed, Warsh has spoken.
He believes AI is going to be a productivity boom.
and that there might be a point at the beginning
where it's a little inflationary
before we get to deflationary,
but the last thing he wants to do
is go on some tight hiking cycle because of inflation.
We're gonna get a negative CPI print.
The question is, July 29th, when we have the FOMC,
are they gonna raise rates?
There's a possibility, a good possibility,
it's like 35 to 40% that they will.
If they don't, then I think Bitcoin will be above 70,000
when that time comes
because I think people are going to start factoring in the fact
that maybe they're not going at all this year before the midterms.
Does he really want to hike before the midterms when he was brought in by Trump?
So I think that may be on hold for a while.
And it's not that it's a big deal because it means they're not cutting rates.
But since hikes are expected, it is a positive relative to expectations.
Let's check in on the state of the network.
I am wrapping up at block height 958,184.
The U.S. price to Bitcoin right now is $65,090 to one Bitcoin.
That puts our sats per dollar at 1,536.
That means we're down 48.4% from our all-time high 281 days ago.
However, this is an interesting adjustment.
The estimated difficulty change is now an upward adjustment of 3.7%.
There are 24,480 reachable nodes on the Bitcoin network.
We are up 4.6% from the last episode.
And we have 1,432 blocks until the difficulty retarget, which is, again, an upward adjustment of 3.7%, which is very interesting to see.
And indeed, the state of the network is strong.
Well, if you made it this far, go check out links at thisweekinbitcoin.show.
Links to what I talked about, the back catalog, all of that is over there.
You also can boost at boost.jupiterbroadcasting.com or in your podcasting 2.0 app of choice.
my goal is to give you a podcast here that doesn't get distracted by the emotions or the politics but
tries to focus in on that signal so you can plan for yourself your friends your family your future
whatever it might be and you can stay humble and you can stack sats and kind of hopefully
have a handle on what's dragging things around out there let me know how i did with a boost and
the topic you want me to see covered the singular topic for next week's shorty episode while i'm on
the road okay i'm going to leave you with a value for value track you boost during the music 95%
of the sats go to the artist, and I picked this track for one reason. One reason only.
It uses a fantastic riff of the Podfather for a voiceover to an epic intro. This week,
it's Rules Without Rulers by Richard.
as to them shall seem most likely to affect their safety and happiness.
That line in the Constitution is being carried out by Bitcoin,
not by guns, not by militia, not by so-called domestic violent extremists.
It is a silent revolution.
Thank you.
Bye.