Welcome in to This Week in Bitcoin, episode 79.
My name is Chris, chrislas.com, and jupiterbroadcasting.com.
Why does all the macro news seriously always happen on a show day?
Man, a guy needs a nap after watching the FOMC meeting alone.
And there's no time for that.
There's no time for naps.
There's actually quite a bit we need to get into today.
So let me just say right off the top, take a little pause right here and say,
Happy early Bitcoin White Paper Day.
Of course, everyone knows around the world, October 31st is universally known as the Bitcoin White Paper Day.
It's a day to just take a pause and thank Satoshi and maybe go read the white paper.
At least, you know, the first eight pages. That's what I say. Okay.
We have a lot to talk about. You know, we're now into the second longest U.S. government shutdown in history.
So you'd kind of maybe expect that would be dragging Bitcoin down or moving things.
But from what I'm tracking, I don't really see any big impact on Bitcoin yet. I don't know about you.
So this week, I'm going to take a look at three major macro events that are pushing Bitcoin around that do seem to be having an impact that I think you need to get caught up on.
So be sure to stick around to the update segment, too, because after we get through all of that, there's some good news.
There's some spicy news, a little bit of everything in the update segment.
And you'll definitely want to catch that.
But let's start by looking at what I'm very reluctantly calling a trading narrative monster.
I don't have a better name for this, but I'm talking about the AI trade.
It's entered a new phase this week, and it's the hype around layoffs due to AI efficiency.
And it has everyone, I would say, ratcheting up the tone of the discussion around AI to a whole other level.
Amazon executives say they're all in on AI, confident they can continue to grow with fewer people.
This round of cuts impacts about 14,000 corporate employees worldwide.
They are one of the most valuable companies on the planet, and they seemingly lay off employees en masse once a quarter.
And it just isn't fair to the employees that do make them all of their money and don't seem to get rewarded for it.
Seattle's largest employer confirmed the layoffs in an internal memo, calling AI the most transformative technology we've seen since the Internet.
The memo says the technology is allowing Amazon to operate faster and leaner.
Some newly jobless employees took to social media.
I was laid off by Amazon.
I was one of the 14,000 employees that were affected today.
They sent out an email at 5 a.m. Seattle time.
The music's a nice touch, you know, really makes it hits you in the feels.
This smells like spin to me.
AI is such a perfect cover for what was bad hiring practices.
Amazon, they get to look forward looking.
It would seemingly legitimize the technology.
I mean, can't you almost just picture the conversations in corporate boardrooms and meetings around the world when somebody says maybe we should automate that with AI?
And then, you know, the realistic person says, I don't think it's up for that yet.
I don't think AI is there yet.
And then the other guy in the room says, are you kidding?
Haven't you seen what Amazon is doing?
They just laid off 14,000 people and replaced them with AI.
Of course it works.
Not only that, but it just brilliantly justifies the billions that Amazon has spent and will spend in both AI and data centers.
It's just such a tidy little narrative to cover what is really just piss poor hiring practices since COVID.
Here is the question of the morning. Are AI layoffs real or are they a scapegoat for what's going on in the employment picture in this country?
Christina Percanellos joins us now with that story. Good morning.
Good morning, Andrew. Amazon, Chegg, Microsoft, Meta, SalesSource, the list continues.
Tech companies just are cutting tens of thousands of jobs, and some of them, some of them are blaming AI.
But at NVIDIA's GTC in DC yesterday, top CEOs were telling us something completely different about what's driving these cuts.
For example, Perplexity's CEO says the AI narrative is missing the point. Listen in.
Overhiring they did in the COVID era when they didn't actually need to.
The results of that are being seen now.
So correlation doesn't imply causation.
It's not because of AI that people are losing jobs.
And CoreWeave CEO Michael Intractor frames it as part of a bigger pattern that just happens in tech history.
During each technical revolution, there is a rotation that occurs.
And I think one of the roles for government is going to be to assist the rotation that's required to retrain, to repurpose, to allow people to build careers.
This, even that, is too generous to this narrative.
The idea that we're seeing some sort of rotation or business cycle.
If anything, it's going to be more based on rates and liquidity than it is AI.
These are large language models.
These are not sophisticated thinking machines.
Could they replace a secretary whose only job is to summarize your meeting?
Yes.
Could they replace somebody who you hired to maybe write out and transcript calls or whatever?
I've worked with lawyers that had somebody on staff who would just sit there and transcribe stuff for them.
Those types of jobs, yeah, they're going away.
But these are large language models.
In fact, we should stop calling it generative AI.
We should really not even call it artificial intelligence.
We should either call it machine learning or large language models.
Because that is actually a more accurate description.
And I think what we're actually seeing is more like business cycle adjustments, bad practices in hiring adjustments.
Here's some numbers in just recent layoffs.
UPS announced 48,000 employees.
Intel announced 24,000 employees.
Nestle has announced 16,000 employees are being laid off.
Accenture has announced 11,000.
Ford, 11,000.
Novo, Nordisk, which I would assume makes a ton of money.
9,000 employees. Microsoft, 7,000 employees. PwC, 5,600 employees. Salesforce, 4,000 employees.
Paramount, 2,000 employees. Target, 1,800 employees. Kroger, 1,000 employees. You think
it's AI at Kroger? Is it AI at Target? Applied Materials, 1,444 employees laid off. Meta,
600 employees. Is all of that because of AI? I don't think so. I think we're seeing a structural
adjustment. Now, the question becomes how significant of a structural adjustment.
And I would argue perhaps that's the wrong framing. And I think it's been the wrong framing
for a while. We've talked about this on the show. And Lynn Alden recently touched on this
when she was on forward guidance. And why not have her explain it instead of me for the third time?
Yeah, I think we can, another way of looking at it is a sector by sector basis.
So whether it's real or nominal or sector by sector, I do think that this is an environment you want to slice and dice it.
Perhaps a similar example is Canada, where we look at the per capita metrics.
That really mattered compared to the national metrics because you had, for a while, a pretty high rate of immigration.
And of course, what people feel is the per capita statistics.
If the economy is growing, but an above average rate of it is population growth, that doesn't feel like growth on the individual level.
And I sometimes analyze the economy of Egypt because I spend part of each year there.
They've had pretty high population growth.
They often point to pretty high, even real GDP growth, the way they report it.
But one of the metrics I look at there is energy consumption per capita.
And that's been kind of flat to down for a decade now.
And that coincides more with on the ground what people feel.
Similarly, if you look at things like how many of their labor hours does it take to afford the same car that it did five years ago, it really takes them more hours rather than fewer hours to afford that car, which makes them feel like they're going backward, which is pretty realistic in many areas.
And so when you kind of apply those similar types of metrics to a developed market like the United States, I think you'll get similar pockets where, again, PMI activity is low.
So if you work in multiple different industries, the respondents or the employees there are saying, yeah, business isn't necessarily great.
I'm not really seeing the economic boom that others are talking about.
That's because they're not in the either they're not in the line of fire from deficits or they're not in the line of fire from private sector CapEx spending on AI.
If you're in the orbit or at least next to the orbit of those two things, you're probably feeling okay.
Whereas if you're not, there's this whole array of other sectors that some of them are an outright recession.
I mean, commercial real estate or even residential real estate, anything that's related to turnover volumes is recessionary.
It's a very problematic industry at the moment.
So I would look at things really on a sector-by-sector basis.
I've really been enjoying this rolling recession theory because I keep trying to disprove it and it just keeps getting reaffirmed. I think we've been tracking it on this show when it came to beer sales, Disney park attendance sales, movie theater sales, luxury watch and jewelry sales.
And, of course, home sales. We've been watching how the demographics on who buys and who can't buy there have been playing out. And then last week we talked about the fact that a lot of illegal immigrants that had bought vehicles here, perhaps subprime loans, like we talked about last week for their cars, which I guess just means risky lender, they drove their cars across the border or they've just left their cars here when they self-deported, which these have material impacts.
But also, those people were buying consumer goods.
Those people were ordering from Amazon.
And Amazon's delivery sales are down something like 24% right now.
So I think what you're seeing is sort of this knock-on effect where when a recession kind of hits an area, the people that it affects, then their demand goes down.
Or you're seeing government actions that are in some cases improving the economy and in some cases weakening the economy just by removing demand.
It's a very complicated system.
And so the question becomes is do these rolling recessions begin to accumulate or is the Fed stimulus policy strong enough to continue to offer background liquidity that sort of paves over these and the overall market continues to rally?
That seems very likely. And so when you have all of these jobs now that are starting to look pretty shaky, the common and I think it's still the common belief as of today.
My gut feels like this is going to begin to shift. The common belief today is that it's a low hire, low fire market.
And that's their cute way of saying, well, not a lot of people are getting hired, but they're also not firing a lot of people either.
So if you got a job, you'll keep it kind of a thing. But I actually think we're transitioning into a low higher high fire.
Not like crazy, but I think that the needle is beginning to tilt that direction.
And so that's going to be one of the number one signals the Fed watches.
And today, as I record, like I mentioned, it was an FOMC meeting day where we got Jerome Powell to come out on stage and tell us what the new price of money is going to be.
And the Fed did announce that they plan to cut rates as expected by 25 basis points.
That now brings the Fed rate to 4%.
All right.
We're getting what they call closer to neutral.
I guess the Fed believes that somewhere around 3%, 2% to 3% is a neutral rate.
And so they're just above neutral at this point.
There were two dissidents, one favored no cut and another favored a 50 basis point cut instead of just 25.
And here's Jay Powell from today's event really getting to the nut of why they had to cut in banker speak.
In the labor market, the unemployment rate remained relatively low through August.
Job gains have slowed significantly since earlier in the year.
A good part of the slowing likely reflects a decline in the growth of the labor force due to lower immigration and labor force participation.
though labor demand has clearly softened as well. Although official employment data for September
are delayed, available evidence suggests that both layoffs and hiring remain low and that both
households' perceptions of job availability and firms' perceptions of hiring difficulty continue
to decline. So that I think right there is a pretty good example of how, well, A, the Fed doesn't have
a lot of data right now, and B, the data they do have is backwards looking. So he just said it.
He didn't say the colloquial version of low hire, low fire, but he just said it in banker speak. And I think that's informing their current rate cut decisions and the future rate cut decision trajectory that we'll talk about. That's the point they're working from. I suspect I could be wrong, but I suspect by the end of November, early December, the narrative will have shifted on that. And it's a low hire, high fire.
But right now, Jay Powell believes it is a low hire, low fire market.
And he just says that.
And that is part of their current analysis of future cuts.
Although official employment data for September are delayed,
available evidence suggests that both layoffs and hiring remain low
and that both households' perceptions of job availability
and firms' perceptions of hiring difficulty continue to decline.
In this less dynamic and somewhat softer labor market,
the downside risks to employment appear to have risen in recent months.
Inflation has eased significantly from its highs in mid-2022,
but remains somewhat elevated relative to our 2% longer-run goal.
Estimates based on the Consumer Price Index suggest that total PCE prices rose 2.8%
over the 12 months ending in September, and that, excluding the volatile food and energy categories,
core PCE prices rose 2.8% as well.
Nearly 3%, in other words.
And that's after you exclude the stuff that everybody needs to live their daily lives.
That is horrible.
I mean, you should do the math on 3% inflation for 20 years.
Just do the math on that compounding effect there.
And that's where we're at right now.
And they've been having a hell of a time with that 2% target.
They couldn't get it to 2% early on.
And then since COVID, they can't get it under 2%.
They can't get it under 3%.
And that, even 3% is atrocious.
And they're, you know, so 2.8% is their rough cooked number.
By the way, they also have a new metric.
I don't know how new it is, but that's a new one they're talking about at least, where they have tariff excluded inflation.
So if you exclude the tariff cost inflation, okay, all right, but I have to pay that cost.
So why would you exclude it?
Sending in September and that excluding the volatile food and energy categories core PCE prices rose 2 as well These readings are higher than earlier in the year as inflation for goods has picked up
In contrast, disinflation appears to be continuing for services.
Near-term measures of inflation expectations have moved up on balance over the course of
this year on news about tariffs, as reflected in both market and survey-based measures.
Beyond the next year or two or so, however, most measures of longer term expectations remain consistent with our 2% inflation goal.
They always say that. Always. They always have said that. You can go back years of Jay Powell's job and he always says that.
That, well, you know, yeah, inflation isn't where we want it right now, even when it was below 2% and then once it was above 2%.
Yeah, it's not where we want it right now, but don't worry because we're long-term thinkers.
And when we look at the long-term math, we see it gets back down to an average of 2%.
And then when you ask them, can you show me that math?
Yeah, well, you see right here on the line chart where we say we're going to try real hard?
Yeah, once you add that in, we're going to get to 2%.
So it's silly he always adds that.
So here we are.
We're in a situation where it's just, you know, these are risk-reducement cuts because, you know, the stock market's softening.
But maybe even bigger news than a rate cut is the Fed announced they would end quantitative tightening on December 1st.
And you recall I told you this is something we're looking for because this will shift mildly the liquidity profile in the market.
So the Fed noted that their mortgage-backed securities, which are basically bundles of home loans, are going to be invested into T-bills after December 1st.
So they're going to be a T-bill buyer, short-term duration T-bill buyer.
So I think that is actually maybe even more bullish for Bitcoin than a rate cut, than just a 25, than one single rate cut.
So things seem like they're moving from restrictive to what they call supportive of the balance sheet policy.
So they're not doing quantitative easing. They're not turning the money printer on in that sense. But it is definitely going to provide a little bit more liquidity up to the market as they stop tightening and they invest in treasuries.
And so that might have you thinking, geez, if that happens in December,
ooh, all right, here comes the Santa rally.
Well, don't get too excited.
I'm not so sure it could happen.
But Jerome Powell went beyond just his typical disclaimer about future policy changes.
He went above and beyond to point out that you really shouldn't get too excited.
Don't expect another rate cut in December.
In the near term, risks to inflation are tilted to the upside
and risks to employment to the downside.
A challenging situation.
There is no risk-free path for policy
as we navigate this tension between our employment and inflation goals.
Like he did last time, he's once again saying,
we have no good answer.
We have two paths ahead of us,
and neither one of them are actually the correct one.
So since they're both in a bad spot and they're in conflict,
we're going to do the only thing we can do
and try to get back to a neutral rate position.
Our framework calls for us to take a balanced approach
in promoting both sides of our dual mandate.
With downside risks to employment having increased in recent months,
the balance of risks has shifted.
Accordingly, we judged it appropriate at this meeting
to take another step toward a more neutral policy stance.
With today's decision, we remain well positioned to respond in a timely way
to potential economic developments.
We will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook, and the balance of risks.
We continue to face two-sided risks.
In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December.
A further reduction in the policy rate at the December meeting is not a foregone conclusion.
Far from it.
Far from it, he says.
Like, it never says that kind of stuff.
For banker, that's tough talk.
And it was a point he reiterated in the QA shortly after that.
So that's going to leave things a little bit in the unknown territory.
If the labor market continues to deteriorate, it'll probably push them towards another rate cut.
But one of the things he implied, although it didn't come directly out and say it, is if they don't have good data to work from, they're more inclined to just do nothing.
And what that was was a veiled threat about the government shutdown.
because without the government functioning, they can't get current data.
And if they don't have current data, they can't make decisions.
It's sort of the point he was trying to make.
So if the government shutdown continues long enough, they could screw up the rate cut.
Ha ha ha ha!
Okay, number two.
This rare earth thing.
I tell you, this is a massive, massively big deal.
And the White House has moved very fast on this issue.
They have signed landmark frameworks with deals or a deal to have a deal, I guess you could call it.
That's what they're that's what they're calling a framework.
It's a deal that they're going to have a deal with Japan just this week.
And it covers mining, recycling, processing, critical infrastructure, all of that for rare earths just between the U.S. and Japan and a few others.
The U.S. has also made agreements with Australia, Malaysia, Cambodia, Thailand, Vietnam, again, all around rare earth minerals, processing capabilities, etc.
I mean, it's actually you got to you got to admit that is very impressive.
But there is no skipping the proof of work.
While these agreements do reduce long term risk and that's going to get priced in, it will take years to fully counter China's dominance in this area.
China currently holds around 69% of all rare earth mining, and they do 92% of the refining.
That's why they could put a tariff on anything that has 1% of their rare earths in it or a control policy.
And the thing that I think matters to a lot in the tech industry is nearly all the global rare earth magnet manufacturing is done in China, nearly all of it.
But these deals need to happen, right?
The U.S. needs to position themselves.
The best time to figure this out would have been 40 years ago.
The second best time to figure this out is today.
So I am honestly shocked at how fast the Trump administration is banging these deals at.
And I think it's something that might get more notice with the passage of time.
Now, some of these are only frameworks, but I imagine even if only a couple of them materialize into deals, that's a lot better.
And it's interesting because all of this is in a backdrop now to Trump going to China to sit down with Xi and they announced, just perhaps in preparation for the meeting, that they would be buying 180,000 tons of U.S. soybeans, which is the first purchase in months since all the trade disputes.
Now, this is positioning. This is signaling. This is China telling the market, telling policymakers that they're willing to play ball. And that's how it should be interpreted for you as a Bitcoin. There's a signal to the market. They're trying to signal. But you need to keep it in perspective as well. That doesn't mean it's a done deal.
China was buying approximately 2.18 million metric tons a month of soybeans before these trade disputes.
In the peak, sometimes during the real busy months, 5 to 6 million tons of soybeans a month.
And they just bought 180,000 tons after not buying any for months.
So, you know, like keep that in perspective.
But this is a massive deal because it impacts the AI trade.
It impacts the iPhone and Apple trade.
It impacts building computers, Bitcoin miners.
I mean, it's in everything.
And so Bitcoin has been trying to figure out how to price this in as a market.
Tyler, 10 p.m. local time here in New York, 11 a.m. your time.
What are we expecting in the conversation between the two world leaders?
Yeah. Hey, Danny.
Well, it really is starting to feel like the contours of any potential U.S.-China agreement
is expanding beyond what we originally expected to be just a pullback in the recent escalation
of tensions, right?
We started this week coming out of the trade talks in Malaysia, where we heard the Treasury Secretary Scott Besson suggest that we were going to get an extension to the trade truce in place and set to expire on November 10th.
And also some mitigation when it comes to recent actions like China was going to start to resume its purchases of U.S. soybeans, which Bloomberg News has confirmed.
And I would say all of this is early and Bitcoin should always be prepared for any of this to go south, because what we have right now is consensus on issues.
We don't have deals. But Besson did come out and say that 100 percent tariffs are off the table.
And that also China was going to scale back, delay some of its export curves related to critical and rare earth minerals.
But as Matt, that's a big development right there. Right. So the U.S. that that is a big development.
The U.S. has time to build up their supply chain and they can work out it, hopefully work out a deal with China.
If they pull that off this week, I think that's going to be a major tailwind for Bitcoin going into December and November and all of that.
As these things start to stack up, clearing out these major uncertainties, well, they're critical.
All right, so there's three macro events that are impacting Bitcoin.
Now, let's talk about something that's going to impact how you spend Bitcoin in the future,
or perhaps prevent you from spending it.
This is actually a positive development.
So let's start with Lendon.
I think that's how you say it.
Ledin.
They are a Bitcoin-backed loan company, and they just announced that they surpassed $1 billion in originations for 2025, and that their quarterly volume has reached $392 million.
That, to me, suggests massive demand for Bitcoin-backed loans.
And they're not the only one, right?
We've talked about SALT, Strike is in this, Unchained Capital.
And then for large institutional customers, I'll have more news on that soon.
According to the co-founder of Ledin, CEO Adam Reeds, he says the results reflect the growing demand for Bitcoin collateralized credit and Ledin's focus on solid management practices.
They say surpassing the $1 billion mark on loan originations year to date reinforces the growing demand for responsible Bitcoin-backed lending and our commitment to transparency and trust.
Yeah, you know, it's year to, I mean, 2025 ain't even over yet.
I've talked about Bitcoin-backed loans quite a bit in the past on this show.
and I have to say this week
while I'm very excited for letting there
they're starting to feel like an old
product I mean it
they're not horrible but
they do have their downsides
as somebody who's experimented with them
and it's not the typical thing like a margin
call when the price drops and stuff like that
in fact it's
broader in flexibility and the fact
that you have to take out a one big
chunk sum of money
and if you can only do that every 12
months, you kind of have to know what you have to forecast out 12 months and it's not very flexible.
This week, Lava, who's known for Bitcoin loans, introduced the world's first Bitcoin backed line
of credit. It's a line of credit. And in a sign of how fast this entire space is moving,
in the same week, Strikes, Jack Mallers also said that they're working on a very similar product
and he went into some detail.
And I think Bitcoiners should listen to this.
Think of this as a way to get access to your Bitcoin
without selling it,
and in a way that you can manage it
and you don't have to commit to these large sums of money.
You know, what we've seen with lending,
we've lent out hundreds of millions of dollars.
We're going to cross a billion soon.
And a lot of these are people borrow against their Bitcoin
to buy more Bitcoin.
So that's leverage.
Some of these are people borrow against their Bitcoin
to get a car, to buy a house, to start a business.
But also some of these, people are trying to treat it like a line of credit.
What do I mean by that?
Well, you know, if the only loan you can get against your Bitcoin is a 12-month loan,
then you have to take out the amount of cash against your Bitcoin that you're going to
need for the 12 months.
And a lot of the people don't want a 12-month loan.
They just want a loan that can cover their next credit card bill or cover their dentist's
appointment or they need to fix their bathroom.
And so my idea was, well, if someone has a certain amount of Bitcoin on the platform,
let's say 25,000 Bitcoin, let's just give them a line of credit that goes up to 50% of their balance.
So that would be $12,500.
And so then let's say their credit card is $4,000 that month.
They have a mortgage payment of $2,000.
And after the month is over, they've spent $6,000.
When a bill comes in and is paid from Strike, Strike automatically in real time extends a line of credit and pays your bill for you.
And sends you a push notification like, hey.
To make sure it's clear, what he's saying is that say you put $25,000 worth of Bitcoin, not 25 Bitcoin or 25,000 Bitcoin, but $25,000 worth of Bitcoin.
You would then have access to a $12,500 line of credit because it's a 50% loan to value ratio.
And that means the Bitcoin price could come down considerably before you have to worry about a margin call.
And so you would get access to $12,500 of spend, but you would only have to pay for the amount you actually used, like a credit card.
So, you know, maybe you have a credit card that allows you to spend $5,000, or maybe you have a credit limit of $20,000 or $50,000 or whatever it might be.
But if you only put $500 on it that month, then you only are responsible for $500 and you only have the interest rate on the $500, et cetera, et cetera.
And if you pay it off, like you don't even have to pay the interest on it.
that's the idea with a line of credit,
is you could take a little portion of your Bitcoin stack,
store it in Strike,
or maybe eventually one of these products
will have a hardware-based multi-sig backing.
Strike doesn't right now.
Lava doesn't.
Unchain does, but their requirements are like the minimum
is like $100,000 loan.
But this is a product that's getting developed out,
and they will begin to compete on features
like self-custody down the road.
Right now, it's going to be fees, rates, interface,
customer support.
the basics. But then as these companies, and we have multiple of them that are trying to do this,
they're going to have to compete on things like self-custody as well. So imagine a future where
you don't have to screw around with IBIT or an ETF. You can buy good old hard sats. You can hold
them and you can draw from them as a line of credit when you need to. That's what they're
talking about here. Your mortgage was paid. Your line of credit just grew from $0 to $2,000.
Hey, your credit card was paid, your line of credit just grew from $2,000 to $4,000,
and you've used X percent of your line of credit against X amount of Bitcoin.
And then your direct deposit comes in and you can pay off that line of credit And then the rest can go to stacking sats So that way you always buying Bitcoin You never selling Bitcoin You not taking out these massive loans because people get really scared like oh I taking out a huge loan What if the price dips What if I get liquidated
But when I talk to customers, they're not worried about getting liquidated over a $6,000 line of
credit against their Bitcoin. And that way, you don't have to own tons of fiat. And that way,
you don't have to own any fiat. And that way, your Bitcoin works as collateral to finance your
everyday expenses. And it's a much better user experience. And, you know, we obviously are also
looking like, should we wrap that and give you a credit card on top of it just so that you can
spend the line of credit through the card itself? I'm not sure about that one yet. I'm looking into
it. Later on in the stream, it sounded like he's very seriously looking into it. You could see the
advantage of that. A credit card that's balanced is based on your collateral. But when you need to
go to get new tires or something like that, you have an interface.
You can interface with the traditional financial system.
Strike also, and this isn't an ad.
I don't even have an affiliate link for them.
But they let you pay your bills and they let you take your paycheck in a SATS.
And so you can start to see where you bring your paycheck in via auto deposit.
It all goes to SATS.
And then you use the bill pay and the line of credit to kind of manage access to fiat
as you need it.
And whatever you don't use just stays in SATS.
And the math works out. It's a pretty good way to end up stacking additional sats.
And it also turns out to be a pretty good motivator not to spend money.
So boost in, support the show and let me know, would you like a product like this, a line of credit backed by your Bitcoin?
Does it appeal to you or, you know, for those of you that this appeals to, have you already ran off to ETF land?
I hope not. But let me know. Send a boost.
would you actually sign up for something like this
assuming the rates and the risk
met your tolerances
boost in and support the show with something like
Fountain FM or Podverse or Cast-O-Matic
or go grab AlbiHub and you can use all
kinds of apps
Well, coming up in the show, it's your boost and then a big, overloaded, oversized update section.
And of course, the final clip of the week.
But I want to mention you can support the show by doing what you do.
You want to stack sats on River?
It's a great place to stack sats.
Use our link in the show notes and support the show when you do it.
Now, if you're all about self-custody, maybe you're in Canada or the U.S., check out the Bitcoin Whale.
They do something nobody else does.
There's no wallet on their platform.
You bring your own wallet.
It's all about self-custody.
It's crazy great.
That's the Bitcoin well.
Link in the notes.
Now, you want to spend some sets.
Get them on Lightning real quick and then buy a gift card from hundreds of choices.
I'm talking about the Bitcoin company.
You can log in with Lightning.
No user ID or account required.
Something that's just going to get leaked.
Nothing like that.
And they have hundreds of gift cards to go from stats to gift card in just seconds.
Foldcard.
That's what I use to pay my bills, buy gift cards for things like family members and gifts.
Foldcard's fantastic.
And then Salt.
that's where I go to get my liquidity from my Bitcoin right now so I can
you know get access to some of that value without actually having to sell the Bitcoin
I think Salt's great too because they have a fantastic
margin call product that makes sure you don't get completely liquidated which
you know it's always a good thing in Bitcoin all right links in the show notes
right at the top for all that
And we do have some boosts coming into the show this week.
And Chew Toys here is our baller booster with 30,000 sats.
Hey, rich lobster!
Fun will now commence.
All right, Chew Toys says,
I just set up my Nots node as my true server.
As my true server? What do you mean as a...
What can you tell me about the privacy best practices when running a node?
I've had a node before and on Umbral, but I gave up after a hard drive failure.
Also, no need for video for me.
I like to listen to the show while I work.
You know, graphs on Nostrisis could be valuable.
Interesting idea.
Supplemental imagery on Nostrisis, huh?
Well, that's, you know, really, honestly, where I could take Chutoy, where I could do that now is the chapter images.
If a guy had the time.
Come on, AI, how come you haven't solved that if it's so good?
I can replace 14,000 workers, but it can't generate me chapter images that are appropriate to the topic.
What's up with that?
Security best practices.
I would just take a gander at running a Tor node.
Just see what that's about.
You know, I mean, run your node on Tor.
See if that works for you.
You know, you could also look into node IP and transaction broadcasts.
Just so you have a sense of what that's like.
Boy, I'm thinking about this tutorial.
It's like this could be a whole other episode.
Maybe we should put this in our AlbiKide one.
I'm writing this down right now.
Okay.
I like that.
Something maybe for our Albie Guide episode.
Thank you, Chutoy.
Appreciate the baller boost.
Adversary 17 is here with 24,576 sets.
I hoard that which your kind covet.
And Adversary's Rights,
here's an update on the Knotts versus Core nodes.
Knotts is taking up 50, not five,
50 gigs of more space.
Not sure why.
I'd be curious to know if anybody else
is noticing a size differential between knots and core. Adversary says, no video for me. I prefer
audio because it allows me to think critically about what is being said. Video requires more
sensory input. It takes more brain power. Plus, I listen during my commute. Yes. Make it so. Yeah,
I agree on that. I do find visuals to be distracting. I think there are times, like when
it's dollar amounts and charts, which does come up a lot on this show, where it is useful. But if you
want to do a little experiment, play a news clip, like from YouTube, and then like minimize your
browser or something and play it again. I don't know. And you'll probably notice, especially if
it's like something about war, something really detailed and complex, you'll notice the little
things in there that you didn't notice just by watching, in my opinion. And maybe that's just me.
Maybe it's because I have ADD. And so the video is just too distracting.
Hey, goodversaries. Appreciate that boost. It's always nice to hear from you.
OB's here with 21,420 sats.
Coming in hot with the boost.
All right.
Our buddy Andrew knows all about Bitcoin. Of course, he's talking about from CNBC. He's the heel and Joe is the baby face of our wrestling fans out there. A video on Primal and Zapdos streams and YouTube and Rumble would be great. Oh, actually a pro video, huh? You know, maybe for live events to OB, you know, I, you know, when I asked last week what people would think of a video version of the show, I kind of knew what you would say because you're an auto, you're an audio audience, right?
it's sort of like going to a steak restaurant and asking people if they would like to order,
I don't know, a hot dog?
No, that's not quite right.
You know what I mean?
Like you're asking the wrong crowd.
But I also, I like hearing why people love audio because I'm a big audio format fan.
So I don't mind at all.
And I do think that if I were to get into video for this show in any capacity,
Noster and ZapDotStream would probably be high on my list.
I don't even, I mean, I suppose maybe YouTube as well is just a publishing destination, but I just, I can't get myself excited about building a large presence on YouTube.
You know, that platform is very fickle.
Things can change.
You know, you can build a niche and then YouTube takes away all the heat from that niche.
So, yeah.
Thanks, OB.
You make me want to be a better man.
Appreciate you.
Mac Jollers is here with 3,000 sats.
This is the way.
I prefer audio.
I'm never watching podcasts
but I've definitely clicked on those short video clips
so if you do video be sure to make some of those
those shorts man I tell you what I experimented
recently with some of those
YouTube definitely puts the heat on those suckers
they definitely do
I think what I think I think I don't know nothing
about nothing but I think what YouTube
does is when you publish a short
they rapid fire throw it in front of
people as fast as possible as soon as the
videos render boom boom boom boom
and then they immediately start getting the feedback
on that. And if people like it and they get engaged,
they continue to spread it around.
And if they don't, they shut that sucker down fast.
But those shorts, if they have
the right combination of stuff,
they'll go flying. It's really
something. Thank you, Mac. Appreciate
the boost. Gene Bean's back with
4,666 sats.
Oh my god, this drawer is filled with
brooklobes. Gene Bean votes
audio only, although Nostra
Clips would be welcome. Again, another
vote for Nostra Video Clips. You guys,
you guys, on the same page.
You know what I'm saying?
This is a tasty burger.
Yeah, I got answers and I want some questions.
All right.
We can't have you being undercompensated for TWIB.
Surely all the people, the listeners of the hashtag Bitcoin hashtag podcast can figure out how to use the hashtag lightning network to show their appreciation for what you do.
If anyone wants some help figuring it out, hit me up.
I'm on Mastodon at Gene Bean or he provides his end pub, which I wish we need an easy way.
What I have done, Gene, and maybe this is maybe a hack, but I got chrislas.com and I just set up with a redirect to a primal page for with my end pub because people need, you know, a friendly URL.
I can't.
But he did provide his end pub, which is great.
Thanks, Gene.
Thank you.
Thank you for that sentiment.
You know what I mean?
Appreciate that.
Tough little ship there, Gene.
Tough little ship.
Little.
Not little at home.
Mix is here with 2,100 sats.
Everything's under control.
No need for video here. I feel the need for video mostly comes from the want need to put something on YouTube. Audio is more useful when you listen to pick up more details and how things are said. Oh, right there, right? I know. Mix, I think you're kind of right. Well, I don't know. I think a lot of people that make content don't like YouTube. I'm definitely in that camp.
And video, the question I think, the core question about video comes down to how much value does shareability and virality have with a small sprinkling of discoverability.
All words I kind of hate.
But you know what I mean.
Nobody shares around links to podcasts.
They share links to video and shorts and stuff like that.
So I think that's why people are on there.
Frankly, I find the YouTube platform abhorrent.
I think it's creator hostile.
And I think they would like to crush podcasting.
So if I were to do video, it would mostly be in the alternative enclosure and it would be on a peer tube platform, ideally.
And then it would be on a Nostra platform, ideally, and then perhaps on YouTube.
But I don't think I'd be sending anybody there.
Paranoid Coder comes in with 2,000 sats.
The traders love the vol.
No message, just the value.
And I appreciate that.
Oppie's here with 4,000 sats.
Boy, they are doing a lot with mayo these days.
I have ADHD and I use podcasts and audiobooks to help me focus at work.
Video is distracting, so I just never use it.
That being said, if others would like to have it, I have no issue as long as audio is the first priority.
I've given up on a few longtime listeners due to the host moving to video first mindset and making audio a waste of time to listen to.
I'd hate to see that happen to Twib.
Yeah, I agree.
A big, big pet peeve of mine.
Because I'd made that mistake, I think, in the past.
Now, thankfully, I made that mistake a decade ago and then realized I need to focus on multi-track audio.
And to this day, we live video stream Linux Unplugged, but it's an audio first show.
When we're done, we produce independent tracks.
We give our audio editor and he produces it.
This show, I record to multi-track my track, the clips, all that's on its own tracks.
I don't edit, but I do mix it down and publish it.
And I have the ability to like, you know, drop a gate on a track if I need to, if there's noise or something like that.
And it just even that level of control, even if I'm not doing a lot of post-production, even just that increases the quality.
And I can, you know, or I can toss a compressor if I mess something up on there.
Like I have optionality, right?
It's like a raw, it's like raw photos versus JPEGs in a way.
And when you go video and you have to go, it's sort of like you're going straight to JPEG.
You know, people get so distracted by all of that.
So that was a lesson I internalized a decade ago,
is the audio is great.
And audio, you know, the video is always a secondary product.
And so what we do in Linux Unplugged is the live stream.
You know, we'll put that out as video.
But the core show and what pays the bills is audio.
Thanks, Hoppy.
Nice to hear from you.
Appreciate your input there.
Tomato's here.
Hey, Tomato.
He brought 2,048 sats with him.
I've been enjoying the balance of show recently.
Keep up the good work.
Ah, thanks for the feedback.
Appreciate that, Tomato.
One dull geeks here with 3,333 sats.
Well, I'll be dipped.
Regarding video, it's great when there are visuals
that help convey information.
But as soon as people do that,
the audio version seems to suffer,
and I tend to switch to the video,
and they tend to switch, or I tend to switch,
to the video-only version.
Is there some way to stream sats
while watching the link to the video feed?
Well, that's the great thing about being in your RSS feed
as an alternative enclosure.
It just plays in your podcast player.
Yeah.
Anyways, enough about that.
But yeah, it's a good question.
Cardboard Warrior comes in with, thank you for the boost, with 5,000 sats.
Probably a silly question, but when you run a node, say on Lenovo running Windows 11,
do you have to keep said node running all the time?
Thanks for the value.
Yes, indeed.
You do want to keep it running all the time because the Bitcoin network runs all the time.
Good question, though.
Not a dumb question.
I could totally, you know, and it will catch up.
It's just not going to be as functional.
And if it's offline for a while, it'll take a while to catch up.
Thank you for the boost.
Northern HODL is here with 2,121 sats.
I'm not against video, but I only listen to audio podcasts.
I'm usually walking, driving, or lying in bed.
Yeah, where I would find video to be useful would be at the desk.
You know, if you're watching, if you're sitting at the desk, like me, I've got too many screens,
so I might toss a video up there.
And if I'm going to go the route of a podcast while I'm at the desk,
I might just go the route of a video podcast.
I might not be looking at it constantly.
I might not even have that particular tab up, but I might tab to it from time to time.
I'm with you, though.
I mostly listen in the car when I'm driving.
If I go on a walk, definitely bring in, you know, or if I'm working on the outside of the house, the RV, whatever, studio, put in a podcast.
I love that.
Because, you know, one thing is I don't want the topic to change for like an hour.
Like if you go with YouTube, it's like every 15 minutes, something new, you know.
Thank you for the boost.
Ed's here with 3,333 sats.
Danger zone
I vote for audio format
Video is a huge
Is huge data wise
I download
In my download queue
My podcast content
Daily to my local storage
Oh good idea
In this usage model
I can stream content
Without data connections
Heck yeah
I never worry about storage
As my phone will stay in the cab
Of my truck for a while
And I walk around with a bluetooth
And I listen to Twib
While working at the same time
Thanks for producing
The best Bitcoin podcast
I've heard on the topic of Bitcoin
And doing it in format
Focused on audio
Yeah
Let's hear it good buddy
Alright I'll take that
That is true.
Thanks, Ed.
I like that.
Of course what I was talking about it wouldn have changed the default to be I wouldn rip the bandaid off as it were You like that I wouldn rip that bandaid off but I agree with you Like if you
I love the pre-downloading.
Like when I go on a road trip and stuff,
I download everything.
Audiobooks,
podcasts,
you name it.
I love that.
Golf Winch is here with,
Golf Winch is here with 2,000 sats.
I'm doing my part.
This is one of my favorite weekly shows.
Audio for me.
Video is too time consuming.
for you or for me?
For me, I would just do it live.
But yes, yes, it can be.
Oh, my God.
If you want to mess around with like shorts
and edit them really tight and stuff like that,
it's horrible golf.
Thank you for the boost.
Mug Daddy's here with 5,000 sats.
This is the way.
I listened to this podcast for a while
while I'm doing other things.
So I have zero interest in video.
Mm-hmm.
I'm getting that.
That's not possible.
Nothing can do that.
Thank you for the boost.
And I love how productive you all are.
good god that's great army guy 6902 is here with 5 000 sats i am programmed in multiple techniques
another great episode as a truck driver audio is king for me but i'm sure video would also be nice
especially for the charts and the clips keep up the great work well that's such a nice balanced
take army guy and yeah and you know if i did a video version it would basically be what you hear
just with visuals i'm not by the way doing one i wanted to take the pulse on this because for this
show, it would be pretty straightforward for me to do one live to tape. I would just capture as I do
the show. I would just capture my screen, capture the clips I'm playing and produce it. So I wanted
to put the offer out there. But I love that I'm hearing kind of how you guys like that wasn't what
I expected was to hear how you guys listen. I mean, think about it from my perspective. I have
no effing idea. So in a way, this is like market research here. This is fantastic. Appreciate that.
If anybody else wants to share, I'm always up. Let me know. Kiwi Bitcoin. And thank you for the
boost army guy kiwi bitcoin guide is back with 4567 sets i love video for technical tutorials
but prefer audio for news and interviews hmm that's an interesting distinction that's interesting
i like i like that uh he goes on to say how about some detailed video content on technical topics
perhaps available as bonus content video content would involve more effort for you so putting in
the effort towards an evergreen technical content would mean it sticks around longer
Thanks for the in-depth content and research you put into every show.
And plus one for that AlbiHub deep dive.
All right.
Mm-hmm.
Yep.
Mm-hmm.
Thanks, Kiwi.
Good to hear from you.
Good boost.
Nakamoto 6102 is here with 3,500 sats.
Put some macaroni and cheese on there, too.
Plus one for audio only.
And thanks for the value.
You got it, buddy.
Thank you, Nakamoto.
Nice to hear from you.
Ace Ackerman's here with a row of ducks.
No video necessary.
There's already plenty of quality content there to digest.
That's true.
There is a lot of, there is a lot.
Yeah.
Although, I don't know if I would say any of it meets the standard, but yes, I agree.
There is a lot.
Why do I got to do that?
MDS is here with 11,000 sets.
I don't understand what the heck is going on here.
Australia is getting between its largest trading partner and its primary leverage tool against its greatest adversary.
What could go wrong?
Of course, he's talking about the rare earth deal.
And the agreement was a handshake?
Who's left holding the bag if China pivots?
Yeah, well, that could very well be what happens, MDS.
It's a great question.
The least you cobbers could do...
Cobbers?
What's a cober?
The least you cobbers could do is check out the band of Aussie plebs
stacking sats on Fountain before the warships arrive.
Check out Social Hijack.
Not mad at you, Chris.
Keep up the great work.
I like you.
That's good.
You're a hot ticket.
Yeah, you're a hot ticket, MDS.
I like that.
I think that was a good one.
Thank you for the perspective, too.
Okay, what do we have here?
We have VCAVLO.
What is it?
V-C-A-V-A-L-L-O.
Vacavalo?
No, that's probably not it.
2,001 sat.
Good news, everyone.
Here's to your hourly rate.
He's a good guy.
He's a real good guy.
No, he's a great guy.
All right, thank you very much.
I appreciate that.
It's pretty funny.
Next caller.
Philip is here with 3,333 sats.
You're doing very well.
Chris, this content's great and valuable.
keep it up. Thank you very much. I appreciate that. Bug-Eyed Stormtrooper. Hey, there he is.
You know, I was thinking about you the other day. I was like, that's such a great name.
He's here with 5,000 sats. Report again. I would lean towards not using video as it doesn't fit my
listening habits, but wouldn't shame any effort towards that direction. I like that. I want to
say things like that, but I wouldn't shame any effort towards that direction. That's how I want
believe you said that. So what is your listening habit, though? That's the bit I want to know.
You know what I mean? These are the bits that I'd like to hear. Joey D's here with, Joey DD,
Joey Double D's here with 5,000 sats. This is why I have bedtime wine. But no mess, it's just
the value. And of course, I always do appreciate that. A couple other boosts below the 2,000-sat
cutoff on the video topic. Of course, I read all of them, and I do above 2,000 sats and above
just for time on air.
Also, a big shout-out to everybody who streams Sats as they listen.
38 of you did that, and collectively,
you stacked the show 40,351 Sats just by streaming them to us.
Thank you very much, Sat Streamers.
Makes a difference there.
Now, we combine that with everybody who boosted in this week,
and it brings the show up a little bit from last week
to 200,766 Sats.
If you'd like to boost the show,
Fountain FM makes it pretty easy
because they host the Lightning Wallet for you,
make it easy to get started,
integrate with Strike and whatnot.
Of course, there's a few different routes you can take,
from running your own self-hosted setup with AlbiHub
to going all the way to the hardcore,
to the dark side with Boost CLI.
Find out more at podcastapps.com.
Check out AlbiHub.
If you just want to get started quick, Fountain FM.
And thank you everybody who supports the show with a boost or a Fountain FM membership.
We'll have more for you in the future or, of course, a Jupiter.party membership.
All of that goes towards making this an ad-free show.
Make it so.
Thank you everybody who supports the show, either directly or indirectly, with that automatic or boost.
Well, there's big news from J.P. Morgan, one of the world's largest banks,
and they announced this week they would begin the process to accept Bitcoin and Ethereum as collateral by the year end.
Now, this is notable in that their CEO, Jamie Dimon, has been one of the loudest, most voracious critics of Bitcoin.
And I'll play some of his highlights now so we can celebrate this massive capitulation.
This is Jamie Dimon in 2000.
I'm only going back a couple of years, friends.
This is Jamie Dimon in 2023 calling for Bitcoin, calling Bitcoin a waste of time.
And I think in this one, he even calls it a pet rock.
What we're talking about, we pretty much always have some crypto conversation with you.
I'm just curious because I don't think we've talked to you since.
I think all that's been a waste of time.
And why you guys waste any breath on us totally beyond me.
Imagine in 2023 saying that all the stuff on crypto has been a waste of time and a waste of breath before everything that has happened this year.
And it wouldn't just be like, you know, a no-coiner pleb, but this is one of the richest bankers in the world.
Imagine missing it this hard and being this guy.
Because you just think the whole thing just is going to zero and it's fake?
Bitcoin itself is a hyped-up fraud.
It's a pet rock.
You're back to that? Really?
Yeah, of course, yeah.
So what do you make then of BlackRock and other firms that are investing in infrastructure?
No, that's different.
Blockchain is a technology ledger system that we use to move information.
We've used it to do overnight repo, intraday repo.
We've used it to move money.
I love the, oh, not Bitcoin, but yeah, blockchain, guys.
They've been around for years, and they're just so stupid.
Like, blockchain is some great database, right?
Like, blockchain is better than an Oracle database for moving these things around that they're talking about,
where it's two centralized entities moving money between each other.
Like they need a global decentralized blockchain.
So that is a ledger.
That's a technology ledger type of thing that we think will be deployable.
Remember, we've been talking about that for 12 years, too, and very little has been done.
There are some tokens that I agree with you on, but Bitcoin is based on a distributed ledger.
It has all the characteristics of a store of value.
Old Joe coming in clutch since 2023.
It's immutable. It's scarce.
It's totally untrue.
It's 21 million.
Oh, yeah, really.
How do you know it's going to stop at 21 million?
Totally untrue.
By the way, here's a totally fan.
Here's a total.
Here's a total Jamie Dimon fantasy of what could happen.
Totally untrue, though.
Because it's Satoshi.
Everyone says that.
Well, maybe it's going to get to 21 million.
And Satoshi's picture is going to come up and laugh at you all.
There isn't a picture.
And by then, Satoshi will have taken out billions of dollars.
What was your reaction to the failure of FTX and all of that?
You know you've seen lots of failures over the years of different things that have happened on Wall Street and the world of finance.
I'm not surprised at all.
I called it a decentralized Ponzi scheme.
The hype around this thing has been extraordinary.
The underlying asset.
But you have a lot of clients who aren't involved.
You guys have all seen the analysis on Tether and the analysis on all these things and the lack of disclosures.
And it's outrageous.
Regulators should have stopped this a long time ago.
People have lost billions of dollars.
You know, some are, you know, if you look at it as lower income people, it's some in some cases.
Jamie, there's a difference between saying FTX is a decentralized Ponzi scheme and saying that crypto itself is a Ponzi scheme.
That's like, I mean, Madoff created options.
Crypto itself doesn't do anything is a pet rock.
You're happy to.
Bitcoin.
Yeah, you can own it all you want.
I'm just talking.
I mean, there's a lot.
It's billions of dollars.
I don't care about Bitcoin.
So we should just drop the subject.
All right, let's just move on, he says.
I don't want to talk about this anymore.
And then, of course, you remember the classic testimony when Elizabeth Warren and him prepared ahead of time and exchanged emails planning on what they'd talk about.
And when he had his moment to testify, of course, Jamie Dimon said that if he ran the government, his fantasy, of course, he would shut the whole thing down.
I've always been deeply opposed to crypto, Bitcoin, etc.
Deeply opposed.
I forgot he says that.
I've always been deeply opposed.
I've always been deeply opposed to crypto, Bitcoin, etc.
He doesn't even understand it, right? He can't tell the difference between FTX and Bitcoin and other cryptos.
You could hear that. He doesn't understand it, but he deeply opposes it.
I've always been deeply opposed to crypto, Bitcoin, etc.
You pointed out the only true use case for it is criminals, drug traffickers, anti-money learning, tax avoidance.
And that is a use case because it is somewhat anonymous, not fully, and because you can move money instantaneously and because it doesn't go through, as you mentioned, all these systems have built up over many years.
Know your customers, sanctions, OFAC.
They can bypass all of that.
If I was the government, I'd close it down.
Oh, I'd close it down.
Oh, OK.
Yeah.
Boy.
And then, of course, in 2024, he continued to say it's a fraud and a Ponzi scheme.
Crypto.
If you mean crypto like Bitcoin, I've always said it's a fraud.
So no hope for it.
Well, if they think they're a currency, there's no hope for it.
It's a Ponzi scheme.
It's a public decentralized.
Who's they, Jamie?
Who's they?
That was on Bloomberg.
Now, here he is in January of 2025 saying that Bitcoin has no intrinsic value and it's basically like smoking.
You've said that it's as useless as a pet rock.
This is on the CBS Sunday Morning News.
What do you really think?
You're going to have some kind of digital currency at one point.
So I'm not against crypto.
You know, Bitcoin itself has no intrinsic value.
It's used heavily by sex traffickers, money launderers, ransomware.
So I just don't feel great about Bitcoin.
I applaud your ability to want to buy or sell it.
Just like, I think you have the right to smoke.
But I don't think you should smoke.
You know, I hate that he ties it to the sex predators and stuff like that.
And we've gone through the data.
We've looked at it.
We know that it's low, that the amount of illegal activity on Bitcoin has been dropping for years as people realize it's an open ledger.
So that's the background.
So that's the scale of capitulation when J.P. Morgan announced that they'd be getting involved with Bitcoin lending.
If the customers want to use it and how they use it and it's used properly, we'll be doing it.
It's what the customer wants. It's not what J.P. Morgan personally wants.
Oh, it's a bit of a change of tune there all of a sudden.
J.P. Morgan declined to comment, but this is a space to watch because although it's early days and so far isolated to the trading division,
it could ultimately expand to other areas of the business, whether it's corporate or asset management or even consumer.
But again, early days still here, but still quite interesting, guys.
It's early days at J.P. Morgan. But I wonder when you have, you know, the world's biggest bank now wading into this, what it's going to mean for the other financial services and banks that are already in this arena, as well as some of the crypto banks.
Yeah, I think usually the way it works is if a client gets a certain service from one bank, they ask if it's available at the other counterparties. It's also doing businesses, other prime brokerage divisions and so forth. And so this is definitely something where JP Morgan has heard from, as I mentioned, the hedge fund managers and asset managers as a service that they want.
And the firm has kind of been of the mindset recently that if regulations allow for it, they will explore it and figure out what they need to do to make it happen.
The bigger question comes from kind of a risk management standpoint, which is that Bitcoin and Ether are more volatile than typical types of collateral.
So you have to take a certain size haircut in order to make that feasible from a risk management standpoint.
Really what she's talking about is you just have to have more collateral.
So that way you can withstand a larger drawdown.
The trend in the update section this week of convictions changing to chase profits is undeniable. We'll get back to that. But before we continue on that trend, I thought it was worth mentioning that BitKey, the folks of the BitKey wallet, have proposed a new Bitcoin improvement proposal, a BIP as they're called, that is for chain code delegation.
delegation they say it's a major step forward for multi-sig privacy instead of
sharing a full set of chain codes it withholds them entirely co-signers get
only the minimal info needed to sign a transaction without learning the
balances or unrelated activity this means multi-party wallets like corporate
treasuries or family vaults can now have co-signers that help recover funds or set
spending limits
without seeing your transaction history.
This has been authored by the current and former BitKey engineers that work there,
and their proposal aims to become an open standard for any wallet that wants to adopt it.
BitKey will be the first implemented, enabling truly private collaborative custody.
That sounds really neat.
So I'll put a link to this in the show notes where they explain more about it.
But, you know, as somebody who has a family,
and I would love to have lots of sub-wallets and maybe do something like co-signing,
something I'll follow very closely.
And if I see anything move forward, I'll try to report on it for you.
This story is a bit interesting and complicated.
Credit ratings firm S&P Global assigned a B- to strategy this week.
Now, this rating, which is not a very good one, it's considered speculative grade, does open up strategy to new forms of capital investment.
But hilariously, one of the reasons they only gave strategy a B minus is because they're concerned about them not holding enough melting fiat.
They write, quote, our ratings on strategy incorporate our view that the company's narrow business focus and high Bitcoin concentration and low U.S. dollar liquidity.
They need more treasuries and dollars in order to be rated high.
And Saylor just sat down for an interview today or yesterday and was asked about getting a B minus instead of, you know, something perhaps a little more prestigious.
I'm here with the executive chairman of Strategy, Michael Saylor. Thank you so much for joining us.
Happy to be here.
Michael, this is your first interview since the S&P granted its very first rating to a Bitcoin-focused company. Is that correct?
That's correct.
So tell me about this announcement, what the significance is to the industry.
Well, the news just came out today. S&P put out a press release that they've granted for the first time to a Bitcoin treasury company a credit rating.
So we were rated as a B minus.
Is that fair?
It's a start. We expect to move up in the ratings over time.
But we think it's a very auspicious start because it represents institutional adoption of Bitcoin-backed credit.
And of course, the most exciting thing we've done this year are four IPOs of four digital credit instruments.
Strike, strife, stride, and stretch of late.
And now that we've got an S&P credit rating, that's going to open up the market.
There are hundreds of billions of not trillions of dollars of capital that won't buy an unrated instrument.
They can go ahead and acquire a rated credit instrument.
So it's really a great day for us and for the entire crypto industry, I think.
Yeah, I think the big takeaway is just having a credit rating opens them up to potential investors that couldn't invest in somebody that doesn't have one, which is a wild thing.
But of course, they have something like that.
Now, let's get back to that profits over conviction and how it's going to be changing people's minds.
CleanSpark, one of the largest Bitcoin miners, is pivoting to AI.
They've acquired land.
They're building out data centers.
They've been in competition with Microsoft for Wyoming AI data center space.
And they're based out of Las Vegas.
And they're moving into artificial intelligence and beginning to develop AI data centers alongside
their Bitcoin mining business.
And the CEO of CleanSpark talks a little bit about this.
So I want to start this conversation with an announcement you made exactly a week ago.
CleanSpark is moving away from being a pure play Bitcoin mining company
and introducing AI compute into its portfolio. Talk to me about what's behind that shift for
CleanSpark specifically, because you're not alone. I mean, lots of miners have been doing the same.
So talk to me about this decision. Well, Bitcoin miners are uniquely positioned in that
we have the ability to build out and energize data centers very rapidly. And what that's resulted in
is as we're seeing this kind of rush for AI capacity.
For example, this morning on CNBC,
they were talking about hyperscalers
are spending 60% of their free cash flow on CapEx
to try and keep up with AI.
Well, where we're seeing constraints,
constraints, excuse me, is on access to power.
So CleanSpark, as an example,
started out as an energy company.
And five years ago,
we made a shift to a pure play Bitcoin miner. In that period of time, we've become the largest
Bitcoin miner in North America. So what really has led to that is our ability to access energy
and land very rapidly and to deploy that. So as we kind of analyze the opportunities,
it's readily apparent that the cash flows and the profitability for a pivot or a strategy that's
that's kind of down dual tracks, maximizing the value of our Bitcoin mining operations,
but also using that access to land and power. Who could have seen this coming? Remember a few
weeks ago when I told you I'm concerned about the power needs of AI eating into Bitcoin mining
operations. This is interesting. I generally don't think any company should have a split focus.
Bitcoin mining is an extremely excruciating business at times.
Having a split like this maybe it a good thing Maybe it creates another revenue stream Or maybe it a bad thing because it dilutes your focus But the thing that the reason why I believe
this is going to be a particular pressure point for commercial Bitcoin companies, especially ones
that are public shareholders, et cetera, is they have the power deals figured out. They had to solve
this years ago. They've got what, almost eight, nine years of a lead on the AI companies on
working out these power deals. And so if power is one of the number one bottlenecks to this build
out, the money that's going to get thrown at these companies is just going to be insane. And they're
going to take their eye off of mining. And maybe this isn't a bad thing, but I think it's just
something, it's a trend we should be watching. To provide AI data center services is really the
most appealing for our shareholders. Yeah. Talk about how you sort of offset the demand for power,
the cost for power, because it is getting more expensive. How does CleanSpark sort of manage
the cost of power in this pivot that you're making? Yeah. So it's interesting. Bitcoin mining
is a very unique load. When there's demand on the grid, in fact, meeting with the principal of one
of the utilities in Georgia, they told us that if they had 100 hours per year of flexibility added
to the grid, it could solve the vast majority of the rolling brownouts, rolling blackouts that
challenge many utilities. So Bitcoin mining is an interruptible load, meaning that we get a signal
from the utility when there's increased demand and we have the ability to curtail those loads and
push power back very rapidly. AI data centers, the opposite side of the equation, many of the MSAs
require that the uptime is 99 and five nines uptime. So blending a Bitcoin mining facility
with an AI data center gives you the interruptibility, the flexibility of those loads that
the utilities so desperately need. Just a quick story when Hurricane Helene hit in-
All right. That's all right. All right. Okay. All right. So that's CleanSpark and they're making
a pivot. I don't have a deep analysis on this other than this is just something I think I want
I keep an eye on. And I think it's going to be interesting to check back on CleanSpark three to
five years, you know, as the AI play is sort of settled down, where does this leave them?
That's going to be my question. So that's something I'll keep an eye on. But if you get any stories,
want to send me a link, please do. Always very helpful. And like I said, it might not all be bad.
Maybe this shakes mining up. It moves things around and it brings new players into the space
and gives smaller players a chance. So it might not necessarily be a bad thing if CleanSpark
fumbles this. And then there's the general tone shift and attitude shift around the environmental
impact of these things. The study that said that each Bitcoin transaction uses a swimming pool of
water was updated this week to recognize that an entire Bitcoin mining facility, on average,
uses significantly less water than a single U.S. household. It went from a swimming pool per
transaction to the entire mining facility uses less water than a U.S. household. That's a huge
pivot. And it's all this realignment around profit and build out around AI. And in this weird way,
it's restarted the conversation around investing in energy and that the energy investment is more
important than other high priority issues, even climate change. And I'm not the one saying this.
Bill Gates is the one saying this.
But economics works there.
When the climate activists who have been very supportive of what you've done and you've been very supportive of what they've done read this.
And if Greta Thunberg is reading this and saying to herself, my goodness, he seems like he is reversing himself, what would you tell her?
I'd say wasn't the goal here to improve human lives.
And shouldn't we, in our awareness of how little generosity there is to help measure, you know, should we get them a measles vaccine or should we do some climate related activity?
And if if we could take if we stop putting all vaccines and that saved you point one degree, would that be a smart trade off?
That's the kind of question we have to ask.
so I'm a climate activist
but I'm also a child survival
activist
I mean you want kids to survive don't you
and so you better invest in things that make human life
better and in his memo
you know I think Gates is trying to make the meta
point in my opinion
that the world governments
are getting too debt riddled
they cannot continue to afford
to spend money on all these different things and there's going to be
less and less money to go around
for these things and
he's not convinced
that we get the return on investment for overall human quality of life.
And that he thinks that things like AI, this is his opinion,
are probably more likely to discover the cure to some of these issues,
like diseases and climate change, than they are to worsen them.
And that if we were to curb their development in the name of climate change,
we'd be holding human development back.
It a remarkable change in stance And it interesting you know just something like nearly 40 of Bill Gates portfolio is Microsoft
Of course, they're massive into AI.
The next biggest portion of Bill Gates's portfolio is Berkshire Hathaway, also massively doing AI investments.
And the list goes on from there.
So Gates with his Microsoft and his Berkshire, you know, he's got a lot of deep AI investments.
This pivot had to be made, I suppose.
But what I wonder and I ponder and I posit to you is will this shift around energy production and this tolerance for high energy use applications stick around for more than a couple of years?
Is this a temporary thing or is this a permanent phase shift?
I'd really like to know because I'm hopeful it's a permanent one, but I'd like to hear maybe the counterside to that or maybe somebody who agrees.
Well, we talked about the billions that have been converted from Bitcoin into iBit last week.
And that got some feedback.
Bitcoin's been captured!
Something kind of like that.
Look at the Bitcoiners. They're giving up their sovereignty.
You know, that kind of stuff.
Whenever the banks are involved and Bitcoin's involved, people get upset.
I've said this before, but I think the journey will be something a lot like Linux.
You know, it starts as this crazy, impossible idea that maybe somebody would like.
It becomes this sort of cyberpunk technology.
And then it eventually becomes the general technology platform of the world.
And that means Microsoft and Samsung and Intel are using it.
And it means, you know, crazy kids restoring PCs in a basement are using it.
And it means that whole range is possible.
And I think that's going to be true with Bitcoin. You're going to have the banks and the financial system that are using it. And then you'll have the open source freaks and those of us like me that are just like hardcore self-hodlers and self-hosters. We're still going to be around too.
And David Marcus, he's the co-founder and CEO of LightSpark.
He sat down with Natalie Brunel on CoinStories.
And David's interesting because his company, amongst others, has partnered with SoFi, which is a bank here in the States.
And they're using LightSpark for international remittance.
So LightSpark is using the Lightning Network.
And when you're in the SoFi app and you send money to somebody in another country, you send them dollars.
or maybe even within the US actually.
But when you send money on the backend,
it's using Lightning.
You don't even know it.
You only see dollars in the SoFi app.
You don't know anything about Bitcoin.
You don't know it's using the Lightning network.
So he's an interesting chap
and he's got an interesting perspective
because he was a former PayPal president.
He worked at Meta.
Now, you know, he's working very heavily
in the Lightning network space.
So he has an interesting point of view
on using Lightning as a transaction layer
and using Bitcoin as a store of value
at the same time.
And you've probably heard this. It came up a lot this summer.
Jack Dorsey and others brought up this idea that if Bitcoin is only ever a store of value
and it's never used for day-to-day transactions, then it's essentially failed.
And it hasn't lived up to Satoshi's dream.
Well, I've always felt like that's a little bit too bleak of a look at the situation.
And I really like David's answer when Natalie brought up this question.
So I had Matt Pines on my show recently.
And one of the things he said is if Bitcoin is only a store of value, it has failed.
Do you agree with that?
Yeah, I fully agree.
Yeah.
But I think we need to unpack that.
It's like it needs to be a store of value for the network to be secure, trusted, and all that.
So it's a prerequisite step for it to become what Satoshi wanted it to be, which is everyday payments.
Now, on the way to everyday payments, there are two ways to think about this.
One is actually using Bitcoin to unit of account for everyday payments.
I think we're far from that for the reasons we discussed.
But I think using Bitcoin as a neutral settlement network and asset to move between fiat currencies and to move stablecoins, this is happening now.
And in the next five years, it's going to become mainstream in a massive way.
And I think it's going to start moving trillions of dollars of value every year on top of the Bitcoin network.
And I think when that happens, Bitcoin will have fully entered its utility phase.
And in some cases, people will start receiving and sending payment denominated in Bitcoin.
And then, you know, time will do its thing.
Let's check in on the state of the network.
921, 373 is our block height.
Block height 921, 373.
I like that. 921. Current market price in USD for one Bitcoin is $111,280. That puts our sats per
dollar right now at 898 sats to $1. Oh, the price just dipped down to $11,300. That's cool. $111,300.
These numbers, I don't know. I'm liking them today. I don't mind Bitcoin at $111 at all,
to tell you the truth Our all high was I do like that too down 11 percent since then that was 23 days ago on october 6th we target difficulty date is now in november 11th i think this will probably
change but the estimated difficulty adjustment is a downward 11.4 percent reachable bitcoin nodes
23,995 down a little bit.
What's going on there, guys?
It's time to node up.
Time to node up.
The largest Noughts node currently has just about 8% of the network share.
So there you go.
That is a quick snapshot, a state of the network.
Well, if you made it this far, go check out the links.
This Week in Bitcoin.show
My goal is to create something that doesn't get distracted by the emotions around what's happening,
but just focuses on the signal, helps you make the best decisions.
Let me know how I did with a boost.
Also, boost in if there's anything you'd like to see from the show.
Maybe I missed something or you have a little extra context.
please boost in. Send it my way. I'd love to have that.
Now, as we get out of here, I am going to leave you with a value-for-value track.
If you boost in while the music plays, 95% of your sats go to the artist and anyone on their team.
It's their discretion.
And this week, I'm leaving you with the end of the world.
Seems appropriate for Halloween, and it's by Fleo Zara.
There are no trees in the patio
This life is taken, what's there left to own?
No cars, no trees and no stuff bones
There's all these parts of truth in your eyes
Destroyed by that past that is scaring me
There are no flowers
There are no tools on the radio
When there ain't nothing, there ain't my studio
No Friday movies and a shopping mall
There's all these parts of truth in your eyes, destroyed by our past, and it's gilded, we've gathered, we've been.
There are no flowers.
guitar solo
welcome to Video