Welcome in to This Week in Bitcoin, episode 83.
My name is Chris, chrislas.com, jupiterbroadcasting.com.
I'm so stinking thankful for Bitcoin.
I mean, once you really get Bitcoin, it's not that the fiat price, it's not that it doesn't matter.
It's just that when it goes down, your conviction in the asset doesn't really change.
Because, you know, Bitcoin historically has drawdown cycles.
And then the coins get redistributed to stronger hands.
And then, inevitably, it pumps higher than ever before, usually.
I mean, we all know this is the phase of price discovery we're in.
Probably going to be in for a lot of our lives, if maybe all of our lives.
It doesn't mean the rest of the world gets that.
And it doesn't mean the rest of the world and the bankers aren't paying close attention.
And this week, they saw some blood in the water.
It has been a wild week of reveals.
I'm going to get into a few of them.
And when the price is down, the knives have come out.
And Wall Street, they still seem a bit confused.
Some of them seem to be trying to attack.
Some of them have been trying to put it together.
And some of them are worried that it has broader implications for the wider market.
It's the number one story.
Let's make one more move here.
At least one more discussion point before we take a break.
Bitcoin.
It's an A-block story, I think, still.
Oh, it's an A-block story, guys, because it's a number one story. It's an A-block story, at least until it's not.
Until it isn't. It's down again. OK, Bitcoin is.
At the time they were recording this, Bitcoin had reached up to 87 and was down to 86.
So while they're talking about it, Bitcoin was down 1.6 percent.
They're talking like it's destroyed, right? But OK.
I think the broader thing to pay attention to is the questions he asks and the implications.
Coinbase got downgraded today at Argus.
So, you know, there's a belief that the market overall is not really going to be able to fully stabilize until Bitcoin does.
You own Coinbase in the ETF.
So what's your view on that?
I love it.
So number one thing that jumps out to me is there's an overall belief that the market won't stabilize until Bitcoin does.
Interesting number one.
Number two, he goes to his expert who owns Coinbase via an ETF.
So this guy's the Bitcoin expert because he's a Coinbase shareholder?
Until Bitcoin does.
You own Coinbase in the ETF.
So what's your view on that?
I think I said yesterday.
I've said last week and I'll say it again today.
I think it's going lower.
I think the entire crypto space, Coinbase is going lower.
I love the conviction in which they speak, right?
Because, of course, this was a couple of days ago and now Bitcoin is several thousand dollars higher than what he said.
Maybe they'll go down again.
Who knows?
But it's just sort of funny, the conviction in which these guys speak of,
I've said it before, I'll say it again, I'll say it tomorrow, I'll say it tomorrow afternoon,
and the day before, and the day after, and the day before, and the day before.
And it's just like, what?
Hold on, slow down, buddy.
You're just saying nonsense.
Like, I could have said it before, I'll say it again.
Okay.
All right.
I think I said yesterday, I said last week, and I'll say it again today.
I think it's going lower.
I think the entire crypto space.
Coinbase is going lower.
It's going low because of what's going on with crypto.
It looks to me like the crypto asset class peaked on October 6th.
The crypto asset class peaked on October 6th. Keep that date in mind.
We're in the midst of a liquidity driven sell off. You could cite whatever reason for it.
We're in the midst of a liquidity driven sell off, which we'll come back to.
But in terms of observing momentum on a very near term basis, there's no signal that I see in front of me that suggests a turn.
Nothing's going to turn it around, guys.
Did you did you believe? Do you believe what others do that until Bitcoin firms up, at least stabilizes somewhat, that the market itself is going to feel a little more volatile?
This conversation is sort of a microcosm of the broader conversation happening. Why is it going down? We don't know. Something happened after October 6th. Is it an indication of broader problems in the wider industry in the market? Is Bitcoin the canary in the coal mine or is it something unique to just Bitcoin? What's going on? That's the general discussion.
And what really seems to have shifted is, and I think it's happened just during the run of this podcast.
I mean, if you look just, say, 80 weeks ago, the panel would have laughed at the idea that Bitcoin's price action has any meaningful market signal.
They would have laughed at that idea.
But now they take it very seriously.
And you hear them implying something went wrong after October 6th.
Well, October 6th was our last all-time high when we hit $126,000.
ETH was pumping.
A lot of the altcoins were pumping.
and then something, as you hear them imply, broke down in quote unquote crypto.
OK, what's going on here?
Let's let's talk about this.
You might remember a few weeks ago I mentioned we're seeing a lot of talk about Binance being
at the center of a lot of issues in the market.
It seemed that their pricing oracle had lost sync and wasn't reflecting the broader market
price, but just the price on Binance only.
this caused a liquidation event that was larger than when FTX went down. That is massive. By the
way, it took us eight weeks to recover when FTX went down. So this was a big, big deal. And it
didn't happen on October 6th. October 6th is when the money was still flowing. It happened on October
10th. And I'm not an expert in this particular event, never used Binance, and I'm not a DeFi guy.
So when these types of things happen, I don't tend to pay them much attention until they start
impacting Bitcoin. That does seem to have happened. Now, to help us understand, I'm going to bring in
our DGN and chief on the show, Tom Lee, to explain what is supposedly, supposedly,
Supposedly, a software bug or a glitch.
What specifically occurred on or around October 10th that would lead us to where we are now on what, November 20th?
Yeah.
Well, Steve actually pointed this out.
There's a lot of what they call automated processes in crypto.
One of them is called ADL, okay?
And that's an automatic liquidation feature that would take place if someone's account
or their collateral drops in price.
DeFi is wild, man.
So the automatic deleveraging feature, it's a feature, right?
It's a feature, according to Tom.
So the way things work in standard Bitcoin land, say you go get a loan and you use Bitcoin
as collateral, and then you have a loan to value ratio.
You usually want to double it.
So say you want a $5,000 loan.
Just keep the numbers simple.
You want a $5,000 loan.
You'll put $10,000 worth of Bitcoin in.
And that way you're over collateralized, all right?
And then if for some reason Bitcoin were to crash and your Bitcoin no longer collateralized that $5,000,
SALT or Lend or Strike or whoever would contact you and say, you know, sir or ma'am, you have 24 hours or 48 hours,
whatever their window is, each place has their own policies, and they do make them clear.
You have this amount of time to add more collateral, collateral to pay off your loan or to put some more cash in your account.
And if you don't do that within 24 or 48 hours or whatever it is, we will margin call you,
which means they will take your Bitcoin, cash it out to help cover your loan.
But in DeFi, there's no tech support, right?
There's no customer service in DeFi.
You're not going to have anybody help you and give you a 24-hour heads up.
So they have a feature, automatic deleveraging.
Well, what happens when the source of price breaks?
You start deleveraging people that shouldn't be deleveraged when their accounts are in good standing.
So that's what happened on Binance, at least my understanding and my opinion.
And that event, their price oracle going sideways caused all kinds of problems.
Okay?
And so, yeah, yeah, automatic deleveraging.
It's a feature.
One of them is called ADL, and that's an automatic liquidation feature that would take place if someone's account or their collateral drops in price.
It's essentially like a margin column.
On a specific exchange, a stablecoin's price varied from other exchanges.
Actually, stablecoin should stay at $1.
It dropped to $0.65.
Uh-oh.
But that only happened within the exchange quotes, within this exchange because of liquidity.
that triggered an ADL, an automatic liquidation across many accounts.
It wiped out as that spread across other exchanges, right?
Because liquidations cascade.
Almost too many crypto accounts got wiped out,
even though minutes before they were actually profitable accounts.
Some of it retail, some of it professionals,
bit of a retail massacre, much like FTX was.
Another FTX parallel.
So who is behind this?
Like, who's the they in the market makers and they got hit?
Who's the they?
Well, you know, Brian, I am aware of names, but because, you know, I'm not someone who
wants to name names, I think what you should keep in mind is that this error is actually
essentially a bug, you know, a code error, because I think in retrospect, they would
have pulled pricing from across exchanges.
All right.
So he doesn't want to say it's Binance, but in my opinion, it must be Binance because
that's who's been at the center of all of this. They're the one that had the Oracle problems. And I
think it was the BNB coin that got de-pegged. So it's a bug, he says. Well, is it a bug?
Is it a bug when you just design it wrong? You make a mistake? That's not a bug. That's a bad
design. They designed it to only use their own price Oracle for information and their price
Oracle broke. But that was a decision, not a bug. I think he's being pretty loose with the term here.
I mean, in retrospect, you could consider it a bug. It's not functioning the way it should.
But that was a design choice, probably an intentional design choice that Kev's come back and bit them in the arse.
So bug is a very broad term here, in my opinion.
This error is actually essentially a bug, you know, a code error, because I think in retrospect,
they would have pulled pricing from across exchanges to set the price for that stable coin rather than rely on internal quotes.
so but this has resulted in a lot of market makers and traders having less capital and as you know
as crypto prices drift lower because trading volumes drop they need to then have more capital
available which means they shrink their balance sheet further so they sell their bitcoin so this
this is why it affects bitcoin their stupid games blow up in defi and then market makers like winter
Mute and others, they now have a hole in their balance sheet they have to cover. So they go to
the asset that they can sell quickly in the economy that they play in, which is Bitcoin.
So they go to their reserves and they start selling their Bitcoin. Somebody, as an example,
since this happened since October 10th, has been selling every day at 9.30 a.m. Big stacks of
Bitcoin. It doesn't matter the market price, the market sentiment, what the price action is doing
every day, 9.30 a.m., they hit the sell button on a big stack. That is probably somebody executing
a playbook to recover missing funds. And they're doing this type of sale. You could say, well,
we're not trying to play the market. We're just executing a strategy. There's legal reasons to do
it that way. And so they're cashing out their Bitcoin to cover the mistakes and the holes that
were generated by this massive liquidation event, this 20 billion plus liquidation event.
Not a bug, though, right?
That was a design mistake, but okay.
This is then that reflexive weakening.
Okay.
I want to go back to this point, Tom.
I hate the term glitch.
I can't stand the term glitch because, you know, things go down at the airport.
And they say, well, a glitch clause, your flight did not take off.
I agree with the host on this point.
I think it is a travesty that the general public lets the media just call everything a glitch.
As a technology person, that's not a glitch.
There was a problem, a mistake, something screwed up, right?
Glitch is this stupid generic term that we let people just get away with to just excuse like, oh, yeah, your bank account got emptied because of a glitch.
Come on.
However, in Tom's defense, I don't think he said glitch.
I think he said bug.
I think he said bug, which is also being used fairly broadly, but I don't think he said glitch.
I agree with the host, but I don't think he's listening.
That's not a glitch.
that's more than a glitch.
It's a word that is used to describe
pretty serious automation issues,
software problems, crashes,
for some reason that they try to minimize.
Is this some kind of a software bug?
That's exactly what he said.
So these guys, you know, I mean, oh my God,
they don't even do the basics of their job.
He just has to sit there on his butt and listen to Tom,
and he can't even do that.
That's causing part of this?
I'm trying to follow exactly what you're hinting around about.
Oh, then you might try listening.
Yeah.
I mean, Brian, it is.
For instance, in 1987, portfolio insurance was the, quote, glitch.
And that triggered the cascade in 1987.
And so the industry learned and then never offered that again.
You know in 2009 it was really that the collateral wasn secure in real estate in these packaged subprime mortgages Now the industry learned and they recoded that I talking about Wall Street
But then regulators came in and over-regulated.
That was the negative effect of that.
In crypto, this code of ADL and the way they pull prices is never going to happen again.
The good news is we're not going to have over-regulation in crypto.
But now we have to deal with that liquidation effect.
That liquidation effect being everybody that got screwed.
I just I don't really get his point there at the end.
Isn't isn't setting accurate pricing across the industry the exact kind of thing regulation would fix?
Not that it would ever apply to DeFi, but it's just a weird point that he makes there.
Also, keep in mind, Tom is looking for a reason that ETH has tanked.
His treasury company for Ethereum, he bought at the top.
Tom bought at the top.
And now his Bitmine Ethereum strategic reserve is down over 51 percent. He's down billions of dollars right now. So that's another reason why Tom's coming on TV and explaining this bug theory is because a lot of investors are in the red if they bought into his company.
And there's a kind of a, I guess, the subtext of him having to explain that away.
And honestly, I think there is something to this idea that the market pounces when Bitcoin
goes down now because we're in a different game and bankers like JP Morgan are paying
attention.
And they were poised and waiting for a moment just like this.
Bitcoin Twitter was activated this week.
I mean, really, for good reason.
Folks were putting together the implication of MSCI's October announcement,
which JP Morgan just happened to amplify at the perfect time this week.
So a little backstory here.
MSCI, they're considering excluding digital asset treasury companies
from their index tracking funds.
Let that sink in for a second.
If that were to happen, these funds that are passively buying MicroStrategy stock and other debt category companies, they would have to sell if MSCI were to make this decision.
And that would potentially create a, quote, meaningful pressure on the affected names, end quote.
So MSCI has about 38 crypto exposed companies they're considering excluding from index funds.
Micro strategies on there, riots on there, marathons on there, and others.
And they have a consultation window that runs now through December 31st.
And then they're going to announce and publish their decision on January 15th.
And then if they decide to remove these DATs from the indexes, the indexes have to take care of that, i.e. sell, in February.
And it looks like certain organizations are using this dip to take direct shots at MSTR and Saylor's market position.
They're trying to sniff out weakness to see if his strategy can be attacked under price pressure.
And we're talking perfectly timed press releases, suspicious delays in transferring MSTR shares, which is a big deal,
and a full circuit of talking heads ready to amplify the message anywhere that would let them on.
The bottom line this week, the pressure was on for Mikey Saylor.
And in the middle of all of it, he appeared on the CoinDesk podcast, where the host rightfully asked him about the situation.
Now, Saylor's answer is interesting on its own.
But keep listening, because what he reveals is sort of a broader framework, I think, of how he views these attacks, strategies position, and Bitcoin in the broader financial system.
It's really revealing.
And lastly, I just want to ask you about the JP Morgan report that came out this morning,
warning that strategy could be excluded from benchmarks like NASDAQ, MSCI, and it could
trigger an estimated $2.8 billion in automatic outflows.
That's just from the MSCI alone.
What's your response to that?
I think it's a bit alarmist.
I'm not so sure the numbers are nearly that high.
I think actually the numbers would be much smaller.
I also think it's already priced into the market by a factor of 10, if you count it.
I don't think there's any relationship between the decision-making of MSC and the NASDAQ 100 or the S&P 500 index allocators.
The company is an operating company.
It's just like insurance companies use capital in order to create financial products and banks use capital to create financial products.
We use capital to create digital credit finance products.
It's possible there are people in the world that don't fully appreciate digital credit
or digital treasuries.
That wouldn't surprise me.
We had that challenge with bankers that didn't want to bank Bitcoin.
We had that challenge with accountants that were a little bit skeptical of digital assets
accounting.
The accountants embraced the asset.
The bankers embraced the asset.
The politicians embraced the asset.
We had the challenge with credit rating agencies, and they just embraced the asset.
We're starting to get credit ratings.
We have the challenge under the Basel Accords, where Basel Accords allocate zero value to
Bitcoin, and now they've announced they're going to reconsider that.
So I'm not concerned that we have these kind of concerns.
I think we'll educate all of the companies in the space.
Ultimately, it's above my pay grade to decide whether MSCI embraces digital asset holders
a digital credit or not. It's just like it's above my pay grade, whether the S&P 500 puts us
in the index. But what I would say is over the long run, it doesn't matter because over the long
run, this will create near-term volatility. But if the world wants a bank account that pays them
10% rock dividends, and if Bitcoin is digital capital superior to gold, then it's not going to
matter what an equity index allocator decides, if the insurance companies don't want to buy Bitcoin
and the banks don't want to buy Bitcoin or the index allocator doesn't want to support a digital
treasury company, the free market is going to allocate capital and it will adjust. It just
creates a bigger opportunity for some other equity investor that will pile into this particular
asset class. You know, it strikes me that if
Saylor is successful and strategy really sort of
trailblazes this path, two things. Number one, they
really did have to deal with so many arrows. They had
to just take so many of them to get through this that they will create a trail
for others to follow. But number two, I think they will normalize if they're
successful, companies just keeping a little Bitcoin on the balance sheet.
not as a Bitcoin strategic reserve,
but just like they hold assets like real estate.
And some of these things he's knocking down
will make it possible for corporations to do that.
Support these kind of companies.
So it is what it is.
It'll work itself out.
I think whenever there's a lot of volatility in the market,
and right now clearly we've had a lot of volatility of late,
we're living through about a 35% drawdown.
You know, I remember what it was like
when we had the crypto winter,
And there's a 75% drawdown.
When you have a massive drawdown, everyone looks for a reason why.
And they will grasp it.
Is this the reason why?
Everybody wants a reason to explain their pain or the storm or the volatility.
Is it the crypto exchange liquidation bots?
Or is it this?
Or is it that?
At the end of the day, if you look at the chart of Bitcoin for the past 15 years, there's 15
major drawdowns.
It always comes back to an all-time high.
There's five brutal pullbacks in the past five years.
This is not the most brutal.
All of those things have happened without the support of the politicians, without the support
of the banking industry, without the ETFs, without the IBIT derivatives market, without
the support of MSCI, without the support of the S&P index.
I could go on and on and on.
And the reason that digital assets are spreading around the world is because there's a billion
people.
They want to hold the money in their hand.
They want to move the money at the speed of light.
They don't want to be dependent on 20th century financial structures.
They don't trust gatekeepers.
And they would like to move forward with their lives with some control, with financial freedom
and sovereignty and property rights.
and those fundamentals are stronger than ever we just had the secretary of the treasury scott
besant show up at the launch of pub key in washington dc last night right and so in the
midst of all the you know the crypto chaos and people worrying about well will these guys say
that and will this happen you have the most powerful financial regulator in the world
implicitly showing his support for the crypto economy, for digital gold, for Bitcoin,
and explicitly giving guidance to banks that it's okay to custody crypto assets,
it's okay to actually handle them as part of staking and fee allocations, and it's okay to
extend credit. And that is the most profound thing that's happened in 17 years in this industry.
And if we keep our eyes on that, then the near-term volatility is just going to be noise.
We have to work our way through it cheerfully, constructively.
It'll eventually pass.
People will look back and smile and say, you remember the day when that news story came out.
That's Sailor's long way of saying zoom out, bro.
But I wanted to play that longer clip because that is a framework, I think, that he works from.
Now, a little tip.
If you're ever a guest on someone's podcast, don't bang your desk while you're talking.
It transfers to the mic and it's very annoying. So how much truth is behind this JP Morgan coordinated attack? Well, who knows? But it seems plausible. And it seems plausible because just what are the chances a little while later, JP Morgan announces a Bitcoin product that, well, you might consider competing with sailors offerings, perhaps.
Now, this is an interesting one because along with this new product, they also announced a study showing how Bitcoin is a global macro asset, how those that are interested in global macro assets should pay attention and how it's going to be continually traded going forward as a global macro asset.
That's wild coming from JP Morgan.
And then following that, they announced this new, I guess what they consider a product.
It's called a structured investment product, everybody.
Doesn't that sound exciting?
It's linked to BlackRock's Bitcoin ETF, their iBit ETF.
And it's got a catchy name.
It's the Auto Calibrate Accelerated Barrier Notes
linked to the iShares Bitcoin Trust ETF.
Just rolls right off the tongue.
Structured notes like this,
they don't get like catchy consumer product names or tickers.
You got to ask your broker for it.
But here's how it works.
This is a wild one.
This is a TradFi product through and through.
So here's how it goes.
If IBIT is at or above the target price in one year, and the target price is like they
say, it's all in there when you sign up, investors automatically get a guaranteed 16% gain.
So maybe 16% doesn't sound like a lot, but maybe if it's at a bad year, that is.
And that's exactly what JP Morgan expects.
So if IBIT is below that target, the investment will just then continue to 2028.
If Ibit raises, gets up to the target by 2028, investors can then make up to 1.5 times their money with no cap.
So that's nice, I guess.
If Ibit is down in 2028, but not more than 30%, investors get all their money back.
If it's down more than 30%, investors take a loss past that point.
So the idea that they have baked into this thing, and this is crazy to me, is it's essentially assuming the four-year cycle is correct.
And they are betting on Bitcoin having a potential weakness in 2026.
That's my read of this product.
And then a rally into 2028.
Now, their product is designed to sort of be flexible if it does better than that.
But they have built this thing around the thesis that Bitcoin is going to have a rough 2026.
And I don't know if I agree with that.
Now, I'm going to explain why in a moment. But is JP Morgan trying to attack spot Bitcoin price and the MSTR game? Yeah, I would assume they're going to always play every side of every major trade. And when Bitcoin takes a dip, they're going to go all in on that. That would be my my base expectation. But who knows? Who really knows?
all right one story really made waves this week and it sounded a lot like some of the things we
talk about on this show a sub stack was authored by mike green in a post titled part one my life
is a lie and if you were online at all this week you saw this probably getting shared around
In this piece Green drops a revelation a revelation that seems to have really hit a nerve with the entire public It just I couldn believe how much I saw this getting quoted And it fits kind of right in with the thesis of This Week in Bitcoin
So America's entire understanding of what we call the poverty line and what we consider the middle class,
it's built on a faulty 1960s era metric.
That's where we get this U.S. poverty line from is from this 1960s era metric.
And while Mike was digging into why the middle class feels less poor, despite strong GDP numbers for years and what they say is historically low unemployment, the middle class seems to be getting crushed.
And during his research, he found a sentence buried in a paper that says, quote, the U.S. poverty line is calculated as three times the cost of minimum food diet in 1963 adjusted for inflation.
Okay, let me say that again. The U.S. poverty line that you hear about, about, you know, pulling people up above the poverty line, the way they calculate that is three times the cost of a minimum food diet based in 1963, adjusted for inflation.
So the original logic is that families in the 60s spent one third of their income on food.
So the idea was the poverty line was set at a 3x above your basic bare minimum food costs, thinking the food was your most expensive aspect of your budget.
So if you could if you could factor that as their largest cost, then that was a good baseline.
It was designed as a crisis threshold, a crisis threshold that said they could still get food, but couldn't save much, couldn't do much more above that.
And so they took that crisis threshold. And so that was the bare bones food budget. Then over time, we've just kind of adopted it as the general poverty line, not as a crisis threshold. And as you well know, since 1963, food's a lot more than 3% of your budget. Minimum 5% to 7%.
But housing, health care, child care, transportation, those things have gotten radically more expensive and they dominate the household budget now.
So if you keep the original logic, but you were to update it for today's spending, take that 1963 metric and update it, the multiplier isn't 3x above food anymore.
It's roughly 16x, which means the modern crisis line for a family of four is not $31,200 like the U.S. government tells us, but it's actually somewhere, if you're ready for this, between $130,000 and $150,000.
Let's call it $140,000 as a realistic too little of a floor.
Now, this is going to depend on where you live and how many kids you do or don't have.
But if you update the math, $140,000 is the floor for a family of four that wants to cover costs and maybe every now and then stash a little money away.
This is Mike Green on Fox Business.
Real math of survival, though.
So we're talking about real survival, real poverty line, child care, $32,000, housing, $23,000, food, almost $15,000, transportation, almost $15,000.
So these numbers are the numbers he's going off of. And I don't know how many of you are spending $14,000 a year on food, but I'm probably spending more than that. I got three kids. I got a wife and a dog and my fat mouth to feed. $14,000, that would be our best year since COVID. Since COVID, I would not be shocked if we spend $14,000 in six, seven months.
it's bad here in the Pacific Northwest for food costs.
Really, the West Coast and the East Coast
have crushing food costs and housing costs.
How many of you living on the West or East Coast
spend more than $23,000 a year on housing?
Probably a lot of you.
That's, it's a crazy amount.
Childcare, median spend is 32,000,
almost $33,000 a year.
Almost $15,000 on transportation.
And then the one that seems really low is healthcare.
They're saying the average spend is $10,000 a year on healthcare.
Well, if you have a medical event, it's $10,000 when you walk in the door.
And so with these numbers, which to me for the coast are really low.
Now, maybe somewhere in the middle, somewhere where the cost of living is cheaper, these numbers are fine.
But that to me, I would love to see a year where I only spend $14,000 on food.
That would be great.
So this 140, it doesn't even really cut it in the Seattle area if you have a large family, like a family of five.
It's painful math.
And so they're basing it on numbers that, depending on where you live, are either just about right or are even too low.
So it's maybe you're close to the poverty line and, say, the Seattle area might be closer to 150,000, 160,000.
So that's something to keep in mind as we talk about these numbers is that people's experience is going to be a little bit different depending on where they live.
Housing, 23,000. Food, almost 15,000. Transportation, almost 15,000. Healthcare, almost 11,000. Other essentials, 22,000. Add-in taxes. You're saying the real poverty line is 140,000, essentially.
It is very close. And I want to just be clear that that 140,000 doesn't mean you are literally poor.
Right. We're not talking about, you know, country poor sort of stuff.
What I'm describing there is that's really the threshold at which you can cover all of the expenses without government assistance and start saving.
Right. Start preparing for your future. That's a very, very different place than most people think it is.
Obviously, people hit you and saying you you talked about this a little bit in the piece that, hey, you know, it's a lot different in Mississippi than it is in Manhattan.
It's a lot different in Mississippi.
And what's been so interesting to me is actually the anger and frustration and resentment of that number is typically coming from people who don't have kids.
I see a lot of young, informed, intelligent commentators like this is absolutely ridiculous.
$32,000 for child care.
And in the meantime, the vast majority of my comments that are coming in are from people who are actually in that situation saying you're 100 percent right.
This is exactly my experience.
Now, what I think this reveals is a core trap of life in the States right now and probably most of the West.
To reach a median household income of $80,000, most families on average will need two earners.
But that second earner's wages are largely just consumed by child care costs and the other costs to participate in the workforce, you know, transportation, food, things like that that you have to schedule, additional help you have to hire.
So that second earner ends up working just to pay for a stranger to watch their kids.
And it's like it almost eats up all of the second earner salaries.
And these folks, they're not in a place to build wealth via real estate.
Right.
They can't they can't buy tiny bits of real estate and they're not in a place to chase expensive stocks like NVIDIA and hope that they can still ride a pump.
But they can get paid in Bitcoin.
And I'll have more about that in the booths.
Anybody can get, anyone can get paid in Bitcoin. Anybody. I have more of that later. They can stack tiny bits of sats as windows of opportunity allow, a tax return, a STEMI check, holiday gift, earning sats, or sat rewards programs like I talk about with Fold and others.
Like you can't passively earn real estate, OK, but you can passively earn sats and get little bits of property.
And the irony of all of this is Mike Green has never been able to figure out Bitcoin and never understood this, which is ironic because it is the solution to the very problem he's identified.
But beyond that, what I think Mike's research is uncovering, and there is a link in the show notes to it, is a pattern that we keep seeing.
When you dig into these official metrics, we often find that the data is wrong.
You know, some say the data is lying because bad assumptions get baked in decades ago and it sticks around for so long we stop questioning it.
We've been told our whole lives that the poverty line is improving, that we're lifting people above this poverty line.
And it's one of the biggest achievements of the West.
But the truth is that poverty line is wildly, grossly outdated.
Basically, it says that you're OK if you're making annually the cost of a new car.
Like that's the poverty line, the cost of a new car.
One purchase and you've spent your entire annual salary.
This is exactly where Bitcoin has a unique product market fit.
You can buy tiny amounts, literally a few dollars at a time.
Its digital nature is a feature, not a bug for people who rent or move frequently or live in tiny, small places.
You live in a tiny home?
Way better than trying to be self-sovereign with your gold or stacking cash under your mattress.
And if you grew up digital, well, then digital money just makes sense.
There's a real product fit here.
And I'm just not in agreement with JP Morgan.
I think things could be lining up for a really fantastic 2026.
So even a small stack is going to see returns.
I don't know for sure.
But I think there's about three possible liquidity events.
they're likely to happen, they're going to set up a great 2026.
And like I've said before, a lot of the market liquidity is still hitched to that AI bandwagon.
And so when that shifts, Bitcoin is going to stand to benefit.
And it seems like that might be happening.
The U.S. crypto czar David Sachs said, quote,
According to today's Wall Street Journal, AI-related investments account for half of GDP growth.
A reversal would risk recession.
We can't afford to go back.
And AI-related investments account for half of GDP growth.
But what have I been saying?
And what do we know about GDP growth?
We need GDP to grow so that way our debt doesn't look so bad when we look at our debt to GDP ratio.
So there's a lot of reasons we need that GDP.
That TDP.
There's a lot of reasons why we need the GDP to grow.
And Sachs is a reversal would risk recession.
We can't go back. So there it is. The federal government is going to back the AI pamp.
And they're doing it in a way that I think will set up 2026 to continue to put money into the market.
The president just signed a sweeping executive order launching the Genesis mission,
a push to supercharge American artificial intelligence by going all in,
mobilizing America's labs, scientists, and supercomputers to strengthen national security,
tackle rising energy costs, and cement U.S. dominance in AI. Incredibly important.
This is reminiscent of the Manhattan Project that brought World War II to an early and successful end.
This is Chris Wright. He's the U.S. Energy Secretary.
And the reason why he's making reference to the Manhattan Project is because this Genesis mission, or as I'll be calling it, Project Genesis, will be falling under the purview of the Energy Department, just like the Manhattan Project did.
So there's a little bit of a wink and a nod there.
But also, the Energy Department's responsible for a lot of interesting research projects beyond just energy.
This is reminiscent of the Manhattan Project that brought World War II to an early and successful end.
similar to the Apollo projects that put a man on the moon in 1969.
This is an all-in national effort to take the power of AI
and pair it with the 40,000 outstanding scientists and engineers at our national labs
to use the world's largest supercomputers to advance innovation and science,
to fix our rising energy costs.
But today, a new question is emerging.
Is America too dependent on AI spending?
Fresh analysis shows AI-related investment may have accounted for half of all GDP growth in the first half of the year.
Yeah, of course. Of course.
And that's why they're saying things like the Manhattan Project and the Apollo missions.
Because you know what those were? Massive spends.
That's what those were.
That's what this executive order is signaling to the market, to the money people.
The government's got your back.
Go spend money.
I'm not making a judgment call here.
That's not my job.
My job is to tell you where liquidity is coming from.
By the way, Project Genesis has the most badass government website I have ever seen.
I don't know who's making their websites.
It goes way harder than any federal government website.
It's really something.
This Project Genesis is going to be a driving theme for 2026, right?
I mean, that's what they're telling the market.
And it's going to lead to money flowing into assets.
all government money spending does. Like the White House, they can't set the rate. They can't
set the price of money. But they can do things at the government level that still essentially inject
liquidity into the market. And that's what they're saying is going to happen. So this is one of, I
think, the more bullish things. It'll be an ongoing theme over 2026. And then there's another one.
And these are things we know are going to happen. That executive order is signed. The next thing we
know that will happen. It's just a matter of time. In fact, it's going to happen in May.
Is a new boss for the center of the financial universe will be sitting down and taking over
for J-Pow. It has just been announced by Bloomberg that Kevin Hassett, this man right here,
is the number one choice, the favorite by Trump to be the next Federal Reserve chairman.
This is from the Swan YouTube channel. And this is one of the most important developments in global
finance. And today we're going to break it down. Trump's preferred candidate for the Federal Reserve
chair is not a random technocrat and not a neutral bureaucrat either This is a selection with massive implications for monetary policy for market structure and for Bitcoin itself
We have to remember that the next Fed chair does not simply set interest rates. The next Fed chair
shapes the credibility of the dollar, the discretion of liquidity, and the long-term
stability of the entire financial system. When the selection process shifts from a traditional
insulated search to a politically aligned search, investors immediately start looking for assets
that do not depend on central bank neutrality. Bitcoin will become the beneficiary of that shift.
It is the only global asset without political control, without discretionary supply changes,
and without exposure to the internal pressures of Washington. I will walk you through why this
potential appointment matters, why the market is already reacting to it, and why Bitcoin stands to
gain from every part of this transition. The stakes are absolutely enormous and the opportunity
is even larger. I mean, really, what we are seeing here is an outright politification of the Fed.
And this is an appearance which other presidents, presidents eyes, have attempted to avoid.
And Trump doesn't care to do that, for better or for worse. He's got something he wants to get done.
He feels he has a mandate. He's right. And he's going to take whatever action he has and be damned with precedence set by precedence. So this is actually an astute analysis because it will begin to undercut trust in central banks.
much I think this isn't this is a rough analogy but I would argue analogous to how the Ukraine
war and the way they weaponized the SWIFT system and seized Russian assets started a process of
de-dollarizing at central banks and buying gold and I gotta give it to my buddy the Bitcoin dad
he called it the day we were recording the Bitcoin dad pod and that news broke
years ago he said that's exactly what would happen and he's right and I think we're seeing it again
only this time it's going to be with the Fed and central banks.
Now, for better or for worse, again, not making a judgment call here.
I'm just telling you, this is going to be a liquidity event in itself when we get a dovish Fed in there.
Chance to gain from every part of this transition.
The stakes are absolutely enormous and the opportunity is even larger.
Right after the Bloomberg report, we have seen Kevin Hassett has skyrocketed to a 51% chance
as Trump's potential nominee for the Fed chair.
Second place is Christopher Waller at a 27% chance, and third place is Kevin Warsh with a 16% chance.
Hassett is by far and away the number one candidate, according to prediction markets.
What we're seeing right now is a shift in how the Federal Reserve is selected, and that shift has major consequences.
Trump is not looking for a traditional, insulated central banker.
He is looking for someone aligned with his administration's economic policies, and the market understands exactly what that means.
when a central bank becomes more closely connected to political objectives, its perceived independence
weakens. Once that credibility begins to erode, investors start to reassess their long-term
exposure to the U.S. dollar, and they begin searching for an asset that cannot be steered
by election cycles, political incentives, or policy pressure. Bitcoin fits that requirements
with absolute clarity. It becomes... Now, if that sounds a little extreme, keep in mind,
it's going to be in the context of other pressures that are also making the dollar a less than ideal investment.
Hence the need for stable coins and hence the need to, I guess, dial back the reserve requirements for the bank so that way they can buy more treasuries.
That's kind of what's at play here.
So you imagine you put a new Fed chair in there.
Now, he doesn't control the way everyone votes, but what he can do is whip up consensus.
And he's going to be aligned with the White House.
He works for Trump right now.
and along with the White House,
they'll be pulling out every trick in the book
to pump the markets.
I mean, the White House is doing it now,
so imagine when they have a Fed chair
that's aligned with them.
But there's one more hanging Chad narrative out there,
and I legitimately hesitate to even go there.
It's because it's almost a meme at this point.
But I'm not the one bringing it up, okay?
To be fair, it's not me bringing this one up.
I warned you earlier this year,
I just got to set expectations,
that when all the crypto focus,
quote-unquote crypto,
of the White House
and of all the Congress critters,
when it shifted from Bitcoin and a Bitcoin reserve
to stable coins and the Genius Act,
I was telling you at that point in time,
the Bitcoin reserve is going to have to wait.
Now, I was optimistic and I'd hoped
that after Genius had passed,
we'd see the focus return to a Bitcoin reserve.
That didn't happen.
What we saw instead is now they're focused
on this market structure bill,
which is still ongoing.
There's some talk of it finishing in December,
maybe early 2026.
OK, when market structure is done, it is possible.
Take this with a grain of salt.
It is possible we may see the discussion turn back to the Bitcoin reserve at some point in
2026.
And the reason I say that is because just this week, fresh ideas have been proposed on how
to budget nooch fund this thing.
Introduce the Bitcoin for America Act, which would allow Americans to pay their federal
taxes in Bitcoin.
Tell us about this.
Well, look, we're talking about affordability. That's just your dollar has been getting crushed.
You know, the house that you live in didn't inherently get more valuable.
The money that you measure it in got worth less. And gold is another indicator.
One of the best performers in the past year or two years has been gold.
And that's just one of the worst performers been the dollar.
So a lot of people hold other assets. Bitcoin's been one of the big rises over the last 10 years for sure.
and you can pay your taxes in Bitcoin and avoid capital gains on that.
But the president created a strategic Bitcoin reserve.
How do you fund it?
Well, having one control point, the Secretary of Treasury control it makes sense,
but you can fund it with no government spending just by collecting Bitcoin as payments for taxes.
So that's what the Bitcoin for America Act does.
I mean, I like it better than them being super incentivized to seize Bitcoin as the way to fund it. Not that they won't do that. But I like this is I think people would take advantage of this, especially if there's no capital gains, at least some of the whales that have been around for a while.
Who knows, right? But the reality is just one of these three possible liquidity events plays out and we well, we know the Project Genesis is kicking off and we know we're going to have a new Fed chair.
I think absent any major black swan events, assets like Bitcoin, I mean, especially Bitcoin, are set up to do well in 2026.
That's my read. However, I would like your read.
Are you feeling bullish for 2026? Why or why not?
You know, we are at a point in November where you could really see this thing going any way.
And I'll be completely honest with you.
If this was November of 2024 and you were asking me about 2025, I was feeling pretty bullish at this point.
You know, the election was just over.
Things were pumping like crazy.
It seemed like we would be at 125,000 by January or April in November of last year.
Now, looking back with hindsight, well, we know because we've gone through it week by week why we are not there.
And it's pretty clear there's been a lot of chaos.
But, you know, in November, it's hard to tell.
It's pretty foggy.
But just a couple of these things play out.
It seems like it could happen.
So let me know.
Are you feeling bullish?
And then you got to tell me why or why not.
OK, boost in, support the show and let me know.
We got a lot more show.
It's a big one this week.
Coming up, your boosts.
Why 8% of the Bitcoin supply moved this week.
An OG's take on the filter fork debate.
And some fresh quantum FUD that I need to bust.
And of course, our final clip of the week.
So I want to let you know you can support this show just by doing what you do.
You want to stack sats on River? Use my link when you sign up.
It's the best way to stack sats in the U.S. and you can support the show.
If you're all about self-custody, you don't want them to have a wallet, you want to host the wallet, check out the Bitcoin well.
Canada and the U.S., an amazing automatic self-custody platform.
Holidays are coming up. You ready to spend some Bitcoin? Got them in a Lightning wallet?
Go from sats and Lightning to a gift card like Amazon or hundreds of others in just seconds.
That's the Bitcoin company.
They only deal with Bitcoin.
Now, you heard me mention ways to passively stack sats, like paying your damn bills and things like that.
That's the fold card.
Community favorite.
Now, if you want to get access to your Bitcoin value without selling it, need a little cash, that's salt lending.
Last but not least, if you're a Fountain FM listener, don't forget we've got that Fountain FM membership.
It's a great way to support the show with fiat or sats.
And I have plans to wrap that content up in 2026.
Oh, and we do have some boosts.
Four score and seven boosts to go.
Did I say I was going to wrap up the fountain member?
No, I'm going to ramp it up.
I've got ideas to ramp it up.
So if you're a fountain member, stay tuned over 2026.
All right.
Let's get to our baller booster and its producer Jeff with 50,000 sats.
He's a good guy.
He's a real good guy.
No, he's a great guy.
Oh, I'm really glad you did this.
So Jeff is sending us an update.
Listeners, you might remember he boosted in before and he has been experimenting with mining Bitcoin completely off solar.
Here's a little winter update.
I was hoping we'd get this.
Jeff writes, I need to rethink my mining game for the winter, much less sun to convert to sats.
and my miner has been off a lot lately.
I might just let the miner run at a lower rate 24-7
and then bump up the power on sunny days for a few hours.
As for the SAT sale,
I upped my DCA with a smash buy a few times
as the price was just falling.
I didn't hit the bottom, but I'm happy with what I got.
Thanks for another great show.
SATs are on sale.
SAT sale boost.
Woo!
Boost!
Oh, yeah, I was wondering, Jeff.
So I think, yeah, I mean, definitely just run it lower, right?
You could also look at some of those bid axes if you want to go crazy.
But what if you, you know, since you're not running the AC, you know, there's some days you're not doing laundry.
Your overall net power usage might be down.
So maybe you could supplement a little bit and turn up the miner.
I mean, I would hate to see that number go down myself.
But you are trying to do it off of green energy.
So do keep me posted on how that develops.
And thank you for being the baller boost.
Appreciate that very much.
OB comes in with a generous 33,333 sets.
Hey, Chris, great show.
Keep it up.
I'm taking a break from 40 hours of podcasts a week, but you did make the shorthand for lists of for the episodes.
I must listen.
Oh, that's great.
He says, also, I don't think they fight you has started yet.
You read my mind, OB.
First of all, I'm glad I made the short list.
But I was thinking that this week, too, that like what we're seeing from JP Morgan and the index funds, the war hasn't even started yet.
They're just assembling the troops and drawing the battle lines.
I think a lot of Bitcoiners think we somehow with ETFs and all this stuff getting approved, like we've made it.
I don't know yet.
I think, you know, certain areas we have, but the bankers, I don't think they're going to give up so easily.
I'm keeping my eye out, Obi.
Thank you for the boost.
Really appreciate it.
Mac Jollers is here with 21,000 sats.
I love it.
Strike or Cash App should make their own plugin and allow you to instantly connect your account to the Bidax.
Oh.
He says, yeah, so that way you could just mine and have the sats go to your account.
He says, the option to solo or pool mine will drive true adoption.
It's fun.
It's interesting and it helps the network.
This is the way.
Yes.
I want to get in on this.
I've been thinking that for the last few months that it might be time for me to try to just get a bed access.
Just every time I go sit down, I look at one.
I think, Chris, you could spend that $400 and just buy sats.
You know what I mean?
And I think I should just buy the sats.
And then I'm sort of frozen in my decision process.
But it would be.
But then you made me think, Mac.
It's like, but it's also educational.
It's fun.
And I am participating in the network.
And how do you put a value on that?
This is the way.
I like it.
Thank you, Mac.
I'm going to give that a lot more thought.
Paranoid Coders here with 2,000 sats.
Coming in hot with the boost.
No message, just value, though.
Boost!
Thank you, Paranoid.
VC Avalo's here with a row of ducks.
That's 2,222 sats.
All right, so you asked how bill pay from Strike works for me.
Oh, great.
Okay, VC.
Here we go.
He says, what you get is a bank account and routing number from Strike.
That's where I have my Bitcoin balance, and I hold zero US dollars.
I put that bank account and routing number they give me into my credit card, my mortgage, my car payment, etc.
Literally everywhere and anywhere I have to pay bills.
So all of my USD-based bills are paid for my Bitcoin quote-unquote checking balance in Strike.
Importantly, I also have an auto-withdrawal threshold on Strike where anything above the
mount is moved to a new address in my cold storage automatically. Hold on. You can give
strike like an X pub or something. How are you, are you manually putting a new address in there?
No, right. You're doing auto withdrawal. How are you getting, how do you get strike to withdraw
to a new address every time? Please tell me that. Is it X pub? Like, how are you doing this?
I did not know they could do that. All right. Anyways, he says, so he has a threshold in strike
where when his balance of stats gets above a certain level, it auto moves to a new address
in his cold storage automatically.
So this is the way it works.
He says he gets paid in Bitcoin,
which goes into his quote unquote
checking balance, you know,
with Sats and Strike.
And then he uses that balance
for monthly expenses.
Excesses above that
are then automatically swept
to cold storage.
He finishes by saying
it's actually fairly mind-blowing.
Yes.
Okay.
So this is what I was talking about.
Anybody can get paid in Bitcoin.
Anybody.
And this is actually a big brain way
to passively accidentally stack Sats.
every this is the wrong way to put it but just conceptually stay with me every dollar unspent
stays a sat right so you everything sats by default and you only leave sats when you spend money
and so if you have a few hundred dollars say left over in your checking account every month
well in this scenario they would be sats and you end up i've done the math you end up just stacking
even with the tax implication of spending sats to pay your bills, you still end up with a larger
stack. This is one of the most underrated ways for everyday people to just stack sats. You get
paid in Bitcoin, and then you will find you think real hard before you go buy that cheeseburger
from McDonald's because you're converting sats to pay for that. And you think real hard about it,
and it's actually a great discipline. Sometimes you do it, sometimes you don't. When you don't,
you now have more Bitcoin.
And that adds up over time.
And it's even when you're not getting by.
And sure, there's going to be months
where maybe you got to buy new tires
and you drain your bank account.
That kind of thing can happen.
But VC, what I would love,
could you chime in on the tax stuff?
You're still hitting,
you're getting a tax bill for this.
I think where this could get even better
is if Strike does roll out,
and I think they will, that line of credit.
And then you use that,
which would be based with Bitcoin collateral.
You would use that to pay the bills.
and then you would not have the tax implication of selling sats.
But I'd love to know if you're tracking that,
does Strike just, I assume they just track that for you
and then you're just going to give that to your accountant?
That seems like it could be a lot of little transactions though,
so I'd love if you wanted to follow up on that
and if you're thinking about the line of credit product.
And I really hope more people consider this.
I hope I get a chance to do this soon and then I will report back
and I think other people should consider it too.
Thank you, VC, really appreciate that.
And I'd love to hear more on how it goes.
I think that's a really great idea.
User 15 comes in with 2,121 zets.
Oh, my God.
This drawer is filled with fruit lobes.
All right.
So I asked, and he says, tariff dividends denominated in U.S. dollars will be inflationary.
So I asked if Trump is going to give everyone a $2,000 stimmy check that comes from the tariff revenue.
Since that's not new money supply being created, is it technically inflationary?
and user 15 says, yes, fiat payouts expand the use of the dollar
and sending money to individuals instead of paying down the debt
carries an opportunity cost and prolongs inflation.
Simply put, when you play fiat games, you win fiat prizes.
That's it right there, right?
Because there's really no winning here
because they're not going to pay down the debt
and then they're going to give the money to the people.
They're going to take what is essentially an uncapped crap coin
and they're going to go buy scarce products with it.
There's just not a lot of ways to win that one.
Thanks, user 15.
Hey, if you want to update your name in your fountain profile
and boost in and tell me who you are, please do.
But I like that.
Thank you very much for answering that.
Appreciate that.
Gene Bean's back with a row of ducks.
Hey, Gene.
I think I'm done with knots after the recent round of stupidity.
Back to core I go.
Suggestions on config adjustments would be appreciated.
Oh, that's...
All right.
I don't have any off the top of my head because I'm still running 29.
In fact, I think one of my nodes is running 28.
My main node is running 29.
And I also have an AlbiHub.
I got three nodes.
And I don't know what the AlbiHub is running.
But I like this idea, as I will eventually upgrade.
And I think a recommended node config could be a really cool segment.
Thank you, Gene.
I think I am going to do that.
If you have any input, please, please send it in.
Nice to hear from you.
Hey, Faraday Fedora is back with the Rodux.
I think if Trump was serious about bringing back manufacturing to the United States, you'd see those around him investing in that sort of thing.
This would be the investment opportunity of a lifetime.
Instead, you see those folks going to him to get special deals and exemptions to keep doing what they've always been doing.
It's all about being a gatekeeper and having control, not about setting America up for success.
Hmm. Yeah, if you follow the money there, Faraday, they're investing in things like crypto.
Huh.
Yeah, I wonder if they're investing in things like manufacturing.
I couldn't say.
I suppose if they were, people would be critical of that.
But that's a good observation.
He says, also, around the BIP444 locking up UTXOs,
that's got to be the stupidest thing I've ever heard.
If I'm a bad actor, I'm not going to do that thing with my life-saving stack.
I'm going to use a wallet I just made and a handful of SATs,
maybe something I got from a Bitcoin ATM.
Dude, don't give him the idea.
Don't give him the idea.
dude. You're right though. Yeah. Okay. I got more on that. I got more on that in the update section.
Thank you for the boost. Let's see. The Majestic Caster, I'm going to say, comes in with a row of
ducks. Long time listener, first time booster. Hey, all right. Good job. Thank you for the boost.
Thank you, Majestic Caster, if I'm getting that right. Good to hear from you. Hey, Ace Ackerman's
back with a row of ducks. The orange pill. It's a hard one to swallow some days. Yeah, sometimes you
pay more, you pay less for it. But, you know, the pill doesn't change. It's just the way the market
values the pill. Don't forget that, Ace. Thanks for the boost. Blazer4151 is here with 4,321 sats.
Coming in hot with the boost. Well, this week in Bitcoin has become my only news podcast each week.
I might skim the headlines, but other than that, keep up the great work.
Wow.
I appreciate that.
Thank you.
Make it so.
I will keep up the effort.
I appreciate that.
With support from the audience, the show continues.
Philip is here with 3,333 sats.
Well, that's Eric, good buddy.
I like that.
I feel like 333, there's got to be a meaning to that one.
Boy, they are doing a lot with mayo these days.
Of course I stick with the DCA, Chris.
That's the whole point.
Yeah, why get distracted by ups and downs, right?
That's sort of the benefit of the DCA.
Good point, Philip, but thank you very much.
And it's good to hear from you.
Hey, there's KiwiBitcoinGuy.
He's back.
4,567 sats.
Put some macaroni and cheese on there, too.
I make regular DCA buys at the same time every month for the same amount.
I don't try to time the peaks or the dips.
I just buy, consolidate, and move to cold storage.
It works for me.
Keep it simple.
Remove the emotion.
Get a regular routine going.
and then store your savings in cold storage.
Tick tock.
Yeah, Kiwi, next block.
I think there's something really peaceful to that.
Now, it's personality-based.
Some people, you know,
they love trying to snipe the dips or whatever,
but there is something really nice about
this is your nest egg for the future.
This is a multi-year investment.
I just said it and forget it.
Some weeks I get it on sale.
Some weeks I pay more.
And I don't fuss about it.
I think it's a pretty healthy way to look at it, Kiwi.
Thank you very much.
Appreciate hearing from you too.
Hey, look, there we go.
good news nakamoto 6102 is back good news everyone 3500 sats says appreciate the content well thank
you appreciate the value hey wow look at that that's kangaroo paradox right there hello kangaroo
paradox let's go 11 100 and one sats that's not possible nothing can do that oh hey first time
boosting twib that's great thank you very much
I'm a total Bitcoin newbie and really enjoying your breakdown of the macro news.
You've convinced me to start stacking sats.
Hey, thanks for that.
I'm considering noting up too and was about to go nuts to balance out the network.
But all this bit 444 business has me convinced to go with core 30 and just tweak the settings.
I will report back once I get it up and running.
Ha!
Yes!
Woo!
Love that! Love that!
Wow, that's great. Okay, I had to get up and celebrate that.
Kongaroo, thank you for getting on board.
Glad you're stacking SAT, getting yourself some assets for the future.
And note up! You'll learn a lot about the network when you do it.
Man, you're going all in at ludicrous speed.
We going to have to go right to ludicrous speed Thanks for boosting the show It good to hear from you I really like that Good to hear about Good to hear about I love it I love it I love it when people note up
So good to hear.
Bob was here with 7,222 sats.
Nuclear launch detected.
Love the signal.
I have a weekly and monthly budget for my Bitcoin buys.
I opt for slightly larger amounts than typical daily and buy when I see a bigger down leg.
But not the all-in Smashbox kind.
I've heard that straight DCA beats timing the market over the long run,
but I like knowing I got even a little bit of the lowest drops.
And if I eat through my budget prematurely,
then I can always sell the car, the dog, or the kids,
or anything I can get my hands on until I mine more fiat.
But can we all agree buying at any price a day is going to be a good deal in four years?
Yeah, you nailed that.
Yeah, I mean, we're going to look back at $80,000 and think it was a fantastic deal.
Chris, have you heard the talk about on-chain fees getting higher in the future, making it unfeasible to manage multiple small amounts?
I've heard you talk about this in episode 8.
If I DCA via Strike and then I do consolidate a large chunk into a hot wallet, do I still have all those little UTXOs from Strike or did I create a new larger one moving them to my hot wallet?
What if I then move from that app wallet to cold storage since it preserves the multiple small UTXOs?
Thanks.
Yeah, so I don't buy from strike very often,
but I seem to recall they do batch withdrawals.
And when they do that,
I think you're going to get one large UTXO,
but it's not guaranteed.
And really what you could do is take the transaction ID,
put that into mempool.space,
and there'll be a big old visual there.
You can see if it's lots of little lines,
then you got a bunch of little UTXOs.
If it's one big line, then you got one big UTXO.
I'm wondering about your setup.
So it sounds like you're three wallets in, right?
So you got your strike wallet,
you got your hot wallet and then you've got your cold storage wallet that's not bad what i might
consider you know if you've listened to episode eight probably i mentioned it in there i think
you know you could take that middle wallet and make it liquid and then it doesn't really matter
and then when you do withdraw out of liquid it'll be consolidated just something to consider
you know there's a lot of talk about privacy coins and all that and liquids right there it's
pretty straightforward it's really not that tricky apps like the bowl wallet and aqua wallet make it
pretty easy. And of course, there's bolts.
I'm forgetting, you know, bolts,
bolts.whatever it is. I'm tired, so I'm
blanking out on the name. But there's the bolts
zap, whatchamacallit, they'll let you just
swap to from on-chain lightning
or liquid. And that's really
convenient. Just something to consider with the three-wallet
setup. There's a little bit of room in there for
some maybe improvement, but maybe not. Maybe it
works really well for you. And I think you're
going to be okay coming out of Strike, but check out
on mempool.space or your own mempool if you have a node
and let me know.
And if anybody has any experience with that, I
I'd also just like some clarification there, but I think he's set.
Bobby Pins here with 10, and thank you for the boost.
Bobby Pins here with 10,000 sats.
It's over 9,000!
Texas just bought $10 million of Bitcoin.
Proud to be a Texan, y'all.
Just wish it was real sats instead of IBIT.
Baby steps.
Yeah, I wanted to get this story in the news section.
I thought maybe even it could be a narrative for 2026 if other states do this,
but we just don't know at this point.
It is really great.
I think IBIT for states is probably what they're comfortable with, right?
They work within these worlds.
And would they properly set up Sparrow in a cold wallet?
Probably not.
They would probably blow it.
And then that would be a massive controversy when they lost their stash.
$10 million worth of Bitcoin in a few years.
It's going to be a lot more.
So maybe this is for the best.
Either way, it's exciting to see a state forward thinking.
And you hope others will do so in 2026.
Thank you, Bobby Penn.
Thank you, everybody who boosted the show, even those that are below the 2000s at cutoff for making it on air.
I still read them and have them in the show notes.
Really appreciate that.
And of course, thank you to everybody who streams sats.
You did a nice lift this week.
We had 39 of you stream sats as you listen to the podcast.
And collectively, you stacked 85,067 sats.
That's really not too bad.
Thank you.
And then when you combine that with those of you who sent a message as well,
did a lot better than last week.
We stacked 252,223 sats for episode 83.
Fountain.fm is making it easier and easier to boost.
It's a really straightforward way to support the show
and get new podcasting 2.0 features.
There is a self-sovereign route as well with AlbiHub
and a whole bunch of great apps over at podcastapps.com
or newpodcastapps.com.
You get new features as well.
And don't forget, we have that Fountain.fm membership
that lets you use SATs or your Fiat to support the show.
And of course, thank you to the Jupiter Party members.
There's no advertiser.
There's just the audience.
And honestly, for a news podcast about Bitcoin, I think it's probably the right way to go.
And every time you guys step up and support the show with a membership or a boost, you make it viable and you make it possible for another episode.
So thank you very much.
As we approach Turkey Day, I'm very grateful for all of you out there.
you may have seen the headlines this week that more than eight percent of the bitcoin total supply
moved in the past week this is a pretty rare event the other times we've seen this kind of
movement was march 2020 when bitcoin was at five thousand dollars and people were snapping it up
December of 2018 when Bitcoin was at $3,500.
Could you imagine an entire Bitcoin for $3,000?
All right.
Why is so much Bitcoin moving around in the past week?
Well, it seems that 800,000 Bitcoin was moved by Coinbase to a new address.
They posted that they were cleaning up accounts and will be transferring a large number of coins internally.
Yeah, and then they did.
Also, which caused a bit of panic for about 10 minutes, tens of thousands of MicroStrategy coins were moved.
I'm not sure if all of them are on Coinbase anymore.
Some people was pretty panicked,
like panicked that this was Saylor capitulating
and selling and stuff like that.
Interestingly, strategies seem to need to clarify.
They said, if Bitcoin drops
to our $74,000 average cost basis,
we still have 5.9 times the assets to convertible debt,
which we refer to as the Bitcoin rating of our debt.
At 25,000 Bitcoin price,
that would be two times our assets to convertible debt.
okay, I guess that means they could,
even at 25,000, they're still good.
My only hesitation is I get it,
and then they kind of make up their own metric,
the Bitcoin rating of debt.
Like that's something they made up.
So then I get a little uncomfortable again.
But he seems to say they're okay, and I believe him.
All right, well, this is something that I've been watching
because I don't think it's a black swan event,
but it would be a disruptive event to the market.
I've been getting the feeling
that President Trump might be a little done
with Treasury Secretary Scott Besant.
And I've made that comment recently.
I think the market has a lot of faith in Scott.
And if Trump were to fire him,
I think it would impact the price of Bitcoin
and the market in general.
And he said, Trump said this just a few days ago.
The only thing Scott's blowing it on is the Fed.
Because the Fed, the rates are too high, Scott.
And if you don't get it fixed fast, I'm going to fire your ass, OK?
Man, this is a real Kobayashi Maru for Scott here because Scott doesn't control the rates.
The Fed board does, right?
So he can try to suggest to Jay Powell and the other board members that they vote to lower the rates.
But he can't do it himself.
So Trump, of course, wants to fire Jay Powell.
And Scott keeps talking Trump out of it.
I can't tell you, Scott, sir, don't fire him. Sir, please don't fire him. He's got three months to go. Don't fire him. I want to get him out, Scott, please. He's a voice of reason. You're very lucky you have him. I'll tell you that. Yeah.
I don't know. It just seems like one of those Trump jokes that's not so much a joke.
I don't think it's a black swan if he fires Besant, but it could be a gray swan, you know, maybe a gray crow.
I don't know. I think there would be a reaction, though.
No wins situation for old Scott, too, so it's hard to see where it goes.
And it's that kind of thing Trump might do, even though he has to wait a few months.
But while we're talking about politically connected figures in the know, Eric Trump posted a tour of his Bitcoin mine operation.
And it's a U.S.-based operation that seems to be producing a notable amount of the daily Bitcoin supply.
Hey, friends, Eric Trump. Welcome to American Bitcoin.
It's a little sneak peek of our facility in Texas using American energy to mine Bitcoin right here on American soil.
We could not be more proud of this facility.
35,000 of these servers right here, all liquid cooled, securing the network, mining Bitcoin.
Every single day we mine about 2 of the world Bitcoin supply and we safeguard it every single day So when people say that cryptocurrency is intangible it not It very tangible
And this right here, guys, is living proof. Take a look at the company. Come join us. We could not be more excited about our growth.
Of course, he's got to pan up the stock. It does look like a clean, nice facility, though.
All right, let's talk about quantum FUD.
You know, this is my opinion, but based on everything I've read, the discussion on GitHub with the Bitcoin developers, discussion on Noster from developers I trust, my reading of technical discoveries that have come out around quantum recently, I'm just not worried about a quantum threat to Bitcoin anytime soon.
Now, you could ask me again in 10 years or maybe five years and say, hey, are you worried about it now anytime soon?
maybe my answer would be different, but I don't think it will be for the next five or 10 years.
I am worried, though, about the narrative around quantum. I'm worried about the risk of the
narrative about Bitcoin and quantum. And I think it could be getting away from us already. And the
reason I say that is you're already seeing folks that know better trotted out to try to take stabs
at Bitcoin and use it as an excuse to pump Zcash. Sort of one of the fundamentals. Now, there's
something else going on within the Bitcoin community that kind of non-crypto people need
to know about. This is a gentleman from VanEck. And that is ultimately VanEck has been around
before Bitcoin. We will walk away from Bitcoin if we think the thesis is fundamentally broken.
What? Why would he be saying this? And what do you suppose the chances are? He's saying this at
$84,000. Bitcoin's been on the slide. He just had, oh, we could walk away from Bitcoin at any moment.
I mean, we're not saying anything's wrong now, but if it looks at us sideways, we're out.
VanEck has been around before Bitcoin.
We will walk away from Bitcoin if we think the thesis is fundamentally broken.
We don't right now.
But you always have to look at the underlying technology.
And the crypto, sorry, the Bitcoin community has been asking itself about, is there enough encryption in Bitcoin?
Because quantum computing is coming.
No one is asking that.
People, I guess they think the entire Bitcoin network uses elliptic curve encryption or something.
like i don't i don't know what he thinks nobody's worried about all of bitcoin getting hacked it
would be older wallets at first right and let's be real here we are at tens of qubits right now
you're going to need thousands of qubits to be able to do an attack like this and at that point
you're going to go after tls and all kinds of things and so and then secondly is there enough
privacy in bitcoin and so a lot of bitcoin ogs or maxis have been looking at zcash no they are
What's that? Zcash is a token sort of related to Bitcoin with a lot more privacy.
Because the kind of garbage that we got about Bitcoin four years ago is it's like used for all bad illicit behavior.
But now everyone kind of realizes when you move money around on the Bitcoin blockchain, you can see it.
You can see it move from one wallet to another. And a lot of people are looking for more privacy.
He went from quantum to privacy.
And the idea that the transparency of the blockchain is a problem seems to completely miss the absolute bankruptcy and trust in all of the institutions, including the financial institutions, and how much transparency and trust is valued right now.
But let's not kid ourselves.
No one is seriously selling their Bitcoin for some Zcash pump trap.
and neither one of them are fully quantum resistant.
Zcash is a fork of Bitcoin.
So when he says it's kind of related,
yeah, yeah, it's a fork.
It's a fork of Bitcoin with a faster block time
and patches for privacy.
Both Zcash and Bitcoin rely on elliptic curve cryptography.
Both are vulnerable to attacks.
Now, you could absolutely argue
Zcash is further along in different ways.
But if you remove the privacy features,
Zcash would basically be Bitcoin
The team behind it, ZeroCoin Electric Coin Company, deliberately chose to fork Bitcoin rather than build from scratch for the obvious reasons.
They could inherit the proof of work model.
They have the tooling, the developer familiarity, some network effects.
It's obvious why they would do it.
And then they merged privacy features that could be technically merged into Bitcoin if there was demand.
How do I know that?
Because it's a fork of Bitcoin.
Yes, I looked into it.
It would require non-trivial work.
But if there was demand, it could be done to Bitcoin.
Now, Ethereum, on the other hand, Ethereum has much, much bigger problems with quantum vulnerabilities than Bitcoin, where Bitcoin is going to see issues in is at first is going to be in the Satoshi era wallets.
OK, let's play that out.
So somebody gets access to Satoshi era wallets.
Well, what happens?
Then we have a bunch of old coins that get distributed back into the market.
Bitcoin goes on sale for a while and coins go to strong hands.
Okay.
Oh, that's rough, right?
Well, what happens to Ethereum?
Well, guess what?
That elliptic curve encryption I mentioned?
Ethereum's EVM proof of stake relies directly on that,
meaning that if quantum could break elliptic curve encryption,
they could break not just wallets of Ethereum,
but they would break consensus itself of the Ethereum network.
That is a massive, massive bigger issue.
But nobody talks about it.
And that tells you it isn't really about the risk. It's about creating a FUD narrative to pump Zcash while Bitcoin's down. And Bitcoin's consensus doesn't collapse under a quantum pressure. Ethereum does. It's that simple, right? That's the real difference. And so I just think this whole Zcash narrative is so overcooked.
If privacy really mattered, then Nimblewimble getting the Litecoin would have put Litecoin on the map. And I hate to say it, but I think Monero would be a lot further along too. Right now, the market wants an open, transparent, something that's designed by rulers. Sorry, something designed by rules, not rulers. And the reason why I got distracted there is I was debating if I should talk about the Zcash infinite printing bug that was completely missed because of the privacy architecture of Zcash or not.
But I will leave that as an exercise to the listener.
I really, I don't want to come across as some sort of Zcash basher.
I don't think about Zcash at all.
I don't care.
But I do get annoyed when people create these quantum FUD narratives to try to pump their bags.
So I think we should have a little OG wisdom.
Now, this is a clip from Andre Antonopoulos.
And I don't agree with everything he says or has said in this clip or has said in the past.
But I do respect him.
because if it wasn't for Andreas,
I think a lot of people wouldn't know
how to talk about Bitcoin
in the way they do today.
And some of the people out there
that are rich,
that hold massive bags of Bitcoin,
directly owe it to Andreas's
early advocacy for Bitcoin.
And so he was asked recently
on his thoughts around the filter fork
and BIP444,
which isn't its actual name anymore.
But he was asked about it
and I thought it was important
to share his rather practical
straightforward thinking on it, which aligns with a lot of what I've been concerned about too. So
probably another reason I wanted to play it. Summarize. Any data can be encoded as any data.
One person spams another person's content. The power to decide what is and what isn't allowed
is dangerous because it leads to censorship. It also leads to giving the developers power
over the protocol, which will eventually be used by someone else. And if the developers are shown to
be able to censor, then they will become required to censor in any and all jurisdictions where they
live. And so that's extremely dangerous. And people will be able to put ordinals and
shit pegs and JPEGs and NFTs and garbage and Bible verses, I already said garbage,
and other stuff on the blockchain, whether we want them to or not.
And so I would rather people put it in an op return where we can then disregard it,
prune it, and not have to carry it anymore forever than if they put it,
hide it in other places of the protocol because we made op return too hard.
And so I actually think that's a better solution.
Yeah, like I said, I don't always agree with everything he says there,
But I do think there's some irony that when this entire core 30 debate started and the increase in Operaturn, I initially was not in favor.
I was willing to listen to both sides, but it seemed like it would just enable more spam.
But now with this filter fork discussion and the furthering of all of this, I've realized Operaturn may be the lesser of two evils.
I mean, in order to keep Operaturn small and avoid spamming the network, you have to go to extreme measures.
Because what I've been watching over the last couple of weeks is individuals delight in finding ways to encode random different stuff into the blockchain in all different manners and means,
just to prove to the filter folks that they have to constantly be doing a cat and mouse game So Andreas is right There always will be a way to encode data And so if that is true which I believe it to be
then perhaps the best solution is op return,
where those of us that run our own nodes and whatnot
could just choose to chop it off and ignore it.
And then we have a dedicated place for that crap to go.
And if you don't want it, you don't get it.
And if you do want it, it's there.
And we don't have to go down seizing people's UTXOs
and forking something right at its golden moment of adoption,
which would be absolute manic suicide, right?
I mean, you run, maybe not,
but you run the risk of blowing a golden opportunity,
a literally once in the universe kind of opportunity
with a fork like that,
especially when you consider the interests involved
like the DATs and the big holders
and things like BlackRock,
like there's a lot of variabilities there.
We don't need to be provoking any of that right now.
And the idea that we would seize UTXOs or do some sort of fork seems so anti-Bitcoin to me that I can't even believe it's being discussed.
I just don't know.
I can't imagine.
As somebody who's been watching this since 2011, this really blows me away.
This really does.
I've seen some crap.
And I mean, I have seen some crap.
I have seen some crap.
But this is some fresh stuff here.
So I thought Andre's, I thought his opinion was worth reflecting on because he's also been around for longer than me.
And he raises some of the same concerns.
And I just think that can't be ignored.
And I have not heard good answers to those.
I don't tend to give Coinbase a lot of positive coverage on this podcast,
but every now and then a broken clock, right?
And I got a hint this week that there just might be some solid thinkers over there at Coinbase.
And so I wanted to play this as our final clip this week.
This is the head of strategy, and he doesn't think that we are in a prolonged bear market at all.
He thinks it's just a temporary drawdown, and he's kind of just looking at the fundamentals.
Nothing's really changed since the all-time high.
If you just step back and think about it structurally,
in fact, you can argue the news coming out about Citibank, J.P. Morgan,
both leveraging stablecoins at a huge scale.
The Czechoslovakian National Bank has come out and announced they will be the first Eurozone country to purchase Bitcoin for the Treasury.
Clarifying rules from the IRS.
Harvard Endowment announcing they own more Bitcoin than gold.
All of those things are structurally very, very positive.
From the exchange point of view, we're not seeing a massive increase in open interest in a futures market.
CME, you can check it yourself.
I was always taught early on a declining price market accompanied by a rapidly declining open interest means the market is breaking down structurally.
People are exiting the market forever.
When I look at Bitcoin, I see the number of active Bitcoin wallets roughly the same as it was three months ago.
I see both CME and Coinbase Futures open interest, again, taking down a little bit, but not nearly in line with price direction.
And so I go back to the very, very basic principle of if I like apples, I don't like them less because they're on sale.
And so if you like this asset, you like it more.
If you don't like this asset, if you've never liked this asset, you now have the microphone for a few months or two weeks.
We'll see how long.
And enjoy that moment.
Let's check in on the state of the network.
I'm wrapping up at block height 925,338.
Bitcoin's doing okay.
Current USD price to one Bitcoin is 90,470.
That puts our sats per US dollar at 1,106 sats.
We're down 28.3% from our all-time high.
Yep, feeling it right now.
Our all-time high was $126,180 51 days ago on, on, if you were listening to the show, you know the answer, October 6th, October 6th.
Retarget date is today, as I record.
Difficulty adjustment going down 1.7%.
Reachable nodes on the network, almost 24,000, just ticked below actually earlier today, 23,857 nodes.
Core 30 clocking in at 12.5% of the network, followed by Core 28.
and then Notts 25, 11, 10 at 7.7.
There's a few other versions of Notts on there too.
So they're basically pretty close to Core 30 still.
There's been a lot of weird number games
in the node numbers.
I don't like the jumping around I'm seeing.
Feels like somebody's spinning up some VPSs.
So to me, it seems like the solution
is for us plebs to node up.
We are up 3.2% in the last 24 hours,
only down 1% over the last seven days.
Starting a slow tick back up.
Could be good.
Don't know for sure yet.
But overall, TikTok next block, the network's doing just fine.
Well, if you made it this far, you should check out the links at ThisWeekInBitcoin.show.
The stuff I talked about, the research papers, whatnot, linked over there.
Some stories I might not have covered as well.
Also, I'd love a boost to tell me how I did with my goal of telling you the important bits around the news, but not get distracted with the emotions.
I think it's the signal that matters.
So that way you can plan for your family and your stack.
Boost in also with what else you'd like to see from the show and your price prediction.
Do you think 2026 is going to be bullish?
Why or why not?
All right.
Well, I hope you have a great Thanksgiving for those who pig out and celebrate it.
I'm grateful for all of you out there.
I'm going to leave you with a value for value track this week.
If you boost in during the music, 95% of your sats will go to the artist.
And today's Value for Value track is by Justin Landtrip.
This is his latest album, Floodgates, and this track is Epiphany Rising.
The devil I know just carving out flesh from an old alone
And this and I've been thinking
I've found an excuse for every dream
I want epiphany is rising
I think I want to kill the king
Head on down
Beat the crowd
Watch his head
Tumble down
Burn the fields
Tell some lies
Open wide
Long dark night
Don't you wonder
Why can't we see it
The humming flood
And all these leeches
Swim around my head
I leave and don't look back again
Don't look back
Look how I unpack my heart
With every breath
Turn around, more than what I live
I get loaded fingers, lost fans
And I'm stacking and stacking regrets
Got this constant need to flee and be
Some sense of self, an epiphany is rising
I think I wanna kill the king
Head on down, beat the crowd
Watch his head tumble down
Burn the fields, tell some lies
Open wide, long dark night
Don't you wonder, why can't we see it?
The humming flood and all these leeches
Swim around my head
Leave and don't look back again
And don't look back