Welcome in to This Week in Bitcoin, episode 105.
My name is Chris, chrislas.com, jupiterbroadcasting.com.
Well, Bitcoiners said they wanted to take over the world.
Turns out, when you ask for macro problems, well, the macro problems show up.
Before we get into that, though, I do have just a very quick production note for you.
All going to plan, this episode will be the first episode of This Week in Bitcoin with video.
Yes, now, don't worry.
It's just mostly me recording an audio show.
So if you're an audio nerd, the show's not changing.
But I do have some charts this week.
And if you're using a podcasting 2.0 app that supports video, you can just flip between the audio and the video to your leisure.
And, you know, the show's still going to be the same, still going to be the show as it always is.
Just maybe a little extra layer there for the chart enjoyers.
So I would like to know what you think.
Check it out.
Send me a boost.
Give me some feedback and all of that.
But let's get into some macro pain.
And it's painful for multiple reasons.
Yeah, you're going to have to let me talk about the bond market.
I don't want to talk about the bond market.
But Bitcoin is talking about the bond market.
That's why your pamp went away.
Now, normally the bond market's a pretty boring thing, so we don't talk about it.
It's sort of priced based on inflation expectations, how growth is going, what the debt issuance is, if Fed policy is scary or not.
Those kinds of things often impact the price or the yield for the bonds.
I think for us to really get through this, the thing you need to understand about bonds is really this.
It's pretty simple.
When there's fewer buyers for bonds, that means the prices fall and the yield rises.
When there's more buyers for bonds, that means the prices rise and the yields fall.
So fewer buyers, the yield rises.
More buyers, the yields fall.
And right now, the yield is rising.
And not just in the U.S., but all over Western governments.
The United Kingdom is up right now.
Germany is up right now.
France, Canada.
And what's striking is they're all up in the last month or so in numbers you don't normally see in the bond market.
So there is a lot of concern over this.
You're seeing investors freak out a little bit about what this could mean, and it's getting reflected in macro asset prices.
So I'm really worried that what we're seeing in the equity market is going to accelerate.
We haven't seen a breakout of yields to these levels in quite some time.
And that 5% level for the long bond, that matters, and it has in the past for equities.
So I'm keeping an eye on what happens in the stock market today, frankly.
What is pushing rates higher?
Again, you mentioned the third year at 5.10%.
That really gets people's attention.
The 10-year at 455, that breaks out a little bit.
What's going on there?
Well, I think we're still trading the conflict in the Middle East.
We're still worried about the energy complex.
We're coming off of a series of inflation prints that have demonstrated that we're already starting to see some pass through to core.
There were a few technical adjustments from the BLS that propped up the core numbers.
So we weren't particularly surprised or worried, but the market clearly is.
And we just went through the 10 and 30 year auctions.
And so they're still in the process of being redistributed.
And as we have seen in the run up to pretty much every weekend, we're worried about the event risk of those two days in the Middle East.
because frankly, anything can happen.
You don't want to hold a risk position over the weekend?
For some extent.
Ah, ha, ha, ha, ha.
Yeah, you're killing me here with that.
So I want to put this in perspective for you.
In this next clip, this does have a chart
that could be worth looking at.
I'll try to break it down for you audio folks too.
But I think it does help us kind of understand
why this is more significant than maybe the last time
I talked about the bond market.
Take a look at this chart of current CPI
against the 1970s inflation cycle and overlay them.
the correlation is almost 100%.
So this isn't a vague resemblance.
It's literally the same shape.
So he's got a chart here with today's inflation
and the inflation trajectory of 1970s.
And it's uncanny.
It's uncanny how they overlay.
And what it suggests, like I talked about probably more than a year ago,
is that we are going to go through cyclical inflation spikes.
And we're at the beginning of another one right now.
And that's something the bond market is factoring in. Now, silly enough, right? What do they do in the short term? They dump things like Bitcoin, gold and silver. In the long run, they always pick it up, right? And that's always those assets always benefit real estate, those kinds of hard assets, too. But in the short run, this is always how it goes. And they're looking at this, these charts like this. And they are panicking in the investment market. They are panicking about this.
April 2026 sits at exactly the same inflection point where the inflation in the 1970s re-accelerated
before peaking near 14%. The Fed declared victory then too. It said that inflation was over and the
bond market started to price exactly what happened next. The yield on the 30-year US Treasury just
cleared 5% for the first time since 2007, which is terrible because that was the year before the
global financial crisis. Yields on long-dated government bonds are now at their highest levels
in 18 years. And here's what that actually means in plain English. The market is no longer willing
to lend the U.S. government money for 30 years at any reasonable price. The buyers are demanding
tribute and they're getting it. Now, layer this on top. Interest expense on U.S. debt just hit
$1.27 trillion over the next year, which is more than the entire defense budget. And at the current
pace, it will surpass Social Security and become the largest line item in our federal budget.
So think about how crazy this is. The U.S. government will spend more money on paying interest on past borrowing than it spends in the retirement safety net for almost 70 million Americans.
Roughly one third of the federal debt rolls over in the next 12 months at these new extremely high yields.
And every additional percentage point costs the Treasury hundreds of billions of dollars.
All right, this is a key point, and it goes back to the new Fed chair.
Every basis point change here is just a massive cost in interest payment for the federal government.
We really got to wrap our heads around how critical this is, because I think it shows you how boxed in Warsh is and how desperate the Treasury is.
And every additional percentage point costs the Treasury hundreds of billions of dollars.
And here's what this sets up and why Bitcoin is the best asset positioned for the next decade.
Every basis point higher that the bond market grinds, the closer the entire federal budget gets to a math problem with no solution.
So normally to solve this, I mean, well, the typical thing you hear getting thrown around at this point is yield control.
You know, we need to institute yield control.
And that's when the Federal Reserve comes out and starts buying treasuries as needed to keep the yields rising.
They are the buyer of last resort.
They provide buy pressure for the market.
Wouldn't that be nice?
I guess they're sort of the sailor of the market, only sailors doing it willingly and they get forced into it.
But it's not a good look for the Fed.
It's not a good look.
It's not a good look for the state of the United States economy either.
And since Scotty B has gotten into office, I have been watching and expecting a little plan over time when they talk about bank deregulation.
We've covered this before on the show a couple of times.
What they're really talking about is making it possible for the banks to buy more treasuries.
That way they can change the balance sheet math and they can buy more and essentially get a little stealth QE via the banks.
Now, this to me seems like the perfect solution because it's pretty hard for the public to get hip to this kind of activity.
You don't see explicit buying from the Federal Reserve.
So the rest of the world doesn't really quite pay the same attention.
but it still has the same inflationary effect and the same damage to the middle class that just
money printing from the Fed directly would. Now, Luke Roman, he's usually got a pretty negative view
on things, but I think he's on point with this one because we've been watching this develop.
And he stopped by Marty Bent's show, and I'll try to put a link in the show notes.
And this was pretty early into the podcast. And Luke has a theory on how they're going to do
sneaky yield control to try to get these bond yields back under reasonable rates.
there's ways you can do it i don't think they would ever want to do explicit yield curve control
they may not ultimately have a choice but that's sort of the hotel california once you check in
you can't check out but you know the one way that i think is being discussed and and like wall street
sort of loves because it's their guy doing it is you know kevin warsh warsh cuts rates
warsh shrinks the balance sheet uh which means he's selling bond right so the long end will rise
further. So you're going to get a steepening in the yield curve. And then Worsh changes the
regulations for banks so banks can buy more treasuries without reducing lending to Main
Street. And so that is like the grand, that's the macro Fed. These are not the droids you're
looking for. It's the Jedi mind trick, right? Like, hey, look, we're shrinking the balance sheet.
Well, not really, because you're the regulator of the banks. You're cutting rates. You're
shrinking your balance sheet, but then you're just moving it over to their balance sheet and
taking the regulations off so they can still lend to the federal government by treasuries and lend
to Main Street at the same time. That's inflationary. That's basically just QE through the banks
with better marketing. And that's fine. That's probably what needs to happen.
That's one way you could do it because the banks ultimately don't care about real returns. They
just care about spread, at least until inflation really gets extreme. At that point, they might
start to care. But if the government tells the Fed, it tells the US banks that, listen,
inflation is 4%, right? When it's actually 12, as long as they can make their 200 basis points,
250 basis points front to back, they don't care. This is what makes them such good customers.
Most of the market is going to care about the real return rates, real inflation rates,
but the banks, the federal government, the treasury market,
they're all just going to look at their number and go, yeah,
that's the real number. Yeah, of course it is. Yeah. Well,
that's the number I believe.
Well, as long as they can make their 200 basis points,
250 basis points front to back, they don't care. You know,
now if inflation is frigging 20 or 25,
not that I think that's what it's going to get.
That's where you get into questions of, you know, listen, guys, we're,
we're not going to make a 30 year mortgage at, you know,
with inflation at 20% because it's gone in frigging five years, six years.
yeah on a real basis so there's ways you can do it that aren't explicit yield curve control
yeah i just when i think about this i think they'll come up with a clever way to do it
excuse me i don't think that's the problem i think they will absolutely come up with a clever way to
do it my concern comes around to how this impacts everyday people you know i think about this chart
here of inflation that's matching 1970s. And it eventually gets up to 14, almost 15%. Now,
that would be by the way they measure it in the 70s, of course. But it's not like you're not eating
the same foods and consuming fuel and housing. And I just think if we were at somewhere where
the actual inflation rate, real inflation is around 14% in your energy, in your housing,
in your food, people that aren't holding a hard asset like Bitcoin are going to get absolutely
destroyed here. And this is where I start thinking maybe I should start taking all my, you know,
any kind of income and just convert it immediately to sats, spend a little bit minimal that I have to
spend and just store every free penny in sats because this is going to be a wild ride. And
this is just going to be over the next three years or four years or so if this so far, if this lines
up. And the thing is, I can't go out and buy a bunch of houses. You know, the boomers, you lucky
SOBs, you got to that before me. But I can buy a Satoshi at a time. And so when the money printing
comes, that's our best defense. And I just think it's inevitable. It's just absolutely,
the bond market is telling us that. The debt levels are telling us that. The situation with
Iran is telling us that. All of these things are telling us that Bitcoin is inevitable and that the
money printing is inevitable. And so people that hold fiat are just going to get horribly debased
to pay for the government's irresponsible decisions.
Now, hopefully this is the last time I have to talk about this for a while,
but don't mistake the Clarity Act timing on this.
Don't ignore the timing on this.
This is about getting the stablecoin and tokenization flywheel for the treasury market up and running,
and they need to do it in the next couple of years.
So there is real urgency here.
That's what the Clarity Act is really about, and it will be good for the treasury market.
So this week, by the very skin of its teeth, the Clarity Act cleared a major hurdle and finally passed the Senate Banking Committee.
But it wasn't a clean fight.
And you could tell Senator Lummis knew it.
And there is a payoff for Bitcoin in here.
But for us to get on the other end of this, there was a really dirty fight.
And so let's go back to the beginning of this week.
And you could see Lummis, she's ready to go.
Lummis isn't hummus, but she's kind of grinning and bearing it at the same time.
Bill designed to create a clear regulatory framework for digital assets could soon be heading to the Senate floor for a full vote in less than two hours The Senate Banking Committee markup process on the Clarity Act said to begin Republican Senator Cynthia Lemus is here and she the author and champion of that bill She sits on the Senate Banking Committee as chair of the Digital Assets Subcommittee
Good morning to you. Sounds like we're here. It's going to happen.
That's a fact. We've been working for over nine months with Democrats trying to
get this bill ready for today. It provides a regulatory framework that currently doesn't exist
in the digital asset world. It's the Wild West out there. And that allows fraudsters to operate
without a regulatory framework to respond to their illicit activity. It also allows legitimate players
to set up shop overseas because they do have regulatory frameworks. This is a way to bring
this industry into the fold into the United States, make it strong, robust and serve the
American consumer. Well, not if the damn banks have anything to say about it. And they I warned
you this is going to happen. They plan to fight like hell. And they did. What is the banking
industry telling you about all this? Yeah, they don't like it. This is some competition for them.
They view it as competition that will hurt their ability to sustain the deposits they need to make loans.
I disagree with that.
They want changes that actually would go back to the Genius Act we passed last summer and make changes to it.
I think that they should embrace digital assets.
It's going to be part of the financial products they can offer in the future.
We're going to have a digital dollar, a digital Bitcoin, digital alternative coins.
It's going to be a new financial landscape.
And I'd like to see the traditional banking industry embrace it instead of fight it.
Oh, yeah, they're going to get right on that.
No, no, no, no, they did not.
In fact, they brought out their fiercest warrior, the person who never tires of fighting for the banks.
She came out swinging with her best stuff.
While we're at war, Iran is openly gearing up to collect crypto fees from oil tankers to pass through the Strait of Hormuz.
How dare they? She'd much rather they take dollars.
Yes, that was Liz Warren, and she warned that if this passes, everyone is going to go full degen.
Crypto-related activities that taxpayer-insured banks are permitted to engage in.
Wow. But this one falls far short. Under this amendment, banks would be able to transact in decentralized finance, lend against crypto as collateral, own crypto directly, trade crypto derivatives and more.
What could possibly go wrong? Why are Republicans trying to divert Americans' deposits away from small business lending and mortgage lending?
This just makes no sense.
As somebody who runs a small business, trust me when I say Bitcoin lending is a huge, huge win for small businesses.
If the bill passes, even with this amendment, the next crypto crash could bring down the banks as well and bring down the entire economy.
Let's strike this section instead of trying to tweak it along the edges and pretend that that fixes this problem.
She's warning you it's going to bring down the entire economy.
I mean, she's not maybe totally wrong.
You know, I could see the banks getting a little degenerate with the crypto and whatnots, although they are supposed to follow the rules of the road that clarity provides.
Right. But I think she's definitely a little hyperventilating here because she then once again says that if this passes, the economy is going to blow up.
And what's so great is Tim Scott's face in this clip.
It's another reason maybe watch the video version or go look this up.
He is so done with Liz.
It pushes more of the market into crypto and removes protections for investors and removes recourse for victims.
That is the wrong direction to go in.
All right.
When this blows up the economy, I hope everybody remembers.
Oh, you better remember.
Liz tried to warn you guys.
She tried to warn you.
You know, I want to play a response to Liz from Senator Lummis.
And it's not bad.
You know, she's got like a binder there and she's like paging through.
Like she's got a response for everything.
She's a little upset.
She's kind of shaking a little bit.
She's a little PO'd, I think.
And it is an interesting response.
But what is more interesting and what I think we should listen for is what it reveals about all the levels of surveillance that are baked into this Clarity Act.
Like this is – I had no idea, right?
Because everybody's been talking about clear rules for the road and what's a security and what's a commodity and this is going to be great.
Tokenizations come up and stable coins, of course.
but the surveillance and security aspects don't get mentioned as much.
But in order to get a response back to Warren,
Lummis just kind of rattles through a whole bunch of these.
So listen to all this.
Regard to anti-money laundering and illicit finance.
It creates risk-based exam standards.
It expands Treasury's special measure authority to act swiftly against foreign money laundering.
It creates studies on mixers and tumblers.
It requires annual treasury reports on foreign jurisdictions compliance with USAML CFD standards.
Who the hell is going to want to use stablecoins?
It requires recurring treasury reports on offshore stablecoins.
It requires mandatory educational materials on digital asset risks, insider resale restrictions to prevent pump and dump schemes.
It has timely disclosure requirements.
Broker deal insolvency disclosures.
A federal regulatory floor for crypto kiosks.
This is very important.
This has been a problem in my state.
Tokenized securities remain securities under SEC jurisdiction.
FTC authority over unfair or deceptive practices.
$30 million per year through 2031 for FinCEN.
With regard to fraud and AML provisions, temporary holds for suspicious activities.
Yikes.
And preventing those who place the holds from having private causes of action.
Okay.
It applies BSA regulation to digital asset brokers, dealers, and exchanges.
This list goes on and on.
I bet it does.
This is a pro-law enforcement bill.
Sure seems like it is.
Wow.
Oh, boy.
So after that rowdy back and forth, there was more, but I'll spare you.
There was the traditional vote.
It's so funny.
These things are so anticlimactic.
They held the vote, 15 in favor and nine opposed.
The clerk will call the roll.
Mr. President.
The clerk will call the roll.
The chairman.
Aye.
So they go around, do all the voting.
The vote is 15 in favor and nine opposed.
The ayes have it.
H.R. 3633 is hereby ordered reported as amended to the full Senate.
I ask unanimous consent that the staff be allowed to make technical and conforming changes and that the cordon rule be waived.
Any objection?
Hearing no objection.
So ordered.
Is there any member who?
All right.
So it passes.
Now, imagine this job.
You fight for more than nine months to get this thing out there.
It's really also about creating a treasury flywheel.
So it's sort of important to survival, to the survival of the economy.
So the stakes are pretty high.
And plus for Lummis, it's sort of the, well, it's become her centerpiece legislation, I guess.
You would hope it was going to be a Bitcoin Reserve Act, but otherwise.
But it's after all of that, not time to actually celebrate.
There's no champagne popping, popping, popping happening yet.
No popping happening because these things take time.
I mean, best case scenario, the bill goes to the floor in June.
Probably not going to happen.
And then, you know, it's midterms. So that's going to delay things. And even if it does pass, another best case scenario is 18 months to actually create all the rules and to have things kick in again, depending on who wins the midterms. That could take a lot longer.
Senator Cynthia Lummis is co-sponsoring the bill and she agrees. Nobody is popping the champagne quite yet.
Oh, there you go. That's how you say it.
There's no time for a victory lap because there's still a lot of work to do.
It's going to take at least three weeks and maybe more.
I would love to have this bill on the floor in June.
That's probably pretty optimistic.
And bottom line here, we're weeks away from a real Senate vote.
And even if it does pass, these rules take 18 months to actually kick in.
Now, how does this affect Bitcoin?
because there's not much in the actual legislation that affects Bitcoin.
I have a theory for that.
I do think it's positive because it creates a dividing line
of legitimate, quote unquote, digital assets and clown crypto.
And I think there's probably more things on the legitimate side
than I would like as a Bitcoiner.
I would have just preferred Bitcoin.
And anything that kind of got an ETF
is essentially going to be on that line of legitimate.
There'll be some more things that make that line across that line eventually.
But it does separate out all the other stuff, the NFT stuff, the meme coins, all of the silly token stuff, the doges, all that stuff.
Well, maybe not doge, actually.
I'm not totally sure.
All that stuff is now in a different bucket.
That's crypto versus digital assets.
That shift is going to be more important than I think we can appreciate as people that have already understood the difference.
Well, I know that you're an investor in Bitcoin, but you also have said that the industry is dying.
Well, I think that the four areas of crypto that are going to end up surviving are Bitcoin, stable coins, equity infrastructure and tokenization.
But most of the rest of the industry is just kind of becoming a ridiculous clown show, right, is they are basically running around and they're trying to be mercenaries.
Everyone is trying to figure out how do I create some coin and hope it goes up in value.
But ultimately, I think that sophisticated investors are trying to figure out where can I put my capital and have it resiliently hold value or increase in value.
I think those four areas.
All right. Now I do owe you an update on BIP-110. I'm kind of just in following mode.
This is probably one of the few topics on the show that I have an emotional reaction to because I just take seizing other people's property very seriously.
But I did find an update for you on BIP-110.
The biggest thing I think you need to know about is that if you're using Bitcoin Noughts, the most recent version that shipped earlier this month, now enables BIP-110.
the soft fork feature out of the box. BIP-110 is still moving forward as a temporary one-year
soft fork. Bitcoin Knots is the main vehicle here. The latest release from this month now includes
the RDTS slash BIP-110 code by default with an opt-out build available. Some node runners and
smaller pools like Ocean are already signaling and running the patched version. But adoption is
still in the low single digits, and the debate is fierce. Supporters call it a necessary cleanup.
Critics warn it could create chain-split risk or cross the line into overreach.
The big thing to understand is this.
The mechanics are UASF style.
That means the community is driving this one.
So over the next year, the whole question of a soft fork comes down to adoption levels.
And sometimes the best course of action is to do nothing.
So I have a question I'd like you to boost in the answer for.
Are you still running Bitcoin?
Nots.
Why or why not? And do you plan to deploy the most recent version with BIP-110 activated?
Boost into the show and let me know. I'd like to take the audience's temperature on this.
You know kind of where I'm at with BIP-110 and I've gone back to Bitcoin Core.
But I'm curious to know if any of you are sticking with nots and why or why not.
Boost in. Let me know.
Well, you can support the show just by doing what you do.
If you want to buy some sats on River, use my link in the show notes.
One of the best ways to stack sats in the U.S., now pay bills and earn sats on your cash.
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You got a whole suite of services over at Fold Card.
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a Bitcoin-backed loan from salt lending
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They have some nice features,
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links to all of those in the show notes you can just support the show by doing what you do
Ask not what your podcast can boost for you,
but what you can boost for your podcast.
And we do have some boosts to support this week's episode
of This Week in Bitcoin.
J-Cube 3 comes in as our baller booster
with 61,200 sats.
Hey, rich lobster!
Thank you, J-Cube.
I think most of the issue with the latest sailor maneuver
is that too many folks just let the idea of him
being Bitcoin Jesus sink in.
He's not.
He's still accomplishing great things.
Sorry for being a boo slacker.
It's nice to hear from you, J-Cube.
You know, the more I think about it, I want him to sell some of that Bitcoin.
It does help, as he puts it, inoculate from the Ponzi scheme accusations.
But also, he's got like 4% of the entire Bitcoin stack now.
Let's let him off-gas some of that.
You know?
We can pick it up.
Maybe at some decent prices, too.
He got enough from us for cheap prices.
Maybe we can buy it back.
What do you think of that?
Thank you for being our baller, J-Cube.
Appreciate you.
Odark Alpha comes in with 53,101 sats.
I hoard that which your kind covet.
Also a fantastic boost.
Hi, Chris.
I was wondering what your thoughts are on Monero.
I often think of Bitcoin as a cryptocurrency 1.0 and Monero as the 2.0 due to its privacy feature.
I don't understand why Monero hasn't overtaken Bitcoin in adoption.
Is it the fact that Bitcoin is a fixed supply or is there some other reason I am missing?
I would like to be able to use Bitcoin more.
Is there a Layer 2 solution to make transactions just as private as Monero?
Well, so you touched on it there.
The fixed supply is not just a small thing, and it is, by the nature of Monero, hard to kind of prove the entire overall supply.
There's also been some drama in Monero's history, and these things add up to how people consider the hardness of an asset.
And Bitcoin is kind of the apex predator when it comes to what makes hard money.
And so if you want to understand why people are interested in Bitcoin, go look up the five attributes.
There's more, but go look up the five attributes of hard money and see how Bitcoin just perfectly, perfectly is engineered to match those.
And that's why people like Bitcoin over things like Monero.
The reality is, is it's also easy to swap from Bitcoin to Monero.
And then you do have some layer two solutions.
You can combine things like Lightning, Liquid, ARK and other layer two solutions that really do provide a great level of privacy and security.
So from where I sit, it's, you know, having been in this now for 14, 15 years, it's not really been something that's been ever really a pressing need for mine.
I've always been able to solve those problems with Bitcoin.
It's a good question, though.
Let me know how it goes for you, ODARC.
And do look up the attributes of hard money and see how it compares to the old Bitcoin.
Thanks for the boost.
OB's here with 21,420 sats.
Saylor can go along to get along.
You'll remember he stopped talking about no second best after the other crypto was no longer a security.
Before then, he essentially, yeah, he said everything else was illegal.
If he can't sell Bitcoin, it's encumbered.
The SEC needs it to be a liquid asset to ensure consumer protection.
I think that's an interesting insight.
I have noticed that he has definitely changed his tune on other crypto.
You know, now he looks at other cryptos, like the DeFi stuff, as customers, I think.
I think that's a big part of it.
Thanks for the insight.
Appreciate that, Obi.
Nice to hear from you.
Speaking of, nice to hear from Gene Beans here with 5,781 sats.
I like you.
You're a hot ticket.
That interview with Adam was a really good clip, but the initial clip was super good and worth the longer listen.
I'd like to listen with my seven-year-old kiddo, but I want to keep the profanity down.
Yeah, I know.
I know.
I hear you.
I know.
I hear you.
I don't often play clips with profanity.
Sometimes there'll be a clip
and sometimes there'll be a song.
It's pretty rare, so I'll try to warn you.
Any particular suggestion on how to go about
graphing sats or dollars over multiple years?
Oh, shoot, I wish I could remember.
There's a couple of good self-hosted applications
that do that.
This is one of the features, too,
the centralized exchanges offer.
If anybody can remember some of the self-hosted apps
you use to track your stack over time,
please boost the name in,
because I am blanking on it,
and I should give it a go.
Give it a little review.
Thank you, Gene Bean.
Nice to hear from you.
You make me want to be a better man.
User 42243 whatever is boosting in with 2,267 sats.
That's not possible.
Nothing can do that.
Is this how I get a mention on the show, Chris?
Not sure how the boosts work.
Love the show.
Yes, user 42453633, but you need to go into Fountain and set your name in your profile.
So that way I can give you a proper shout out.
But you figured it out.
That's the hardest part right there.
Thank you very much.
Thank you for helping us help you help us all.
Sats over bits comes in with 3,987 sats.
Oh, my God.
This drawer is filled with fruit loops.
A week ago, a popular Bitcoin YouTuber asked his audience on Noster what a good Bitcoin podcast listened to was.
Almost one in four people answered, twib.
I can't imagine how busy you are, but I feel like if you were a bit more active on Noster, many more people would align with the show and the value mission and would become consistent listeners and probably boosters.
Just a thought.
Amazing show as always.
Yeah.
Just pump the brakes right there.
You're absolutely right.
I am horrible with social media.
I just don't have the time or energy.
I try.
Noster is the one I would want the most since it's the one I could have the most ownership over and has at least one company influence and all that.
So I try.
I go through spurts.
I just find it.
There's so much to do.
I need a Twib crew on Noster and X helping spread the word because I see so many people on X and Noster opining about there's no good Bitcoin news podcast.
and I'm like, I'm right here.
I'm right here.
I just don't engage.
But you're right.
You caught me.
You got me, Sats.
I should be better about it.
You make me want to be a better man.
You do.
Thank you, though.
And if anybody wants to help spread the word
and join the TWIB army, please let me know.
Tomatoes here with 5,000 Sats.
Coming in hot with the boost.
And Tomatoes says,
I bet Saylor is selling Bitcoin
because of whatever galaxy brain thing I don't understand
that separates what he's doing from a Ponzi scheme.
If it's not that, maybe it's simple.
Buy low, sell high, and he's betting against hot Bitcoin summer.
I think it's whatever keeps that, whatever they got to do to stay legitimate in the market's eyes and keep that yield going that they have with their strike product.
That's really, it's all about feeding that, right?
Maybe he's betting on a cold Bitcoin summer fall.
You guys, you're supposed to help me come up with a name for a Bitcoin summer that sucks because Bitcoin fall summer doesn't make any sense.
And Bitcoin winter summer's dumb.
We've got to have a better name than that.
Gosh darn it.
Thanks, Tomato.
MDS comes in with 2,100 sats.
B-O-O-S-T.
No message, just value.
Thank you, sir.
Ace Accomand's here with a row of ducks.
2,222 sats.
Well, an obvious answer is Coinbase is going to get acquired by J.P. Morgan.
Coinbase is totally going to get acquired one day, aren't they?
Ha.
Galaxy brain on you there.
Had not thought about that.
Philip is back with 3,000.
Thank you for the boost.
3,888 sats.
Thanks for the safe editing clip.
Really handy to send to friends and family who are teetering about getting more open.
They are less likely to shut me down and more likely to ask questions.
There are more and more ordinary, hardworking people in Ireland really feeling the pinch.
Day to day, it's becoming harder to ignore the signals in the noise.
The K-curve is very, very real here.
Chris, can you please big up the Irish Bitcoin conference happening this weekend,
the 23rd to the 24th, May in Dublin?
Now, it got cut off, Philippa, but I'll repeat the bits that did come in here.
It's the Irish Bitcoin Conference, and it's happening this weekend, May 23rd and the 24th in Dublin.
So that's the details that made it through.
I love it when people plug those.
So, Philippa, if you have a report you want to give on how it went, please do follow up.
And you're always welcome to stick that at the beginning of the message.
So make sure you get it in there and then the rest or something like that.
Always try to make it in there.
So again, it is the Bitcoin conference happening in Dublin, and it is the 23rd and 24th of May, 2026.
Thank you, Philippa.
It's nice to hear from you.
We have KiwiBitcoinGuide.
He's back, and he brought in 4,567 sats.
Boy, they are doing a lot with mayo these days.
Five years ago, Michael Saylor created a 20-part podcast series with Robert Breedlove.
Oh, man.
Yeah, with the What is Money?
I never was able to watch the entire thing.
But in there, he talked about history and first principles.
I listened to it twice and it helped me deepen my understanding of Bitcoin and build conviction.
I shared it with my friends.
Now I listen to him talk.
I don't even understand what the words mean.
I don't share any of his talks with Bitcoin newbies anymore.
He's a different guy focusing on different things.
Good luck to him.
I'm just glad I came across the old sailor.
Yeah, isn't that interesting?
I hadn't made that connection, but you're right.
When we first started taking boosts on the show, I think Brent and Wes probably caught some sailor talks, or at least Brent did.
And, you know, that was helpful.
You're right now.
You wouldn't at all.
It's a great point.
It's okay, right?
We move on, right?
Yeah, it's fine.
And he is still plugging away and doing things for Bitcoin, too, I guess.
I don't mean to seem so negative about it, right?
All right.
Thank you for the boost.
Appreciate it very much, Kiwi.
Good to hear from you.
Your inner child comes in with 2,100 12 sats.
Put some macaroni and cheese on there, too.
Your inner child back again, though River is holding my Bitcoin for up to five days.
He's got a couple emojis in there and stuff, so he's feeling it.
You know, I would bet you, if anything, that's River waiting for the ACH transfers to clear.
They are still, can only move as fast as the banking system can move as fast for some of that stuff.
I would love a holy hand grenade clip for the past and future 1-2-5-3-3 boosts.
All right.
So you want, okay, let me tell you, let me ask you, does this match what you're looking for?
Bring up the holy hand grenade.
Ah, the holy hand grenade.
so that would be for 1, 2, 5, 3, 3, boosts.
Boy, it's going to be hard to remember,
but I'll try to remember.
It's got to be 1, 25, 33.
Sats per dollar is fine,
but 97% of the dollar has been inflated away
since its creation.
Other people like to compare Bitcoin to gold,
but the smallest unit of gold is an atom.
Gold can be traded by a gram,
but the equivalent amount of sats to atoms
is a gram of gold.
Oh my God, he's giving me the numbers,
which is more than it'll ever exist.
Okay, the equivalent amount of sats
to an atom in a gram of gold.
I got cut off, so I don't really follow him.
But I like kind of you giving me this math here.
It just needs to be shorter.
It's got to be shorter.
All right, but tell me what you think of the hand grenade sound boost.
So if you boost in one, two, five, three, three sats,
you'll get the holy hand grenade.
Bring up the holy hand grenade.
Let me know what you think about that, all right?
Let me know what you think.
Thank you, everybody who boosted,
including those of you who boosted below the 2,000 sat cutoff
and those of you who streamed those sats as you listened.
29 of you streamed those sats, and collectively, nice boost.
61,776 sats.
Thank you, everybody.
And when you combine that with our boosters this week,
well, look at that.
Not too bad at all.
Loving that.
Thank you, guys.
We stacked 255,942 sats.
Oh!
If you'd like to support the show,
you can do it with a boost.
Fountain makes it really easy,
but there's a plethora of apps that support boosting.
Those are over at newpodcastapps.com.
You can connect it to AlbiHub, and then you can boost from all kinds of apps and services,
from Noster, from, well, your podcast index website.
I mean, it's just absolutely wild out there.
And I think the show's worth a boost, right?
I'm sitting here now.
We're well into over a year.
We've got 105 episodes, so we've crossed the 100 mark.
So the proof of work has been in the show, sitting here focusing on the signal and what matters.
and I hope you enjoy it because you've made it, you've made the show last this long.
So let's keep it going and you can support the show with a boost or by becoming a Jupiter Party member over at Jupiter.party.
Well, I do have a few updates for you this week and I got to start with this story that I'm sure you've probably heard about,
but it made me think about the larger ramifications.
And that is this user who used Claude Code
to recover about nearly $400,000 worth of Bitcoin.
I'll try to keep it short,
but essentially went to college in like 2013.
Remember Bitcoin going from 100 to 200.
Told all my friends,
hey, I'm missing out on this craze.
I went to a Starbucks,
gave some guy local Bitcoins $200 in cash.
He sent me the coin.
I went home.
My friends were all like, you are the dumbest person we know, but we love you.
Anyway, was a bit of a stoner back then.
Made really complicated passwords on blockchain.info.
I had two out of the three.
Couldn't figure out the third.
Kind of like a forced hold.
I was like, you know what?
Hey, I would have sold this thing anyway.
Let's just like wait till it's 100k or a little more.
Eventually started using all these AI tools.
tried trillions of passwords. And then I had a last ditch effort, went home to my parents' house,
dug through their shed with all my college notebooks and was just feeding anything that
looked like a password or a seed phrase into Claude It ended up decrypting this one I was missing two words It figured it out And then when it told me the password I was like oh my God that was my old password So thought I was screwed Woke up this
morning. I had one last laptop from college that I hadn't gone through. And I just said, whatever,
screw it. Open up Claude and just started dumping all the files from that laptop into it. It ended
up finding this old wallet file and then connected that seed phrase for the old password to it,
decrypted it, and it successfully worked. So something I just never would have tried on my own.
So let's be clear about what happened here. He doesn't say it in that clip,
but after trying for five years, he starts throwing AI tools at it. And then his final hurrah
was he just let the thing scan his entire file system. It walked his entire file system and found
the wallet file and then was able to crack it based on the passwords he had provided and whatnot.
And it makes me wonder if this isn't going to be a future attack vector, if you couldn't
turn this into a kind of malware that scans a person's documents and notes and tries to get
an idea of passwords and uses LLM reasoning to try to figure out passphrases. And I don't know,
it's something I'm probably going to try if this ever happens to me,
But it definitely caught my attention.
All right.
Here's another thing that I was like, whoa, whoa, what?
Ordinals was being used for something?
This is from Chain Analysis, and they're looking at a report from the Italian financial police.
And they say one of their suspects made over a million euros in undeclared gains using Bitcoin ordinals and BRC20 tokens while also collecting public subsidies.
So they were also getting state subsidies.
Now, the interesting part is really the mechanism.
It wasn't just buy Bitcoin, wait for the price to go up, and don't report it.
There was an actual ordinal income loop they used here.
So they would fund inscriptions.
They would then mint assets.
They would list them, sell them for a profit, and then roll the gains back in and repeat.
And the case looked at a – I guess the police got a seized leisure hardware wallet.
And even though the wallet generated fresh addresses for every single transaction, investigators used transaction patterns.
to cluster them together and map the overall activity.
So even though he had self-custody
and even though he was using unique keys for every transaction,
they're still able to put it all together in a graph.
And then they brought it to the conclusion
by then, of course, connecting it to the centralized exchanges he used
and the KYC records, and then boom, they got him.
But he was basically profit harvesting through ordinals.
The entire thing is the only actual use case for ordinals
that I've come across for so far.
So I'll put a link to the Chain Analysis article
in the show notes if you're interested.
And also, I think the other thing that struck me about it
was that it shows that law enforcement's
getting a little more advanced in the Bitcoin ecosystem.
Now, another story that is worth following,
especially if you're a customer of Swan Bitcoin or Strike,
they are both being sued by Prime Trust.
Now, the lawsuit alleges,
and I'll talk about both of them,
we'll start with Strike.
the lawsuit alleges that Strike saw the collapse coming early of Prime Trust and rapidly moved
customer assets off of Prime and then received preferential treatment before the bankruptcy.
According to the complaint, Strike withdrew nearly $29.5 million and 1,939 Bitcoin during
Prime's final weeks, including a 1,350 Bitcoin transfer on June 2, 2023. Prime's estate claims
strike insiders knew about the mounting regulatory pressure, insolvency risk, and operational
problems before they did anything, or before the public did, sorry. In other words, they had
knowledge before the public. The filing also cites strike's own claims submissions where the company
admitted it took steps to, quote, protect its own customers' interests by moving funds to external
accounts away from Prime. You might recall this is when strike went to their own self-hosted
infrastructure. At least that's, I believe, they haven't really given us very many details.
Now, the prime trust estate is attempting to claw back at least $13.9 million and 1,758 Bitcoin from the preferential transfers.
A clawback is a big deal.
The suit alleges also, there's a separate suit, sorry, to make it clear.
My advice would be don't hold massive funds on these platforms.
I don't know why I think strike's probably a little safer is my gut, but here's the situation with Swan.
Swan's also being sued.
They withdrew allegedly 11,944.8 Bitcoin worth $938 million at the publication time and $24.66 million in cash and roughly $5 million in stable coins.
And get this, Swan, the Bitcoin-only company, was also holding 91,144 XRP worth around $130,000.
They did all of that.
They moved all of that from Prime Trust 90 days before the August 2023 bankruptcy filing.
Maybe, I don't know, maybe Swan was hedging XRP. I don't know.
This is a quote from the suit.
Quote, Swan, unlike most of Prime's customers, did not suffer significant losses because Swan had insider non-public information.
Yikes.
Specifically, the suit alleges the senior executive at Prime Trust, who is also a paid Swan advisor, contacted Swan Bitcoin CEO Corey Clipson four days before the company met with Nevada regulators.
And the executive tipped off Clipson about Prime Trust's deteriorating financial conditions.
Swan used Prime Trust as a custodian for its retail exchange business before Prime Trust suffered a catastrophic loss of funds, leading to receivership state of Nevada in 2023, which is now managing this.
I'll note too, I think it was they lost access to a big ETH wallet.
So the folks that were responsible for holding your Bitcoin lost access to a big ETH wallet, Prime.
Kicked this whole thing off, CEOs left, took money, but then didn't have access to it.
A lot of drama covered it before.
Prime Trust is demanding the return of funds transferred as part of its Chapter 11 process.
Swan has yet to respond in court.
Prime Trust appears to be suing other well-known firms as well.
Compass Mining, Fold, and Galaxy Digital also came up in my research.
So don't hold large balances on those exchanges right now.
And wait to see what they say.
They generally are pretty good communicators with their customers.
But self-custody, man, it's all about self-custody.
And both platforms make self-custody pretty straightforward.
So it could be time this weekend or maybe sooner to just look at that.
Now, I want to move to a new topic, something I've been hinting at for a while.
And I kind of just sat down and collected some clips to really kind of make my case for you this week.
and that is we have seen a massive pivot in Bitcoin mining.
And maybe it's for the best.
Before the AI boom, a common topic of conversation among Bitcoiners was centralization.
People aren't talking about centralization quite as much these days
because some of the larger players, some of the largest players in Bitcoin mining are pivoting.
And they're pivoting to AI compute.
And Iron was one of the very first to do this.
So I'm going to play a series of clips that are some of these are a little older.
Some of these are from this week. We'll start with Iron, who's been in this for more than a year now.
Well, turning to another high-flying stock, Iron.
Shares are under pressure today, or they were, but up six-fold in six months.
The company owns and operates huge data centers that are run on renewable energy.
This is a huge growth area amid the quest for more AI compute capacity.
Iron is also a miner of Bitcoin and other things that involve heavy-duty compute power.
So joining us now right here on set is Dan Roberts, Iron co-CEO and co-founder.
It's great to have you back on set.
Great to be here.
So let's start with that because this has been the big talking point.
We've had a big week with lots of news and lots of AI deals announced.
Where do you play in the space?
How quickly is it growing?
Super quickly.
We can't meet the demand fast enough.
And at the heart of it is these AI factories that are delivering compute to hyperscalers,
AI labs, inference, training, enterprise.
Yeah, can't deliver it fast enough. So, of course, others have stepped up. Another name in mining you're probably familiar with is CleanSpark.
Also, taking a quick look at shares of CleanSpark, that stock is down about two and a half percent a little past noon.
Shares of the company spiked yesterday after CleanSpark announced it was pivoting away from pure play Bitcoin mining and will add high performance computing to its business.
Now, another name in the space that you're probably familiar with, one of the largest names, Mara Digital.
Mara continues to shift its focus from Bitcoin mining to the unprecedented demand for compute needed to fuel AI.
On Monday, the company said it sold one and a half billion dollars of Bitcoin to fund data center deals like the acquisition of Longridge Energy and Power in the great state of Ohio.
And the CEO of Mara, Fred Thiel, joins us now.
Fred, great to have you on the program.
I'm really excited to ask you about this transition because if you're mining Bitcoin, you essentially need a ton of compute, a ton of power running rigs that hold microchips.
And the same is true for AI.
Can you just make a switch one to one from mining Bitcoin to providing AI?
Well, it's a little bit different infrastructure, but the key gating item in the AI industry today is availability of power.
and this affects NVIDIA, it affects the memory guys.
If you don't have power where you can plug compute in,
you don't have sales.
And so everybody's chasing the limited amount of power
that's available.
We sit on 1.1 gigawatts of energized capacity.
And so for an AI tenant to come in to one of our sites,
it's a question of permitting,
building the type of building they need,
and then they bring in the compute and plug in.
What that does is it dramatically shortens the lead time
for them to get energized.
We have the power available today.
We have the land.
They can come in and get it permitted,
get it built.
18 to 24 months later,
they are energized and turned on.
And as you know,
by what's in the news about Anthropic
and some of these other model providers,
their ability to grow market share
and support their users' need
for agents and tokens
is totally driven by how much compute they have.
And you have an exponential growth
in the size of the compute needed
to run the basic model,
Plus, the agents are using many fold more tokens than they used before when people were just chatting with AI.
And so you just have an insatiable demand currently.
And all this land and power that we sit on is just a very valuable asset.
So we looked at this and said there was nothing better for us to do with our assets than do this conversion.
It was the best thing for our shareholders.
Now, I think this is a bit bearish for Bitcoin short term.
And I'll tell you why.
Unlike Saylor, miners have always been willing to sell their Bitcoin stack to fund operations for the most part.
Now they're selling large bits of their stack to fund these operations to build out compute and data centers and space for people to rent.
Iron just signed not too long ago a huge deal with Microsoft.
So they're making money on this.
But they're selling their Bitcoin to finance some of this.
Now, not all of them.
Some of them are doing other strategies where they're doing complicated lending and yield programs and whatnot.
And there's different experimentation happening here.
But I would take it. I'd take a discount on Bitcoin to sort of distribute out some of the hash because you're still seeing what we'll see in the network state of the network. But we're generally we have been seeing a upwards adjustment of the difficulty. We'll see. I don't know if that's changing or not. I have to look. But I think maybe their play is the right one. It may be healthier for Bitcoin long term.
and if you think about their core business not as mining bitcoin and producing bitcoin and securing
the network which is how i was mistakenly thinking of their business and if you listen to them
apparently their core business all along has been buying and selling power contracts which
is how they talk about it so you have to admit big money does seem to be getting less skeptical
of the ai bubble where at the beginning of the year the question was is it a bubble is it not a
I think that question's been answered. And I have kind of maybe the quintessential demonstration of this. I want to play Ken Griffin here. We played him before. He's the founder and CEO of Citadel, one of the world's largest hedge funds. He's got real relevance here because in the past, his warning about AI really chilled some of the higher end financing. And now he's changing his tune.
So I'm going to compare and contrast for you.
This is Ken Griffin from three months ago.
There was a recent Harvard paper on this.
They called it AI work slop, that it looks good, but if you sort of peel back the onion,
the substance isn't there.
I was with one of my colleagues who runs our commodities business, and he handed a report
that we were generating with an AI engine.
It doesn't matter what the topic was.
The first few sentences, like, wow, that's really insightful.
and then you go down below that and it's all garbage.
So that's going to...
So that was him three months ago.
Now, I want to play him from this week.
That's a bit still, he kind of has a doomer tint on it.
I think he looks at it as a bad thing.
I look at it as a force multiplier.
But still, to go from, you know, it's just slop.
It doesn't do anything.
When you actually put it to work, it falls apart.
That was his stance just three months ago.
This is what he said this week.
Let me just share a few thoughts with you on this. Number one is, in the last few months,
there has been a step change function in the productivity of the AI toolkit.
It is profoundly more powerful than it was just nine months ago. And for us at Citadel, that has
that has allowed us to unleash a much broader array of use cases for ai and it has been really
interesting to watch to be blunt work that we would usually do with people with masters and
phds in finance over the course of weeks or months being done by ai agents over the course of hours
or days. So these are not mid-tier white-collar jobs. These are like extraordinarily high-skilled
jobs being, I'm going to pick a word, being automated by a Genic AI. And I got to tell
you, I went home one Friday actually fairly depressed by this because you could just see
how this was going to have such a dramatic impact on society.
And when you witness it in your own four walls,
when you see work that used to be man years of work being done in days or weeks,
it's like, wow, that's the first time I've seen real impact in our four walls.
I think it's a positive thing.
He seems to feel it's really a negative.
but in my view, we have added so much complexity over the last 50, 100 years, but really the last
40 years, so much red tape and paperwork and complexity to every single job. Nobody can be
an expert in anything, but every individual often at some point in their life will need
legal advice or you'll need help with paperwork or sorting through a job. And these things are
going to be multipliers for that, that the average people have access to. And people look at it as
big techs just spending all those crazy amounts of money.
But what we're getting is intelligence on demand.
And a lot of it they're giving away at cost right now.
And it's a very unique period of time where we get access to these frontier models and
they subsidizing our access to them And we can use that to build tooling that makes us more effective And you can leverage that in the marketplace to make your business or whatever it is more successful And that is going to imagine a positive version of this where you have a business
say a podcasting business that accelerates production and reduces cost with some agentic
workloads being handled, just totally automated now. And as a treasury, they're stacking Bitcoin
for the long term.
So you make the business more efficient
and you make it run itself more
while you're stacking Bitcoin at the same time.
What do you think that does?
That just enriches the content.
That gives people that are in JB
time to focus on all of the other things
they've never been able to get to
that make the business stronger,
that give us opportunity to hire more
or maybe launch additional podcasts, right?
And that's just at a tiny micro scale.
And you apply that across the entire economy.
And I don't think it's a doomerism thing.
I think it's going to be an extremely positive thing.
And I think it's going to be extremely positive for the businesses that can leverage both that and Bitcoin at the same time.
let's check in on the state of the network before i get out of here i'm wrapping up at
Block height, 950,276.
Bitcoin's price to U.S. dollars right now is 77,520.
That puts our sats per dollar at 1,290.
We're down 38.6% from our all-time high, which was 226 days ago.
Whoa!
Wow, we are survivors.
That is really impressive.
Now, we do have the estimated difficulty adjustment.
It is an upward adjustment, but a very small one of 0.4%.
with a retarget date of May 29th.
So that still has time to change May 29th 2026 If you want to send a transaction right now it one sat per V Not too bad at all We are 1 blocks away from our retarget
And we are still up 0.9% for the day.
And we're still up 1.6% for 30 days.
Hey, I'm going to take a win where I can get it.
I'm going to take a win where I can get it.
Things are moving nice. I mean, even with all of the news of the big miners,
we're still seeing a tiny upwards adjustment of difficulty.
That's great to see, too.
So I'd say the state of the network is indeed quite strong.
Now, if you made it this far, check out links in the show notes over at thisweekinbitcoin.show.
Don't forget, I'd love to get a boost from you and let you chime in on the state of Bitcoin
not and BIP 110.
And if you're still running Bitcoin not, please do love to hear from you.
Also, anything you think I should have covered, any updates, stuff that you think was missed,
let me know.
I'll try to incorporate that stuff.
And of course, my goal here is to give you a show that doesn't get distracted by the emotions around what's happening, but just tries to focus on the signal and tells you what the heck is really going on out there.
So you can always let me know how I did with a boost on that as well.
Now, I don't have any other kind of show announcements for you or anything like that, but in the probably not too distant future, I am going to plan a live show.
And I think it'd be really great to hang out, chat a little bit and do something we've never done.
and then I'll record a regular episode
and you can hang out live for that.
So the way to really participate
is to get a podcasting 2.0 app
or, you know, hang out over jblive.fm
and listen to it wherever you want
when I do announce it.
But that is just something
I want to put on your radar
because I think it's going to be a lot of fun
and the Fountain FM folks
may or may not have it in the works, it seems.
All right, I'm going to leave you
with a value for value track.
This is Heavenpool from Ambrel.
I think that's how you say it.
send them a boost and 95% of your sats will go to the artists of the track.
Thank you.
you