The News Block #26 (02/29/24)
Bitcoin Nears Previous ATH, Trump Changing His Tune on Bitcoin, TBC Sues Feds Over “Emergency” Mining Survey, ECB Says Bitcoin Has Failed, New Emails Reveals More About Satoshi Nakamoto
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Bitcoin’s Price Explodes:
Bitcoin’s price continues on an unrelenting tear, peaking above $63k on Wednesday before dropping back towards $60k.
Bitcoin is now up +45% in the last month alone!
Many are contributing this Bitcoin rally to the consistent demand supplied by spot Bitcoin ETFs, which continue to see significant inflows.
BlackRock’s ETF saw over half a billion dollars in inflows on Tuesday alone.
It’s safe to say that these Bitcoin ETFs are seeing a historic amount of trading volume. Bloomberg Senior Analyst Eric Balchunas tweeted about how they are “officially a craze.”
To put this into perspective, BlackRock’s Bitcoin ETF traded more than Invesco’s wildly popular QQQ ETF, which tracks the Nasdaq-100.
With Bitcoin’s price continuing to perform like this, driven by these new ETFs, it’s no wonder why it continues to be the hottest topic being discussed by the mainstream media, politicians, large financial institutions, and everyday investors worldwide.
Donald Trump is Softening His Stance on Bitcoin:
For the first time in an election cycle, Bitcoin has exploded into the political spotlight and has become a talking point for Presidential candidates.
With an estimated 40 million Americans owning Bitcoin today, Bitcoin has grown too large for elected officials not to have an educated opinion on the new technology.
Voters increasingly want to know…what is your stance on Bitcoin!?
We’ve already seen favorable Bitcoin takes from Robert F. Kennedy Jr. and former candidate Vivek Ramaswamy, both of whom I’ve had the chance to interview about Bitcoin.
As for the Biden Administration, it has taken a pretty hostile stance against the network, given some of the actions and verbiage out of the White House over the last four years.
But the one candidate that we haven’t heard much from on the subject is former President Donald Trump. That is until Laura Ingraham of FOX News recently asked him this:
He’s clearly not been ‘orange-pilled,’ but this is a noticeable shift in tone from Trump. Perhaps Ramaswamy has been in his ear.
Back in 2019, Trump said he was “not a fan of cryptocurrencies” and that it was “backed by thin air.” In 2021, he said, “Bitcoin just seems like a scam.”
But now he appears to be softening his stance towards Bitcoin.
I think Trump’s comments point to a bigger idea though – that Bitcoin and the dollar can co-exist. Yes, perhaps over a very long time period, Bitcoin could become the global reserve currency and the only form of money used by the entire world, but I think it’s reasonable to think that that day is far away from today.
Over the short-term, Bitcoin’s adoption will likely continue to grow as a new store of value while the dollar’s adoption also continues to grow as a medium of exchange as weaker fiat currencies continue to fail.
We’ve been in a position of great privilege, being the nation that issues the global reserve currency. But when we keep printing paper promises without limit, we undermine the value and trust in that currency.
Bitcoin can’t be printed at will, and there is no counterparty or nation issuing it that you must trust to not debase it. Bitcoin is making all-time highs in over a dozen other currencies downstream from the dollar.
I would tell Trump that we should integrate Bitcoin into our financial system. Bitcoin makes money incorruptible and facilitates the ability to securely conduct business — which is the cybersecurity of our nation. And a strong, productive economy is the backbone of generational flourishing.
So whoever our next president is… let’s make our money great again.
Bitcoiners Fight Back Against Government Overreach:
As I mentioned before, it’s fair to say the Biden Administration is not a fan of Bitcoin. The Biden Administration recently ordered the EIA - the Energy Information Administration - to perform an emergency mandatory survey of Bitcoin miners, asking miners to divulge extensive information about the nature of their businesses.
If the miners failed to comply with the survey, they could face hefty criminal penalties.
The survey was deemed an “emergency” due to the so-called harm miners pose to the public. I think the real emergency to them is Bitcoin being back above $50,000. They seem to be looking for any excuse to illegally collect more data on miners.
Not only do these actions infringe on the privacy of private businesses, but they also appear to be discriminatory against a specific industry. But the industry is fighting back.
On Friday, the Texas Blockchain Council and Riot Platforms sued the US Department of Energy, asking the court to issue a restraining order prohibiting the EIA from collecting information.
President of the TBC Lee Bratcher said, “This action is an abuse of authority in order to further the Biden Administration’s public goal to limit or eliminate US Bitcoin miners.”
In response to the lawsuit, the EIA has already publicly stated it will stop seeking information or imposing fines for not complying.
The court has already stated that it believes the justification for the EIA’s “emergency request” will “fall short.”
Wyoming Senator Cynthia Lummis summed it up well in the tweet below:
This is undoubtedly a win for the industry and the broader fight against government overreach, but the bigger battle is likely just getting started.
The ECB Says “Bitcoin Has Failed” in New Blog Post:
This recent Bitcoin rally has also caught the attention of the European Central Bank.
The ECB last wrote about Bitcoin in November 2022 in a piece titled “Bitcoin’s Last Stand” - published near the bottom of the bear market. Since the piece was written, Bitcoin has rallied more than 200 percent.
Now, the ECB is doubling down. It published a piece last week attempting to argue that the ETF approvals are not a sign that Bitcoin is becoming a legitimate asset class, as many people believe.
The post also consists of easily debunked claims on why Bitcoin has failed as a store of value and why it primarily serves as “the currency of crime.” The article even called for an outright ban on it. In all seriousness, this ECB post reeked of fear.
The ECB argues that it’s writing about Bitcoin to help protect society from the damage that will happen when the Bitcoin “house of cards” collapses.
But what about the very real social damage that the ECB’s reckless policies have caused? The ECB’s X profile says its task is “to maintain the euro’s purchasing power.”
Well, how’s that going for them? As Stack Hodler points out below, the euro is down 99.5% against Bitcoin over the last 10 years.
Perhaps if the ECB took a look in the mirror and did a better job at managing its own currency, it wouldn’t feel the need to attack a decentralized money that allows people to take ownership of their wealth and protect their savings.
I discuss the ECB and a proposal to ban Proof of Work mining in Europe in this week’s Coin Stories interview with Lyudmyla Koslovska, so make sure to check it out on Thursday.
Reddit Holds Bitcoin as Treasury Reserve Asset:
An ETF is not the only way that Bitcoin is becoming legitimized. It is also being increasingly adopted by corporations.
This week another corporation announced that it is holding Bitcoin as a treasury reserve asset. This time, it was popular social media giant Reddit when it filed for an IPO.
The filing reads, “We invested some of our excess cash reserves in Bitcoin and may continue to do so in the future and that it holds Bitcoin for “treasury purposes.”
However, it is worth noting that it doesn’t appear that Reddit has the same conviction as MicroStrategy or Block regarding the amount of Bitcoin they hold. The same filing described its holdings as “immaterial,” meaning the value of their bitcoin is not a meaningful amount.
However, the message here is not the dollar amount of Bitcoin but rather why Reddit is investing in it in the first place. To see another corporation investing in Bitcoin as a treasury reserve asset is a signpost for a trend I fully expect to continue to gain momentum in the next bull market.
Emails Reveal More Clues About Satoshi Nakamoto’s Identity:
The last story of the week revolves around a question that every Bitcoiner has wondered at some point, “Who is Satoshi Nakamoto?
Today, the identity of Bitcoin’s founder remains unknown. But a recent treasure trove of never-before-seen private emails from Satoshi has revealed more clues about who exactly this legendary person was.
These private email conversations were released to the public as part of an ongoing court case in the UK. They are between early Bitcoin collaborator Martti Malmi and Satoshi, and the emails were exchanged between them from 2009 to 2011.
Below are some of my favorite excerpts from the emails…
When asked why he chose the number 21 million, Satoshi replied:
“My choice for the number of coins and distribution schedule was an educated guess. It was a difficult choice, because once the network is going it's locked in and we're stuck with it. I wanted to pick something that would make prices similar to existing currencies, but without knowing the future, that's very hard. I ended up picking something in the middle. If Bitcoin remains a small niche, it'll be worth less per unit than existing currencies. If you imagine it being used for some fraction of world commerce, then there's only going to be 21 million coins for the whole world, so it would be worth much more per unit.”
When asked whether Bitcoin is harmful to the environment, Satoshi replied:
“Ironic if we end up having to choose between economic liberty and conservation.
Satoshi said Proof of work is the only solution to make p2p e-cash work without a trusted third party and that it was fundamental to coordinating the network and preventing double spending. And the best part was he said that even if it used a lot of energy – bitcoin would still be less wasteful than the conventional banking space with all those skyscrapers and junk mail credit card offers.
Unfortunately, proof of work is the only solution I've found to make p2p e-cash work without a trusted third party. Even if I wasn't using it secondarily as a way to allocate the initial distribution of currency, PoW is fundamental to coordinating the network and preventing double-spending.
If it did grow to consume significant energy, I think it would still be less wasteful than the labour and resource intensive conventional banking activity it would replace. The cost would be an order of magnitude less than the billions in banking fees that pay for all those brick and mortar buildings, skyscrapers, and junk mail credit card offers.”
The last excerpt I’ll share was maybe my favorite – Satoshi was asked why people may flock to Bitcoin, and his response was:
“Until now, no scarce commodity that can be traded over a communications channel without a trusted third party has been available. If there is a desire to take up a form of money that can be traded over the Internet without a TTP, then now that is possible.”
After 15 years and having grown to more than a $1 trillion market cap, I think it is safe to say that the desire for digital money we can trust to be decentralized and scarce is getting stronger by the day.
Make sure to read the emails in full here.
All I want to say is thank you Satoshi - whoever you are.
Until next week, keep stacking.
- N₿
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Grant Williams is the creator of the "Things That Make You Go Hmmm..." newsletter, co-founder of on-demand financial media platform "Real Vision," host of "The Grant Williams Podcast," senior advisor to Matterhorn Asset Management AG in Switzerland, and a portfolio and strategy advisor to Vulpes Investment Management in Singapore.
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