This Week in Bitcoin

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Powell pulls the punchbowl and $1.5 trillion in 'paper wealth' vanishes. I'll unpack Wall Street's meltdown, JPOW's 'maybe we'll cut, maybe we won’t' strategy, and how inflation still runs the show.

Then, we take a serious look at the idea of a U.S. Strategic Bitcoin Reserve. Could an executive order make it happen overnight?

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LINKS:

• What Is the National Debt Costing Us?
• Bitcoin Miner Hut 8 Buys $100M BTC Bringing Total Holdings to $1B
• The Dutch government urged to establish a National Bitcoin Reserve in an open letter. 
• CNBC Daily Open: Expectations on Fed cuts were the lethal blow to markets
• El Salvador secures $3.5 billion IMF financing package after agreeing to make accepting Bitcoin voluntary and unwind its Chivo wallet.
• Bitcoin Crosses $108k, US Spot ETFs Are The Largest Holder, MSTR To Enter Nasdaq-100
• US Federal Reserve cuts fed funds rate by 25 basis points
• SUMMARY OF FED CHAIR POWELL'S STATEMENT (12/18/24)
• Bitcoin Policy Institute drafts Executive Order for a Strategic Bitcoin Reserve for President Trump
• A US strategic reserve could push bitcoin to $500K: Bitwise CIO - YouTube
• FASB Officially Adopts Fair Value Accounting Rules for Bitcoin Starting December 2024
• El Salvador to Scale Back Bitcoin Policies for $1.4 Billion IMF Loan Deal
• BlackRock releases 3 minute educational video explaining what Bitcoin is.

MUSIC:

• Digital Age Blues by Simon C

[00:00:00] Unknown:

Professor, if you say inflation tomorrow is going to be higher than it is today,   why are you cutting interest rates and pumping money in? They're cutting interest   rates because they said they were going to cut interest rates. That's not their job.   Okay, look, this is a moment for new economic leadership. The past four years   have been dominated by the Fed.   It's time for someone else to step in, and we know who that is,   and say the new priority is growth, lower taxes, lower prices,   and an economy you can work in. All true. And America will say amen.   Music.  

We'll be back.   Welcome in to This Week in Bitcoin, episode 40.   My name is Chris, and I'm in your feet a little bit late this week because I've been fed watching.   And actually, I've been watching the bits most people skip.   It's the Q&A after the prepared statement that has the best details.   So we'll get into a little bit of that. We'll also talk a bit more about the   Bitcoin Strategic Reserve and the bigger picture that a lot of analysts seem to be missing.   People discovering the idea seem to be missing a piece of that.   We'll talk a little bit about that and how it all fits together.  

We've also got general updates and news.   So let's start with the macro stuff.   Because that's got to be on everybody's mind as I record on December 19th, 2024.   The market is just absolutely tanking along with Bitcoin down quite a bit right now.   As I record, about a 10% decline and the stock market also not doing very well.   Why? Well, you know, the Fed got together and had a meeting and a small group   of people, you know, can impact the entire market.   But I think to really understand what's happening, we should probably step back   and say, well, why did things rally after the election?  

What was the post-election rally based on? Was it a fantastic jobs report?   No. Those things keep getting revised downward and they're looking softer and   softer. Is it fantastic retail sales? Strong consumer?   No, actually. When you adjust for inflation, retail sales down.   Well, okay, maybe it's the stock market. That's been booming.   Well, kinda. I mean, the Magnificent Seven are booming.   Only 32% of the S&P 500 stocks have outperformed the index year to date.   Over the last 70 years, there's only one other period where this kind of streak occurred.   98 to 99 before the dot-com bubble popped when we saw that kind of consolidation.  

It's brutal. The Russell 2000 Index has not hit an all-time high for nearly 800 days straight.   That's the longest streak in 13 years. So maybe, maybe the rally after the election   was because the housing market is booming, right? The housing market is huge.   Everybody's buying homes. No, mortgage rates are up.   Home sales are down. The average homebuyer age right now in the United States is 56 years old.   So at scale, statistically, only boomers are buying houses right now.   What happened was the market was coiled up because we had a 50 basis point rate   cut in September and then another 25 basis rate.  

And money was already semi easy as it was. I mean, just look at how well the market's been doing.   And so as expected, when Trump won, that coil popped and things really ran.   But just as I predicted with that post-election pop, I also said,   what's going to sustain that run? And this week, that exuberance popped and   the market freaked out when the easy money ride was just forecasted to get a little less easy.   Things will just be a little bit harder.   And on that news, $1.1 trillion was liquidated from the cryptocurrency market.   I believe it's $1.5 trillion has been liquidated from the U.S.  

Stock market, which is like 70% of Bitcoin's market share just in one day got   liquidated from the U.S. stock market on this news.   Everything just went down, down, down.   So let's get into what really happened here.   It starts with seemingly good news. The Fed announces they're cutting rates again.   Today's Money Watch, we are talking about an issue that is really important   when it comes to your wallet interest rates. Yesterday, the Federal Reserve   said it's cutting rates by a quarter of a percentage point.   This is the third reduction this year, lowering rates a full percentage point   since back in September.  

CBS News business analyst Jules Schlesinger is here to tell us what this means   for everyday Americans. Jill, I lose track of this every time.   It's so technical. There's so much jargon. Oh, it's so hard. Yeah.   It must be nice to be so financially privileged that you don't even have to   think about it because that's the reality.   That's why he doesn't know what's going on here.   What's happening is we are at a macro fork in the road.   The Fed has cut by 25 basis points   and sounds like they're going from four rate cuts to only two in 2025.   And this fork, one direction leads us to a prosperous, booming 2025 with things really cooking.  

And the other leads to recession within the next year.   Things are on the precipice to go either direction. A couple of metrics that   always really jump out at me is the trucking employment metric because its decline   pattern before a recession has been really spot on. And that's the range it is in right now.   Inflation continues also to   drive up the cost of goods. So like we really need a healthy supply chain.   Without a healthy supply chain, inflation pressures are even worse.   And then what compounds this problem is that our wages haven't caught up to   where inflation brought stuff already.  

And if inflation is going to continue to cook for a bit.   Then the wages will never catch up. So housing affordability is horrible.   Money market fund assets and M2 money supply also suggest economic stress or potential recession.   So we have a lot of weak fundamentals here. The reality is, you know,   the market just needs a narrative though. They want to be bullish.   They want to be bullish, but they're just a little freaked out.   So let's talk about how 1.5 trillion got wiped out.   Yeah, look, the Fed completely misread where inflation is going to go and they're   admitting it tacitly in these projections. They are right now saying inflation   will be 2.5 percent at the end of next year, and it won't get down to 2.1 percent   until the end of the following year.  

Twenty twenty seven. They're talking about getting down to two point two or   twenty twenty six down to two point one percent.   So what they're telling us is where they thought we'd be at the end of this   year. Is it going to happen till next year?   And then that's not going to happen until the year after that.   So inflation is with us for longer.   The September cut was a mistake. They should have never done it.   Frankly, I think Jerome Powell should resign. This is an admission of failure on his part.   The market, what we saw today is the market has lost confidence in the Fed.   It does not believe that the Fed has inflation under control.  

And yet Powell insists they do have it under control. In fact,   he almost insanely says things are going according to plan.   Look, Jerome, they're not going according to plan. We can see where you thought   we'd be. We're not there.   And now you tell us we're never getting Hmm, you might say they're a little salty, wouldn't you?   You see, these genius investors are panicking. They're panicking.   All these rich, super smart, look at me, I'm brilliant, investors,   they've really been depending on easy money to win.   And even just suggesting that the money might not get looser,   is a blow to these addicts. And so now you have the market pricing in the risk   of inflation for longer, less cuts, and the risk of government debt,   which is now at $36.2 trillion.  

This is a big problem. That alone is sort of this black swan could be a major   factor, could take liquidity out of the market at any moment kind of problem.   The CBO, which is the Congressional Budget Office, projects that the interest   payments for fiscal 2024 will be $892 billion.   And then they expect it to rise throughout the next decade, climbing to $1 trillion   in 2025, just payment on the interest.   And then they adorably think it'll only get to $1.7 trillion by 2034.   Of course, their model just assumes a nice, reasonable addition to debt and   not these crazy trillion and every six months additions that we seem to be going through.  

So their models are our best case scenario.   But as it stands, but here's in real terms why the situation is bad,   because today already at the current interest payment,   we're already spending more on the interest than the federal government does   for Medicaid or any federal spending on children all combined or any of the   income security programs, which includes things like low income Americans,   supplemental mental nutrition programs,   child aid, and even tax credits.   It only gets worse as we continue to add debt. So the national debt continues to climb.   That payment is going to continue to be high as the debt expires and we have   to refinance it at higher rates, which is happening this year and next year.  

And then you have inflation.   Inflation is kind of killing the party. As Powell put it this week,   progress has, quote, stalled. And once again, it seems like their inflation   predictions have just completely fallen apart.   And it's a real risk now. And here's J-PAL's assessment on navigating the risk around inflation.   I could follow up on that. You mentioned the risk and uncertainty indexes toward   the back of the document.   The upside risk to inflation jumped quite substantially.   The only thing really that's happened, you mentioned that the disinflationary   story remains intact, yet the risk weighting has jumped to the upside.  

The only real thing that's happened is November 5th in the meantime.   Is it fair to say that that's what's driving the higher sense of upside risk on inflation?   Once again, we've had a year-end projection for inflation, and it's kind of   fallen apart as we've approached the end of the year.   There you go, his own words. Their inflation projections have fallen apart.   That is certainly a large factor in people's thinking.   I can tell you that might be the single biggest factor, is inflation has once   again underperformed relative to expectations. It's still, you know,   going to be between two and a half and three.  

It's way below where it was. But, you know, we really want to see progress on   inflation to, you know, as I mentioned, as we think about further cuts,   we're going to be looking for progress on inflation.   We have been moving sideways on 12-month inflation as the 12-month window moves.   That's in part because inflation was very, very low measured in the fourth quarter of 2023.   Nonetheless, as we go forward, we're going to want to be seeing further progress   on bringing inflation down. and keeping a solid labor market.   Okay, so they've blown forecasting inflation.  

It's been going sideways, and they've had less progress than they expect.   I've been raising this question on the show for weeks. Then why are they lowering the rate at all?   And it seems like they simply lowered the rate because the market expected them to.   And they don't really have a great answer. Jean, this is my liquid The New York   Times. Thank you for taking our questions.   I wonder if you could talk a little bit about why officials think it's appropriate   to cut rates at all in 2025 if inflation is expected to remain firm throughout the year.   That seems like a pretty good question. So you forecasted now going from four   cuts in 2025 to only two cuts.  

Why do any of them at all if we're having inflation problems today?   I wonder if you could talk a little bit about why officials think it's appropriate.   To cut rates at all in 2025, if inflation is expected to remain firm throughout   the year. You ask about 2025.   I think that the slower pace of cuts for next year really reflects...   Both the higher inflation readings we've had this year and the expectation that   inflation will be higher.   You saw in the SEP that risks and uncertainty around inflation we see as higher.   Nonetheless, we see ourselves as still on track to continue to cut.  

I think the actual cuts that we make next year will not be because of anything   we wrote down today. We're going to react to data.   That's just the general sense of what the committee thinks is likely to be appropriate.   Sorry, just one quick follow-up. Why, I guess, would you make those cuts?   Like what would be the trigger to cut?   So to cut further after this point, I would say it this way.   We've reduced our policy rate now by 100 basis points. We're significantly closer to neutral.   At 4.3 percent and change, we believe policy is still meaningfully restrictive.   But as for additional cuts, we're going to be looking for further progress on   inflation as well as continued strength in the labor market.  

And as long as the economy and the labor market are solid, we can be cautious   about, as we consider, further cuts.   And all of that is reflected, to your question, in the December SEP,   which shows a median forecast of, I'm down two cuts next year compared to four in September.   So the problem here is, answer is, well, as long as the labor market remains   robust, I think we're okay to continue to cut.   As long as the economy remains strong, I think we're okay to continue to cut.   The labor market isn't strong. The economy isn't strong.   It's strong by their numbers. But you know what strong signal we also have that   tells us it's not in good shape?  

The way everybody just voted for Donald Trump.   When people voted for Donald Trump in the exit polls, the biggest reason was the economy.   The economy. The economy isn't doing well. They're getting killed by the economy.   So the American people in a landslide just voted for a bad economy.   They said the economy is bad. We want somebody to come in and do something to try to change it.   But J-PAL is up there telling you the economy is great, employment is great.   See, and I suspect, and I wonder if you're going to pick up on this in the next   clip, I think a distrust is really finally starting to set in about the Fed's   ability to even have any kind of grasp on inflation.  

Because for a third time, reporters tried to pin down Jerome Powell on inflation   risk versus rate cuts. Nick Tamarosa, The Wall Street Journal.   Chair Powell, to make sure I understand, participants today revised up their   core PCE inflation projection for 25 so that the central tendency runs from   two and a half to 2.7 percent.   And as Howard noted earlier, most of the committee sees the risks to those projections to the upside.   So if inflation only declines next year from 2.8 to 2.5 to 2.7,   what would compel the committee to be cutting in that situation?   That paper shuffling you here in the background is JPOW going through his talking points.  

Let me find these numbers.   So we have inflation coming down, core inflation coming down to two and a half next year.   That'd be significant progress. You see a slower path. I think that does take   on board that we want to see real progress. But we'd be seeing meaningful progress   to get inflation down to that level.   That wouldn't be all the way to 2%, but that would be better than this year.   This year will be 2.8 or 2.9. That would be meaningful.   I think the market is trying to internalize the fact that they have lost faith   that the Fed has this under control. Do you get that vibe?  

Here's a clip of Jay Powell from May of 2024.   So here we are now in December of 2024. So kind of the beginning,   the end of spring, the beginning of summer, the federal chairman,   Jerome Powell, said, I don't see any inflation problems.   I don't see any stagflation problems.   In addition, I would say, you know, most forecasters, including our forecasting,   was that last year's level of growth was very high, 3.4 percent in,   I guess, the fourth quarter,   you know, and probably not going to be sustained and would come down.   But that would be our forecast.  

That wouldn't be stagflation. That would still be to a very healthy level of growth.   And, of course, with inflation, you know, we will return inflation to 2 percent,   And and that won't be. So I don't see the stagger of the inflation.   That's weird because the show did. The show sure seemed to. A lot of Bitcoiners sure seemed to.   J-Pow got it wrong. Here he is three years ago, just as the covid lockdowns   were ending June 16th, 2021.   So really, the problem now is is that demand is very, very strong.   Incomes are high. People have money in the bank accounts.   Demand for goods is extremely high, and it hasn't come down.  

We're seeing the service sector reopening, and so you're seeing prices are moving   back up off their lows there.   But in terms of overcorrecting, I mean, I think there is a possibility on the   other side of this that inflation could actually be quite low going forward.   But that's not really where our focus is right now. Our focus right now is we   need to – our expectation is that   these high inflation readings that we're seeing now will start to abate.   And that's what we think. And it will be like the lumber experience and like   we expect the used car experience to be.  

With things like airplane tickets and hotels, which are the other two factors   in the most recent CPI report that went up a lot, We expect that those prices   will get back up to where they were, but there's no reason to think that they're   going to keep going up a lot.   Because if they are, people will build new hotels. There's no reason for supply   and demand to be out of whack in the hotel business over any period of time.   So it's remarkable how wrong all of this is so far.   You know, so this was June 16th of 2021.   And mid-May on Coda Radio, I was calling everything that happened with inflation,   with the rates, with tech layoffs. It was obvious.  

I don't mention that to brag. That's not why I'm mentioning it.   I mention it because it's startling that the Federal Reserve,   with all of their data, all of their models, all of their experience,   all of their degrees, all of their doctorates, they keep blowing this.   This is years ago, before inflation went out of control. We think that'll happen.   I think in terms of the timing and the effects on inflation in the near term,   there's a lot of uncertainty.   The overall story is one that we think is right, and we think the incoming data support it.   And, you know, so do many, many forecasters. Oh, yeah. And if you look at the   forecasts on the FOMC, you will see that as well.  

Our best minds, no inflation coming. I don't know what you're worried about.   So if people had any sense, they would be questioning how reliable the Fed has   been on calling inflation from the very beginning. They've blown it from the very beginning.   That's going to give them some bearish pause. And I get the sense that we're   probably not going to see any rate cut in January, which is going to give people bearish pause.   If I could follow up, if somebody looked at these projections and also the insertion   of the extent and timing language in the statement, which has been used at times   in the past when the committee thinks maybe it's going to be on hold for a while, and they said,   gee, this looks like it could be the last rate cut for some time,   would they be mistaken to infer that?  

So that's not the decision that we made at all. Yeah, I think if you ask me,   the reality around employment and inflation is just wrecking the Fed's narrative   that they've had for the last couple of years.   And now everybody's got to digest that for a minute.   Music.   It's not all bad this week. The narrative around establishing a Bitcoin strategic   reserve has stepped forward in a few different directions, and I want to update you on that.   Some of it really kicked into high gear when Strike CEO Jack Mahler stopped   by Tim Pool's politics podcast and discussed the possibility of Bitcoin.  

An executive order to create and establish a Bitcoin reserve.   So first of all, Senator Lummis of Wyoming, shout out Senator Lummis,   unbelievable Bitcoin advocate.   That's her bill, by the way. The Bitcoin Act is that you're going to take the   excess reserves from the Fed banks, which is in gold, and you're going to build   a Bitcoin position with that. And it's a million Bitcoin is the target.   I also know Trump is looking at a day one executive order.   Sorry, sorry. Day one executive order for a Bitcoin reserve for the United States? Yeah.   So I know that there's people looking at the Dollar Stabilization Act is it   gives the president wide discrepancy to protect the dollar and there's potential   to use a day one executive order to purchase Bitcoin.  

It wouldn't be at the size and scale of a million coins, but it would be a significant   position and it'd be a message that the United States, listen,   here's what I think isn't talked about enough about the strategic reserve.   I think it's one of the biggest economic announcements if it happens in American history,   but it's the first positive one why is no one talking about that the   US made a really big economic announcement in 1933 what was   it we're taking all your property right we're confiscating your   stuff they made a big one in 1971 what was it   we're divorcing ourselves from the gold standard divorcing ourselves from the   immutable laws of mother nature we're printing money they made a big one in   2008 what was it we're bailing out all the bad actors we're not letting consequences   follow through we're not letting the business cycle finish if Trump makes one   It's a positive one for the first time ever.  

It's not defensive. It's not reactionary It's pro-technology pro-growth Governments   own two percent of the supply of this thing who owns the rest the public It's   something that acts in the best interest of the people So to me if he does an   executive order on day one,   no matter the size The magnitude of a positive economic announcement out of   this country for the first time in a hundred years Acts in the best interest   of the public where the public owns it The public was first before Wall Street, right?   To me, that's the message. It's inspiring. The Bitcoin Policy Institute has   drafted a proposal for an executive order that establishes a strategic Bitcoin   reserve in the United States.  

The draft mandates consolidating government-held Bitcoin within seven days of   signing, and it prohibits selling seized Bitcoin and instead diverts it to the   country's Bitcoin reserve.   It also establishes a Bitcoin acquisition program within 60 days to purchase   at least $21 billion in Bitcoin.   Some people are unhappy because it defines Bitcoin as a store of value and digital   gold. And, of course, a lot of people think it has a lot more potential, and I agree.   I don't really think their definition matters to Bitcoin in that executive order.   I think the bigger, broader question is, is an executive order a good way to go about this?  

I've worried from the beginning, since the strategic reserve proposal was first   announced, it's too soon.   We're too soon on this. I don't think people fully have had enough time to get   the financial literacy and education they need to understand why a Bitcoin reserve makes sense.   And so a lot of people are just going to instinctually fight this kind of thing.   And if it's an executive order, it seems to me like,   well, it would be easier for a future executive to undo it, where if it's something   that's passed by Congress and signed into law by the president,   that's much more integrated into the system. Also, it would be literally integrated into the system.  

But I do think an executive order would probably spur other nations to take it even more seriously.   We're starting to see half a dozen   nations at least mumble about this and consider it and talk about it.   And if we actually pulled the trigger, even as an EO, I would think that would   probably accelerate other nations to adopt.   But I don't think it would be as solid long term as passing Lemmes' bill.   You know, I think it's also just it's just not quite the same scale of a big   deal that the actual Bitcoin Reserve Act would be.   It's just not as bullish of a moment either.  

If we do get a Bitcoin strategic reserve where the government is buying Bitcoin   and there's a bill from Senator Lemmes that had the government buy a million Bitcoin.   This is Bitwise's CEO.   $200,000 Bitcoin is going to be looking quaint. You're going to be looking at   $300,000, $400,000, $500,000 Bitcoin.   It's just too big a story because governments all around the world would have to do it.   When this initial idea was floated, I was somewhat skeptical of it.   But over the months, it hasn't gone away.   In fact, we continue to see leaders in the Trump administration suggest that they're open to it.   I still think maybe it's less than a 50% chance, but it's not zero.  

And again, if it happens or if we start to see it happening in other countries,   you're going to see a rip up in Bitcoin that will make 2024 look pretty docile in comparison.   I do think the odds are starting to fade on strategic reserve bill.   And I think maybe that's why the executive order is getting a little bit more attention.   Billionaire Dan Moorhead, though, says there's a bigger, broader reason why   the U.S. might want a Bitcoin reserve.   And it comes down to a precarious problem that only the world's reserve currency really faces.   I think that is actually a really important thing. When you're the reserve currency   of the world, you don't have somebody else's currency to save in.  

So the United States doesn't have another currency. It stores $600 billion in   gold, which is a staggering amount.   It's equivalent to 11 million years of American worker wages.   So that's kind of crazy.   Go to digital gold. Bitcoin is much better. And so I do think it's totally rational.   The U.S. already owns 1% of the world's bitcoins.   Keep that, increase that. So I do think it is actually a really good policy.   There's a couple countries that already do own Bitcoin.   It'd be great for the U.S. to get out in the lead.   So let's take a look at the bigger picture here. Yeah, the stock market's freaked   out right now because it's harder for them to make money now.  

And money costs them a bit more and will cost them more for longer.   And inflation is going to be a persistent problem, which is now admitted by the Federal Reserve.   That might actually bring us closer to big money investors starting to understand   something that Bitcoiners have known for a long time.   Bitcoin is the best hedge against inflation.   100% of the time, when measured over a few years, smart money will figure out   that Bitcoin is a long-term inflation play.   And the Fed just said, we're looking at maybe two years.   Well, who loses money on Bitcoin in two years? In three years or four years, no one loses money.  

So this is the perfect opportunity. And Bitcoin, as well as the Bitcoin ETFs,   I think they're perfectly positioned for people looking for a store of value   to protect themselves from debasement.   Now, we've known this narrative forever.   But I think this macro environment is going to incentivize people to figure it out at a faster clip.   If the Fed comes out and admits, yeah, inflation higher for longer,   well, then the only reasonable thing to do as an investor is to embrace and plan for that.   And anyone paying attention is going to see that. Bitcoin is a worldwide asset as well.   So while the U.S. figures this out, and it does play a big role in price action   and user adoption right now.  

There's things on the horizon that we might need to talk about more in the future,   like China's economy is experiencing one of its largest collapses since it joined the WTO in 2022.   Ten-year Chinese government bonds are now around a 1.75% yield.   30-year bonds are below 2%.   People all around the world need hard money outside of their government's control.   And so they're looking for a solution. And Bitcoin is that solution.   And it's easier than ever now to stack sats.   Speaking of that precious scarcity that makes it such a great inflation hedge,   BlackRock freaked a bunch of people out this week when they released a seemingly   helpful educational video that explains what Bitcoin is.  

And I'll play a little bit of this for you because it's not bad, at least at first.   Bitcoin, bit by bit. We've all heard about Bitcoin, but what exactly is Bitcoin?   Let's start at the beginning. around 100,000 years ago.   Oh, okay. This is like we're going way back, Putin style. You know,   I actually was really thrilled to see this. I mean, we'll get to the bad part here in a moment.   But, you know, when we heard that BlackRock and others were going to be selling   Bitcoin ETFs, it meant that they're going to be putting their marketing money behind Bitcoin.   And that eventually we would have these videos that were meant to be shared on social media.  

And here we are, one of the very first. And they're starting with the evolution   of money and bringing us up to Bitcoin.   Throughout history, we've used all kinds of objects to help make transactions and store value.   From seashells, to shiny metals, to paper notes.   That's because the value isn't just in the object itself, it's in how much we   agree the object represents.   Music.   So the object can be many things, even, as it turns out, a string of digital code.   The Internet changed everything. It connected the world, changing how we communicate,   work, shop, and manage finances.  

It also opened the door to a new kind of currency and asset.   Enter Bitcoin, a digital currency not governed by banks or governments,   but by its global community of users.   Music.   Bitcoin exchanges happen person to person anywhere in the world in near real   time and for near zero transaction costs, saving money, time and opening financial   opportunity to those without access to a banking system.   OK, there you go. That's money. Now, number two, Bitcoin's fixed supply. All right.   One of obviously the most important things about Bitcoin, something that makes   it a great inflation hedge. BlackRock is going to educate us about Bitcoin's fixed supply.  

Bitcoin has a fixed supply of 21 million Bitcoins. Uh-oh.   While the voiceover is correct, what's on screen is a little distressing.   About one minute and 30 seconds into the video, which I'll have linked in the   show notes, superimposed over the baked-in captions already,   BlackRock has a legal disclaimer that reads, quote,   there is no guarantee that bitcoin's 21 million supply   cap will not be changed and that's   crap i understand lawyers probably looked   through this marketing sent it to them for review and they said no you have   to put this disclaimer on there lawyers don't understand how bitcoin works but   it's kind of distressing to see blackrock imply that there's no guarantee that   bitcoin's 21 million supply cannot be changed and of course a lot of doom doomsayers doomsdayers,   doomsdayers thought this is the   first sign that BlackRock is going to fork Bitcoin and create more coins.  

I don't know why they would do that, because it would dilute their value and   make their investment go down to value.   But that was the conclusion, is this is the very beginning of kind of priming   you, priming you for the idea that we could increase the supply of Bitcoin.   And that's why BlackRock put this disclaimer in there.   But, I don't know about that. You see, we should probably be clear about how   Bitcoin's 21 million cap works.   The 21 million supply is not enforced by a single line of code or any single function in Bitcoin.   You can't open up a code editor and change a number from 21 to 30.  

It's the outcome of Bitcoin's issuance schedule combined with the rules of the   Bitcoin protocol. So, okay, how would you actually change the supply cap?   To change Bitcoin's total supply cap, developers would have to change Bitcoin's   fundamental issuance schedule, which is hard-coded into the Bitcoin core software.   To change that, developers would need to modify part of the code that controls   the block subsidy, that's the amount of Bitcoin rewarded for mining a block, and the halving logic.   Could you imagine the scope of that adjustment? Just imagine getting that through   the Bitcoin development process.  

Just imagine. And that would be step one.   Step two would be to actually enforce the change.   So you'd have to get the miners, the node operators, all of the end users with   wallets and Bitcoin Core would all have to agree.   All of them with their individual incentives would have to agree to then upgrade   to the new version that increases the supply cap.   All of them would have to move against their own financial incentive.   Since Bitcoin's value really comes from its hardness and that fixed supply of   21 million and how good it is as functional as money, it would be shooting yourself in the foot.   You would be taking away the hard moneyness of Bitcoin and diluting its value.  

So the incentives don't line up in that group. So even if you could somehow   fundamentally change the way the block subsidy works and the halving logic and   get that through Bitcoin core and then somehow release that,   there's no way you get all the miners and node operators and end users to upgrade   because they wouldn't want to dilute the value of their coins.   So people don't need, I don't think people need to freak out about this. Or am I just off base?   Is BlackRock and these other ETFs a big threat and I'm missing something here?   I mean, I agree it is spooky seeing them slap disclaimers about supply caps   on a video that's supposed to be educational.  

And then, you know, you go retweet that or retweet it or whatever.   And then, you know, that that stinkers in there. That's a turd.   But I don't think it's a nefarious like plan to prime you. I think it's covering their butt.   But I'd like you to boost me your thoughts. Maybe I am missing something with   these ETFs because I sense not a panic, but a growing concern.   I think it would be a fair way to label it about these ETFs.   And keep in mind, you also have a chance to toss in a 2025 prediction as well.   Send me a boost. Let me know.   Music.  

All right, coming up on the show, your boosts, a brief election reflection with   a crypto angle, some big updates, final clip of the week, state of the network and more.   So let me just mention some ways you can support the show by doing what you do.   If you want to stack sats, buy them   on River. I think it's one of the best resources in the United States.   They own their entire platform. They have proof of reserves.   They're on the Lightning Network.   They have a brilliant UI and lots of options and ways to stack sats.   The Bitcoin Well is another amazing option, especially for those of you in Canada,   with some great self-custody options.  

So if you want to stack sats, River or the Bitcoin Well, I have links in the show notes.   No official relationship with them, but that affiliate link generates some sats for the show.   If you want to spend your sats, the Bitcoin company makes it really easy to   buy gift cards over Lightning.   You can log in with a Lightning address. You don't need to create an account,   and you can get set up in just seconds.   Use my promo code JUPITER. you get extra sats and the show gets some sats.   Now, you can stack sats by paying your bills. That's the Fold Card.   I got a link to that. That's how I pay all my bills. And I stack sats every   single month using the Fold Card.  

And if you want to get access to your Bitcoin value without selling it,   careful when the market's choppy.   But I'll put my Salt Lending affiliate link in there too. That's what I use when time comes.   All of those links help support the show. Thank you everybody who does that.   And of course, we also have a bunch of boosts that support the show.   The lever you have pulled breaks. He's not in service. Please make a note of   it. Let's get into the boost this week.   And now it is time for le boost. And our baller boost is the podfather himself, Mr.   Adam Curry, coming in with 50,000 sats. Hey, rich lobster!  

He says, I'm loving Salty Chris. Yeah, man, that fuck got me worked up.   I'm feeling better this week.   I was a little emotionally drained afterwards. I was like, I got to take it easy.   But, you know, I got it out of my system, and I think I'm doing much better now.   And that boost helps, too. Thanks, Podfather. Nice to hear from you. Thank you very much.   User 3836652 comes in with 20,000 sats. Use a boost. This old duck still got it. Make it so.   Now, I think, user, you can go into Fountain and set your profile name and follow   up with your name if you'd like, and I'll try to include that.  

But he writes, hi, thanks for all the quality content. I think you touched on   the topic of QC going after a BTC address, and I've heard that older addresses   are more susceptible, like, say, Satoshi's addresses.   Can you explain why older addresses are more susceptible and why?   Oh, QC quantum computing.   I thought you were talking about, like, quantitative easing or quantitative   tightening because I'm still in Federal Reserve mode. No, I don't think so. Not at this point.   I would keep in mind that the Willow chip,   only ran for just a few moments and doesn't do any actual functions or operations   beyond the benchmark that they have particularly written for it at this moment.  

And it only can run for just a brief period of time.   And that is what, what did they say, 106 qubits and you need at least a million   to start chipping away at Bitcoin and you need to build a run continuously to do that?   I think we're easily 20 years away from that.   I think we're easily. Now, it could Wall street   be looking for its next thing to go crazy on   and invest a ton of money into quantum computing and   shorten that down to 10 years maybe yeah maybe   but the fact that we already have some proof of concept in   place and we have other ways we could potentially solve it doesn't leave me   too concerned i think what you're thinking about is probably like the different   additions and improvements that have come along to bitcoin over the years and   that is something we could definitely get into in the future thank you user   appreciate that boost one dull geek comes in with 4,444 sats.  

That's two rows of ducks, which I don't know, I'm going to say that's an Aflac duck, right?   Aflac! Yeah, there he is. It's difficult to convince someone whose salary depends   on remaining ignorant. Love the long shows.   Probably talking there about Chris Hayes, and I still... I don't think Chris   Hayes' salary depends on him being ignorant.   Wouldn't he be more successful if he was helping his viewers become financially   successful and literate?   How does his salary benefit from losing audience over time. I just don't get   it, Wendell Geek. That's the thing.  

Like, I think you're right in the short term, but how does that work out long term?   Don't make no sense. Glad you like the long shows. Thanks, Wendell. Nice to hear from you.   Nor Flomo comes in with a row of ducks, 2,222 cents.   Your response commentary to all the FUD was brilliant. Stay salty.   I can't help it. The FUD gets me fired up. It does.   It does after all these years, too. You know, I thought eventually,   you know, I just wouldn't care to get into some sort of Zen state.   But, you know, when you look at how much good Bitcoin could do for the middle   class folk and people that are really hurting from inflation,   it just feels like a harm to humanity to slow down adoption like they do. It just gets me.  

It just it just gets me. Thanks, Norfomo.   Probably saying that exactly right. And thanks for the boost.   Sept comes in with 3000 sats.   Really good episode. The length of the episode was perfecto.   Thanks for the hard work. Thank you for recognizing the longer episodes do take   a bit of work. It's funny.   Short, short episodes are a ton of work. And well, longer episodes are a lot   of work just because I don't edit this show, but I do prep the clips,   right? That's where the edit work is.   And this show is I prep all the clips, trim them to length, pre-watch them,   you know, organize them, collect them.  

That's where the bulk of the work is. And so a long show can definitely,   definitely mean a lot more clips and a lot more work. And I appreciate the value there.   User 24 9 comes in with 15,000. Fun will now commence.   Great show. If you don't expect these people, I don't know if you expect these   people to ever actually get it.   But I posted on X right after I saw that Critic Slam Crypto.   It says MSNBC at the bottom of the screen.   People either aren't watching or don't find them credible. It's either stupidity   or malice. And intelligent people are no longer taking them seriously.  

That's just it. That's just it, User 24. It's like, they're hurting themselves with this?   Maybe temporarily, like they're getting some hater to watch?   For the evening, but long term, they're just undermining their credibility. I think it's wild.   I continue, I would like to run a Bitcoin node and have a dedicated Linux laptop   for all things Bitcoin. Any good resources available?   Oh, how exciting. Become a node runner. I very much encourage it.   It's like the next, it unlocks the next level of understanding and appreciation for Bitcoin.   So starting from order of easy to hard, I think the easiest is probably something   like Start9 if you could dedicate the entire machine to it. And it sounds like you could.  

I don't know if you have other things running on there, but Start9 can host some other stuff.   Also, I think Umbral is worth looking at. I think Start9 kind of has an edge   in terms of practical use and stability and things like that.   But I think Umbral is trying to be very, very aggressive and competitive there too.   And then if you have a Linux box already and you just want to install things,   you could install just something like Bitcoin D and LND and then put AlbiHub   as a Docker container on there.   And you could literally just run the individual components and you don't need   a whole orchestration OS.  

Kind of depends on your comfort level. I'd say easiest to start nine,   most complicated is just loading the services yourself.   But, you know, that's the beautiful thing about free software is there's a lot   of routes you can take from totally under your control to a prepackaged experience.   Kind of like Linux distros, but for nodes.   Those are the top two I recommend. I know there's others out there and if I   missed one you really like, boost it and share your experience for node OSs,   I guess they would be considered.   Not sure. Let us know how it goes, 24, and nice to hear from you. Mufurio!  

Mufurio! Comes in with 10,000 sats. It's over 9,000! Which was really two Jar   Jar boosts, 5,000 sats. You suppose!   No message, though. Thank you for the value. I really appreciate it.   Bola Pura comes in with 17,000 sats. The traders love the vol.   I've been procrastinating on setting up a Nix Bitcoin and now my Albie wallet,   needs immediate attention so I thought I'd just send the stats to you thanks   for the show thanks, you know, I hope that doesn't mean you're going away I've   kind of been getting like one or two of these a day from folks that are winding down their Albie,   wallets I will point out,   that Fountain FM, you could go create an account with Fountain they run a hosted   wallet for you could send all the stats there.  

And then you can just boost from Fountain's website with your account.   You don't actually have to use the app.   Once you got an account and a wallet set up with Fountain, which you might have   to do through the app, all your future boosts can be from the web.   And you can use whatever podcast app you want.   So you don't have to empty out the Albi wallet. I've seen a lot of people doing that.   And I hope that doesn't mean you're not going to participate because there's   a lot of exciting improvements in Q1 and Q2 for the boost experience.   So we're going through a transition with Albi's custodial service.  

On the other end of it, what's being built and what is getting worked on right   now is extremely exciting.   So about, you know, spring, it's going to be it's going to be a whole new experience.   It's going to be really slick.   Lots of new options. But, you know, in the meantime, it means Albie is going away.   And I hope people don't bail from the overall value for value boost experience   because it will crush us. We love you guys.   This is my favorite way to hear from you and support the show.   I mean, if I had to hunt down sponsors and spend 15 hours a week for sponsors   on the show, it wouldn't be viable. I just wouldn't be able to do the show.  

But I do appreciate that support. It's great to hear from you both.   And I hope to hear from you in the future very much.   Ah, Mr. Kaspeland is back with 2,100 sats.   Fountain 1.1.110 is still having sat streaming issues. Oh, I wish I would have   read this this morning. I had a meeting with them this morning.   Well, a little birdie tells me that around Christmas, there'll be another update.   So keep updating, and I will follow up on that.   I love you, SatStreamer, so I'm sorry to hear that, Koss, and thank you for   not only telling me about it, but then kind of closing the gap there with a little boost.  

That's really a stand-up thing to do. Appreciate that.   Mix is here with 5,000 sats. You're so boost. Thanks for the episode. Thank you for the boost.   Nakamoto6102 is here with 4,000 sats. Thanks for the show.   You've mentioned using Liquid Network on previous shows. Is that for privacy   purposes? Any recommended Liquid wallets?   It's both for privacy and ease of use and being cheap.   The Liquid network is a side chain. There's essentially a clone of Bitcoin,   but its block time is down to two minutes.   And it's run by a consortium of like 20 operators.   And then there's a bunch of other node operators, including,   you know, individuals and whatnot.  

And when you move your Bitcoin into the Liquid network, you kind of lose track of it.   And when you come out of the Liquid network, you go to a new address.   And so the tracking is sort of broken there.   That's nice, but that's not the main reason. The main reason I like Liquid is   it's a hot wallet for me where, say, I need to add liquidity to a Lightning node.   That's just a quick swap from Bolts from Liquid. I use Bolts.exchange,   and I go from Liquid right into Lightning Sats.   And I don't have to break out my cold wallet. I don't have to go through all   that whole process. And so it's also a great way to send sats to my kids.  

So my kids get their bitcoin bitcoin when they   get allowances or for their birthday or for christmas in a   liquid wallet that we then at the end of the year sweep to a hard wallet   for them and that way like if i want to send them 5 000 sats i don't have to   have a lightning node for them and i don't have to pay high fees and they get   it essentially instantly which is an experience kids like and so i'll send them   essentially their allowance sats over liquid so it's a side chain that allows   you to move around privately and cheaper,   and then you peg in and peg out. It's permissioned, though.  

So it's the equivalent of an exchange with a more...   With a more appealing risk profile. That's how I look at it.   I hope that high level helps. Thank you for the boost, Nakamoto.   Gene Bean's here with 6,492 sats.   This is a tasty burger. That's some ducks and a bit more. He says,   you know, if the smaller pools are worthwhile, listeners of the show could form one.   Oh, a mining pool? This Week in Bitcoin mining pool?   That would be cool. What apps or programs should I start off running myself?   I ask because I've been looking at Nick's Bitcoin as the type of node to spin   up since I already use NixOS.  

Okay, if you're comfortable with NixOS, NixBitcoin is the nuclear grade,   put it in space, land it on Mars, and depend on it for 15 years using seriously hardened technology.   I really have the most faith in NixOS. If I'm going to run something as a commercial   appliance that's running like lightning services for the network or something   like that, I'm running it on NixOS and using NixBitcoin from this point forward.   Everything being described in a configuration file means the system is self-documenting.   What port things are on, how things are installed, what packages I went with,   what the backup is configured to do, it's all self-documenting.  

It also, when it does updates, it self-checks. And if the update has any kind   of problem at all, it won't build.   And even once it does build, you can build in a way where you run your current   environment until you reboot. And then you reboot into the new built updated environment.   And if there's any problems, as you know, you can roll back.   That, to me, is massive when it comes to managing a Lightning node.   You know, if you're not comfortable, I don't recommend NixBitcoin unless you're   comfortable with NixOS. Otherwise, I'd say Start9 or Umbral, probably.   Let me know how it goes, Gene. I'm really excited to hear you're doing that. That's great.  

Whomever whiz comes in with 10,011 sats. Oh, my God, this drawer is filled with   fruit loads. Well, I finally got my AlbiHub and I bought my first sats.   Hey, congratulations, dude.   Aha, that's great. Feeling a slight twinge of regret that I never set up the mining rig in 2009.   I was an econ major. I read the white paper, and I even had a home lab with dual WAN.   I talked a big game to my profs, but ultimately spent my time and energy on   video encoding and PDP file sharing instead.   The catalyst for this boost, though, was hearing that you needed a binary boost clip.   So here is my submission. Ah, I see now 10,011 sats. I see what you're doing   there. That's the binary boost.  

Oh, you give me a few options here. Uh-huh.   Okay, thank you. I'm going to take a look. It's six, five different options?   Five different options. All right.   Oh, the downloads aren't working, though. Oh, the downloads aren't working.   You might try linking them again.   That's pretty good. I like where your head's at there.   Thanks, WhomeverWiz. Nice to hear from you. And congratulations on getting your first sats.   It's never too late to start stacking because you don't need to be a billionaire, right?   I mean, I'm sure I'd love to be, but really it's about protecting yourself from   debasement and just building some savings that will grow over time.  

And you don't have to do any kind of crazy gambling to get there.   Thank you so much for boosting in, and congratulations on the new AlbiHub setup.   Hey, it's Jim from InkTink. What? Jay from Mateek? I don't know how I'm going to say that one anymore.   Well, let's hear it good, buddy. I tried. I'm going to say Jim from Mateek.   Just pump the brakes right there. Okay, I'm sorry.   Hey, Chris, I don't plan to give Bitcoin for Christmas. Okay, I was asking this.   If I would, it's still only two conditions. One, I make sure they know how to hodl it well.   The IT security has to be taken very seriously, and they have to understand   the appropriate measure to secure 12-word C phrases.  

Number two, they have to buy some first to engage with it.   Such is a gift with Bitcoin for sure. People will underestimate it.   Maybe take it lightly and lose it. Hmm.   Maybe. You might be right. Number one, I suppose if they bought it,   there's definitely a lot more online.   He says, also continuing, once in a Bitcoin meetup in 2019, someone sent me   some sats on a mobile app. I don't remember which one.   After having an issue with the phone, I had to reinstall it,   and it seems I didn't do a proper backup.   I was not ready at that time to huddle well.   That, I think, is maybe a rite of passage for a lot of people, unfortunately.  

Some of us learn by making mistakes, and I think a lot of us take a first pass   or two at our understanding of Bitcoin. I mean, I certainly did.   I mean, look at me, man. I was mining it and getting 50 Bitcoin at a time.   And I didn't understand what I had on my hands. I bought into the PayPal narrative.   Thought we needed to replace PayPal.   And I spent it thinking that was what the future was.   And now it's like, well, maybe I should have spent it. Maybe I should have saved   a little bit. Didn't realize we're going through price discovery.   We have to figure out what this thing's worth. It's a monetization phase for a while.  

So I think a lot of us lost Bitcoin or spent Bitcoin because we just didn't,   you know, on our first pass, didn't really wrap our head around it.   And it takes a little bit of time to figure it out. Not everybody, but for some of us.   Thanks for the boost, Matik. Nice to hear from you.   BitCryptics here with 2,048 sats. Oh, that's pretty spicy, I'd say.   Oh, boy, day one of them is our guarantee.   Number one, or plus one for longer episodes, plus one for salty sometimes,   and plus one for being in team disruption.   The human nature element is always the same. For ones being disrupted,   they get scared of losing their nice, stable thing.  

Hmm. Yeah. Kind of thinking about the Chris Hayes take and the others.   That's really what it is, isn't it? It's a disruption to the established way   that they've benefited from. He says, in this case, it's the whole fiat system.   And they lash out and they'll tell lies. And, of course, the loudest ones are   those getting the biggest benefit from the status quo. Oh.   That's how we know disruptors are on the right track. Let's go.   I think that's pretty insightful.   Thanks, BitCryptic. I like that one. It pumped me up a little bit. Woo! Woo!   I think you're onto something there. Zach Keele's comes in with 4,000 sats. That's pretty funny.  

Next caller. I like River, but their IRA option through Rocket Dollar seems   to have a relatively high fee. What are your thoughts on iTrust Capital?   They seem to be the good guys with the IRA option and no monthly fees.   Oh, you know, that's a name I have heard a few times. I don't have a strong   opinion on iTrust Capital.   You know, I don't know if I fully embrace the IRA Bitcoin stacking solution.   I do love the idea of getting access to it tax-free, but...   Man, I want access to it in my 40s. I want access to it in my 50s.   I want access to it in my early 60s. I want to be able to have rolling access to it all the time.  

And to me, it just seems Bitcoin appreciates so fast.   And you have things like loans and other tools you get access to.   It's like the IRA feels so constrictive and restricting.   When Bitcoin itself is appreciating at such a rate right now,   like that's one of the great things about the time we live in.   We won't get to live probably to hyper-Bitcoinization like at the scale most   Bitcoiners dream of, but we get to watch the monetization phase where this thing's   growing at like 60% a year on average.   And you can get access to that value without having to sell it. I don't know.   I'd love to hear others' thoughts on this and what they think is a good IRA option.  

I know Unchained Capital is also pretty good at retirement accounts,   but again, I don't have any personal experience there.   I am really glad, those Achilles, that you did look at the river one and followed up with the fees.   That's good to know. That's something I will keep in mind. Appreciate that.   Nico the Greek comes in with 10,000 sets. Did you buy that from a certified vendor?   Coming in with a long overdue boost. Love this show. I was hoping you were going   to cover this week's FUD. And you over-delivered when you called out Chris Hayes as a dumbass.   Did I do that? I did get salty. Very much appreciate the constant,   great, and constructive analysis. Well, I appreciate the boost, Nick.  

Thank you very much. It is good to hear from you.   Ace Ackerman's here with AroaDucks. If a national currency backed by Bitcoin   is developed, do you think it will be in the form of an Ethereum token or a   Bitcoin chain or something else? Oh, Ace.   It's the holidays, man. How could you do this to me?   Oh, God. Could you imagine? Could you imagine like a nation state currency backed   by Bitcoin on an Ethereum blockchain?   You just gave me nightmares, dude. I don't even know if I have an answer to that.   That's pretty good, though. Can I say no?   Mug Daddy's here with 10,000 sats. Banks are Ponzi schemes run by morons.  

Man, another great episode. You always find the absolute worst FUD from the worst people.   Hey, man, I'm just doing my job. He says, I also finally set up a node.   Oh, congratulations. Well done. I'd love to hear more details about the direction you went.   I'm getting the sense from the audience. there's a lot of interest in how people   are setting up their nodes. So if you do like to share, I think it'd be helpful for the class.   And well done. Thanks, Mug Daddy. Appreciate that.   The mutologist is here with a row of ducks.   I believe a lot of people have seen experts. I believe a lot of people and even   experts see Bitcoin as the same as Dogecoin.  

Basically, it's a gambling asset and people profit on its volatility.   Bitcoin is not the most valuable. Bitcoin is not the most valuable cryptocurrency   due to it being the first, but actually being truly decentralized,   free, and inflation-proof storage of value.   Yeah, and it also, it just makes a really good money. It makes a better money   than gold. It's the best money ever invented.   Go look up on Google what makes good money, what makes good hard money,   and look at boom, boom, boom, boom, boom. Bitcoin hits every one of them.   But I think you're right. A lot of people just look at it as like a risk stock, like –,   like Tesla. They look at it like Tesla as well, for better or for worse, for now.  

But I think if the inflation narrative really sets in and people really look   at a long-term inflation world, I think that could change.   We'll see. I hope I'm right. I really do. Thanks, immunologist. Nice to hear from you.   User308's here with 10,000 sats. Boy, they are doing a lot with mayo these days.   Well, I've been looking for a great explanation for the willow clip.   Thanks. Thank you for sending the value back. Appreciate that.   And Baffo is back with 5,000 sats. You're so boost.   On point as usual, although at these prices, a slight bit of angst is going to kick in.   Well, good news, Baffo, 90,000 is back.  

Baffo. So there you go. As I record right now, it's at 96.   So I guess it's back on sale, right? Isn't that a good thing? Don't we love it?   Chatty Mike's here with 3,000 three sats. This is a tasty burger.   Seems like FUD was order of the day. If politicians get away with blatant lying,   then why can't the media and everyone else? Oh, savage.   I'm against companies holding excess assets like cash. Other than a reserve,   they should invest or at least pay out dividends. Hmm.   Okay. Okay. Yeah. Unless your business trades Bitcoin or accepts it for payment,   there's no need to hold it on the balance sheet. That's just my hot take.  

Yeah, I wonder if I agree. I think there is advantages to having Bitcoin on   a business balance sheet, just like there's advantages to having real estate   on a business balance sheet.   But, yeah, we're seeing a lot of companies just try to add – or we will see   more and more – companies that are sort of zombie companies that aren't doing   great. And they'll try adding Bitcoin and all of a sudden they're doing fantastic   or something like that. Yeah.   It's going to be an interesting thing to watch is, you know,   there's going to be a little bit of that going on, like saving a failing company   by throwing some Bitcoin on the balance sheet and just, you know, riding the gains.  

All right. That's all the boosts above 2000 sats. Thank you,   everybody, for supporting the show and making episode 40 possible.   It's 40 episodes of This Week in Bitcoin.   Thank you so much for supporting the podcast. I mean, it really means a lot.   It's a passion project for me, and these boosts feel like I really get to connect   with part of the Bitcoin community.   If you'd like to boost in, you can start with the easy mode.   That's Fountain FM, and you can go all the way to the self-sovereign,   self-hosted with AlbiHub and lots of great podcast apps at podcastapps.com.   You just need to get some sats and start boosting.  

It's a lot of fun and a good way to kind of get your toe into the ecosystem as well.   There's a lot going on. It's pretty exciting. We had 42 individuals stream SATs   just listening to the podcast, and it was a long one.   And you helped me stack 86,789 SATs for the show.   When you combine that with all of the boosts, we had 66 unique participants   in This Week in Bitcoin Episode 40, Value for Value Model.   And we stacked a grand total of 293,354 SATs.   Not too bad at all. Thank you, everybody. Really appreciate that.   We're going to ride off into the holidays with that little win.  

And I'd love to hear from you and keep that ball rolling because there's a lot   more to cover as we get into 2025. I mean, can you even imagine?   Music.   Appreciate all of you. All right, let's get into it.   All right, now let's have a little election reflection, if we could.   I hope enough time has passed. This isn't an emotionally triggering question,   because I'd like to really source the community's wisdom on this one.   During the leading and final days of the election, and really since the election   has wrapped up, the crypto lobby and the crypto voting bloc has been a big part   of the discussion, kind of bigger than I expected, to be honest.  

And I think it's a fair question to ask, did Liz Warren and her anti-crypto   army play a role, at least somewhat, in the Democrats' loss of the presidential election?   Van Jones, who is a commentator on CNN, was at an event put on by the New York Times.   And he seems to believe that the Democrats were hypocritical in their stance   towards the middle class.   And the way they viewed and treated the crypto voting bloc had a lot to do with their loss.   So you have two parties that have fundamental hypocrisies built into them.   We thought that their hypocrisy was going to blow them up.  

We thought that playing 50 with all these crazy people was going to blow up,   but it's our hypocrisy that blew us up.   And so rather than sitting up here and trying to defend everything,   I think there's an opportunity because most people listening to this,   the New York Times is going to be our people.   So look, there's a bunch of stuff we did wrong. You touched one of them.   People hurting economically, and we kept trying to tell them that,   you know, we're building cathedrals for them in 20 years with this Inflation   Reduction Act. It didn't work.  

We also ran people out of our party on crypto.   50 million people bought some crypto. That's a bet on a future.   They are trying to get to a better future.   Joe Biden, Kamala Harris, Elizabeth Warren, beating the hell out of crypto,   beating the hell out of Silicon Valley people was not smart.   Now, here's what I'm trying to put together.   Is this reality or is this just a convenient scapegoat?   You know, they are maybe Van Jones is looking at several narratives out there,   putting them all together and coming together with a convenient scapegoat.   Without having to really say, oh, you know, our candidate wasn't very good at   this, this, or that. They didn't do these, that, or that interviews.  

Instead, it was crypto. Is that what this is? Or is there something more real to this?   Another big Democrat player or spokesperson for the election was Mark Cuban.   And he says that young men voted against Harris because of crypto and her crypto policies.   Another area was crypto. I mean, I was very clear early on that there was data   from Pew Research that said, you know, at least 40 percent of young men were into crypto.   And the way I explained it to them wasn't a big picture crypto thing at all.   I was like, look, for a 21 year old kid, particularly men these days,   they're not like we were when we were growing up, where it was a rite of passage   to open up a bank account or to get a savings account.  

Now they download Robinhood or Coinbase or some app and they live in an app economy.   And if you downloaded Robinhood or Coinbase, you're buying crypto over stocks   and you're buying crypto not just because you want to see it go up,   but because it makes you part of a community.   You know, Dogecoin is a meme stock that everybody talks about,   Bitcoin, whatever it may be.   And so if these young men have their entire net worth tied up in crypto and   you've got an SEC head, Gary Gensler,   doing everything possible to reduce the value of their net worth and everything   they read in those apps about what's happening to the price of their crypto   is driven and talked about relating to Gary Gensler, they're not going to vote for you.  

And I said it to Gary Gensler directly. I said it to Kamala.   I said it to her team that Gary Gensler could cost her the election.   And there's an argument to be made when you look at the numbers.   You know, a whole lot of young men voted against Kamala Harris.   And I think crypto had a lot to do with it.   All right. Is that a scapegoat or is it the truth we chase? A fleeting shadow or a clear cut?   Music.   I think part of the analysis is that people want to people want to be able to trade crypto.   And I think why meme coins do as well as they do is people can only afford to   get in at very low, low prices.  

They got 50 bucks, 100 bucks, and they want a thousand X that.   I think that's a part of what the Harris administration missed and what plays into this.   All right. Time for some updates.   And I want to start with one that's coming out of El Salvador this week.   El Salvador is scaling back some of their Bitcoin policies in trade for a $1.4 billion IMF loan deal.   Now, some of the policies that they're scaling back is the agreement makes Bitcoin   use voluntary for the private sector.   It limits public sector Bitcoin activities   and phases out the government's involvement with the Chivo wallet.  

Let's take this in reverse. So the Chivo wallet, I never thought was a very good idea.   Having the government hands in a Bitcoin wallet, not great. having that spinoff   independent is probably an improvement.   It makes it impossible to pay for your taxes in Bitcoin. That's,   I think, the biggest blow.   Because that, to me, is A, a pretty critical part of a real currency,   and B, a lot of El Salvadorians are saving in Bitcoin.   They spend in dollars, and they save in Bitcoin.   And tax bills are the kind of thing you save up for. And then lastly there,   what they started with is they're not going to force private businesses to accept Bitcoin anymore.  

I think a lot of Bitcoiners would agree that's always should have been that   way. People should be free to choose to or not to adopt Bitcoin.   The reason why mandating it is nice is because it creates a streamlined experience,   but the people that really benefit from that experience are the tourists, not the locals.   The locals are, again, spending in cash. I do think tourism,   though, will incentivize many businesses to continue to accept Bitcoin as means   of payment, like in El Zante Beach at the hotel I stayed at.   They're catering specifically to Bitcoiners, so they're going to obviously continue to accept Bitcoin.  

They have the option. They just don't have to do it now.   Tax is only being paid in U.S. dollars.   That's concerning to me. They also, the IMF, says they want to see transparency,   regulation, and supervision of digital assets and enhanced safeguards of the   consumer protection and investor protections. Yeah, we'll see.   We haven't got a lot out of El Salvador. Bichelli did say that they're going   to continue to daily buy and perhaps increase their Bitcoin purchase.   But this seems like they tried to strike a deal. The overall Bitcoin glow has   faded a bit, but Bitcoin is still technically legal tender.  

You can go to El Salvador and spend it, and that hasn't been changed.   But forcing people to accept it has changed. Being able to pay your taxes in   it has changed, and their involvement in the Chivo wallet is going to be phased out.   In exchange, they get $1.4 billion from the IMF.   Good, bad. I'm a little indifferent on that one. And I think El Salvador is   a wait-and-see five-year thing, and we're about five years – or it has another   five years, and we're about five years into it, so a total of 10 years.   You know, Picheli will have two terms. I'd like to see where it goes after Picheli's   two terms and see where the country – and if it continues down this path,   then I think there's a real opportunity there.  

Now let's talk about the ETFs. I just want to mention just the absolute scale of these things.   The Bitcoin ETFs yesterday, as I record, collectively bought 2,500 Bitcoin in one day.   In the past week, the ETFs have bought 23,800 Bitcoin.   In the past month, the Bitcoin ETFs collectively have bought 84,000 Bitcoin.   And so far this year, since the ETFs opened, they collectively have stacked.   $525,000 Bitcoin. That's an awful lot.   They now are surpassing Satoshi's stash.   And they're getting to be one of the larger holders.   World governments and the plebs still dramatically outstrip them.  

But they're getting up there in size.   The ETFs have stacked $525,000 Bitcoin. Not sats.   Not sats. Individual Bitcoin.   OK, our last clip of the week before we get to the state of the network goes   back to the Bitcoin reserve topic.   President Trump earlier this week rang the bell on Wall Street and your good   buddy Jim Cramer had a chance to interview him.   And this was Trump's comments on a Bitcoin reserve and where that's at right   now as of this week. In time, how about a crypto?   Really, we do need, I think, to some, you're embracing crypto,   very different from the previous administration, strategic petroleum reserve like for crypto.  

I think so. We're going to do something great with crypto because we don't want   China or anybody else, not just China, but others are embracing it.   And we want to be the head.   We're going to be ahead of A.I. We're going to be way ahead of A.I.   And we've got to produce tremendous amounts of electricity. You know that it's   unbelievable when you think that we need more than twice what we already have.   If you think that's pretty for a specific industry, but we'll be able to do it.   We have Lee Zeldin in charge of the environment. He's going to be giving us   very strong approvals, I think.  

And he's going to make sure everything's good and clean and proper,   but he's going to give us very fast approvals.   Music.   Let's take a look at the state of the network. As I record, the Bitcoin price   has ticked up just a bit to 97,670 U.S. greenbacks.   We're back above 1,000 satoshis per dollar, 1,024 satoshis to one U.S. dollar.   We're down 2.4% since the last episode.   We're down 9.8% from our all-time high.   We've flirted with 108,280 US dollars to Bitcoin, and on some exchanges even got to 110.   But we've slid a little bit. The reachable nodes has also slid just a little bit.   19,973 reachable Bitcoin nodes on the network.  

And this episode was recorded at block height 875,490.   The state of the Bitcoin network is choppy, but the fundamentals remain very strong.   Where it goes from here, I'm not sure. If you've made it this far,   I want to let you know I'll be off next week. I'll be off for the holidays for a little bit.   Not quite sure when I'm coming back, but it will be soon.   So in the meantime, go catch up on the back catalog.   We'll have all of that at ThisWeekInBitcoin.show.   And please do consider boosting into the show with what you'd like to hear from it.   And consider sharing it with a friend. And, you know, it's always a great way   to orange pill somebody is hit them with the Bitcoin hard truth and do the one-two   combo with this week in Bitcoin.  

Anyways, even if you don't share it, I just hope you have a great holiday.   Maybe you get a chance to orange pill a friend or a family member,   or maybe you don't bother.   Just hope you enjoy it. Now, I'm going to wrap us up with a value for value   track like I always do. I hope you have a great holiday.   And don't forget, while you're listening to our wrap-up track,   90% of your boosts go to the artist while the music is playing.   Music.