BITCOIN BOX SCORE

Exchange Rate: $27,495

Market Capitalization: $536.3B

Hash Rate (90 days): 392.6 EH/s

Transactions (30 days): 13,231,635

Network Fees (day): 13 sat/vB

Bitcoin Dominance: 50.67%

What do these numbers mean?

Bitcoiners,

Many critics in America argue that bitcoin is not commonly used to purchase groceries. However, they overlook its worldwide popularity. Due to the dollar's extensive reach and status as the most stable fiat currency (for now), individuals from other countries are driving bitcoin adoption.

Although bitcoin's price action has been subdued this year, its global adoption has continued, indicating more than just buying and selling. Let's examine where adoption was most prevalent this year.

• Asia: Undoubtedly, this is the epicenter of new Bitcoin and “crypto” business activity. Six Asian countries are leading in adoption: India, Vietnam, the Philippines, Indonesia, Pakistan, and Thailand. India, for instance, boasts large transaction volumes and is a frontrunner in utilizing lending protocols.

• Europe: While the U.S. ponders regulation, Europe has moved to attract innovators. Reports indicate a swing in investor sentiment, favoring Europe's regulatory clarity (a spot bitcoin ETF has already launched in Amsterdam).

• Sub-Saharan Africa: Bitcoin isn't just an investment; it's a lifeline in this region. Facing economic challenges, countries like Nigeria and Uganda have undergone impressive Bitcoin adoption, providing vital financial support to their populations.

Regional dynamics and innovation influence bitcoin's growth, and as regions establish clear regulatory paths, the question remains: which will drive adoption next?

With that, let's dive into the news.

NEWS

The IRS is coming for you 🕵️‍♂️

The IRS has become notably aggressive toward taxpayers, emphasizing its intent to target "high-income filers" and accusing wealthy taxpayers of evading their "fair share." The agency has disclosed plans to hire 87,000 new revenue collection agents, costing $79 billion, to collect an additional $180 billion, primarily from those deemed "high income."

Who does the IRS serve?

As the government struggles with increasing debt, there has been a stronger focus on improving tax collection to address deficits. However, the harsh language is worrying since the agency is supposed to work for taxpayers, not against them.

Central bankers: “Tokenization” is the future 🏦

Tokenization, linking real-world assets to crypto tokens, has caught the attention of global regulators and financial institutions, with the U.S. Federal Reserve Board releasing a discussion paper on the topic.

The authors highlight how tokenization can increase access and ownership of assets such as real estate, gold, equities, and ETFs. Buyers can acquire tokens representing fractions of the underlying asset on markets that trade 24/7.

Lipstick on the fiat pig

Tokenization is an attempt by traditional finance to refine a fundamentally flawed system, applying a cosmetic fix to deep-rooted issues. It's akin to dressing up a problematic foundation (government money) with a superficial solution (centralized blockchains) without addressing the inherent vulnerabilities of the system.

RFK Jr. Bitcoin Magazine interview 🎤

In an interview with Bitcoin Magazine, U.S. presidential candidate Robert F. Kennedy Jr. expressed his support for bitcoin, emphasizing the need for financial freedom and considering backing the dollar with bitcoin. RFK's pro-bitcoin stance revolves around providing alternatives to fiat currency and counteracting potential governmental control via central bank digital currencies.

Bitcoin's cultural relevance grows

RFK Jr.’s support for bitcoin signals increasing relevance in mainstream politics. The endorsements of well-known political figures enhances bitcoin’s legitimacy and will, in time, affect policy.

Quantitative easing turns fifteen 📈

This week marks the 15th anniversary of the QE (Quantitative Easing) era, symbolized by the passage of TARP, which made central bank asset purchases mainstream, expanding G10 balance sheets from around $5 trillion to nearly $30 trillion by the end of 2021.

During this period, U.S. equities, notably the NASDAQ and S&P 500, performed well – consistent with what you would expect an easy money asset bubble to look like. Bonds and most commodities lagged, with gold and bitcoin being exceptions.

The Global Financial Crisis nailed fiat's coffin shut

When President Nixon untethered fiat currencies from gold in 1971, trust in fiat systems was mortally wounded, a phenomenon known as "Nixon Shock."

The aggressive actions of central bankers in response to the Global Financial Crisis exploited the extreme flexibility of fiat. At the time, it may have seemed necessary, but in retrospect, it was clearly an overreaction that served to accelerate the demise of the system.

It's no coincidence that bitcoin began as an explicit response to the actions of elite banking and government institutions during the Global Financial Crisis.

BITCOIN ADOPTION CONTINUES

Elon Musk labeled "fiat currency" as a scam, amplifying discussions on the credibility of traditional money versus the potential of alternatives, with many in the bitcoin community seeing his comment as an endorsement.

Unchained has partnered with Coincover to enhance its collaborative custody network's security, emphasizing decentralized key management and safeguarding over $2 billion in bitcoin, addressing the industry's concerns about single points of failure and unauthorized asset access.

Financial services giant Block is nearing the release of its first bitcoin hardware wallet, a hexagon-shaped device with biometric security, following hints from co-founder Jack Dorsey.

Volcano Energy and Luxor Technology have launched Lava Pool, El Salvador's first bitcoin mining pool powered by renewable geothermal energy, aiming to boost the country's energy infrastructure and economy while supporting grid demands with flexible load management.

Blockstream and Swan Bitcoin have partnered to launch Swan Vault, a collaborative custody solution powered by Blockstream Jade, addressing bitcoin investors' need for secure and user-friendly asset storage.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week:

Bitcoin is a cornerstone.

Understanding the landscape of global finance can be challenging, as key decisions are usually made behind closed doors.

The system is vulnerable to exploitation, surveillance, and censorship – and the ones who profit most depend on secrecy and privileged access to information.

These issues are deeply rooted in the system, making change difficult.

Enter bitcoin – a revolutionary monetary alternative offering a new pathway to financial fairness. Instead of a confrontation, it provides a workaround: Build a new financial system, from the ground up, using a different set of first principles.

At the heart of this transformation is a layered approach:

1. Foundation Layer: Bitcoin Itself. As the world's only truly decentralized public blockchain, bitcoin epitomizes censorship resistance. It is immutable, transparent, and impossible to co-opt by large, centralized institutions like corporations or governments. This makes it ideal to serve as the cornerstone of a new financial system.

2. Infrastructure Layer. For over a decade, entrepreneurs and technologists have meticulously crafted this layer. It comprises infrastructure like industrial-scale mining operations, custody solutions, and currency exchanges. Innovations like the Lightning Network have introduced new use cases, especially in the payments sector.

3. Application Layer. This is where the rubber meets the road with consumer-facing products like bitcoin banks and financial services. They will succeed because, with bitcoin as a cornerstone, they will deliver user experiences far superior to those that are possible to create within the current banking system.

By using a layered approach to visualize its adoption path, we can understand its crucial role in shaping the future of finance.

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COIN CHECK

According to the Austrian Business Cycle Theory, what is a primary cause of economic booms and busts?

1. Fluctuations in consumer demand

2. Changes in technology and innovation

3. Government intervention and manipulation of interest rates

4. Natural disasters and external shocks

Check your answer at the end of the page.

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ANSWER

3. Government intervention and manipulation of interest rates

For a more detailed explanation of the Austrian Business Cycle Theory (ABCT), see this book chapter by economist Robert P. Murphy.

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