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%
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.
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."
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.
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 📈
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.
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:
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.
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.
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.
That’s all for this week, folks! When you signed up for this newsletter, we promised to act as your personal guide and help you understand what’s happening in the world of bitcoin. What did you think of today’s newsletter? Reply to this email and let us know what you’d like to see more of.